Tea Party – Page 2 – The Burning Platform

‘White boy’ Biden calls tea party ‘crazy’

This nutjob is one heartbeat away. He’s Obama’s best defense against impeachment.

Washington (CNN) — Vice President Joe Biden, in a closed-door meeting with black clergy in South Carolina on Tuesday, referred to himself as “the only white boy on the east side of Wilmington” as he recalled his days as a Delaware public defender and pressed faith leaders to elect Democrats this year.

He offered a candid critique of Republicans, calling the tea party “crazy,” according to a detailed readout of Biden’s remarks provided to CNN by a person in the room.

“This is not your father’s Republican Party,” he said, according to the source. “This is a different breed of cat, man. I am not making a moral judgment, but I will tell you that they have no judgment.”

Biden was in South Carolina for the day to support local Democrats in competitive races. But South Carolina’s role as an early presidential primary state added another layer of political intrigue to his trip, one of several to the state this year.

His office declined to comment on his remarks at the private meeting.

Biden predicted dire consequences for Democrats if Republicans win full control of Congress in November.

“If they win again, we are going to get no consensus on anything for the next two, four, six years,” Biden told the gathering of more than 100 ministers. “But if we beat some of these folks, it’s going to give some spine to the Republicans who know better.”

He added, “If we win, will turn things around. There will begin to be consensus.”

Biden delivers ‘Elizabeth Warren-type speech’

The day’s public event was a rally at Allen University, a historically black university in Columbia. Before a crowd of roughly 1,000 people, Biden took sharp aim at Republicans in Congress and in the South Carolina state house, including Gov. Nikki Haley, accusing them of putting ideology over compromise.

Vice President Joe Biden speaks during the Civil Society Forum at the US-Africa Leader Summit in Washington in August 4.

“Your governor is denying 200,000 South Carolinians additional Medicaid because she opposes expansion,” Biden said.

But he was more blunt in the gathering with ministers. He said Americans side with Democrats on issues from minimum wage, “tax fairness,” combating climate change and making climate change affordable. Pointing to the enactment of strict voter ID laws in GOP-dominated states, Biden said Republicans have been successful in discouraging Democrats, especially African-Americans, from voting.

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‘I’m Joe Biden and I don’t like Twitter’

“What the other team has done so skillfully over the last 15 years is convince our folks that it’s not worth voting,” he said. “Rich guys never get fooled that it’s not worth voting. They always show up and vote. But they tell our folks it doesn’t matter, that government doesn’t work anyway.”

At one point referring to himself as “Joe Biden, progressive Democrat,” Biden pointed to gains in manufacturing jobs under President Barack Obama, but said the middle class still “has not come back yet.”

“You can see it in the eyes of your parishioners,” he said. “It’s not just in black America, it’s white America as well. People are wondering, when is it going to be OK?”

“Corporate profits have soared,” Biden said, criticizing “these guys running hedge funds in New York.” He noted that the top 1% of earners in the United States make almost a quarter of all the money earned in the country. “How can that possibly be fair?” he asked.

“The biggest problem is income inequality,” he said, echoing populist-themed remarks he made at a South Carolina fundraiser earlier this year. “Because when income inequality spreads, economies shrink because folks don’t have money to spend.”

Six times Joe Biden aimed for the truth and caused a headache

Sitting next to South Carolina Rep. Jim Clyburn, the highest-ranking African-American in Congress, Biden talked up his political background and told the assembled audience that he “got 98% of the African-American vote every time I ran” in Delaware.

Black voters routinely make up a majority of the Democratic primary electorate in South Carolina.

Biden pointed out that his career began as a young public defender in Delaware, representing low-income clients. That’s when he called himself “the only white boy on the east side of Wilmington.”

Later in the day, Biden echoed his remarks at a fundraiser for the South Carolina Democratic Party at the home of Dick Harpootlian, a prominent local attorney and former state party chairman. About 40 people attended, including Elizabeth Colbert-Busch, the sister of comedian Stephen Colbert, who unsuccessfully ran for Congress last year.

“He gave a great speech,” Harpootlian said. “He said Republicans are being stymied by the extremists John Boehner that doesn’t want to go against. He said that hopefully some moderates can prevail this November.”

Harpootlian, who has been publicly critical of Hillary Clinton, said Biden will have a head start in South Carolina if he decides to run for president because of his previous campaigns and his longtime friendship with former Sen. Fritz Hollings.

“If he runs, there is no candidate who will have been to South Carolina as many times as he has,” Harpootlian said. “He has a built-in infrastructure.”

TEA PARTY IS A FRAUD

The true uncorrupted Liberty Movement was started by and continues to be led by Ron Paul. The Fox News Tea Party is nothing but a Republican scam designed to capitalize on discontent. There are no neo-cons in the true Liberty Movement. These worthless shills had nothing to do with Cantor being defeated, as detailed below.

Via Benswann.com

Dear Tea Party, On Cantor’s loss- You didn’t build that

By: Michael Lotfi Jun 11, 2014

In addition to a $15k/month consulting fee, Tea Party Patriots President Jenny Beth Martin pays herself a $272k/year salary while only spending 5% of total donations received directly on candidates.

VIRGINIA, June 11, 2014- It’s been 24 hours since the polls closed in Virginia, and the political establishment was rocked in what is being called the most earth-shattering defeat in decades.

National Tea Party groups have been fast to speak out and congratulate Brat on defeating Eric Cantor (R-Va.), the GOP’s second most powerful Republican. As is often the case, when a big win is scored, those with large megaphones are always ready to speak up.

“Congratulations to Dave Brat on his huge upset. The statement from the grassroots could not be any clearer. It doesn’t matter what office you hold or how powerful you are. If you lose touch with activists on the ground, then your seat is in danger,” wrote Freedom Works’ Matthew Kibbe. “The grassroots are taking their seat back at the table and returning accountability to Washington. Votes on Capitol Hill will be heard back in the district,” he added. “We are proud to stand with Dave Brat in his election and look forward to working with him to reform Washington, D.C.”

Tea Party Patriots, one of the largest Tea Party groups in the nation, said in a statement: “Dave Brat won tonight in Virginia because he effectively harnessed the outrage at Washington over policies that have not been repetitive of the people …” She added on Twitter: Eric Cantor “lost his election – is the establishment dead? Way to go #teaparty activists in VA. You the grassroots won. #noamnesty won.”

You are proud to stand with Brat? But wait– You didn’t!

They all champion Brat, as if they had been cheering him all along, and yet not one of them gave him a dime. Club for Growth, Madison Project, Tea Party Network (not to be confused with Tea Party News Network), Tea Party Patriots, Tea Party Express— not a single dime. In natural political fashion, never let a tragedy– or victory go to waste. Now, they will all continue to send out newsletters to their massive email lists claiming “See what we did in Virginia! We can take the country back! –Oh, P.S. please donate $10.” In fact, they’ve already started sending them– touting Brat’s victory as a reason to donate more to their respective groups. Why? Again, you all did nothing.

In fact, all of these groups have been collecting millions in donations, and they have not put a single dime into many winnable races.

According to a Washington Post report, the six largest national Tea Party groups have spent more than $37.5 million on the mid-terms so far. However, only $7 million of the spent donations have actually gone directly to candidates. Where did the other $30.5 million go? Well, it goes directly into their family members’ pockets for ‘consulting fees’, giving themselves lucrative benefit packages, paying themselves $272k/year salaries, and even spending $52k in interior decorating fees for one of their fancy Capitol Hill town-homes. How fiscally conservative of them.

Of course, there are fixed and variable costs, and the best talent should be paid what the market demands.

However, three of the largest groups — the Tea Party Patriots, the Tea Party Express and the Madison Project — have spent only 5 percent (some even less) of their money directly on election-related activity during this mid-term election cycle. Two other prominent tea party groups, the Senate Conservatives Fund and FreedomWorks, have devoted about 40 percent. In contrast, the average Super-PAC devotes more than 60% of their funds directly to candidates.

Dear Tea Party Patriots’ Jenny Beth Martin,

If you’re paying yourself $272k/year (plus a $15k/month ‘consulting fee’) and are devoting 5% of total resources to candidates, then what in the hell are you doing to deserve $272k/year + $15k/month? What are you doing with the other 95% of your time and money?

National Tea Party groups are becoming the very monsters they tell you all to fear and hate in their fundraising emails. Their most recent emails and statements should reflect shame and sorrow. They should be apologizing to Brat and countless other candidates they are completely ignoring while convincing millions of people to fund their luxury lifestyles. However, they won’t apologize. Instead, they will simply send more fallicious fundraising emails to capitalize off of Brat’s victory.

These groups did absolutely nothing to help Brat beat Cantor. The local tea party and grassroots activists are 100% responsible for the win.

Donors Beware: Do not be fooled by their emails. Do not let them score millions of your dollars off of Brat’s victory. Give your money directly to a candidate (never to the party) and give to local groups only.

Follow Michael Lotfi On Facebook & Twitter.

THOMAS JEFFERSON – TEA PARTY EXTREMIST

If He Was Around Today, Thomas Jefferson Would Be Considered A Tea Party Extremist

By Michael Snyder, on January 20th, 2014

Thomas Jefferson was radically anti-tax, pro-gun and anti-central bank. He loved precious metals, he openly acknowledged a “Creator” and he wanted to add an amendment to the Constitution which would ban the federal government from going into debt. If he was around today, he would be considered a “nutjob”, an “extremist”, a “fascist” and even a “potential terrorist“. But of course Jefferson was none of those things. Rather, Jefferson was a great thinker, the primary author of the Declaration of Independence and our third President. Below, I have shared a list of 13 famous Jefferson quotes (13 for the 13 colonies that originally founded America) that show just how far America has fallen away from our founding principles. I think that most of you will be very shocked when you read this list…

#1 “It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world.”

#2 “If we can but prevent the government from wasting the labours of the people, under the pretence of taking care of them, they must become happy.”

#3 “No free man shall ever be debarred the use of arms.”

#4 “I think our governments will remain virtuous for many centuries; as long as they are chiefly agricultural; and this will be as long as there shall be vacant lands in any part of America. When they get piled upon one another in large cities, as in Europe, they will become corrupt as in Europe.”

#5 “To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves and abhors, is sinful and tyrannical.”

#6 “And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity in the name of funding, is but swindling futurity on a large scale.”

#7 “Paper is poverty,… it is only the ghost of money, and not money itself.”

#8 “It is said that our paper is as good as silver, because we may have silver for it at the bank where it issues. This is not true. One, two, or three persons might have it; but a general application would soon exhaust their vaults, and leave a ruinous proportion of their paper in its intrinsic worthless form.”

#9 “The incorporation of a bank and the powers assumed [by legislation doing so] have not, in my opinion, been delegated to the United States by the Constitution. They are not among the powers specially enumerated.”

#10 “That we are overdone with banking institutions which have banished the precious metals and substituted a more fluctuating and unsafe medium, that these have withdrawn capital from useful improvements and employments to nourish idleness, that the wars of the world have swollen our commerce beyond the wholesome limits of exchanging our own productions for our own wants, and that, for the emolument of a small proportion of our society who prefer these demoralizing pursuits to labors useful to the whole, the peace of the whole is endangered and all our present difficulties produced, are evils more easily to be deplored than remedied.”

#11 “Certainly no nation ever before abandoned to the avarice and jugglings of private individuals to regulate according to their own interests, the quantum of circulating medium for the nation — to inflate, by deluges of paper, the nominal prices of property, and then to buy up that property at 1s. in the pound, having first withdrawn the floating medium which might endanger a competition in purchase. Yet this is what has been done, and will be done, unless stayed by the protecting hand of the legislature. The evil has been produced by the error of their sanction of this ruinous machinery of banks; and justice, wisdom, duty, all require that they should interpose and arrest it before the schemes of plunder and spoliation desolate the country.”

#12 “I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.”

#13 “We hold these truths to be self-evident, that all men are created equal; that they are endowed by their Creator with inherent and inalienable Rights; that among these, are Life, Liberty, and the pursuit of Happiness; that to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed; that whenever any Form of Government becomes destructive of these ends, it is the Right of the people to alter or abolish it, and to institute new Government, laying its foundation on such principles, and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”

Sadly, great statesmen like Thomas Jefferson are in very short supply today.

At this point, most of our politicians are millionaires that have totally sold out to the elite.

And if “another Thomas Jefferson” did show up on the national political stage today, he would be treated like garbage. The amount of abuse that is heaped on those considered to be “Tea Party extremists” these days is absolutely staggering. The following are just a few recent examples that demonstrate this…

-New York Governor Andrew Cuomo said the following during a radio interview last Friday: “Who are they? Are they these extreme conservatives who are right-to-life, pro-assault-weapon, anti-gay? Is that who they are? Because if that’s who they are and they’re the extreme conservatives, they have no place in the state of New York, because that’s not who New Yorkers are.”

-An article that recently appeared on a prominent liberal news websites had this striking headline: “Frankly, Koch Brothers Deserve the Death Penalty“.

-Professor Terrence Moore recently explained that it is now common practice for textbooks across the United States to use the term “fascist” for all “right-wing extremist groups”: “In the margin of the teachers edition, the teacher is instructed to explain the term ‘fascist’ to the students and to point out that the term ‘fascist’ is now applied to all right-wing extremist groups.”

The sad truth is that Thomas Jefferson wouldn’t have a prayer of making it to the White House today.

In fact, he would probably be blackballed by both major political parties.

America is in decline, and it is not because the principles that this nation was founded upon have failed.

Rather, one of the primary reasons why America is falling apart is because we have rejected the principles that were handed down to us by men like Jefferson.

Shame on us.

THOSE DAMN FACTS

It must be those dastardly tea baggers sabotaging the Savior’s glorious, well conceived, well executed, cost saving, life saving healthcare plan for America. Of course a 2,400 page law written by healthcare industry lobbyists, with 11,000 pages of rules and regulations, managed by thousands of government drones, enforced by the IRS, impacting 19% of the U.S. economy, and rolled out on a computer system that doesn’t work, was sure to improve the lives of all Americans. More government in our lives is exactly what we need. Now please bend over and await your Obamacare rectal exam. The $2,500 savings check is in the mail. But be warned, we are depending on another government organization losing $19 billion per year to deliver that check, so it might be awhile.

…Individuals in most states will end up spending more on the exchanges. It is true that in some states, the experience could be the opposite. This is because those states had already over-regulated insurance markets that led to sharply higher premiums through adverse selection, as is the case of New York. Many states, however, double or nearly triple premiums for young adults. Arizona, Arkansas, Georgia, Kansas, and Vermont see some of the largest increases in premiums.

…The Obama Administration is desperate for younger people to enroll to prevent an adverse selection death spiral.

…Our findings confirm that younger populations see larger percentage increases in premiums. A state that exhibits this clearly is Vermont, where the increase for 27-year-olds is 144 percent and the increase for 50-year-olds is still 60 percent, but far less. All states exhibit this relationship.

Heritage Foundation

“If you like your doctor, you will be able to keep your doctor. Period. If you like your health-care plan, you will be able to keep your health-care plan. Period. No one will take it away. No matter what.”

“For people with insurance, the only impact of the health-care law is that their insurance is stronger, better, and more secure than it was before. Full stop. That’s it. They don’t have to worry about anything else.”

“If you already have health insurance, the only thing that will change for you under this plan is the amount of money you will spend on premiums. That will be less.”

“I want to be very clear: I will not sign on to any health plan that adds to our deficits over the next decade.”

“Health care reform will cut the cost of a typical family’s premium by up to $2,500 a year.”

Source:

http://directorblue.blogspot.com/

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

YOU AIN’T SEEN NOTHING YET – PART TWO

This is Part Two of a three part series trying to make sense of the Crisis period we entered in 2008. Click here to read: PART ONE

Catalyst of Change

“As late as December 1773, November 1859, and October 1929, the American people had no idea how close it was. Then sudden sparks (the Boston Tea Party, John Brown’s raid and execution, Black Tuesday) transformed the public mood, swiftly and permanently. Over the next two decades or so, society convulsed. Emergencies required massive sacrifices from a citizenry that responded by putting community ahead of self. Leaders led, and people trusted them. As a new social contract was created, people overcame challenges once thought to be insurmountable – and used the Crisis to elevate themselves and their nation to higher plane of civilization.” – Strauss & Howe – The Fourth Turning

Anyone who hasn’t sensed a mood change in this country since the 2008 financial meltdown is either ignorant or in denial. Millions of Americans fall into one of these categories, but many people realize something has changed – and not for the better. The sense of pure financial panic that existed during September and October of 2008 had not been seen since the dark days of 1929. Our leaders used the initial terror and fear to ram through TARP and stimulus packages that rewarded the perpetrators of the financial collapse rather than helping the middle class who lost 8 million jobs, destroyed by Wall Street criminality. The stock market plunged by 57% from its 2007 high by March 2009. What has happened since September 2008 has set the stage for the next downward leg in this Crisis. The rich and powerful have pulled out all the stops and saved themselves at the expense of the many. Despite overwhelming proof of unabashed mortgage fraud, rating agency bribery, document forgery on a grand scale and insider trading based on non-public information, the brazen audacity of Wall Street oligarchs is reminiscent of the late stages of the Roman Empire.

“Crime, once exposed, has no refuge but in audacity.”
― Tacitus, Annals

The actions of the governing elite have provoked the darkening mood creeping across the land. The rise of the Tea Party in 2009 was fueled by anger over the bank bailouts, out of control federal spending and ever increasing taxes. The anger spilled over into town hall meetings, as Congressmen felt the wrath of public dissatisfaction. The fury propelled Tea Party Republicans to being elected in large numbers in 2010. But the movement was hijacked by the Republican establishment and defanged. As 2011 progressed, with Wall Street continuing to pillage the American middle class, the Occupy Movement spread to cities across America and around the world. The movement, led by Millenials, claims that mega-corporations and Wall Street manipulate the world in an unbalanced way that disproportionately benefits a super wealthy minority and is undermining democracy. They have shone a light upon the fact the 1% has used their wealth and power to plunder the national treasury, while impoverishing the 99%. The audacity of the 1% was on display for all to see when former Goldman Sachs CEO and former U.S. Senator Jon Corzine absconded with $1.2 billion of his customers’ money and continues to hide it in the vaults of his fellow robber baron Jamie Dimon at J.P. Morgan. To this day, no one has been jailed for this heist or any of the thousands of other crimes committed by the Wall Street titans. These psychopaths will not be satisfied until nothing remains of our country but a barren desert.

“They have plundered the world, stripping naked the land in their hunger… they are driven by greed, if their enemy be rich; by ambition, if poor… They ravage, they slaughter, they seize by false pretenses, and all of this they hail as the construction of empire. And when in their wake nothing remains but a desert, they call that peace.” – Tacitus, The Agricola and the Germania

A few weeks ago I watched The Grapes of Wrath movie for the first time in many years. The novel was written by John Steinbeck during the last Fourth Turning. It is as powerful today as it was in the 1941. It perfectly captures the mood of the country during the Great Depression. The message of the working class being exploited and manipulated by wealthy landowners resounds today. The Joads only sought an opportunity for a job, their own land, simple human dignity, and the chance for a better future. Wall Street has replaced the wealthy landowners as the exploiters of the working class. Steinbeck saw the Federal Government as a solution during the 1930s, but they are a major part of the problem today, as politicians have been captured by corporate and special interests. Their solutions do not benefit the average middle class American.

The feelings about our government and political system is reflected in Suzanne Collins’ Hunger Games novel, which captures the vein of government brutality, oppression of the working class, excessive wealth inequality, and the vapid shallowness of our American Idol culture. The Hunger Games was written in 2008 and the movie version has become a worldwide sensation. The immense divide between the wealthy ruling class, living an obscenely decadent lifestyle, and the exploited working class on the verge of starvation, is portrayed in a cruelly sadistic manner. The fact that it is appealing to Millenials and all generations says much about the changing of attitudes in the last four years. Hunger Games will be viewed as the modern day Grapes of Wrath by future generations.

There is no denying the darkening disposition of the country, except by those whose job it is to deny the reality of our deteriorating situation. Those whose power and wealth are dependent upon a citizenry being kept in the dark and convinced the way out of this mess is to resume spending borrowed money, have pulled out all the stops since the initial catalyst for this Fourth Turning struck with its full fury in 2008. The frantic efforts by those in power to prop up the status quo were predictable. If our leaders had dealt with the initial crisis in a realistic manner, many wealthy powerful men would have gone broke. They have been able to temporarily fend off a full-fledged catastrophe as predicted by Strauss & Howe:

“At home and abroad, these events will reflect the tearing of the civic fabric at points of extreme vulnerability – problem areas where, during the Unraveling, America will have neglected, denied, or delayed needed action. Anger at “mistakes we made” will translate into calls for action, regardless of the heightened public risk. It is unlikely that the catalyst will worsen into a full-fledged catastrophe, since the nation will probably find a way to avert the initial danger and stabilize the situation for a while. Yet even if dire consequences are temporarily averted, America will have entered the Fourth Turning.”

But they have solved nothing. In fact, they have exacerbated the problem areas of debt, civic decay and global disorder with their “solutions”. Our leaders have added $5.6 trillion to the National Debt; the Federal Reserve tripled their balance sheet by taking on $2 trillion of Wall Street toxic debt; the Federal Government assumed trillions in new debt by taking over Fannie Mae, Freddie Mac and Sallie Mae; and real GDP went up by a mere $103 billion (.8%) between the 4^th quarter of 2007 and the 4^th quarter of 2011. Rescuing the 99% was never the focus of their solutions. It was to save the bankers and wealthy investors (1%) who took the world destroying risks and should have borne the losses of their risk taking. The oligarchs have been wildly successful in this effort. The stock market has doubled from its lows. Borrowing at 0% from the Federal Reserve has done wonders for banker bonuses. Global disorder increases by the day, as politicians and bankers force austerity on their citizens, while continuing to harvest billions in profits and bonuses still waging wars of choice, further enriching the peddlers of debt and the peddlers of death (military industrial complex).

The Great Depression lasted from 1929 until 1940. The GDP of the country actually grew by 80% between 1933 and 1940. The stock market soared by 100% from the 1932 low to its 1933 high. It then soared another 100% from 1934 through 1937. Despite these fabulous economic statistics and investment riches scooped up by the 2.5% of the population that owned stocks, they still call this time period the Great Depression. With unemployment ranging from 15% to 25% during this entire time frame, the common man suffered greatly. There was no recovery for the 99%.

The net worth of the 99% is highly dependent on the value of their homes and their ability to increase their annual wages. Home prices have fallen 34% from their peak and continue to fall, recently reaching 2002 levels. Real median weekly earnings are lower than they were in 2003 and have fallen 3% since the economy supposedly entered its recovery in December 2009. Gas prices have doubled since early 2009. The 1% rejoices as they treat oil as an investment in their diversified portfolio. The 99% suffer as the average household is spending $2,500 per year more to fill up their vehicles. Food prices are up 15% to 25% in the last three years, even using the manifestly manipulated BLS figures.

It is essential for those in power to utilize their mainstream media propaganda machines, massaging of economic information and Ben Bernanke’s printing press to give the appearance of recovery to the masses. In the last three months the hyperbole and extreme spin from the corporate mainstream media has become exceedingly robust. It smells of desperation. Even as the media touts a recovery and Obama peddles drivel about millions of new jobs, Bernanke keeps the throttle of quantitative easing and zero interest rates wide open. Their actions are not consistent with their rhetoric. People who had jobs as accountants making $55,000 per year in 2007 are now stocking fertilizer in the garden center at Lowes making $20,000, with no benefits. This is the face of the jobs recovery. Only a corporate media doing the bidding of their masters could possibly rejoice at the February data showing consumers spending at a rate 450% higher than their income gains as a sign of recovery. There is a concerted effort to revive the auto market by the Federal Government (Ally Financial) and the Wall Street banks by employing exceptionally loose credit standards for auto loans and leases that are reminiscent of the subprime mortgage debacle. I’m sure it will turn out better this time. The downward spiral of trust is accelerating as predicted by Strauss & Howe:

“As the Crisis catalyzes, these fears will rush to the surface, jagged and exposed. Distrustful of some things, individuals will feel that their survival requires them to distrust more things. This behavior could cascade into a sudden downward spiral, an implosion of societal trust.”

The downward spiral of societal trust is well founded. The monied interests have captured the political process. The regulated have captured the regulators. Wall Street has always controlled the Federal Reserve. Corporations and the wealthiest among us select the politicians that will best serve their interests. The governing elite of psychopathic bankers, corrupt politicians, and powerful mega-corporations create crises, then save us from the crises they created, while accumulating more control, wealth and power. This perpetual swindle has been going on for decades and has reached its zenith as it did during the last Fourth Turning. Income inequality has reached the extreme levels last seen in the 1930s. The capitalism storyline has grown old and tired. Complete systematic capture is the reason for those at the top reaping all the benefits of our dysfunctional economic system.

The rampant mortgage fraud, the robo-signing crimes, trillions of shadowy derivatives, unfunded government pensions, unfunded Medicare and Social Security promises, and the bald-faced looting of customer accounts at MF Global have brought about a realization among those capable of critical thought that this Crisis is growing worse by the day. Strauss & Howe clearly understood the factors that would lead to this deficit of trust:

“But as the Crisis mood congeals, people will come to the jarring realization that they have grown helplessly dependent on a teetering edifice of anonymous transactions and paper guarantees. Many Americans won’t know where their savings are, who their employer is, what their pension is, or how their government works. The era will have left the financial world arbitraged and tentacled: Debtors won’t know who holds their notes, homeowners who owns their mortgages, and shareholders who runs their equities – and vice versa.”

Here we stand, three and a half years since the catalyst of this Crisis. What event or events will produce the regeneracy stage of this Fourth Turning and when can we expect its arrival? I’ll try to make some educated guesses in Part Three of this series.

Click here to read: PART ONE

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THE BEST LOOKING HORSE IN THE GLUE FACTORY

“Believe me, the next step is a currency crisis because there will be a rejection of the dollar, the rejection of the dollar is a big, big event, and then your personal liberties are going to be severely threatened.” – Ron Paul

As usual the MSM did its usual superficial dog and pony show for the American public on Saturday and Sunday. The overall tone on every show (not journalism) was to calm the audience. Every station had a “downgrade special” to explain why you shouldn’t panic over the downgrade of the United States. As we can see, it didn’t work. Worldwide markets went berserk. The reactions of the various players in this saga have been very enlightening to say the least.

As I watched, listened and read the views of hundreds of people over the last few days, I recalled a statement by David Walker in the documentary I.O.U.S.A. This documentary was made in late 2007 before the financial crisis hit. The documentary follows Walker, the former head of the GAO, and Bob Bixby, head of the Concord Coalition, on their Fiscal Wake Up tour.

In the film, Walker tells the audience: “We suffer from a fiscal cancer. If we don’t treat it there will be catastrophic consequences.” He argued the greatest threat to America was not a terrorist squatting in a cave in Afghanistan, but the US debt mountain. He was nervous about the increasing dependence on countries such as China, which are the biggest holders of US Treasury bonds. Bixby explained: “If you knew a levee was unsound and people were moving into that area, would you do nothing? Of course not.” These men were sounding the alarm when our National Debt was $9 trillion. Evidently, no one in Washington DC went to see the movie. They’ve added $5.5 trillion of debt to our Mount Everest of obligations.

After listening to the shills, shysters, propagandists, and paid representatives of the vested interests over the last few days, Mr. Walker’s response to someone pointing out Europe and other countries were in worse shape than the U.S. came to mind:

“What good does it do to be the best-looking horse in the glue factory?”

At the end of the documentary there was a prestigious panel of thought leaders discussing ideas to alter the country from its unsustainable fiscal path. I was shocked when Warren Buffett basically stated there was nothing to worry about:

“I’m going to be the token Pollyanna here. There is no question that our children will live better than we did. But it’s just like my investments. I try to buy shares in companies that are so wonderful, an idiot could run them, and sooner or later one will. Our country is a bit like that.”

Buffett has since turned into a Wall Street/Washington apologist, talking his book. He declared this weekend the US deserves a quadruple A rating. He has tried to protect his investments in GE, Goldman Sachs, Moodys and Wells Fargo by declaring their businesses as sound and their balance sheets clean. He is now just a standard issue sellout spewing whatever will protect his vast fortune. Truth is now optional in Buffett World.

The Oracle of Omaha has continuously bad mouthed gold and pumped up the economic prospects for the U.S. He trashed gold in his March 2011 report to shareholders:

“Gold is a way of going long on fear, and it has been a pretty good way of going long on fear from time to time. But you really have to hope people become more afraid in a year or two years than they are now. And if they become more afraid you make money, if they become less afraid you lose money, but the gold itself doesn’t produce anything.”

I guess the leadership of this country has created a bit of fear in the market, as gold has risen from $1,400 to $1,750 and Warren’s beloved financial holdings have tanked, along with the stock price of Berkshire Hathaway (down 23% since March). There seems to be an inverse relationship between the barbarous relic and lying old men shilling for the vested interests.

Vested Interests

When you watch the corporate mainstream media, or read a corporate run newspaper, or go to a corporate owned internet site you are going to get a view that is skewed to the perspective of the corporate owners. What all Americans must understand is everyone they see on TV or read in the mainstream press are part of the status quo. These people have all gotten rich under the current social and economic structure. Buffett, Kudlow, Cramer, Bartiromo, Senators, investment managers, Bill Gross, Lloyd Blankfein, Jamie Dimon, Jeff Immelt, and every person paraded on TV have a vested interest in propping up the existing structure. They are talking their book and their own best interests. Even though history has proven time and again the existing social order gets swept away like debris in a tsunami wave, the vested interests try to cling to their power, influence and wealth. Those benefitting from the existing economic structure will lie, obfuscate, misdirect, and use propaganda and misinformation to retain their positions.

The establishment will seek to blame others, fear monger and avoid responsibility for their actions. Ron Paul plainly explains why the US was downgraded:

“We were downgraded because of years of reckless spending, not because concerned Americans demanded we get our finances in order. The Washington establishment has spent us into near default and now a downgrade, and here they are again trying to escape responsibility for their negligence in handling the economy.”

The standard talking points you have heard or will hear from the vested interests include:

Stocks are undervalued based on forward PE ratios.
Ignore the volatility in the market because stocks always go up in the long run.
Buy the f$%ing dip.
America is not going into recession.
The market is dropping because the Tea Party held the country hostage.
The S&P downgrade is meaningless because they rated toxic subprime mortgages AAA in 2005 – 2007.
The market is dropping because the debt ceiling deal will crush the economy with the horrific austerity measures.
The S&P downgrade is meaningless because Treasury rates declined after the downgrade.
Foreigners will continue to buy our debt because they have no other options.
Foreigners will continue to invest in the U.S. because Europe, Japan and China are in worse shape than the U.S.
America is still the greatest economy on the planet and the safest place to invest.

Each of these storylines is being used on a daily basis by the vested interests as they try to pull the wool over the eyes of average Americans. A smattering of truth is interspersed with lies to convince the non-thinking public their existing delusional beliefs are still valid. The storylines are false.

Here are some basic truths the vested interests don’t want you to understand:

As of two weeks ago the stock market was 40% overvalued based upon normalized S&P earnings and was priced to deliver 3% annual returns over the next decade. The S&P 500 has lost 17%, meaning it is only 23% overvalued. Truthful analysts John Hussman, Jeremy Grantham and Robert Shiller were all in agreement about the market being 40% overvalued. This decline is not a buying opportunity.
The S&P 500 was trading at 1,119 on April 2, 1998. The S&P 500 closed at 1,119 yesterday. In March 2000 the S&P 500 traded at 1,527. By my calculation, the stock market is 27% below its peak eleven years ago. As you can see, stocks always go up in the long run. It is just depends on your definition of long.
The talking heads on CNBC told you to buy the dip from October 2007 through until March 2009. The result was a 50% loss of your wealth.
The government will report the onset of recession six months after it has already begun. People who live in the real world (not NYC or Washington DC) know the country has been in recession for the last seven months. The CNBC pundits don’t want to admit we are in a recession because they know the stock market drops 40% during recessions on average and don’t want you to sell before they do.
The stock market held up remarkably well during the debt ceiling fight. It did not begin to plunge until Obama signed the toothless joke of a bill that doesn’t “cut” one dime of spending. The markets realized the politicians in Washington DC will never cut spending. The National Debt will rise from $14.5 trillion to $20 trillion by 2015 and to $25 trillion by 2021, even with the supposed austere spending “cuts”.

The left wing media and the frothing at the mouth leaders of the Democratic Party have conducted focus groups and concluded that blaming the extreme, terrorist Tea Party for the stock market crash and the S&P downgrade plays well to their hate mongering ignorant base. They have rolled out their rabid dogs, Joe “gaffe machine” Biden, Howard “AYAHHHHHH!!!” Dean and John “ketchup” Kerry, to eviscerate the Tea Party terrorists.

The mainstream liberal media would like you to believe the Tea Party is an actual cohesive group that wants to throw grandmothers and the poverty stricken under the bus. The neo-cons in the Republican Party and their mouthpieces on Fox News have tried to co-opt the Tea Party movement for their purposes. There is no one Tea Party. It is a movement born of frustration with an out of control government. Ron Paul represented the Tea Party before it even existed and is the intellectual leader of the movement. His is the only honest truthful voice in this debate:

“As many frustrated Americans who have joined the Tea Party realize, we cannot stand against big government at home while supporting it abroad. We cannot talk about fiscal responsibility while spending trillions on occupying and bullying the rest of the world. We cannot talk about the budget deficit and spiraling domestic spending without looking at the costs of maintaining an American empire of more than 700 military bases in more than 120 foreign countries. We cannot pat ourselves on the back for cutting a few thousand dollars from a nature preserve or an inner-city swimming pool at home while turning a blind eye to a Pentagon budget that nearly equals those of the rest of the world combined.”

S&P’s opinion about any debt should be taken with a grain of salt. They, along with Warren Buffet’s friends at Moodys, were bought and sold by the Wall Street criminal element. Anyone with a smattering of math skill and an ounce of critical thinking would have concluded the U.S. was a bad credit three years ago. A Goldman Sachs trader had this opinion of the brain dead analysts at Moodys: “Guys who can’t get a job on Wall Street get a job at Moody’s.” Michael Lewis, in his book The Big Short, summarized the view of the rating agencies:

“Wall Street bond trading desks, staffed by people making seven figures a year, set out to coax from the brain-dead guys making high five figures the highest possible ratings for the worst possible loans. They performed the task with Ivy League thoroughness and efficiency.”

The most laughable storyline spouted by the Democrats and their lapdogs on MSNBC is the extreme austerity measures forced on the country by the Tea Party has caused the stock market to collapse. The plan “cuts” $22 billion in 2012 and $42 billion in 2013. Over this time frame, the Federal government will spend $7.4 TRILLION. The horrific spending “cuts” amount to .86% of spending over the next two years. Meanwhile, we will add at least $3 trillion to the National Debt over this same time frame. Of course, we could listen to Paulie “Spend More” Krugman and add $6 trillion to the national debt with another stimulus package. When a Keynesian solution fails miserably, just declare it would have worked if it was twice the size.
Barack Obama, the James Buchanan of our times, gave one of the worst Presidential speeches in the history of our country yesterday. In full hubristic fury he declared the United States of America would ALWAYS be a AAA country. The American Exceptionalism dogma is so very amusing. We are chosen by God to lead the world. Barack should have paid closer attention in history class. The Roman, Dutch, Spanish and British Empires all fell due to their hubris, fiscal mismanagement and overseas military exploits. The American Empire has fallen and can’t get up.

And now we come to the $100 trillion question. The establishment/vested interests/status quo declares the United States as the safest place in the world for investors. They frantically point out that people are pouring money into our Treasuries and interest rates are declining. They hysterically blurt out that Europe has much bigger problems than the U.S. and China’s real estate bubble will implode in the near future. These are the same people who told you the internet had created a new paradigm and NASDAQ PE ratios of 150 in 2000 were reasonable. The NASDAQ soared to 5,000 in early 2000. Today it trades at 2,358, down 53% eleven years later. These are the same people who told you they aren’t making more land and home prices in 2005 were reasonable. They told you home prices had never fallen nationally in our history, so don’t worry. Prices are down 35% and still falling today.

Medicare and Medicaid spending rose 10% in the second quarter of 2011 from a year earlier to a combined annual rate of almost $992 billion, according to the Bureau of Economic Analysis (BEA). The two programs are likely to crack $1 trillion before the end of the year. Medicare’s unfunded liability alone amounts to $353,350 per U.S. household. The National Debt will reach 100% of GDP in the next four months as we relentlessly add $4 billion per day to our Mount Everest of debt. Federal spending in 2007 was $2.7 trillion. Today, they are spending $3.8 trillion of your money. The country does not have a revenue problem. We have a spending addiction and the addict needs treatment. Doctor Ron Paul has our prognosis:

“When the federal government spends more each year than it collects in tax revenues, it has three choices: It can raise taxes, print money, or borrow money. While these actions may benefit politicians, all three options are bad for average Americans.”

The politicians and bankers who control the developed world have made the choice to print money and create more debt as their solution to an un-payable debt problem. Europe, Japan, the U.S., and virtually every country in the world want to devalue their way out of a debt problem created over the last forty years. It has become a race to the bottom, with no winners. Every country can’t devalue their currency simultaneously without blowing up the entire worldwide monetary system. But, it appears they are going to try. The United States will never actually default on its debts. Ben Bernanke will attempt to default slowly by paying back the interest and principal to foreigners in ever more worthless fiat dollars. This will work until the foreigners decide to pull the plug. For now interest rates are low and the U.S. is the best looking horse in the glue factory. But we all know what happens to all the horses in the glue factory – even Mr. Ed.

“It is true that liberty is not free, nor is it easy. But tyranny – even varying degrees of it – is much more difficult, and much more expensive. The time has come to rein in the federal government, put it on a crash diet, and let the people keep their money and their liberty.” – Ron Paul

2011 – THE YEAR OF CATCH-22

I wrote this on January 3. It was my outlook for 2011. Whenever I think I’m too pessimistic about the world, I go back and read old articles. This article is less than 4 months old and the situation has gotten much worse, much faster than I anticipated. The economy has slowed dramatically, even with the payroll tax cut and Ben’s QE2. I now think the 2nd half of 2011 will be outright recession. Again, my own words prove than I’m actually an optimist compared to what really happens. Think about that the next time you get depressed by one of my articles.

As I began to think about what might happen in 2011, the classic Joseph Heller novel Catch 22 kept entering my mind. Am I sane for thinking such a thing, or am I so insane that asking this question proves that I’m too rational to even think such a thing? In the novel, the “Catch 22” is that “anyone who wants to get out of combat duty isn’t really crazy”. Hence, pilots who request a fitness evaluation are sane, and therefore must fly in combat. At the same time, if an evaluation is not requested by the pilot, he will never receive one (i.e. they can never be found “insane”), meaning he must also fly in combat. Therefore, Catch-22 ensures that no pilot can ever be grounded for being insane – even if he were. The absurdity is captured in this passage:

There was only one catch and that was Catch-22, which specified that a concern for one’s own safety in the face of dangers that were real and immediate was the process of a rational mind. Orr was crazy and could be grounded. All he had to do was ask; and as soon as he did, he would no longer be crazy and would have to fly more missions. Orr would be crazy to fly more missions and sane if he didn’t, but if he was sane, he had to fly them. If he flew them, he was crazy and didn’t have to; but if he didn’t want to, he was sane and had to. Yossarian was moved very deeply by the absolute simplicity of this clause of Catch-22 and let out a respectful whistle. “That’s some catch, that Catch-22,” he observed. “It’s the best there is,” Doc Daneeka agreed. – Catch 22 – Joseph Heller

The United States and its leaders are stuck in their own Catch 22. They need the economy to improve in order to generate jobs, but the economy can only improve if people have jobs. They need the economy to recover in order to improve our deficit situation, but if the economy really recovers long term interest rates will increase, further depressing the housing market and increasing the interest expense burden for the US, therefore increasing the deficit. A recovering economy would result in more production and consumption, which would result in more oil consumption driving the price above $100 per barrel, therefore depressing the economy. Americans must save for their retirements as 10,000 Baby Boomers turn 65 every day, but if the savings rate goes back to 10%, the economy will collapse due to lack of consumption. Consumer expenditures account for 71% of GDP and need to revert back to 65% for the US to have a balanced sustainable economy, but a reduction in consumer spending will push the US back into recession, reducing tax revenues and increasing deficits. You can see why Catch 22 is the theme for 2011.

It seems the consensus for 2011 is that the economy will grow 3% to 4%, two million new jobs will be created, corporate profits will rise, and the stock market will rise another 10% to 15%. Sounds pretty good. The problem with this storyline is that it is based on a 2010 that gave the appearance of recovery, but was a hoax propped up by trillions in borrowed funds. On January 1, 2010 the National Debt of the United States rested at $12.3 trillion. On December 31, 2010 the National Debt checked in at $13.9 trillion, an increase of $1.6 trillion.

The Federal Reserve Balance Sheet totaled $2.28 trillion on January 1, 2010. Today, it stands at $2.46 trillion, an increase of $180 billion.

Over this same time frame, the Real GDP of the U.S. has increased approximately $350 billion, and is still below the level reached in the 4th Quarter of 2007. U.S. politicians and Ben Bernanke spent almost $1.8 trillion, or 13% of GDP, in one year to create a miniscule 2.7% increase in GDP. This is reported as a recovery by the mainstream corporate media mouthpieces. On September 18, 2008 the American financial system came within hours of a total meltdown, caused by Wall Street mega-banks and their bought off political cronies in Washington DC. The National Debt on that day stood at $9.7 trillion. The US Government has borrowed $4.2 since that date, a 43% increase in the National Debt in 27 months. The Federal Reserve balance sheet totaled $963 billion in September 2008 and Bernanke has expanded it by $1.5 trillion, a 155% increase in 27 months. Most of the increase was due to the purchase of toxic mortgage backed securities from their Wall Street masters.

Real GDP in the 3rd quarter of 2008 was $13.2 trillion. Real GDP in the 3rd quarter of 2010 was $13.3 trillion.

Think about these facts for one minute. Your leaders have borrowed $5.7 trillion from future unborn generations and have increased GDP by $100 billion. The financial crisis, caused by excessive debt creation by Wall Street and ridiculously low interest rates set by the Federal Reserve, 30 years in the making, erupted in 2008. The response to a crisis caused by too much debt and interest rates manipulated too low was to create an immense amount of additional debt and reduce interest rates to zero. The patient has terminal cancer and the doctors have injected the patient with more cancer cells and a massive dose of morphine. The knowledge about how we achieved the 2010 “recovery” is essential to understanding what could happen in 2011.

Confidence Game

Ben Bernanke, Timothy Geithner, Barack Obama, the Wall Street banks, and the corporate mainstream media are playing a giant confidence game. It is a desperate gamble. The plan has been to convince the population of the US that the economy is in full recovery mode. By convincing the masses that things are recovering, they will begin to spend and buy stocks. If they spend, companies will gain confidence and start hiring workers. More jobs will create increasing confidence, reinforcing the recovery story, and leading to the stock market soaring to new heights. As the market rises, the average Joe will be drawn into the market and it will go higher. Tax revenues will rise as corporate profits, wages and capital gains increase. This will reduce the deficit. This is the plan and it appears to be working so far. But, Catch 22 will kick in during 2011.

Retail sales are up 6.5% over 2009 as consumers have been convinced to whip out one of their 15 credit cards and buy some more iPads, Flat screen TVs, Ugg boots and Tiffany diamond pendants. Consumer non-revolving debt for autos, student loans, boats and mobile homes is at an all-time high as the government run financing arms of GMAC and Sallie Mae have issued loans to anyone that can fog a mirror with their breath. Total consumer credit card debt has been flat for 2010 as banks have written it off as fast as consumers can charge it. The savings rate has begun to fall again as Americans are being convinced to live today and not worry about tomorrow. Of course, the current savings rate of 5.9% would be 2% if the government was not dishing out billions in transfer payments. Wages have declined by $127 billion from the 3rd Quarter of 2008, while government transfer payments for unemployment and other social programs have increased by $441 billion, all borrowed.

Both the government and its citizens are living the old adage:

Everybody wants to get to heaven, but no one wants to practice what is required to get there.

The government politicians and bureaucrats promise to cut unsustainable spending as soon as the economy recovers. The economy has been recovering for the last 6 quarters, according to GDP figures, but there are absolutely no government efforts to cut spending. This is proof that politicians always lie. It will never be the right time to cut spending. Another faux crisis will be used as a reason to continue unfunded spending increases. Having consumer spending account for 70% of GDP is unbalanced and unsustainable. Everyone knows that consumer spending needs to revert back to 65% of GDP and the Savings Rate needs to rise to 8% or higher in order to ensure the long-term fiscal health of the country. Savings and investment are what sustain countries over time. Borrowing and spending is a recipe for failure and bankruptcy. The facts are that consumer expenditures as a percentage of GDP have actually risen since 2007 and Congress and Obama just cut payroll taxes in an effort to encourage Americans to spend even more borrowed money. Catch 22 is alive and well.

The first half of 2011 is guaranteed to give the appearance of recovery. The lame-duck Congress “compromise” will pump hundreds of billions of borrowed dollars into the economy. The continuation of unemployment benefits for 99 weeks (supposedly to help employment) and the 2% payroll tax cut will goose consumer spending. Ben Bernanke and his QE2 stimulus for poor Wall Street bankers is pumping $75 billion per month ($3 to $4 billion per day) directly into the stock market. Since Ben gave Wall Street the all clear signal in late August, the NASDAQ has soared 25%. Despite the fact that there are 362,000 less Americans employed than were employed in August 2010, the mainstream media will continue to tout the jobs recovery. The goal of all these efforts is to boost confidence and spending. Everything being done by those in power has the seeds of its own destruction built in. The Catch 22 will assert itself in the 2nd half of 2011.

Housing Catch 22

Ben Bernanke, an Ivy League PhD who should understand the concept of standard deviation, missed a 3 standard deviation bubble in housing as ironically pointed out by a recent Dallas Federal Reserve report.

Home prices still need to fall 23%, just to revert to its long-term mean. That is a fact that even Bernanke should be able to grasp (maybe not). Anyone who argues that housing has bottomed and will resume growth either has an agenda (NAR) or is a clueless dope (Bernanke). A new perfect storm is brewing for housing in 2011 and will not subside until late 2012. You may have thought those bad mortgages had been all written off. You would be wrong. There will be in excess of $200 billion of adjustable rate mortgages that reset between 2011 and 2012, with in excess of $125 billion being the dreaded Alt-A mortgages. This is a recipe for millions of new foreclosures.

According to the Dallas Fed, in addition to the 3.9 million homes on the market, there is a shadow inventory of 6 million homes that will be coming on the market due to foreclosure. About 3.6 million housing units, representing 2.7% of the total housing stock, are vacant and being held off the market. These are not occasional-use homes visited by people whose usual residence is elsewhere but units that are vacant year-round. Presumably, many are among the 6 million distressed properties that are listed as at least 60 days delinquent, in foreclosure or foreclosed in banks’ inventories.

The coup de grace for the housing market will be Ben Bernake’s ode to Catch 22. In his November 4 OP-ED piece he had this to say about his $600 billion QE2:

“Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance.” – Housing sage Ben Bernanke

On the day Bernanke wrote these immortal words 30 Year Mortgage rates were 4.2%. Today, two months later, they stand at 5.0%. This should be a real boon to refinancing and the avalanche of mortgage resets coming down the pike. It seems that money printing and a debt financed “recovery” leads to higher long-term interest rates. The more convincing the recovery, the higher interest rates will go. The higher interest rates go, the further the housing market will drop. The further housing prices drop, the number of underwater homeowners will grow to 30%. This will lead to more foreclosures. Approximately 50% of all the assets on banks books are backed by real estate. Billions in bank losses are in the pipeline. Do you see the Catch 22 in Bernanke’s master plan? The Dallas Fed sees it:

This unease highlights the housing market’s fragility and suggests there may be no pain-free path to the eventual righting of the market. No perfect solution to the housing crisis exists. The latest price declines will undoubtedly cause more economic dislocation. As the crisis enters its fifth year, uncertainty is as prevalent as ever and continues to hinder a more robust economic recovery. Given that time has not proven beneficial in rendering pricing clarity, allowing the market to clear may be the path of least distress. – Dallas Fed

Quantitative Easing Catch 22

Ben Bernanke’s quantitative easing (dropping dollars from helicopters) is riddled with Catch-22 implications. Bernanke revealed his plan in his 2002 speech about deflation:

“The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost.”

The expectations of most when reading Ben’s words were that his helicopters would drop the dollars across America. What he has done is load up his helicopters with trillions of dollars and circled above Wall Street for two years continuously dropping his load. Bernanke’s quantitative easing, which will triple the Fed’s balance sheet by June of 2011, began in earnest in early 2009. The price for a gallon on gasoline was $1.62. Today, it is $3.05, an 88% increase in two years. Gold was $814 an ounce. Today, it is $1,421 an ounce, a 61% increase in two years. In the last year, the prices for copper, silver, cotton, wheat, corn, coffee and other commodities have risen in price by 30% to 90%.

Quantitative easing has been sold to the public as a way to avoid the terrible ravages of deflation. The fact is there are less jobs, lower wages, lower home prices, zero returns on bank deposits, higher fuel costs, higher food costs, higher real estate taxes, higher medical insurance premiums and huge jaw dropping bonuses for the bankers on Wall Street. Somehow the government has spun this toxic mix into a CPI which has resulted in fixed income senior citizens getting no increases in their pitiful Social Security payments for two years. You can judge where Ben’s Helicopters have dropped the $2 trillion. Quantitative easing has benefited only Wall Street bankers and the 1% wealthiest Americans. The $1.4 trillion of toxic mortgage backed securities on The Fed’s balance sheet are worth less than $700 billion. How will they unload this toxic waste? The Treasuries they have bought drop in value as interest rates rise. Quantitative easing’s Catch 22 is that it can never be unwound without destroying the Fed and the US economy.

The USD dollar index was at 89 in early 2009. Today, it stands at 79, an 11% decline, which is phenomenal considering that Europe has imploded over this same time frame. Bernanke’s master plan is for the USD to fall and ease the burden of our $14 trillion in debt. He just wants it to fall slowly. Foreigners know what he is doing and are stealthily getting out of their USD positions. This explains much of the rise in gold, silver and commodities. The rise in oil to $91 a barrel will not be a top. The Catch-22 of a declining dollar is that prices of all imported goods go up. If the dollar falls another 10%, the price of oil will rise above $120 a barrel and push the economy back into recession. Then there is the little issue of at what level of printing and debasing the currency does the rest of the world lose its remaining confidence in Ben and the USD.

A few other “minor” issues for 2011 include:

The imminent collapse of the European Union as Greece, Ireland, Portugal and Spain are effectively bankrupt. Spain is the size of the other three countries combined and has a 20% unemployment rate. The Germans are losing patience with these spendthrift countries. Debt does matter.
State and local governments were able to put off hard choices for another year, as Washington DC handed out hundreds of billions in pork. California will have a $19 billion budget deficit; Illinois will have a $17 billion budget deficit; New Jersey will have a $10.5 billion budget deficit; New York will have a $9 billion budget deficit. A US Congress filled with Tea Party newcomers will refuse to bailout these spendthrift states. Substantial government employee layoffs are a lock.

There is a growing probability that China will experience a hard landing as their own quantitative easing has resulted in inflation surging to a 28 month high of 5.1%, with food inflation skyrocketing to 11.7%. Poor families spend up to half of their income on food. Rapidly rising prices severely burden poor people and can spark civil unrest if too many of them can’t afford food.
The Tea Party members of Congress are likely to cause as much trouble for Republicans as Democrats. If they decide to make a stand on raising the debt ceiling early in 2011, all hell could break loose in the debt and stock markets.

The government’s confidence game is destined to fail due to Catch-22. Will the consensus forecast of a growing economy, rising corporate profits, 10% to 15% stock market gains, 2 million new jobs, and a housing recovery come true in 2011? No it will not. By mid-year confidence in Ben’s master plan will wane. He is trapped in the paradox of Catch-22. When you start hearing about QE3 you’ll know that the gig is up. If Bernanke is foolish enough to propose QE3 you can expect gold, silver and oil to go parabolic. Enjoy 2011. I don’t think Ben Bernanke will.

“That’s some catch, that Catch-22.” -Yossarian