Political Reality

This morning you wake up to the first in a two-part series. Which is ironic, because as you wake up to this article you are doing the exact opposite of what the majority of US citizens are doing. This part One is a bit longer than I would have preferred. But that was necessary. There are a ton of political realities that just screamed out to be highlighted. And before we can get to part two, we have to recognize and understand these political realities. Many of you may wish to deny what you read here today. But don’t waste your time trying. Instead, give some serious thought to what you are reading. Because while it may not be happening with the active readers that come to SUFA to exercise their brain each day, the reality is…….
The People are falling back to sleep.

The economy is falling off the Mainstream Media broadcasts, and with the attention span of the modern voter, the economy is becoming nothing more than the daily nag one eventually becomes desensitized to.

The turmoil in North Africa has created new headlines and the distracted voters now have a new scapegoat for their economic misery – nasty Muslim dictators/rebels who control all the oil.

This is very beneficial to the Federal Reserve System and the government. The deficit is growing at an unprecedented rate. The monetary base now is growing after a year of deflation.

It is clear that irrationality of Keynesianism is winning.

No one sounding the alarm, except for the Austrian economist. But the Austrian economists are far, too far, in the periphery of academia, and therefore nowhere near government bureaucracy.

The MSM runs columns about “one of these days there will be a crisis. . . . but not soon”.
There is no sense of urgency.

There is no sense that the government is digging the nation irrevocably into the hell-pit of debt.

There is no real concern about unemployment.
The experts have written off the millions of ex-workers whose lives will never be the same again as if they were expendable losses in a war.

The goal of every government and politician is to defer the day of reckoning. The voters are happy with this, too.

Why?

Because the voters know that the day of reckoning will bring an era of great pain. There is no easy way out of this period. Everyone wants to defer the pain for another year, or another decade. Everyone wants to die before the reckoning and, well, too bad for their kids.

The voters also assume that they have no power and, in this, they are correct.

Voters in the United States get to choose every two years between politicians who are no different then the ones they replace.  The candidates all run on the same basis: little or no changes in Washington is all that we need to make. No one runs on a platform of a balanced budget next term. No one expects it because that would be akin to political suicide.

The public has accepted Obama’s budget projections: a trillion dollars in new debt every year for the next decade.

The fact that it will be $1.5 trillion this year does not raise any alarms – 50% higher, and no one is shocked.

The Republicans in the House are thumping their chests about spending cuts amounting to 10% of the deficit – not of the whole budget, but off of the rate of going into debt! Voters can’t tell the difference.

It’s business as usual.

The voters assume that the people in charge know what they are doing. Though back in 2008, they didn’t all assume this. Now most of them do. The People now believe that their political mischief in ranting against the Federal government has brought The Political Messiahs – and they are here to guide the People through to the Promised Land. It does not matter that it is paid with debt, the People believe they about to arrive to the land of Milk and Honey.

In 2008 and 2009, Glenn Beck built his audience. Now half of it has departed. His viewers do not want to hear how bad things really are really.

They have become complacent to the constant bad news. They don’t want to hear reasons why things will not get better without comprehensive and massive change. Massive  change will require massive  sacrifice by the entire society, all around the world. No one wants that.

Many people believe that if you cannot change things in Washington, then the best thing you want is to hear is that the economy are fundamentally sound. This is the view of most Americans most of the time.

People want another Ronald Reagan telling them that America “is back in business”.

They do not care that he refused to veto any spending bills.
They did not care that he began the massive deficits of the modern era, deficits nine times Nixon’s annual deficits in 1970 and 1971.
Reagan signed the Social Security tax hikes in 1983 that Americans are paying for now. No one criticized him.
They want a new Reagan but forget that Reagan wanted to avoid confrontations with Congress. Government grew ever larger on every promise of his to shrink it.

But a Great Depression will force sacrifices.

In the past, such sacrifices grew the expansion of the Federal government. The boom caused by the Federal Reserve (created in 1913) went bust in 1929. Then came a decade of sacrifice. Then came World War II. More sacrifice. The government grew huge. This was consistent with the political philosophy of Progressivism, which the intellectuals had been promoting ever since 1885.

Crisis after crisis mandated sacrifice: World War I, the Great Depression, World War II, Korea, Vietnam, Poverty, Drugs, the Cold War.

The Panic of 1907 was a crisis.
It was used to justify the creation of the Federal Reserve in late 1913, just before the Christmas recess.

World War I was a crisis.
It was used to hike the tax rates of those in the top income brackets.
This was the fulfillment of Karl Marx’s call for a steep graduated income tax. He had called for this in The Communist Manifesto, published anonymously in 1848. Marx was afraid for his life if he had published in his name. Income tax is one of the 3 (out of his 10) Manifests that still live on today – Income tax, Public Education and a National Central Bank. Nearly every nation on earth has these three Communist manifests. Not bad for a man who sponged off his rich, capitalist-earning, but socialism-for-everyone-else best friend for his whole life.

His ideas were used by Lenin to justify bloody revolution in Russia in 1917.
World War I had made the liberal-socialist revolution possible in February 1917. By October of that year, Lenin made it real in the largest country on Earth.

There is a pattern.

An intellectual comes up with what appears to be a crackpot idea.
It is promoted by a handful of crackpot intellectuals.
Then it spreads to a wider circle of intellectuals.
It percolates for decades.
Then comes a crisis.

This creates a window of opportunity for the wider body of crackpot intellectuals to promote their solution to the crisis.

The People do not know who is right. They listen to promoters of political change and make a decision. They blame the entrenched politicians. So, they glamor for some rival, a Messiah. The new group gets a chance to entrench their program.

The parts that stick are those that create a strong minority of beneficiaries.

This bloc will organize to defend its permanent receipt of government money. The opponents are too busy defending their own receipt of government money. There is no well-organized opposition to any new outlay of government money.

There is a series of spending programs that go up, never down. This is an iron law of politics – the law of a one-way road. There is no reverse gear.

By the time it the Cold War ended in late 1991, the load of public debt was so great, and the promises to oldsters were so huge, that any call for a departure would have sacrificed the political careers of anyone doing the calling.

This is the “Public Choice” doctrine live and in play. No cuts are possible without harming such a large group of voters that no politician will survive carrying such a platform.

The politics of deferral is the only politics there is.

A sacrifice imposed by a crisis makes possible a major shift in political power.

In all cases, the new politicians are supported on a promise that they will “Do Something”. They call for more government spending, more government control.

Usually they call for such sacrifices to be shifted to the rich. No one dares suggest that a reduction in government is necessary because of all the “benefits” that come from it.

The People are after a reduction of taxes on themselves, and a reduction of government spending their rivals.

The politicians speak of the need for sacrifice, but they avoid telling the voters who must bear these sacrifices.

No, they proclaim that it is the rich who must pay. The voters accept this. All they want is for the pain to stop. They want the recession to end for them. They don’t care if it doesn’t end someone else who merely lost the vote.

The “winners” want sacrifice by others. They do not want sacrifices imposed on them. They will vote against anyone who proposes widespread sacrifices.

This applies to war, as long as there is a volunteer army.

The love of warfare is now basic to the United States, as long as the war is kept quiet.

Bush knew this, which is why there were no photographs of caskets draped in American flags. “Out of sight, out of mind.” The strategy worked. Obama is carrying it forward. The deaths seem minimal. The troops are over there. None of it is on prime time news most of the time.

No one cares about the boys and girls dying “over there” because they choose to join. No one forced them. Therefore, they get what they asked for – a chance to kill and die for their country. Back home – with no threat on anyone here to kill or die – the wars disappear.

The big wars ended in Vietnam. That was when the volunteer army was born, at the end of the war. That ended war protests in the United States.

People are all for sacrifice: sacrifice by others. Charlie is not alone in this philosophy. I dare say, he might even be a majority.

This is what modern politics is all about: promising to reduce sacrifice by large constituencies and imposing sacrifice on other, smaller constituencies.

This pattern is unbroken since the birth of the Nation. Debt increases. Then centralized government increases. Resistance increases – not against centralized government but against who is suffering  the debt burden. The search begins for a politically weak. “Let someone else sacrifice!”

Eventually, the search will find no one.

The political stalemate – no one voter bloc is so weak as to not to cause political disruption. The politicians retreat and call for more debt to pay for the debt consequences to ensure that these consequences get pushed into the future. But the race to the future becomes faster and shorter every budget. It is a race with no winners, and the bet is on to see how long the race can be run.

The only way out is:
Bankruptcy

As long as the money from the government keeps coming, there will be no fundamental change.

As long as this money buys things, there will be no fundamental change.

As long as the sacrifice can be delayed, there will be no fundamental change.

This has been the story of America since before there was the United States.

The Tea Party movement came in response to an economic crisis. That crisis came as a result of Greenspan’s career of deferring the day of reckoning by means of fiat money: in 1987, 1996, and in 2000-2001.

Bernanke is Greenspan’s twin — times 10.

There is a common belief that government deficits, when financed by central bank inflation, can overcome all recessions. They enable the government to delay the reckoning again.

All of Western politics rests on this Keynesian religion of public spending and central bank inflation.

In all the world, only Austrian School economists deny this religion totally.
But who are these Austrian School economists?
They have no influence in academia, the media, or politics.
They are voices crying in the distant wilderness, and their call promises very, very, very terrifying outcomes. Who wants to listen to the howl of wolves proclaiming a dark, cold night?

But the modern Internet allowed these fringe economists a hearing in 2008 and 2009. The warning got out.

But today it no longer does. It has no play. The pain has gone away.

There is no commitment to principle by voters. There is little awareness of economic cause and effect.

But what do we expect?

If most main-stream economists cannot see that the problem is massive deficits and central banking, can we expect voters to understand??

As long as the government controls the schools (public schooling) and the University (public funded tenure system), who will teach something else other than Fractional Reserve banking, boom/crackup deficit government spending even if the People are willing to learn?

The voters are always optimistic. They believe any political messiah that promises there is a solution to every problem, and this solution does not require them to make major sacrifices.

They have no memory of the Great Depression.
The New Deal promised to make the pain go away. But the pain went on and on until World War II.

Only then did the depression go away, but at enormous expense: high taxation, high inflation, price controls, wage controls, and rationing … and of course, tremendous death and destruction borne heavily by our “enemies”.

The recovery after controls were eliminated in late 1946 persuaded voters that the government can solve every major economic problem. No one argued that it was the removal of the government controls that created the expansion. Keynes died in 1946, without facing a rebuttal to his policies. His legacy became entrenched.

The People will not change their minds today. The Tea Party cries out for a smaller Federal deficit, but  – in perfect Reagan fashion – refuses to reduce any government programs that continues to add to the deficit.

To get a balanced budget, there would have to be cuts in Medicare, Medicaid, Social Security, and the Department of Defense.

There is no commitment by the Tea Party to any cuts in these areas. Their mantra is the same as ever: cut the other guy.

It never works.

The quest for “someone else” to bear the sacrifice is never-ending. It always leads to larger government, larger debt, and more central bank inflation.

This pattern goes back to 1755. Why should anyone expect this to change? It is what voters want.

Only one thing will stop it: the bankruptcy of the Federal government. This has not happened since 1788. Since then, it has avoided it.

But the numbers tell us that this will end.

It could end in hyperinflation.

It could end in outright bankruptcy: a refusal to pay interest on the debt.

It could end by hiking the Medicare age limit, or rationing health care.

But the numbers tell us that the sacrifice is coming.

As long as the level of debt does not lead to double-digit interest rates on T-bonds, there will be no major change. Everything hinges on the willingness of private lenders and foreign central banks to continue to buy the Treasury’s debt. There will be no fundamental change in people’s thinking until double-digit interest rates appear.

Anyone who thinks that the Tea Party will change anything prior to double-digit interest rates is politically naive.

Anyone who thinks that Congress will change, short of Federal bankruptcy, is politically naive.

Anyone who thinks that the media will change, pastors will change, professors will change, financial journalists will change, or that public school teachers will change is intellectually naive.

People change their thinking only under pain. This pain must be heavy and constant. It forces them to re-think their presuppositions.

The goal of politics today is to make sure that Atlas will not be allowed to shrug.

Here is the central question of politics in the West: How long will the governments of the West be able to persuade lenders that they should not shrug? All other questions are peripheral.

The politicians know this. They know that the numbers point to a great default.

But they believe, just as Keynesians, Chicago School monetarists, supply-siders, and rational expectation economists believe that the Federal government can and will find a way to persuade lenders to keep lending. The West rests on this faith. If this faith ever wanes, then the day of reckoning will arrive.

At that point, the West gets hyperinflation or another Great Depression.

The solution to the politics of buck-passing is bankruptcy.

But you are not the People. You read at SUFA. Normal people do not read SUFA. Too little sex and not enough scandal.

You are the Remnant.

What do you do? (Part Two)

Advertisements

Comments

  1. gmanfortruth says:

    Good Article Flagster,

    I’m interested in the comments on this, as well as the questions, si I’ll start with a question. Will the Japan situation have a major effect on the U.S. economically?

    G!

    • Richmond Spitfire says:

      Hi Black Flag…

      Great Article…the people are definately becoming complacent again…with a blush, I sheepishly admit that I am guilty as charged.

      I’m looking forward to learning lots from the comments today!!!!

      Best Regards,
      RS

    • Gman,

      Yes, Japan’s economic disaster will give the illusion of economic prosperity here.

      Japan’s Central Bank has already pumped billions of “new” money into the Japanese economy. These funds will be used to buy materials and goods from outside of Japan and labor inside Japan.

      This will give the appearance of the Keynesian economic boom – nothing like a good disaster to get the economy going.

      If a tsunami disaster can save an economy, one wonders what the Keynesian think about a wholesale nuclear war. It would be an economic miracle!

      Keynesian do not understand the Broken Window Fallacy.

      They do not understand that economic destruction is destruction not growth. They do not understand burning down houses does not grow the housing market.

      The day of reckoning -ironically- has been pushed back from the brink due to Japan’s disaster. If that disaster happened to the US, it would be the tipping point, but as long as it happens to America’s creditors, it is a delay. Keynesian must be praying for some massive disaster to overtake China.

      The problem: when the economy comes back to the brink -as it will again – it will be bigger and worse.

      • Truthseeker says:

        To add, Japan does have a lot of our debt. What if they wanted some of it back?

        • TS,

          That would be a very good thing. Trading debt for goods is the only way the nation can avoid disaster – that is, one must earn their way out of debt – an increase in productivity.

          However, it is merely temporary. There is no way the US government will slow its dive into more debt.

      • gmanfortruth says:

        Commodities are way down, looks like the market is going to take a big hit today. Import prices are up unexpectedly.

        • Gman,

          The big selloff is merely a flight to cash – since the world tomorrow is highly uncertain, cash gives one the ability to move quickly one way or other ways.

          It is not a trend

          • gmanfortruth says:

            Do you think it will lower prices in the short term, or will the continue the slow rise?

            • Gman,

              No – other than perhaps fuel prices will dip slightly.

              The timescales of inventory are too long for the short term disruption of Japanese disasters.

              If you were a commodity trader, you’d make (or lose) a bit of cash.

              As a consumer, it will be transparent.

              Things like electronics, however, may become expensive over the year as Japanese inventories suffer.

  2. Truthseeker says:

    Great article! You hit a major point that I tell people, sacrifice has to be made on both sides. To me, that would be DoD, and to another it may be Medicare. All programs should be fair game and cut back. If not, we will do it the hard way and all the programs will be competely cut.

    You decide.

    • TS,

      They have decided, and the choice is : None of the above.

      The crux of my long article: it is pointless and futile and naive to believe that anything will be done to resolve the problem.

      It is the politics of avoidance and delay – it will be someone else’s problem in the future – and they will do whatever it takes to try not have the problem occur today.

      But the future is not that far off – it could be, literally, tomorrow.

      Arguing, debating, fretting, denying, trying to solve …. is absolutely a waste of time.

      You may have noticed that I no longer participate at all in any of the minutiae discussions about politics in Washington on SUFA. It is a dialogue no more serious than the dialogue about who will win the next football game – its all just entertain, nothing you discuss, or debate will change anything.

      I do not have time to waste over political entertainment.

      • Hi BF,

        Good essay, and very observant. I too rarely come to SUFA anymore. The debates are a waste of my time and energy. What I need is information.

        I already know that most American voters are braindead and intend to stay that way. I’m shocked at how many still believe their messiah will save them. I just laugh at them now, knowing that their suffering will be worse than mine, because at least I know its coming. The fools I see are expecting a pony. What they’ll get is a big steaming pile of s****.

        One other comment I’d like to put out is that some areas of DOD are being cut back a bit. We’re facing ANOTHER round of budget cuts out here. Our funding is being cut by 15% for the 2012 fiscal year. We had the same amount last year.

        • Hi Cyndi,

          Just had to say “howdy”.

          I too don’t participate anymore, it was just too time consuming and intense. It is not that I don’t care, but the endless debate of minutia took too much time and energy, and like you, I was looking for insight and info on what the heck is coming our way…it seemed like we were stepping on ants when we needed to be shooting elephants.

          I still love SUFA and have a great deal of respect and admiration for those that stick with the debate day after day. I don’t have the energy to do that constantly, but I do stop by often to read and try to catch up on whats going on here.

          • Hi Dee!

            It HAS been awhile hasn’t it? I’ve been spending much of my time over at zerohedge.com. There’s plenty of good information there. There’s some Left/Right bickering but I just skip over it and get to the useful stuff. I don’t have the patience to argue. If I wanted to spend all my time arguing while the house burns down, I’d stll be married.

            I like your question to BF. That comment about gold stood out to me as well. I think he meant gold as an investment. I’m holding mine as insurance. I’m definitely looking forward to what he has to say about it. BF is the main person who got me out of the mindless sheeple mode. I always knew something wasn’t ‘right’, but he was the one who helped me see what it was.

            • Yep, I give BF much credit for waking me up too, although the first few interactions I had with him made me want to choke the **** out of him….LOL. Thanks for the tip on zerohedge, I will check it out!

              • I know what you mean, lol. BTW, if you ever want to email off SUFA, US Weapon can give you my email. I don’t mind……

                ;o)

  3. Three thoughts off the bat.

    1. The reduction in Glen Beck’s audience may not be entirely due to not wanting to hear bad news all the time. Beck changed his major theme a year ago and started pounding the religion. I think it cost him audience.

    2. The drop off of public awareness and activity was to be expected but may not mean they went away. Remember my comments long ago about the difficulty in maintaining a state of high emotion and activity among the public.

    They need a break from time to time, and it usually comes right after a swing election. The tell will be the extent to which the reactivate as they see the new politicians backtrack from their commitments.

    3. The TEA PARTY that was elected is not necessarily the Tea Party that started out and was so vocal at the health care town halls. The Republican Conservatives pre-empted the name Tea Party and many of the new candidates were actually theirs and not the grass root groups.

    Leaving of course the big question. What will the PEOPLE do about it once they realize what is going on. Will they throw up their hands as they have done before, crying what’s the use? Or will they get mad and finish the house cleaning?

  4. BF Seems this guy agrees with you-anything in here you disagree with. Although I do have a question-you say the people are asleep again but then you say it doesn’t matter because there isn’t anything we can do anyway. So what is the point of your article-to wake us up or to tell us we might as well sleep?

    Quantitative Easing: Our Tiger by the Tail
    By Monty Pelerin
    Friedrich Hayek’s A Tiger by the Tail: The Keynesian Legacy of Inflation was published in 1978. It seems an appropriate description of what Quantitative Easing (QE) has produced. We are far along on a journey that cannot be stopped without enormous damage.

    Quantitative Easing is a euphemism for money creation. Money creation is, by definition, inflation. Eventually inflation produces higher commodity and other prices. Inflation can be created by other Fed policies besides QE. However, for purposes of this article, QE will be dealt with as if it is the primary cause (which it has been recently).

    According to Chairman of the Federal Reserve Ben Bernanke, we are in phase 2 (QE2) of “money printing.” Those knowledgeable of history find this characterization amusing, because the Fed has engaged in almost continuous money creation from its founding in 1913. Since then, 96% of the dollar’s purchasing power has disappeared with much of the loss occurring subsequent to the mid-1970s.

    Mr. Bernanke initiated his so-called QE2 ostensibly to improve traction for the weak economic recovery. According to Bernanke, the program will end in June. With regard to his promise, Mr. Bernanke resembles Charlie Brown’s friend Lucy placing a football.

    QE will end but not in June, at least not permanently. It will not end as a result of political decision or Fed mandate. It will fall victim to Stein’s Law: “if something cannot go on forever, it will stop.”

    Why Quantitative Easing?

    Money creation is never proper economic policy. It does not improve or create wealth. Its purpose is to fool citizens. As such, it is a fraud employed by governments to deceive and steal. If high enough, QE results in societal disruption. At worst, it produces hyperinflation, violence and government overthrow. History offers numerous examples.

    The famed economist John Maynard Keynes did not invent inflation, but he was instrumental in making it seem acceptable as economic policy. In his General Theory, he advocated solving unemployment problems by “fooling” workers with higher nominal wages. He assumed workers were too obtuse to differentiate between nominal and real wages.

    Keynes also was aware of the more devastating aspects of inflation:

    The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.

    He probably was not advocating the destruction of capitalism, although his economic system and his elitism were not inconsistent with such an outcome.

    What is Wrong With QE?

    Inflation, as a policy, is a politician’s dream. As Friedrich Hayek noted:

    … moderate inflation is generally pleasant while it proceeds, whereas deflation is immediately and acutely painful.

    Given the short-term orientation and desire to please, inflation is an easy political choice. From an economic standpoint, however, inflation is always harmful. Keynes’ ideological opponents understood the short-term benefits, but knew inflation’s dangers. Ludwig von Mises stated:

    Credit expansion can bring about a temporary boom. But such a fictitious prosperity must end in a general depression of trade, a slump.

    In a swipe at Keynes notorious short-term focus, Mises stated:

    In the long run we are all dead. But unfortunately nearly all of us outlive the short run. We are destined to spend decades paying for the easy money orgy of a few years.

    The absurdity that money creation can produce economic benefits was illustrated in this Mises’ observation:

    If it were really possible to substitute credit expansion (cheap money) for the accumulation of capital goods by saving, there would not be any poverty in the world.

    All economists recognize that cessation of a monetary expansion will contract the economy. Regardless of how beneficial a cessation might be, it is politically untenable to be seen deliberately engineering such an outcome. That is why QE will not end as a result of conventional political means.

    Why QE is Unsustainable

    Economic stimulus via monetary expansion has a limited life because inflation, in order to provide stimulus, must continuously accelerate. As described by Milton Friedman:

    Inflation is like a drug. Its stimulating effect is temporary. Only larger and larger doses can sustain the stimulus, before the chaos of hyperinflation removes all the gains.

    Friedman’s “larger and larger doses” are necessary, but not sufficient. These increases must also “fool” or thwart the expectations of economic decision makers. As Hayek expressed it:

    Inflation thus can never be more than a temporary fillip, and even this beneficial effect can last only as long as somebody continues to be cheated and the expectation of some people unnecessarily disappointed. Its stimulus is due to the errors which it produces. It is particularly dangerous because the harmful after-effects of even small doses of inflation can be staved off only by larger doses of inflation.

    When it becomes apparent what is happening, people anticipate future government action and act to protect themselves. Once enough people understand the game, the charade ends either as a deep recession/depression (cessation of inflation) or a hyperinflation. The latter occurs when people spend money as quickly as they receive it in order to avoid the loss of purchasing power. In effect, money ceases to be used and society deteriorates to a barter economy.

    Why QE Will Continue Until Hyperinflation Stops It

    From a purely economic perspective, QE and inflation should never have occurred. From a political standpoint, it is a means of hiding the critical economic condition of the country. A stoppage of the program would result in two likely outcomes:

    * 1. A Depression

    Economic and financial performance has been artificially inflated by QE. A bubble in both areas has developed as a result of QE. Chris Martenson explains:

    The Fed has been dumping roughly $4 billion of thin-air money into the US markets each trading day since November 2010. The markets, all of them, are higher than they would be without this money. $4 billion per trading day is an enormous amount of money. As soon as the QE program ends, the markets will have to subsist on a lot less money and liquidity, and the result is almost perfectly predictable.

    From the standpoint of economic stimulus, many analysts believe that QE has run its course or even failed. Edward Harrison states:

    QE2 has only been successful insofar as it has increased business credit and raised asset prices. In my view, QE2 has been a bust as it adds volatility to the system and will have negative unintended consequences down the line.

    If QE no longer provides economic stimulus, then why continue it? Quite simply, stopping QE would potentially cause markets to collapse and the economy to enter a depression. Stopping it also would risk bankrupting the Federal government.

    * 2. A Government Unable to Pay its Bills

    The Federal government is insolvent. Without QE it would likely be illiquid. It is doubtful the US could sell enough debt to arms-length buyers to sustain its current spending. The current estimate of the deficit is $1.7 Trillion.

    Without QE there would be added distress for government and the economy. Domestic interest rates would rise to whatever level necessary to attract market funding. Higher interest rates would provide a further drag on the economy. They would also dramatically widen government deficits. Kyle Bass quantifies what a return to more normal interest rates would do to government spending:

    … a move back to 5% short rates will increase annual US interest expense by almost $700 billion annually against current US government revenues of $2.228 trillion (CBO FY 2011 forecast).

    Added on top of current spending, this cost would increase the deficit to $2.4 Trillion, more than projected revenue collections this year. The government would then be spending more than 200% of what it collected.

    Traditional Treasury investors (foreign individuals, other sovereigns and US investors) are likely unwilling to buy the amount of debt necessary to support US deficits. The biggest non-government buyer of Treasuries, Pimco, the world’s largest bond fund, has eliminated Treasuries from its holdings as reported by Zerohedge:

    Based on still to be publicly reported data by Pimco’s flagship Total Return Fund, the world’s largest bond fund, in the month of January, has taken its bond holdings to zero.

    In June 2010 Pimco held a record $147.4 billion of US government securities. Since then, these holdings have dropped to zero. Pimco now holds record cash balances.

    Serious concerns over continued US profligacy have been expressed by foreign lenders. China, Japan, Britain and other sovereign nations have neither the ability nor the inclination to continue to support our sovereign version of Blanche du Bois’s depend-upon-the kindness-of-strangers. Their economic conditions are at least as dire as ours and as much in need of funding.

    Money invested in US Treasuries by foreign sovereigns has produced losses. A report issued by the Bank of International Settlements (BIS) in 2008, observed and warned:

    Foreign investors in U.S. dollar assets have seen big losses measured in dollars, and still bigger ones measured in their own currency. While unlikely, indeed highly improbable for public sector investors, a sudden rush for the exits cannot be ruled out completely.

    The dollar has depreciated since the BIS warning, further increasing losses to foreign investors.

    Is There a Way Out?

    The fraud that the US government has become over the past several decades is now apparent. Our economy has been hollowed out as a result of “bubble economics.” Consider just some of these facts:

    * Many citizens have filed bankrupted as a result of the financial and housing bubbles.
    * Housing prices are expected to fall another 10 – 20%.
    * Retirements have been deferred and many will never happen.
    * Capital has gone overseas to be treated better with respect to taxes and regulations.
    * Jobs have left with the capital.
    * Unemployment is near all-time highs if measured correctly and many economists believe it will remain extraordinarily high for a decade or more.
    * The social welfare network is under irreparable pressure and will be recognized as bankrupt within the next few years.

    In short, our economy is in a shambles despite what the propaganda machine spews. Harry Schultz, famed investment advisor and newsletter author, wrote at the age of 86 in his final newsletter:

    Roughly speaking, the mess we are in is the worst since the 17th century financial collapse. Comparisons with the 1930’s are ludicrous. We have gone far beyond that. And, alas, the courage & political will to recognize the mess & act wisely to reverse gears, is absent in the U.S. leadership, where the problems were hatched & where the rot is by far the deepest.

    Mr. Schultz has seen a lot in his lifetime. His description, unfortunately, is correct. We are on the brink of a massive collapse — economically and politically. There are only two choices left for our political class. They were laid out by Ludwig von Mises long ago:

    There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved.

    Their choice seems obvious. QE will continue until total catastrophe occurs in the form of a hyperinflationary depression. Politicians will then point fingers at everyone but the real culprits – themselves. In the enlightened era of alternative news, their strategy probably cannot work.

    If I were a politician, I would resign immediately and head for safety before it becomes apparent to the masses what is going to happen.

    A parting caution: While I expect QE to run until a hyperinflationary collapse ends it, an announcement that it has been terminated could cause a severe collapse in financial markets. Be aware of the possibility of this “Lucy football strategy” by a desperate and reeling Ben Bernanke. Expect QE to be reinstated quickly once some pain is felt.

    http://www.americanthinker.com/2011/03/quantitative_easing_our_tiger.html

    • A Puritan Descendant says:

      “In June 2010 Pimco held a record $147.4 billion of US government securities. Since then, these holdings have dropped to zero. Pimco now holds record cash balances.”

      Now my simple thought on this >
      If easy credit comes to a halt due to investors following Pimco’s move, and inflation is under control, is not cash in hand King? Or could our fed simply print more paper?

      • Puritan:

        Absolutely correct.

        The end of credit to government would create a massive recession and a Great Depression.

        All prices, led by commodities, would fall even faster than in 2008/2009. Gold would fall back to sub-$1000 – maybe even as low as a few hundred an oz.

        Cash would be super-king.

        Therefore, well before the trigger is pulled you must be out of gold, land, etc. and into cash. After the trigger is pulled, you may have lots of assets, but no one will buy them.

        • A Puritan Descendant says:

          Thanks, i will start stuffing my mattress!

        • Hi BF,

          Been a long time. You probably don’t remember me, but I was around here a lot 2-3 years back.

          Back then, you said gold would likely hit $5000 per oz. in response to inflation, hyperinflation. You advised having at least enough on hand at $5000 per oz. to pay off your mortgage, if any.

          Now you are saying get out of gold and into cash….yikes! What to do, what to do? Damn it anyway.

          When you say cash…do you mean in the bank, or under the mattress?

          Can’t wait for article #2….hope it holds some hints to guide us.

      • Puritan:

        If the FED steps in to replace private investors or foreign Central banks, then the opposite will occur – massive inflation, perhaps hyperinflation.

        I do not believe the FED will do this. They are there to protect the interests of the banks, and high/hyperinflation would destroy them.

        But Congress may nationalize the FED, and then all bets are off – there is no constraint on Congress to stop hyperinflation other than food riots.

    • V.H.

      Although I do have a question-you say the people are asleep again but then you say it doesn’t matter because there isn’t anything we can do anyway. So what is the point of your article-to wake us up or to tell us we might as well sleep?

      I did not say there isn’t anything you can do.

      I say spending any time trying to invoke change into the current system is utterly wasteful and pointless.

      Part #2 will begin a dialogue on what is possible and where to focus.

      Quantitative Easing: Our Tiger by the Tail
      By Monty Pelerin
      Friedrich Hayek’s A Tiger by the Tail: The Keynesian Legacy of Inflation was published in 1978. It seems an appropriate description of what Quantitative Easing (QE) has produced. We are far along on a journey that cannot be stopped without enormous damage.

      Quantitative Easing is a euphemism for money creation. Money creation is, by definition, inflation. Eventually inflation produces higher commodity and other prices. Inflation can be created by other Fed policies besides QE. However, for purposes of this article, QE will be dealt with as if it is the primary cause (which it has been recently).

      According to Chairman of the Federal Reserve Ben Bernanke, we are in phase 2 (QE2) of “money printing.” Those knowledgeable of history find this characterization amusing, because the Fed has engaged in almost continuous money creation from its founding in 1913. Since then, 96% of the dollar’s purchasing power has disappeared with much of the loss occurring subsequent to the mid-1970s.

      Mr. Bernanke initiated his so-called QE2 ostensibly to improve traction for the weak economic recovery. According to Bernanke, the program will end in June. With regard to his promise, Mr. Bernanke resembles Charlie Brown’s friend Lucy placing a football.

      QE will end but not in June, at least not permanently. It will not end as a result of political decision or Fed mandate. It will fall victim to Stein’s Law: “if something cannot go on forever, it will stop.”

      Why Quantitative Easing?

      Money creation is never proper economic policy. It does not improve or create wealth. Its purpose is to fool citizens. As such, it is a fraud employed by governments to deceive and steal. If high enough, QE results in societal disruption. At worst, it produces hyperinflation, violence and government overthrow. History offers numerous examples.

      The famed economist John Maynard Keynes did not invent inflation, but he was instrumental in making it seem acceptable as economic policy. In his General Theory, he advocated solving unemployment problems by “fooling” workers with higher nominal wages. He assumed workers were too obtuse to differentiate between nominal and real wages.

      Keynes also was aware of the more devastating aspects of inflation:

      The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.

      He probably was not advocating the destruction of capitalism, although his economic system and his elitism were not inconsistent with such an outcome.

      What is Wrong With QE?

      Inflation, as a policy, is a politician’s dream. As Friedrich Hayek noted:

      … moderate inflation is generally pleasant while it proceeds, whereas deflation is immediately and acutely painful.

      Given the short-term orientation and desire to please, inflation is an easy political choice. From an economic standpoint, however, inflation is always harmful. Keynes’ ideological opponents understood the short-term benefits, but knew inflation’s dangers. Ludwig von Mises stated:

      Credit expansion can bring about a temporary boom. But such a fictitious prosperity must end in a general depression of trade, a slump.

      In a swipe at Keynes notorious short-term focus, Mises stated:

      In the long run we are all dead. But unfortunately nearly all of us outlive the short run. We are destined to spend decades paying for the easy money orgy of a few years.

      The absurdity that money creation can produce economic benefits was illustrated in this Mises’ observation:

      If it were really possible to substitute credit expansion (cheap money) for the accumulation of capital goods by saving, there would not be any poverty in the world.

      All economists recognize that cessation of a monetary expansion will contract the economy. Regardless of how beneficial a cessation might be, it is politically untenable to be seen deliberately engineering such an outcome. That is why QE will not end as a result of conventional political means.

      Why QE is Unsustainable

      Economic stimulus via monetary expansion has a limited life because inflation, in order to provide stimulus, must continuously accelerate. As described by Milton Friedman:

      Inflation is like a drug. Its stimulating effect is temporary. Only larger and larger doses can sustain the stimulus, before the chaos of hyperinflation removes all the gains.

      Friedman’s “larger and larger doses” are necessary, but not sufficient. These increases must also “fool” or thwart the expectations of economic decision makers. As Hayek expressed it:

      Inflation thus can never be more than a temporary fillip, and even this beneficial effect can last only as long as somebody continues to be cheated and the expectation of some people unnecessarily disappointed. Its stimulus is due to the errors which it produces. It is particularly dangerous because the harmful after-effects of even small doses of inflation can be staved off only by larger doses of inflation.

      When it becomes apparent what is happening, people anticipate future government action and act to protect themselves. Once enough people understand the game, the charade ends either as a deep recession/depression (cessation of inflation) or a hyperinflation. The latter occurs when people spend money as quickly as they receive it in order to avoid the loss of purchasing power. In effect, money ceases to be used and society deteriorates to a barter economy.

      Why QE Will Continue Until Hyperinflation Stops It

      From a purely economic perspective, QE and inflation should never have occurred. From a political standpoint, it is a means of hiding the critical economic condition of the country. A stoppage of the program would result in two likely outcomes:

      * 1. A Depression

      Economic and financial performance has been artificially inflated by QE. A bubble in both areas has developed as a result of QE. Chris Martenson explains:

      The Fed has been dumping roughly $4 billion of thin-air money into the US markets each trading day since November 2010. The markets, all of them, are higher than they would be without this money. $4 billion per trading day is an enormous amount of money. As soon as the QE program ends, the markets will have to subsist on a lot less money and liquidity, and the result is almost perfectly predictable.

      From the standpoint of economic stimulus, many analysts believe that QE has run its course or even failed. Edward Harrison states:

      QE2 has only been successful insofar as it has increased business credit and raised asset prices. In my view, QE2 has been a bust as it adds volatility to the system and will have negative unintended consequences down the line.

      If QE no longer provides economic stimulus, then why continue it? Quite simply, stopping QE would potentially cause markets to collapse and the economy to enter a depression. Stopping it also would risk bankrupting the Federal government.

      * 2. A Government Unable to Pay its Bills

      The Federal government is insolvent. Without QE it would likely be illiquid. It is doubtful the US could sell enough debt to arms-length buyers to sustain its current spending. The current estimate of the deficit is $1.7 Trillion.

      Without QE there would be added distress for government and the economy. Domestic interest rates would rise to whatever level necessary to attract market funding. Higher interest rates would provide a further drag on the economy. They would also dramatically widen government deficits. Kyle Bass quantifies what a return to more normal interest rates would do to government spending:

      … a move back to 5% short rates will increase annual US interest expense by almost $700 billion annually against current US government revenues of $2.228 trillion (CBO FY 2011 forecast).

      Added on top of current spending, this cost would increase the deficit to $2.4 Trillion, more than projected revenue collections this year. The government would then be spending more than 200% of what it collected.

      Traditional Treasury investors (foreign individuals, other sovereigns and US investors) are likely unwilling to buy the amount of debt necessary to support US deficits. The biggest non-government buyer of Treasuries, Pimco, the world’s largest bond fund, has eliminated Treasuries from its holdings as reported by Zerohedge:

      Based on still to be publicly reported data by Pimco’s flagship Total Return Fund, the world’s largest bond fund, in the month of January, has taken its bond holdings to zero.

      In June 2010 Pimco held a record $147.4 billion of US government securities. Since then, these holdings have dropped to zero. Pimco now holds record cash balances.

      Serious concerns over continued US profligacy have been expressed by foreign lenders. China, Japan, Britain and other sovereign nations have neither the ability nor the inclination to continue to support our sovereign version of Blanche du Bois’s depend-upon-the kindness-of-strangers. Their economic conditions are at least as dire as ours and as much in need of funding.

      Money invested in US Treasuries by foreign sovereigns has produced losses. A report issued by the Bank of International Settlements (BIS) in 2008, observed and warned:

      Foreign investors in U.S. dollar assets have seen big losses measured in dollars, and still bigger ones measured in their own currency. While unlikely, indeed highly improbable for public sector investors, a sudden rush for the exits cannot be ruled out completely.

      The dollar has depreciated since the BIS warning, further increasing losses to foreign investors.

      Is There a Way Out?

      The fraud that the US government has become over the past several decades is now apparent. Our economy has been hollowed out as a result of “bubble economics.” Consider just some of these facts:

      * Many citizens have filed bankrupted as a result of the financial and housing bubbles.
      * Housing prices are expected to fall another 10 – 20%.
      * Retirements have been deferred and many will never happen.
      * Capital has gone overseas to be treated better with respect to taxes and regulations.
      * Jobs have left with the capital.
      * Unemployment is near all-time highs if measured correctly and many economists believe it will remain extraordinarily high for a decade or more.
      * The social welfare network is under irreparable pressure and will be recognized as bankrupt within the next few years.

      In short, our economy is in a shambles despite what the propaganda machine spews. Harry Schultz, famed investment advisor and newsletter author, wrote at the age of 86 in his final newsletter:

      Roughly speaking, the mess we are in is the worst since the 17th century financial collapse. Comparisons with the 1930′s are ludicrous. We have gone far beyond that. And, alas, the courage & political will to recognize the mess & act wisely to reverse gears, is absent in the U.S. leadership, where the problems were hatched & where the rot is by far the deepest.

      Mr. Schultz has seen a lot in his lifetime. His description, unfortunately, is correct. We are on the brink of a massive collapse — economically and politically. There are only two choices left for our political class. They were laid out by Ludwig von Mises long ago:

      There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved.

      Their choice seems obvious. QE will continue until total catastrophe occurs in the form of a hyperinflationary depression. Politicians will then point fingers at everyone but the real culprits – themselves. In the enlightened era of alternative news, their strategy probably cannot work.

      If I were a politician, I would resign immediately and head for safety before it becomes apparent to the masses what is going to happen.

      A parting caution: While I expect QE to run until a hyperinflationary collapse ends it, an announcement that it has been terminated could cause a severe collapse in financial markets. Be aware of the possibility of this “Lucy football strategy” by a desperate and reeling Ben Bernanke. Expect QE to be reinstated quickly once some pain is felt.

      • Hehe-Can I take the re-posting of the article without any comment-to mean you agree with all of it. 🙂

        • V.H.

          …or I forgot to delete it!

          But yes, he is essentially correct – though he did not go where I went in my post – that the politicians will not do a darn thing differently.

          Whereas he posited some scenarios, I am positing only one:
          Bankruptcy

  5. Good article BF.

    My concern is the tea party is too little, too late. It is still quite active, and has made awareness of what you speak to many that had no clue. Unfortunately, the clueless numbers are still huge.

    Saw it here firsthand. Concessions were minor. Budget cuts will hurt but in minor ways when you look at the big picture. And no one wants any part of it.

    Can’t wait for tomorrow! I’m hoping you are going to “let” me be active ’cause I know I will really have a hard time just sitting back……….

    • If I could draw I would do a cartoon of the following:
      The dems arguing that the Reps are using a chainsaw instead of a scalpel, the Tea Party arguing that the Reps are using a chainsaw instead of a bulldozer, and the Libertarians in the back with a truck full of demolition explosives….

      If we accept even chainsaw cuts and not at a bulldozer taking on the budget mountain, it will be too little too late. It might be too late for the dozer, but at least that would make a real dent….

      • In terms of actual need, yes. But I do remember BF pointing out once that taking the demolition explosives approach would also have negative effects on too many people at one time.

        • True, and I concur with that, the whole “don’t pull out all the knives at once” thing. On the other hand, if the knives are about to bleed you out with them in, you cannot waste time pulling out one a week. You pull one, stitch it fast enough to stop the bleeding, then move on to the next. Fast.

          • There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion.

            The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved.

  6. Great article Flag. I concur largely, although I also agree with JAC’s thoughts above (tho they may be a little too optimistic).

    The rot of thought, specifically rational thought, is astounding. Very smart people whom I generally respect fail to think through certain things, the most glaring being cost of various government activities or “benefits”, environmental concerns, use of resources, effects of the market, and the realities of risk, of opportunity, of freedom itself.

    Even if people are not asleep still, many are still in their dreamworld, and having difficulty distinguishing reality from the dreams they have been living in.

  7. gmanfortruth says:

    Charlie will need is blood pressure checked if he reads this 🙂

    http://gmanfortruth.wordpress.com/2011/03/15/consequences/

    • Charlie replied … the blood is fine … it’s just a little silly and unrealistic.

      • gmanfortruth says:

        Glad to hear you blood presssure is good. I wish no harm upon you. 🙂

        If I would have said a week ago that four nuke plants were going to melt down at the same facility in the next week or so, I would have been called silly and unrealistic equally. What you see as unrealistic, I see as a big part of the problem.

        • Come on, Gman, you know I’m not arguing about the placement of nuclear plants … be honest here. I was alluding to your never-ending blaming of the progressive left for all the ills of the world (flood zones where some of the poor have to resdie becuase they can’t afford to move elsewhere (or worse, are born into such situations–imagine the nerve of being born poor?). Your article ranted against the left as usual … somehow it is progressive policy that forced people without money to reside in poor flood-potential zones. As for the rich mansions on stilts you mentioned along the coast, you shouldn’t sweat those people out. IF they can afford to build there, they probably can afford the insurance and/or to rebuild the next day.

          • gmanfortruth says:

            Charlie, A vast majority of our poorest communities have been under Democrat control for decades, don’t you find something wrong with that? Facts are facts my friend, take off your Communist glasses and see more freely. You’d be amazed what you can see with an open mind. 🙂

            • Oy vey … like the Democrats aren’t republicans. Sometimes you kill me, Gman. Which am I, democrat or communist? Oh, right, they’re both the same. BF is right about one thing; the politics of it is damn silly and pretty pointless to argue.

  8. If Market Keeps Falling, Fed Will Keep Printing: ‘Dr. Doom’
    Published: Tuesday, 15 Mar 2011 | 8:15 AM ET
    Text Size
    By: Jeff Cox
    CNBC.com Staff Writer

    Falling stock prices will be met only with more money injections from the Federal Reserve, Marc Faber, the so-called “Dr. Doom,” told CNBC.

    Dr. Marc Faber
    Axel Griesch | ASFM | Getty Images
    Marc Faber
    Speaking as global markets fell violently lower in the wake of the Japan earthquake and fears of a nuclear meltdown, Faber said a stock correction actually is healthy in view of how far equities have come from the March 2009 lows.

    He also expects weakness to persist and the Standard & Poor’s 500 to drop as much as 15 percent. Further, Fed Chairman Ben Bernanke will likely give the green light to another round of Treasurys purchases, which have come to be known as quantitative easing, he said.

    “We may drop 10 to 15 percent. Then QE 2 will come, (then) QE 4, QE 5, QE 6, QE 7—whatever you want. The money printer will continue to print, that I’m sure,” said the author of the Gloom, Boom and Doom Report. Later in the interview, he added, “Actually I made a mistake. I meant to say QE 18.”

    As for the situation with Japan specifically, he said the end result of rebuilding after the quake would be inflation and a positive for stocks, while Japanese Government Bonds, or JGBs as they are often called, would suffer.

    “This huge selloff is an investment opportunity in Japanese equities, but if a meltdown occurs then all bets are off,” he said.

    The Nikkei Japanese stock market index has plunged more than 12 percent this week, its worst two-day drop in more than 20 years.

    US equities have shown far less reaction but were poised to drop more than 2 percent at the open Tuesday. Faber, though, said the central bank would spring into action should the selling get out of hand.

    “I think Mr. Bernanke doesn’t know much about the global economy but he probably watches the S&P every day,” he said.

    “Until very recently the Feds have had very few critiques, very few people criticized the Fed’s policies under Mr. Greenspan and Mr. Bernanke,” Faber added. “Over the last few months, a lot of critical comments have come up about the Fed and its money-printing habit. The S&P drops 20 percent (and) all the critics will be silent and they will all applaud new money-printing.”

    http://www.cnbc.com/id/42085935

  9. 8)

  10. As you say (whether Charlie agrees or not) it will happen (bankruptcy). I saw when it does, reorganize and do it right this time; redistribute from ground zero. Everybody starts at the same point; nobody has control over anything.

    or we can go it BF’s (and I assume your way), let those who have the gelt run things right back to where they are now.

    I see what we have now as the result of capitalism gone wild. You’ll argue and say this isn’t capitalism (a convenient argument I totally disagree with). Man cannot co-exist without government. As Bush said, “man and fish can go-exist) but not man and man, not without government.

    I may not be able to pop in and out today … but I can hear the keys tapping now …

    • Charlie,

      redistribute from ground zero. Everybody starts at the same point; nobody has control over anything.

      Just like Lenin did – followed by Stalin.

      30 million dead later….(whoops)….the Great Soviet experiment.

      or we can go it BF’s (and I assume your way), let those who have the gelt run things right back to where they are now.

      That has been the way it has happened in the past.

      The question: will there be better choices now?
      (See part #2)

      As Bush said, “man and fish can go-exist) but not man and man, not without government.

      Typical excuse of a man who wholly depends on government for his living is to proclaim we can’t do without him!

      • A couple of historical errors later, BF goes on (and on).

        Stalin redistributed hardly anything and was a dictator but forget that.

        If your paradigm is so wonderfully correct all the time … well, then what happened? Why are we in such a mess if capitalism and the free markets (in this great land of ours) were so wonderful?

        Right, the freeloaders got their way. How? If your system assumes man can get along with man in a free manner, what went wrong? Unless you’re going to say it’s not wrong? But then what are you complaining about (like I said, Obama is closer to you than me) ???

        And I do love unemployment, BF … greatest thing since toilet paper. Thanks for the charity, brother!

        • Charlie,

          Stalin redistributed hardly anything and was a dictator but forget that.

          Review your history.
          So to show a “grain” surplus, he took the crop from the Ukraine by force – leaving 30 million Ukrainians to die from starvation (including my great-grandparents and their extended families)

          If your paradigm is so wonderfully correct all the time … well, then what happened?
          Why are we in such a mess if capitalism and the free markets (in this great land of ours) were so wonderful?

          “Free” market requires the repudiation of violence. Government interferes with that immensely.

          Again, as I posted before, you hold the belief that “good” economic systems can only produce “good” things, and never bad things.

          But that is serious error of understanding.

          Economic systems offer understanding of cause/effect.

          It will tell you “if you do this thing, you will get this consequence”. It does not measure good/bad.

          If the consequence was what you want, you win.

          If it was not you lose. Your loss is not due to the economics – it is due to YOUR CHOICES.

          Socialist systems are immoral for their requirement is theft.

          The consequences of the choices of theft will have tendency to magnify “bad” things.

          The current economy embeds theft via government redistribution of wealth. The end of this game is ALWAYS disaster.

          …and you get what you worked for.

          Right, the freeloaders got their way. How?

          Because well intentioned, but economically ignorant souls like yourself believed lies that stealing money from here and giving it there will produce “good”.

          If your system assumes man can get along with man in a free manner, what went wrong?

          My system says this. But you error in believing this is “my system” in play.

          In fact, it is YOUR system in play – redistribution of wealth by violence.

          And I do love unemployment, BF … greatest thing since toilet paper. Thanks for the charity, brother!

          It is not charity if the money was stolen.

          • BF: So to show a “grain” surplus, he took the crop from the Ukraine by force –

            CS: Your words “he took” … not he redistributed. He never allowed the Ukranian people a voice in what was done to them (or pretty much anybody else he dealt with). Much like those here who took what wasn’t there’s (the land, for instance, from native Americans). Oooops.

            Again, as I posted before, you hold the belief that “good” economic systems can only produce “good” things, and never bad things.

            BF: Again, as I posted before, you hold the belief that “good” economic systems can only produce “good” things, and never bad things.

            CS: I assume nothing; you seem to assume everything. There are no proofs for assumptions and historical data leaves our some pretty important variables (i.e., revisionism of Marxism, for one thing. Stating that Stalin redistributed anything for another). But closer to home, your paradigm (as I understand it–no gov’t whatsoever) is an impossibility (especially at this point in history). I can almost agree with the principal; it is the assumptions you make that frighten me. I don’t see how it is possible to assume we backstep to total deregulation when as you yourself say, wealth can flee whenever it wants.

            In a prior post you mentioned how mercantilism is alive and well (something you’re against). You did not want to deal with motive. I suspect motive is what brought it about; capitalists going for the gold, so to speak). How does one put an end to that in a modern world? Why would anyone give up that kind of protection of their wealth?

            By the way, I worked 6 and 7 days a week and felt the same way I do today collecting my first unemployment check in my life (what I get for going legit, by the way) …:)

  11. BF- Not that I think there’s a snowballs chance in hell of it happening, but what would be the consequences of bankruptcy? Obviously, being a bigger budget/debt than your avg american, how long would it take to recover? Would it affect America’s ability to renew trading w/other countries? Would it have to be a reorganization of debts or a wipe them all out kind thing?

    • Matt,

      First, you have to understand what bankruptcy of government means.

      It is not the same as you going bankrupt. If you go bankrupt, they take your things. You and what army is going to take the US away from the government?

      Government bankruptcy is “no one sells to them anymore” – cash up front, no credit.

      Where can government get its money? Taxes.
      What can government buy with taxes? Not much more than defense and a few programs.

      So bankruptcy will manifest in the loss of most of the social and social engineering programs of the government.

      It would not take long before people started lending to the government again – there is no end to stupid people with lots of money. See Argentina: endlessly going bankrupt (reneging on debt) and the next day – new loans!

      It will be different with the US due to its global economic impact. There is a difference between you going bankrupt and Donald Trump going bankrupt.

      • Thanks! Unfortunately, how you described this, bankruptcy might not even work here! Once it happened, you would have all those people who the government supports now thru the various programs that would want”their” money or program restored. Since the majority of our politicians would fall into the stupid category, I’m sure they would rush right out and put us back in debt to make those people happy! Our politicians are the stupid people WITHOUT money, except what they take from us!

        • Matt,

          For your scenario, ask yourself “Where will this money come from?”

          Debt means using someone else’s money. Whose? Where? Under what terms?

          • BF- I realized after I posted, that it should have been more in a question form than statement. But, based on your earlier post about nations being stupid enough to lend again, I assumed that this is where our stupid politicians would run to- some country that has lent in the past and stupid enough to be talked back into it. Or has our government become the last nation willing to do that?

            • Matt,

              No, Mercantilism is alive and well and will continue to operate on a global basis.

              There will be lenders -eventually- so the question will be: what will happen until then? In there, there is a small window of opportunity.

  12. Sat and watched the National Debt Clock one day last week. For every ONE minute the debt went up $3 Million.

  13. Dread Pirate Mathius says:

    8)

  14. plainlyspoken says:

    Good article BF. Leaves someone like me who really struggles to understand the economy issues a lot to consider.

  15. Flagster,

    Great article! There are a few true reformers trying to get the sheeples attention. Ron (end the Fed) Paul, Rand Paul in the senate, and a few others. I think rand has called for cuts to everything, SS, Medicaid, defense, etc…

    • LOI,

      All the good intentions, but they cannot win.

      • When President Barack Obama opened the first meeting of his fiscal commission last April, he promised to be “standing with them” as they produced recommendations for curbing the nation’s escalating debt.

        Republicans and Democrats say they are still waiting.
        Continue Reading
        Text Size

        * –
        * +
        * reset

        Listen to this article. Powered by Odiogo.com Listen
        VIDEO: Obama on budget fight
        VIDEO: Durbin: GOP cuts too much
        Latest on POLITICO

        * Clinton visits ‘new Egypt’
        * Gore back at work on new book
        * Committee moves to defund NPR
        * Dems to vote for short-term budget
        * W.H. wants prison for web counterfeit
        * GOP rejects EPA’s climate finding

        POLITICO 44

        While Obama has said he’s committed to deficit reduction, he has also has made clear it is secondary, at least for now, to his “winning the future” agenda. And that reflects a strategy driven by what his senior aides believe voters care about most — jobs, not deficits.

        Obama’s reluctance to join the debate in a sustained way has provoked rising frustration among lawmakers from both parties, who are speaking more forcefully about what they view as his absenteeism on one of the most pressing issues before them.

        But until House Republicans join their Senate GOP counterparts in appearing open to raising revenues, the administration is reluctant to weigh in too heavily, believing that a grand bargain that would inflict bipartisan pain will be difficult to attain. So, Obama has kept at arm’s length a group of six Republican and Democratic senators working on a deficit-reduction framework, not yet convinced that their efforts will be the vehicle by which a deal is struck.

        “The president’s approach to the larger set of budget issues raised by his own fiscal commission is very, very cautious up to now,” said William Galston, a policy adviser to former President Bill Clinton and a senior fellow at Brookings. “He has not embraced it, not by a long shot. It is clear that whatever he wants to accomplish, he doesn’t want to accomplish it alone and he doesn’t want to step out first.”

        Obama’s light touch isn’t winning over the Hill.

        Senate Minority Leader Mitch McConnell (R-Ky.) made the latest attempt to draw Obama into the debate sooner than the president would like, threatening to withhold Republican votes on the administration’s request to raise the debt limit unless it is coupled with a “credible” effort to rein in Social Security, Medicare and Medicaid spending.

        McConnell’s move followed a nudge by Sen. Chuck Schumer (D-N.Y.) to broaden talks on the short-term budget to include entitlements and revenue increases,

        Read more: http://www.politico.com/news/stories/0311/51298.html#ixzz1GhNPXCi1

  16. What we really need to do is disarm the Amish!

    http://jg-tc.com/news/article_f3443bd0-4b93-11e0-9692-001cc4c002e0.html

    • By the way, I see an easy compromise.. does anyone else?

      • gmanfortruth says:

        Matt, if Illinios law infinges on the second amendment, it is inherantly unconstitutional.

        • Says you, but you’re not a Constitutional lawyer. Stare decisis clearly allows for limitations on who can and cannot own a gun. But that’s not really the issue here.

          The issue is that the state wants to require the Amish to have photographs on their licenses and the Amish have a religious restriction against photographs (apparently).

          Thus the easy solution is to allow them to use high quality, realistic artist drawing of their images for the licenses. Problem solved.

          ::takes a bow::

  17. Good article sir. The pain is coming, how much pain you will have to endure will be determined on how prepared you are. That being said being prepared might not be enough, but I like my odds better than the unprepared.

  18. Okayyyyyyyyy?!?

    So what else is new?

    You ain’t telling me nuttin’ I don’t already know . . . . . Yer just sayin’ it with a heckuva lot more words.

    Now, make yerself useful and tell us all what it is we can do about all this!

    Now before you go and get your dander all up in a ruffle, I ain’t making fun of your post, just trying to get you to smile a bit here. We all know what has been happening for the last century or so, so now we need to know what to do to correct this situation.

    FYI – Good article, BF. I liked it . . . (don’t pass out now)

  19. Charlie,

    Your words “he took” … not he redistributed.

    What do you think he did with it, put it under his bed?

    He distributed it to the Russians in the North
    http://www.loc.gov/exhibits/archives/ukra.html

    He never allowed the Ukranian people a voice in what was done to them (or pretty much anybody else he dealt with).

    They, in fact, had exactly the same voice as everyone in Russia.

    CS: I assume nothing; you seem to assume everything.

    I read what you write – it is not an assumption, but a fact of your own presentation.

    Stating that Stalin redistributed anything for another

    Charlie, because you refuse to acknowledge fact does not make it untrue.

    I don’t see how it is possible to assume we backstep to total deregulation when as you yourself say, wealth can flee whenever it wants.

    Because you paint everything with one color and one brush, you have limited ability to discern.

    Law (regulation) for the prevention, mitigation and repair of VIOLENCE is true law. No one, including anarchists, every dispute this.

    Law (regulation) that imposes violence on the non-violent for another person’s unearned gain is false law. This, you advocate for in your redistribution philosophy. This always leads to tyranny.

    “Deregulation” – that is eliminating “false” law – is a good thing. No one says eliminating “true” law is a good thing.

    In a prior post you mentioned how mercantilism is alive and well (something you’re against). You did not want to deal with motive.

    Motive is subjective – some want money, others women, others power, others all of the above in an assortment. (shrug).

    There is nothing wrong with wanting money
    There is nothing wrong with wanting women
    There is nothing wrong with wanting Power (influence).

    There is a lot wrong in using violence to get it.

    Mercantilism is all about the means – the use of violence – to obtain capital and expend capital.

    Why would anyone give up that kind of protection of their wealth?

    They would not do so willingly. However, there own means (violence) always creates powerful consequences beyond their control and the consequences tend to overwhelm whatever ill-gotten gains they have achieved. It takes time, though.

    • BF: What do you think he did with it, put it under his bed?

      There was nothing democratic about what Stalin did. He turned Marxism on its head (revisionism). He never allowed the Ukranian people a voice in what was done to them (or pretty much anybody else he dealt with). If you mean they had a voice in the sense they could’ve spoken up, that can be equated to the voice those born into abject poverty have in Democratic America (or worse, the voice native Americans had in their being raped of their land) … and that is just ignoring how one accumulates wealth, it seems to me, in a very dishonest way.

      BF: Charlie, because you refuse to acknowledge fact does not make it untrue.

      CS: See above; the problem with assumptions is like pretty much everything else, they can be viewed from two polar perspectives. You refuse to acknowledge them (facts) equally (revisionism).

      BF: Law (regulation) for the prevention, mitigation and repair of VIOLENCE is true law. No one, including anarchists, every dispute this.

      Law (regulation) that imposes violence on the non-violent for another person’s unearned gain is false law. This, you advocate for in your redistribution philosophy. This always leads to tyranny.

      “Deregulation” – that is eliminating “false” law – is a good thing. No one says eliminating “true” law is a good thing.

      CS: That’s a pretty convenient summarization of what works for your paradigm. You get to determine what is “false law” … it permits the kings to remain kings (and god forbid anyone overthrow them).

      BF: Motive is subjective – some want money, others women, others power, others all of the above in an assortment. (shrug).

      There is nothing wrong with wanting money
      There is nothing wrong with wanting women
      There is nothing wrong with wanting Power (influence).

      There is a lot wrong in using violence to get it.

      CS: But nothing wrong with having all three above if you’ve obtained it immorally and/or illegally? And if that was the case (immoral/illegal obtaining of wealth), it will somehow right itself over time (what I think you’re pointing at below).

      BF: Mercantilism is all about the means – the use of violence – to obtain capital and expend capital.

      They would not do so willingly. However, there own means (violence) always creates powerful consequences beyond their control and the consequences tend to overwhelm whatever ill-gotten gains they have achieved. It takes time, though.

      CS: And in the meantime, during several generations of poverty, etc., what, tough noogies?

      I’m assuming you’re going to answer that in the next post (part ii)? I look forward to reading it.

      • Charlie,

        I have a honest question. many times you’ve stated that in your ideal system people would have a say in what happens – something I agree Stalin never offered.

        So I ask, in your system how many have to agree to make it happen?

      • Charlie,

        There was nothing democratic about what Stalin did.

        Oh? Really?

        Here is the Constitution, chaired by the Man himself in 1936.

        The constitution repealed restrictions on voting and added universal direct suffrage and the right to work to rights guaranteed by the previous constitution. In addition, the Constitution recognized collective social and economic rights including the rights to work, rest and leisure, health protection, care in old age and sickness, housing, education, and cultural benefits. The constitution also provided for the direct election of all government bodies and their reorganization into a single, uniform system. It was written by a special commission of 31 members of which Joseph Stalin chaired

        He turned Marxism on its head (revisionism).

        He embodied the heart and soul of Marxist philosophy.

        He never allowed the Ukranian people a voice in what was done to them (or pretty much anybody else he dealt with).

        Here sure did! They got to vote and everything like all the other Soviets!

        CS: That’s a pretty convenient summarization of what works for your paradigm. You get to determine what is “false law” … it permits the kings to remain kings (and god forbid anyone overthrow them).

        I defined “false” law specifically. If you do not like, define law in your own words, and see if it holds consistently.

        I asked a few posts back three non-rhetorical questions that you have yet to answer.

        CS: But nothing wrong with having all three above if you’ve obtained it immorally and/or illegally?

        Morals are subjective – what you think is moral is likely not, and equally what you think is immoral is likely not. But morals for Charlie are defined by Charlie, and have no weight on anyone else.

        Illegal? Just because the law says yea or nay matters not one wit whether it is Right or Wrong.

        If the means uses violence to obtain the goods, then that is evil. Other than that, who cares?

        • BF: Here is the Constitution, chaired by the Man himself in 1936.

          CS: Please, BF, stop the nonsense. The U.S. Constitution claims all men are created equal.

          Oh, really? Even when it was penned there was slavery … for another nearly 200 years slavery existed …

          I’m not going to argue Stalin/Marxism when you toss out revisionist nonsense (remember, I’m red through and through).

          BF: I defined “false” law specifically. If you do not like, define law in your own words, and see if it holds consistently.

          CS: Law is as subjective as is morality or anything else; it is interpreted and reinterpreted over and over.

          BF: Morals are subjective – what you think is moral is likely not, and equally what you think is immoral is likely not. But morals for Charlie are defined by Charlie, and have no weight on anyone else.

          Illegal? Just because the law says yea or nay matters not one wit whether it is Right or Wrong.

          CS: Defining ANYTHING is subjective (ask Clinton). The fact we both disagree as to what is moral vs. immoral should be enough to prove your definitions equally subjective (and wrong to those who disagree).

          BF: If the means uses violence to obtain the goods, then that is evil. Other than that, who cares?

          CS: So, if America was appropriated illegally (violence against native American Indian), we give it back or what?

          • Charlie,

            CS: Please, BF, stop the nonsense. The U.S. Constitution claims all men are created equal.

            Ah, Charlie, no it does not.

            That is the “Declaration of Independence” that says that.

            Oh, really? Even when it was penned there was slavery … for another nearly 200 years slavery existed …

            Wrong document, so your complaint is irrelevant.

            I’m not going to argue Stalin/Marxism when you toss out revisionist nonsense (remember, I’m red through and through).

            Revisionist? You mean the Soviet constitution didn’t say what I posted?

            You mean Stalin didn’t kill millions enforcing his worker’s paradise?

            CS: Law is as subjective as is morality or anything else; it is interpreted and reinterpreted over and over.

            Law is not usually subjective. Gravity kinda works all the time as per the “law”

            Law is not subjective – unless of course, the Marxists gang gets a hold of it.

            CS: Defining ANYTHING is subjective (ask Clinton).

            Ah, your nihlist core comes through.

            Definitions are NOT subjective, by definition.

            The fact we both disagree as to what is moral vs. immoral should be enough to prove your definitions equally subjective (and wrong to those who disagree).

            Whew! You are a piece of work.

            No, morals -themselves- are subjective, the definition of morals is not subjective. It is defined.

            CS: So, if America was appropriated illegally (violence against native American Indian),

            Again you err.

            Illegal does not equal violence – jaywalking is illegal but non-violent.

            Legal does not equal right – as your example demonstrates.

            America was appropriated legally but unjustly.

            we give it back or what?

            Maybe, … maybe not…

  20. Blacks and Republicans
    By Thomas Sowell

    San Francisco’s irrepressible former mayor, Willie Brown, was walking along one of the city’s streets when he happened to run into another former city official that he knew, James McCray.

    McCray’s greeting to him was “You’re 10.”

    Receive news alerts
    Sign Up
    Thomas Sowell RealClearPolitics
    San Francisco James McCray
    Willie Brown San Francisco peninsula
    official Mayor
    [+] More

    “What are you talking about?” Willie Brown asked.

    McCray replied: “I just walked from Civic Center to Third Street and you’re only the 10th black person I’ve seen.”

    That is hardly surprising. The black population of San Francisco is less than half of what it was in 1970, and it fell another 19 percent in the past decade.

    A few years ago, I had a similar experience in one of the other communities further down the San Francisco peninsula. As I was bicycling down the street, I saw a black man waiting at a bus stop. As I approached him, he said, “You’re the first black man I have seen around here in months!”

    “It will be months more before you see another one,” I replied, and we both laughed.

    Actually, it was no laughing matter. Blacks are being forced out of San Francisco, and out of other communities on the San Francisco peninsula, by high housing prices.

    At one time, housing prices in San Francisco were much like housing prices elsewhere in the country. But the building restrictions– and outright bans– resulting from the political crusades of environmentalist zealots sent housing prices skyrocketing in San Francisco, San Jose and most of the communities in between. Housing prices in these communities soared to about three times the national average.

    The black population in three adjacent counties on the San Francisco peninsula is just under 3 percent of the total population in the 39 communities in those counties.

    It so happens that these are counties where the voters and the officials they elect are virtually all liberal Democrats. You might be hard pressed to find similarly one-sided conservative Republican communities where blacks are such small percentages of the population.

    Certainly that would be hard to find in states with a substantial total population of blacks. In California, a substantial black population has simply been forced by economics to vacate many communities near the coast and move farther inland, where the environmental zealots are not yet as strong politically, and where housing prices are therefore not yet as unaffordable.

    With all the Republican politicians’ laments about how overwhelmingly blacks vote for Democrats, I have yet to hear a Republican politician publicly point out the harm to blacks from such policies of the Democrats as severe housing restrictions, resulting from catering to environmental extremists.

    If the Republicans did point out such things as building restrictions that make it hard for most blacks to afford housing, even in places where they once lived, they would have the Democrats at a complete disadvantage.

    It would be impossible for the Democrats to deny the facts, not only in coastal California but in similar affluent strongholds of liberal Democrats around the country. Moreover, environmental zealots are such an important part of the Democrats’ constituencies that Democratic politicians could not change their policies.

    Although Republicans would have a strong case, none of that matters when they don’t make the case in the first place. The same is true of the effects of minimum wage laws on the high rate of unemployment among black youths. Again, the facts are undeniable, and the Democrats cannot change their policy, because they are beholden to labor unions that advocate higher minimum wages.

    Yet another area in which Democrats are boxed in politically is their making job protection for members of teachers’ unions more important than improving education for students in the public schools. No one loses more from this policy than blacks, for many of whom education is their only chance for economic advancement.

    But none of this matters so long as Republicans who want the black vote think they have to devise earmarked benefits for blacks, instead of explaining how Republicans’ general principles, applied to all Americans, can do more for blacks than the Democrats’ welfare state approach.

  21. Back during my silly presidential campaign, I actually said those painful things no one wanted to hear. Most of them can still be seen over at my blog in some form, although a lot of it was said on other sites and interviews spread across the internet.

    I have actually not stopped warning people. I don’t want to see anyone hurt or caught by surprise when the piper gets paid. Many people get very angry when warned. That’s their choice. I can’t force anyone to listen, to believe me, or to make any changes. I feel bad that they will one day remember the warnings and regret ignoring them. It has already happened with some things I warned people close to me about, things they already regret ignoring or thinking they would wait just a little longer.

    But, now, I will do my best to prepare my family. Prepare for the worst and hope for the best, and never stop trying to make things better.

    I was contacted a week or so ago by someone asking if I planned on running for president again, and offering campaign help if I did. I said I had no such plans. The game is rigged. Yet, just for a moment, the idea stuck in my head.

    Yes, it is strange for an anarchist to even contemplate such a thing. I feel that even if voting is a worse than futile action, getting people to run for office with the admitted goal of dismantling every bit of The State they can is still a good way to get the message out. And, just maybe they can siphon some votes away from the bad guys on “the right” and “the left”.

    • Then how about a Kent/BF nationwide lecture tour.

      If you give BF top billing he’d be willing to foot the bill! I’d pay to see that!

      🙂

      • He could have top billing. I’d even leave my name off completely without much persuasion. 😉 And he’d have to foot any bill. Money is one thing I have almost none of. Certainly none for travel. I refuse to fly until the security theater at America airports is put to an end, though, no matter who’s paying.

        The only pic I’ve seen of BF is the one of him in his black hat. I’d wear my black hat too and we could call it “The Black Hats and Black Flag Tour”. Catchy, ain’t it.

        However, I’m not a lecturer. I gladly talk one-on-one or to a small group of friends. For hours, if given the chance! LOL! I prefer the back and forth. If someone asks a question, I’ll answer it if I can. If I can’t you can bet I’ll obsess over finding an answer (even if only for myself).

  22. BF: That is the “Declaration of Independence” that says that.

    Thanks for the correction. My bad. Now answer the question. By the way, you won’t find the word capitalism in either document … but an awful lot of reference to the common good, welfare, etc.

    BF: Revisionist? You mean the Soviet constitution didn’t say what I posted? You mean Stalin didn’t kill millions enforcing his worker’s paradise?

    CS: Revision: The term is most often used by those Marxists who believe that such revisions are unwarranted and represent a “watering down” or abandonment of Marxism. The communist party preaches non-violence … much like you (unless you’re protecting what you’ve appropriated immorally–then it’s fine, I guess).

    BF: Law is not usually subjective. Gravity kinda works all the time as per the “law”

    CS: Laws are interpreted and reinterpreted over and over; see U.S. Supreme Court.

    BF: Law is not subjective – unless of course, the Marxists gang gets a hold of it.

    CS: Now that’s funny. The corporations you rail against were born of man made law. Capitalist man made law.

    BF: Whew! You are a piece of work.

    No, morals -themselves- are subjective, the definition of morals is not subjective. It is defined.

    CS: the word morality is defined; individuals determine for themselves what is moral.

    BF: Illegal does not equal violence – jaywalking is illegal but non-violent.
    CS: Interesting, American Indians killed off by the score you find analogous to jaywalking. While you’re at it, check out Ward Churchill’s stance on the American Indian and how they were killed off after an original $24 “Lease” for Manhattan (Manhattan, not the entire country).

    BF: America was appropriated legally but unjustly.

    CS: And that’s why your entire vision is immoral; you justify anything and everything (including violence) so long as rests on the side of accumulation.

    • A Puritan Descendant says:

      “By the way, you won’t find the word capitalism in either document … but an awful lot of reference to the common good, welfare, etc.”

      GM Charlie, Individual freedom fits with capitalism in capitalism’s simplest terms. “Plant a seed, harvest a crop, plant even more seed, on and on.” It is only when we corrupt capitalism, such as health insurance mandates which violates individual freedoms, that capitalism begins to take on an evil aura.

      Communism fits in no way what so ever with individual freedom.

  23. Black Flag Says:
    March 15, 2011 at 10:05 am

    Puritan:

    Absolutely correct.

    The end of credit to government would create a massive recession and a Great Depression.

    All prices, led by commodities, would fall even faster than in 2008/2009. Gold would fall back to sub-$1000 – maybe even as low as a few hundred an oz.

    Cash would be super-king.

    Therefore, well before the trigger is pulled you must be out of gold, land, etc. and into cash. After the trigger is pulled, you may have lots of assets, but no one will buy them.
    Reply

    *
    A Puritan Descendant Says:
    March 15, 2011 at 10:08 am

    Thanks, i will start stuffing my mattress!
    Reply
    *
    Dee Says:
    March 16, 2011 at 12:08 am

    Hi BF,

    Been a long time. You probably don’t remember me, but I was around here a lot 2-3 years back.

    Back then, you said gold would likely hit $5000 per oz. in response to inflation, hyperinflation. You advised having at least enough on hand at $5000 per oz. to pay off your mortgage, if any.

    Now you are saying get out of gold and into cash….yikes! What to do, what to do? Damn it anyway.

    When you say cash…do you mean in the bank, or under the mattress?

    Flagster,

    Kinda wondering about this myself. I have been worried about having too much in cash, that if it devalues, I would take a big hit. Trying to maintain a balance, cash, gold, stocks, and have been looking for the right property, hunting/farm….

    • A Puritan Descendant says:

      Don’t forget the safest bet of all, ‘Food’. Might not be to convenient to have around, but even a city dweller can stock their closets and under there beds. Rotate for freshness over time.

    • Dee, LOI, Puritan:

      WHOA! Hold that wagon up!

      I did not say to sell your gold! We are NOT in a depression, nor are we approaching it.

      We are approaching INFLATION, and you need to hold your gold.

      I was explaining that you should not marry your gold! – that there will come a time that you must sell it to achieve your advantage.

      But now is not the time!
      I will tell when that time comes~!

%d bloggers like this: