Monday, February 27, 2012

War is the Opposite of Peace and Growth

Thomas J. DiLorenzo over at The Ludwig von Mises Institute shows how war is antithetical to progress and wealth.  A warring nation DOES NOT grow!  Ron Paul has also been speaking for over 20 years about war and the terrible consequences of war on the economic life of a nation.  War brings inflation, stagnation, and poverty for all but mostly for the middle class.  It's time to follow a policy of friendship and commerce with all and NO entanglements.  Read DiLorenzo's essay below.

What You're Not Supposed to Know about War

Mises Daily: Friday, February 24, 2012 by o
It is a testament to the power of government propaganda that several generations of self-described conservatives have held as their core belief that war and militarism are consistent with limited, constitutional government. These conservatives think they are "defending freedom" by supporting every military adventure that the state concocts. They are not.
Even just, defensive wars inevitably empower the state far beyond anything any strict constructionist would approve of. Prowar conservatives, in other words, are walking contradictions. They may pay lip service to limited constitutional government, but their prowar positions belie their rhetoric.
"War is the health of the state," as Randolph Bourne said in his famous essay of that title. Statism, moreover, means central planning, heavy taxation, fascist or socialist economics, attacks on free speech and other civil liberties, and the suffocation and destruction of private enterprise. Classical liberals have always understood this, but conservatives never have. (Neoconservatives either don't understand it or don't care.)  READ HERE

Friday, February 24, 2012


Bob Wallace over at the blog Carpe Libertatem writes about how prices have drastically risen over his short lifespan.  It is truly distressing - and rage must be directed at both our under educated politicians and the head of the Federal Reserve.  These people work in government to enrich themselves and their cronies.  Let's get rid of them and put in honest people who will not be corrupted by the system.  Question is how do we do this?  Read below Bob's column.

I blame this almost exclusively on the Federal Reserve Bank, which is not federal, has no reserves, and is not a bank. It is in fact a legal counterfeiter which has 100% control over our money supply.
Of course, the Fed is thoroughly unconstitutional. The Constitution forbids anything but gold or silver being money. On top of that, it also forbids Bills of Credit, i.e., paper money.
Central banks were tried in the U.S. in the past. Andrew Jackson, for one, swore eternal enmity against them.
"The bold effort the present (central) bank had made to control the government ... are but premonitions of the fate that await the American people should they be deluded into a perpetuation of this institution or the establishment of another like it," he once said. "You are a den of vipers and thieves. I intend to rout you out, and by the grace of the Eternal God, will rout you out."
Jackson engaged in a lot of duels. Perhaps we need dueling to be legal today.
Since the creation of the Fed in 1917, the dollar has lost 99% of its value. This acceleration of this loss of value really took off in 1973, two years after Richard Nixon went completely off the gold standard in 1971. 

Not surprisingly, wages stopped going up in 1973, and have been flat or declining ever since. Except, of course, for the one percent whose income has been skyrocketing -- and they accomplished this by using the State to enrich themselves at everyone else's expense.   

Thursday, February 23, 2012

Waste Deep in the Big Muddy
 Peter Schiff
Friday, January 27, 2012
With its announcement this week that it will keep interest rates near zero until at least late 2014, the Federal Reserve has put another large crack into the foundations underlying the US dollar. In a misguided attempt to provide clarity and transparency, Ben Bernanke has instead laid out a simple road map for economists and investors to follow. The signposts are easily understood: the Fed will stop at nothing in pursuing its goals of creating phantom GDP growth, holding down unemployment, propping up stock and housing prices, and monetizing government debt. To do so, it will continue to pursue a policy of negative interest rates, while ignoring the collateral damage of unsustainable debt, virulent inflation, misallocated resources and credit, suffering yield-dependent retirees, and a devalued U.S. currency.  
Not surprisingly, precious metals and foreign currencies rallied strongly on the news - with gold up more than 4.3% and the Dollar Index down nearly 1.6% in the days following the announcement. The Dollar Index is now down more than 3.5% from its highs in mid-January.
In coming to the momentous decision to extend the Fed's prior low-rate promises by another 18 months, Bernanke and his cohorts relied on a somber view of the economy that is at odds with the sunnier view presented the night before by President Obama in his State of the Union address. To justify holding rates so low for so long, the Fed is choosing to ignore the fact that CPI inflation is currently running north of 3%. Instead, it has conveniently chosen to look at a hand-picked alternative measure, the chain-weighted core PCE, which comes in just a shade below the Fed's arbitrary 2% target. How convenient.
After some changes in key membership at the Federal Reserve's policy-setting Open Markets Committee, in which a few long-time hawks were put out to pasture, the Fed has now established itself at the extreme dovish end of the policy spectrum. Among other central banks around the world, it may now be outflanked only by some very profligate ones in South America and sub-Saharan Africa. Unfortunately, the FOMC has its hands on the wheel of the world's reserve currency, and therefore its decisions may lead the planet into financial chaos as long as other nations are content to follow the Fed farther and farther into a swamp of liquidity. To paraphrase Pete Seeger's protest of the escalation of the war in Vietnam, "we are waist deep in the Big Muddy and the damn fool yells 'press on.'"
The only bright side of the announcement is that it provides precious-metal and foreign-equity investors a fairly good sense that they are on the right side of history. In order to keep rates low, especially at the long end of the yield curve where it matters most, the Fed must continually print money to buy U.S. Treasuries. This will likely push more investors into gold and away from dollar-denominated assets.
As a testament to their own faith in themselves to forecast economic conditions, 6 of the 17 voting FOMC members indicated that they would have preferred to keep rates close to zero at least through 2015. Some even had the audacity to prefer no change until 2016! This comes from the body that couldn't predict the 2008 financial crisis, even while it stared at them from point-blank range. To look into a completely uncertain future and determine that negative interest rates can persist for another four years without igniting inflation is to me the height of economic insanity. Sadly, the inmates have the keys to the institution.
The lunacy persists in the rest of the government as well, with Congress and the White House still failing to address our nation's long-term debt issues. The Fed's commitment gives these politicians a "Get Out of Jail Free" card to continue avoiding responsibility. The deficits will be monetized, so no real efforts need be made to cut spending or raise taxes on middle-class Americans. Central to these plans is the assumption that the rest of the world will happily park their savings in U.S. dollars forever. If the latest announcement does not disabuse the world of this notion, I don't know what will.
As long as interest rates remain far below the rate of inflation, the U.S. economy will fail to equitably restructure itself for a lasting recovery. As a secondary effect, U.S. savers will likely continue to suffer from a lack of yield and a weakening currency. In the end, the collapse of the U.S. economy will be that much more spectacular due to the great lengths we have gone to postpone it.

Sunday, February 19, 2012

FED Plays PR Games

 John Browne
Friday, January 13, 2012
The world was taken by surprise recently by the Federal Reserve Board’s announcement that it would publish some of its economic forecasting that forms the basis for its short-term interest rate strategy. The Fed claims that the move will vastly increase so-called transparency, which has become a buzz word for honesty and virtue. However, the new policies do nothing to remove the cloak of secrecy that conceals still many of its most significant activities. This myth of new transparency will do little to lure investors back into the markets but as an unintended consequence will reveal just how profoundly the markets are currently guided from the top.
The Fed plays the markets like a football game, and Ben Bernanke is currently calling all the plays. Although investors are mere lineman in this struggle, there are things we can do to stay in the game. When tackling a ball carrier in football (or in the rugby played in my home country) it is best to ignore the movement’s of your opponent’s eyes or hands which can be used to obscure his true intentions. Instead, good coaches tell us to fixate on the runner’s feet as the best indicator of his actual path down the field. Likewise, when looking at any political body, like the Fed, it is best to look at their actions and ignore their words.
Bernanke offers endless words about the Fed’s willingness to keep the economy on track. In reality it appears as if he only wants to do one thing: keep asset bubbles from collapsing by continually debasing the currency and looting the savings of thrifty Americans.  Any other policy intentions should be considered misdirection.
The Fed was the enabler of the most massive asset and debt boom in history. Now, the unraveling of this profligacy threatens abject poverty for billions of people. Therefore, it is little wonder the Fed is unpopular and is seeking to retrieve its image. What is the reality of offering public access to Fed forecasts? Is it genuine transparency or is it done to add further weight to negative interest rates as a means of forcing consumers to spend rather than save?
In the past, the Fed has proved far from accurate in its economic forecasting. Indeed, former Fed Chairman Greenspan utterly failed to see the collapse of housing, banking and stock markets, all of which had been accurately forecasted by many others. Prudent investors are wary of Fed economic forecasts and give them guarded weight.
Furthermore, there is a distinct danger that investors may fail to appreciate the political forces which drive the Fed sometimes to act contrary to its economic forecasts. For example, while acknowledging privately that the economy can not be jump started, the Fed nevertheless presses Americans to spend when they should be saving and to hold depreciating paper dollars when they should be storing their wealth in precious metals.
It is widely known that the Fed uses its policy tools and public proclamations in order to influence the U.S. Treasury market. It is far less understood how its moves are equally directed at the stock market. From my perspective, it appears that the Fed have unstated policy directives to keep the Dow Jones index above 10,000. At the same time it seems it has striven mightily to keep the price of gold from rising too fast. The markets are not free, but the Fed talks as if they were...Read the rest here:

Wednesday, February 08, 2012

Our Constitution Rejected by Australia?

What is happening to the world? Australia rejects our Constitution? Are entering a dark ages? Without the American Constitution to guide the darker nature in man what else if left? Read this article by Ben Shapiro at Townhall...

According to The New York Times, the American Constitution is losing popularity with people around the world. "The Constitution," writes Adam Liptak, "has seen better days ... its influence is waning." Liptak points out that in 1987, over 160 of the 170 countries on Earth had cribbed from the Constitution -- but today, few countries do. Why? Liptak suggests, quoting Professor David Law of Washington University in St. Louis, that our Constitution is "Windows 3.1." It's difficult to amend, and it doesn't guarantee so-called "positive rights," such as healthcare, housing and education. Justice Michael Kirby of the High Court of Australia said that he relies more on the legal framework of India, South Africa and New Zealand than on that of the United States.

Intuitively, this sounds wrong. Why would you rely on the legal frameworks of nations that still allow disparate treatment of "untouchables" or countries that until 20 years ago still had different legal standards for blacks and whites? Why not rely on the legal framework that provided for equal rights as early as 1868 and that guaranteed freedom from government overreach almost a century earlier than that?...Read the rest here.