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Archive for April, 2013

More stupid conduct by politicians, police, and the politically correct half-wits that populate Boston. All there actions did nothing to catch the perps. But it did condition the American people to further get accustomed to tyranny and police occupation.

Flyover-Press.com

by William L. Anderson via LewRockwell.com

What our enemy the State learned was that Americans will meekly do whatever the “authorities” tell them to do. I’ve been watching that same phenomenon amongst my “cold dead fingers” friends for several years now. I even witnessed a little short, fat dude in a stripped (referee) shirt evacuate an entire gymnasium full of basket ball fans. Just because they go rowdy when they disagreed with his call, did not mean he could not make them bow to his will due to his position of “authority.”  — jtl, 419

As an ambulance took the seriously wounded Dzhokar Tsarnaev to a hospital, people in Watertown, Massachusetts, realized that the police hunt was over and they cheered. And cheered. Some in the crowd began to chant, “USA! USA! USA!” as though an American team had won an Olympic competition.

To the relieved residents who finally could…

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HuntleyBrinkley

Part 1: Inflation

When I was growing up it was common to be taught to respect certain classes of people and certain professions.  Those whom one was taught to respect and trust were your elders, policemen, judges, statesmen, doctors, generals, teachers, news anchors like Walter Cronkite or Chet Huntley and David Brinkley and, of course, scientists.  These people belonged to a class of people we often generically called “experts”.

Back then, the reports of police abuse were rare.  Malpractice law suits against doctors were far less common.  Science was believed to be the keepers of the key to opening a  Utopian future.  Newspapers and reporters were thought to be impartial and committed to the truth.  Generals still became presidents.  And justice, not tolerance, was considered America’s chief virtue by Americans.

Even today, my parent’s generation still believes one should trust the experts, because they allegedly know what they are doing.  After all, they have PhD’s attached to their names.  If you are of that generation, you followed your doctor’s advice to the letter, you still believe policemen protect and serve, that the government didn’t lie (at least not on the scale it does today), that when they led the country into war it was with good reason or that we were making the world safe for democracy.

Things have changed a great deal since that time.  Yet, in many ways they have not changed nearly enough and often changed in the wrong direction.  Most people still remain clueless about what is happening in the real economy and they increasingly look to government, the source of most of the problems, as its solution.  They cannot distinguish, or perhaps more correctly, do not want to distinguish between the illusions painted by the government and its media allies and the hard truth about our economic reality and the immutability of the sanctions of violated economic law.   They are economically clueless and drink up lies like a drug addict looking for their next fix.  They will not trouble themselves with the details of the matter for they believe one should trust the experts.  So we find ourselves living out an observation…

All the perplexities, confusion and distress in America arise, not from defects in their Constitution or Confederation, not from want of honor or virtue, so much as from the downright ignorance of the nature of coin, credit and circulation.  John Adams

Yawn, boring alert, danger Will Robinson, must – use – brain.  Thinking is hard work.  Much easier to watch American Idol and read about some celebrity’s baby bump in people magazine.   Most people tend to trust the experts because it is easier to let them do the heavy lifting. People just don’t have the time or they would rather indulge in more personal interests and amusements. All this is based on a tenuous believe that the “experts” are impartial, honest, and will do adequate research to “deliver the goods” and to “keep the ship of state afloat”.  After all, that is why they make the big bucks, right?  So what are the “experts” saying?

Inflation

Inflation is not prices going up.  That is misinformation.  Price increases are one of the eventual effects of inflation.  Inflation is an increase in the money supply.

Inflation is also called a hidden tax.  That is the chief reason governments love inflation, at least, initially.  It allows them to transfer wealth from you to them without actually taxing you directly.  Like coin clipping in the old Roman Empire or adding base metal to silver as in ancient Israel, and result allows the government to accumulate more for themselves and spend it before the effects of price increases become reality.

Today, since silver and gold coins are not used as money, as we are supposed to according to the constitution, it is much easier to inflate.  All that needs to be done is print more paper money.  Paper money (currency) in and of itself has no value.  It comes into existence because someone takes out a loan or borrows something.  Paper “money” is printed (or created electronically) to cover the loan by the banks out of thin air directly (as in the case of Central Banks) or indirectly (as in fractional reserves and checkbook money).  All of it is based on someone going into debt, not on producing surplus to meet consumer demand.  That is why banks and governments love paper money.  They can spend more than they have and leave you holding the bag.

Our government says that inflation is between 1 and 2%.  Very very low.  So low, in fact, that there is really nothing to worry about, so just continue watching American Idol and mind your own business.

But this is simply a lie.  Even if true, how does one save when inflation exceeds the interest rate on savings?  Saving is the basis of capital creation (as in Capitalism) and capital is the essential ingredient to the production of goods and the expansion of business, and hence the economy.  Without capital, production and manufacturing contract.  However, financial services and government bureaucracy grow as they suck up wealth via inflation.

My reading of history convinces me that most bad government results from too much government.  Thomas Jefferson

Savings, not spending, is the basis of a sound economy.  Debt and credit expansion is the basis of malinvestment, intervention and bubbles created by government and the big banks.  So let’s use an over simplified example to see how savings are destroyed.

If you are getting 1.5% on $10,000 dollars, you earn $150 in one year.  If inflation is 2% your $10,000 becomes $9,800 for a net loss of $50 ($200 loss – $150 gain).  My parent’s generation were big savers, at least as compared to today.  They frequently hinted at the miracle of compound interest (as Einstein is purported to have done) saving for a rainy day or retirement.  But when the interest rate falls below the inflation rate, the monetary policy of our central bank and treasury is destroying (or transferring) wealth.  Today, people get poorer by saving, not richer.

Adjusting the numbers to deceive “We the People”

If we can but prevent the government from wasting the labours of the people, under the pretence of taking care of them, they must become happy.  Thomas Jefferson

Our government has been constantly adjusting the “inflation” rate for a very long time, and always in their favor (shocker).  They have dropped out food and energy from the core inflation measurements because of “volatility”.  Never mind that everybody needs food and energy to live except in the US Treasury, the White House and Planet FED.  This is where people feel it first and impacts them the hardest.  Never do the main stream media say a word about this or any other “hedonic” adjustment to the inflation numbers by the Bureau of Labor/Lying Statistics (BLS).

Real Inflation

Inflation1

If the government calculated inflation as it did in 1980, it would be over 9%.  So that $10,000 really becomes $9,100 instead of $9,800.  Thus in our simplified example, the net loss is not $50, but $750.  There is a reason people are no longer saving.  The WW2 generation and early baby boomers need to understand that the old save your money for a raining day paradigm just doesn’t work anymore.  The government you trust is destroying your wealth as you keep it in the banking system.  Then they parade out the “experts” using government adjusted numbers to tell you all is well.

Power always thinks it has a great soul and vast views beyond the comprehension of the weak.  John Adams

Now 9% for one year is a lot.  What are the accumulative effects?  How about since 2008, just 5 years ago.  Using the annual true (1980) rate of inflation we see this…

Inflation2

My father is a “well-off” individual.  He is very prudent and full of good advice.  I wish I had taken much of it when I was younger and it applied.  Unfortunately, it no longer does.  I trust he has his wealth in something other than “paper”, i.e., US Treasuries and US Dollars as these instruments are destroying wealth, not preserving it.

It is not a mystery why people are turning away from savings to speculation of all kinds.  I have overheard a person refer to buying a lottery ticket as his retirement.  Actually he is better off doing so.  At least that gives him a 1 in 200 million chance and faint hope rather than a 100% chance of becoming poorer and without hope if he keeps his money in the banking system.

“Inflation is itself an immoral act on the part of government. When modern governments inflate by increasing the paper-money supply, directly or indirectly, they do in principle what kings once did when they clipped the coins. Diluting the money supply with paper is the moral equivalent of diluting the milk supply with water.”  Henry Hazlitt

Well, what about the Stock Market?  It is reaching new highs.  But those highs are on almost no volume, therefore, investors are not pouring into it, there is no large flow of money.  They are merely the effects of inflation and government intervention into the market.  Adjusted for real inflation it has lost nearly ½ its value since the lows of 2007.

DJIA

You see, something is wrong with the money because it is no longer real money. It is now a debt instrument by design.  It is fiat paper that is used to destroy/transfer the wealth of “We the People”.  It is making the government and those closest to the federal tit wealthy by the theft of your wealth via inflation.  It is a criminal act because it is an unconstitutional one.

RealMoney

We are now beginning to see its effects with a 40% loss of middle class net worth in 3 years according to the FED and CNN (largely the deflating of a FED/Government inflated housing bubble)…

LossOfWealth

And what are the experts saying?  Paul Krugman says we need more debt, trillions more.  The FED is trying to inflate another housing bubble (and failing).  Inflation and credit expansion (increasing debt and leverage) has always led to the “business cycle” or Booms followed by Busts as the Austrians have long pointed out.  But the Austrian perspective does not get press in government controlled schools.  It is not in the interest of our central planners to teach this.  They use these man-made business cycles as cover to intervene in the economy, steal from the productive and enrich themselves.

I believe that banking institutions are more dangerous to our liberties than standing armies.  Thomas Jefferson

The government, together with the central bank and its affiliate banks, are involved in the large scale plunder of the peoples of the world.  In the USA, It is constitutionally forbidden to intervene in the markets, schooling, healthcare and banking since constitutionally the government can only do what is expressly permitted.  The government is specifically authorized to issue its own interest free money, as gold and silver coin, and not delegate it to a central bank.  It is supposed to insure domestic tranquility by protecting private property and the wealth produced by saving and labor, not impoverish its citizens by theft and deceit. It is NOT supposed to treat you as a cow to be milked or slaughtered for your meat (by taking your possessions if it can’t take your money).

Power always thinks… that it is doing God’s service when it is violating all his laws.  John Adams

This will end just as history tells us.  Yet our central planners, always thinking they are smarter than those who have gone before them, fail to learn from the history of fiat money.  It always fails and ends in some form of collapse.  The global economic catechism just ahead of us will be number 600.

Research Shows ALL Paper Money Systems Failed so far 599 and counting.

Yet, what do broke governments do?  Try to rein in spending?  Become prudent?  Not according to history.  They do the opposite.  They expand the regulator apparatus and try to squeeze every last bit of money from the people, as Simon Black of the Sovereign Man blog pointed out using the Weimar Republic during hyperinflation as just one example.

Despite being completely broke, governments will dramatically expand their ranks in a last desperate gasp to envelop the problem in sheer size.

In the early 1920s, for example, the number of bureaucratic officials in the Weimar Republic increased 242%, even though the country was flat broke from its Great War reparation payments and hyperinflation episode.

The increase in both regulations and government officials criminalizes and/or controls almost every aspect of our existence… from what we can/cannot put in our bodies to how we are allowed to raise our own children.

Our government has and will continue to pass laws to legalize plunder and criminalize what you will do to protect yourself.  This is just one of many ways the tyrants who rule over us are destroying us in order to preserve themselves and position themselves for power after economic collapse. Whether the “experts” are journalists from the main stream media, tenured Professors, or a retired CIA operatives, they are employed by the government to prevent “We the People” from realizing they are the tyrants and thieves.  This same government that claim to represent us are at the same time plundering the people and destroying the nation.

Experience hath shewn, that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted it into tyranny.  Thomas Jefferson

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