I got a very timely fortune cookie the other day. It sums up most of why I'm writing this blog. I know I speak mostly about financial topics, but I really am trying to open some eyes. Anyway here it is.
"A different world cannot be built by indifferent people"
This video titled "If I wanted America to Fail" follows this same thought.
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These were posted by Krieger over the weekend. I've got a nice theme going today.
Backlash Against the TSA Shredding the 4th Amendment in Houston
Posted on April 27, 2012
My Take: This fits in nicely with my article from yesterday about how 9/11 continues to be used to dismantle the Constitution and further our progression into a police state. For those of you who haven’t read the Constitution in a while this is what the 4th Amendment states:
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
Is this really the kind of country you want to live in where government bureaucrats treat you like a criminal everywhere you go? Are you really that afraid of terrorists? Remember what the very wise Ben Franklin made clear centuries ago that “those who would give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety.”
How about we stop being a nation of frightened children and stand up proud and strong for freedom and liberty. That’s why all of our ancestors came here in the first place . Let’s not throw away all they sacrificed for us.
CISPA – The New Big Brother Bill and Why You Should Hate it
Posted on April 29, 2012
My Take: The articles below speak for themselves. After popular revulsion was able to thwart the prior Constitution demolishing internet spy bills, our “representatives” in Congress have regrouped and passed something far worse in the House with a vote now set for the Senate. As I have maintained for quite a long time, I believe much of Congress is cognizant of their criminal behavior and more importantly they view themselves as better than “we the people” and are now openly manifesting their fear and disgust for the citizenry by passing authoritarian bill after authoritarian bill to protect themselves from the people they supposedly represent. I want to close my thoughts with a powerful quote from one of my American heroes – Henry David Thoreau. I’m not trying to tell anyone what they should or shouldn’t do, but I am one hundred percent certain that we all need to think about these things more deeply than ever before.
Must the citizen ever for a moment, or in the least degree, resign his conscience to the legislator? Why has every man a conscience, then? I think that we should be men first, and subjects afterward. It is not desirable to cultivate a respect for the law, so much as for the right. The only obligation which I have a right to assume is to do at any time what I think right.
I agree with the above. I do not answer to any man or man-made institution. We must answer to something far higher than that, whatever that may mean to you. We are sovereign human beings and we should never under any circumstances live on our knees or expect our others to do so.
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Turn on the printing presses. Somebody go get more ink!
Global Policy Shifting From Austerity Toward Growth
Growth in the United States is softening, the slump in Europe deepening and Britain has fallen back into recession, heightening concern that efforts to cut budget gaps could go too far.
Fiscal austerity has been the mantra on both sides of the Atlantic for the past two years. The tide now appears to be turning.
In Europe, socialist Francois Hollande, who is favored to win the run-off election for the French presidency on Sunday, has laid out a growth agenda. Italian Prime Minister Mario Monti, after pushing through tough budget reforms, is calling on the European Union to back a growth plan.
European Central Bank President Mario Draghi wants a "growth compact" for Europe to complement its fiscal compact, an issue he is likely to be quizzed on at his monthly news conference on Thursday.
Even Germany, fast losing allies for its harsh fiscal medicine after the Dutch government fell over budget cuts, is modifying its tone. "We are not the (fiscal) consolidation Taliban," German Deputy Finance Minister Thomas Steffen said at a conference last week.
In the United States too, there are tentative signs the fiscal debate is poised for recalibration.
"Harsh austerity was all the rage, and it drove the (U.S.) Republican Tea Party landslide in 2010 and became the dominant prescription in Europe," said Greg Valliere, political economist at Potomac Research Group.
"Now it's in retreat on both sides of the Atlantic."
Analysts point to U.S. Senate Republican leader Mitch O'Connell's decision to withhold his support for the tough budget adopted by the Republican-controlled House, which would deepen domestic spending cuts beyond levels agreed in torturous deficits talks last August.
A new poll hints at a waning of support for the Tea Party, the driving force behind deep budget cuts. An ABC News/Washington Post poll on April 15 found that Americans by a broad 23-point margin say the more they hear about the Tea Party, the less they like it. Its support has slipped to 41 percent of Americans from 47 percent last September, the poll found.
U.S. Federal Reserve Chairman Ben Bernanke last week issued his sternest warning yet over the risks of sharp fiscal contraction. Numerous tax cuts are due to expire and budget cuts will kick in at year end, enough to withdraw $500 billion from the economy. Analysts say that would cut 3 to 5 percentage points from growth and tip the economy back into recession.
"There is, I think, absolutely no chance that the Federal Reserve could or would have any ability whatsoever to offset that effect on the economy," Bernanke said.
Although it is too early to tell exactly how the U.S. budget debate will play out in November's elections, analysts say an awareness is gradually building in both Europe and the United States that too-fast budgetary consolidation could actually damage the goal of debt reduction.
Investors also may be willing to give governments leeway.
"Politicians are nervous that loosening the fiscal brake will be taken negatively by markets. But we have reached the point where the contrary is true," said Martin Lueck, an economist at UBS Investment Research.
"If there is a realistic stance of supporting growth on the one hand and fiscal consolidation on the other hand, it will be well received," he said.
ESCAPING THE TRAP
Paul McCulley, former managing director at the giant bond fund PIMCO and now at the think tank Global Interdependence Center, says indebted Western nations are running full force into a liquidity trap. Households, corporations and governments are deleveraging at the same time, sucking all the drivers of growth from the economy and worsening budgets.
No matter how much money a central bank pumps in to hold interest rates low and ease deleveraging, it isn't enough to brake the vicious downward cycle as governments cut budgets, he argues.
"Fiscal austerity does not work in a liquidity trap and makes as much sense as putting an anorexic on a diet. Yet diets are the very prescription that fiscal austerians have imposed," he said in a paper delivered last month at the Bank of France.
John Maynard Keynes called this the paradox of thrift - by paying off debt and saving more, growth weakens and budget deficits and debt levels worsen.
The answer, said McCulley, is for governments to spend more, supported by a central bank that buys up government debt. This will reflate the economy, restore demand and avert depression, which in turn will allow government debt to be paid down.
The U.S. economy has not reached the point of ever-worsening deficits. But first-quarter GDP growth slowed to a 2.2 percent annual rate from 3.0 percent in the fourth quarter. A taste of whether the slowing continued into the second quarter will come in the April jobs report on Friday.
While analysts forecast 170,000 new jobs added, a gain from 120,000 in March, that would be down from the 246,000 monthly average seen from December to February. But seasonal quirks and warm winter weather may depress the number.
A national factory index and U.S. car sales data on Tuesday are expected to show steady growth, which would support the Fed view that the U.S. economy is gradually firming.
Monday, April 30, 2012
Friday, April 27, 2012
It's Friday!
The GDP number came in at 2.2% and the lowest estimate I saw was 2.6%. This follows what I've been saying about the recovery. I think it's only a matter of time before The Bernank gooses the system with more liquidity. Precious metals and their stocks are moving off their lows I think.
The first piece is from Krieger's new blog.
The Rebirth of Barter
Posted on April 26, 2012
Justice in the hands of the powerful is merely a governing system like any other. Why call it justice? Let us rather call it injustice, but of a sly effective order, based entirely on cruel knowledge of the resistance of the weak, their capacity for pain, humiliation and misery.
- Georges Bernanos
(1888-1948)
Outwardly we have a Constitutional government. We have operating within our government and political system, another body representing another form of government, a bureaucratic elite which believes our Constitution is outmoded.
- Senator William Jenner
(1908-1985) U.S. Senator (IN-R)
The Final Act of the Uruguay Round, marking the conclusion of the most ambitious trade negotiation of our century, will give birth – in Morocco – to the World Trade Organization, the third pillar of the New World Order, along with the United Nations and the International Monetary Fund.
- Government of Morocco
April, 1994 Source: New York Times, full page ad by the government of Morocco
Before I get into the email I want to remind everyone that I launched a blog a week ago and it can be found here: http://libertyblitzkrieg.com/ I have also recently added a twitter account if you want to get updates on posts that way and there is a button on the right sidebar for that. Ok, now onto the fun stuff…
The Plates of Power are Shifting
What an amazing time to be alive. Whereas in prior decades plans for global dominance by TPTB via a global fiat currency and supranational organizations set up under the guise of “the general welfare” were largely kept hidden from the public, there was always going to be a coming out party where these control-freaks needed to “sell” global bondage to the 99.9%. Whether you believe 9/11 and the collapse of 2008 were planned or just randomly happened is largely irrelevant. What is indisputable at this stage is that these events were both used as the “crises” to announce their plans. 9/11 was the catalyst to sell the sheeple on the police state here in America and in reality across the entire globe. Despite the fact that you probably have a greater likelihood of being hit by lightning while riding a tricycle than being killed in a terrorist attack, heightened fear was encouraged and promoted by the media and our government in order to put in the infrastructure for a total police state. Many people stood up at the time and pointed out that this event was being used to manipulate people into going along with a shredding of the Bill of Rights, but most of us remained completely compliant out of shock and fear. Then, seven years later we had the global financial crisis. While 9/11 played on people’s fear of physical harm, the GFC played on people’s fear of financial harm. As soon as it happened the selling process was on. The sale was that capitalism had failed. We needed more government. More importantly, the Central Planners (the FED and all other Central Banks) were made out to be the heroes. We were told at the time and continue to be told to this very day that if it were not for the decisive action and infinite wisdom of these mandarins we would be back to the stone age. Combined, the attacks of 9/11 and the GFC were used as the vehicles through which to more overtly announce and sell the implementation of the long planned New World Order.
As we know, for every action there is a reaction and I am pleased to say that the reaction from the public has generally speaking (albeit very gradually) been in contrast to what TPTB had hoped for. While I think 9/11 was a great success for them the GFC was not. In fact, I think it was the absurdness of the actions to save the system since 2008 and the clear theft and consolidation of power by the financial elite since that date that has served more than anything else to wake up tens if not hundreds of millions of people throughout the world. This has clearly frustrated the plans of these clowns and their concern was quite evident on the face of The Bernank during yesterday’s press conference. Things are now falling apart so fast for these guys behind the scenes that they are being forced into increasingly desperate action. This increasingly desperate action is then being translated into more sheeple waking up, which in turn is resulting in the undesired response from the public and even sovereign nations themselves.
Nowhere is this becoming more clear than with the whole Iran fiasco, which may end up being one of the biggest geopolitical mistakes in United States history. This should not come as a surprise since as I mentioned recently the people running this country are more cunning and manipulative than they are wise or knowledgeable. They actually collectively remind me of the child King Joffrey Baratheon in HBO’s Game of Thrones. Washington D.C., Wall Street and much of corporate America are being run by petulant, power-lusting, stunted-adults who are incapable of seeing beyond the next move in the game. They are playing checkers while their opponents are playing chess. This is what is so amusing about the whole imminent failure to implement the New World Order. Their parents or those that came before them might have been able to pull it off. They were far smarter. These guys are ten year olds with a crown strutting around with no clothes on.
The Rebirth of Barter
One of the most important articles I have read this week comes from Forbes contributor Gordon Chang. In it he states that China is preparing to avoid U.S. sanctions on Iran by paying for oil with gold. Not only that but he also mentions that China has already been bartering with Iran to get a hold of petroleum. He states:
Read more here: http://libertyblitzkrieg.com/
********************************************************************************
I thought this was a good comment from Stansberry about the WMT scandal. Mostly, it's about the US loving to incarcerate people.
On Tuesday, I stirred the pot by asking who, if anyone, was hurt by Wal-Mart's alleged Mexican bribes… clearly implying the acts hurt "nobody." Many readers were able to let go of their fears about appearing disreputable and gave the matter serious consideration. Bravo to them. They made me proud and happy to do what I do for a living.
Other responses dismissed my question with the glib phrase… "The law is the law." That's what otherwise rational adults sound like when they refuse to take responsibility for determining right from wrong. It's the easy way out of one of life's most important and difficult tasks. To suggest U.S. law is an infallible representation of right and wrong is just silly.
The United States imprisons 700 people for every 100,000 people in the population… That's more than any other country on Earth… more than North Korea… more than Libya… more than Iraq or Mozambique… Pick whatever godforsaken hellhole you like… it doesn't have nearly the per-capita prison population that we do. More than 7 million people in the U.S. are in prison, jail, or on probation. If you say, "the law is the law," you're not even in the conversation.
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STOCKS AND POLITICS - In the last 50 years (1962-2011), the S&P 500 has been up +21.3% per year (total return) under a Democrat President and a Republican-led Congress, nearly 5 times the +4.5% annual return achieved under a Republican President and a Congress controlled by the Democrats. The stock index gained +11.5% per year when the White House and Congress were controlled by the same political party. The worst stock performance came under a split Congress (up +5.7% per year) regardless of which party controlled the White House (source: BTN Research).
VERY RARE - There are 31 Americans worth at least $10 billion. There are 313 million American citizens. Thus, 1 out of every 10 million Americans is worth at least $10 billion (source: Forbes).
ALMOST FIFTY - Jamie Moyer became the oldest person ever to win a major league baseball game last Tuesday (4/17/12), breaking a 79 ½ year old record when the Colorado Rockies beat the San Diego Padres 5-3 in Denver. At 49 years, 150 days in age, Moyer has thrown 58,753 pitches in his 25-year career (source: MLB).
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What Falling Milk Prices Say About an Economic Slowdown
The decline of milk prices this year has been a welcome development for consumers pressured by $4 a gallon gas, but could be a bad sign for the economy.
Falling milk prices—particularly over the past decade—have been a warning signal for a slowdown, while rising prices have accompanied upturns in the economy, according to research from Nicholas Colas, chief market strategist at ConvergEx in New York.
"That's good news for this high-profile consumer good and its effect on inflationary expectations," Colas said. "At the same time, milk prices have been cyclical since the Great Depression. The pullback in 2012 could therefore be a useful early warning sign about a slowing U.S., and global, recovery."
Prices pulled back during the recessions of 2002-03 and 2009, while they surged in 2001, 2004, 2007 and 2011.
More recently, milk has been on a slow but steady decline since reaching a historical peak in September, falling nearly 4 percent at the supermarket and nearly 25 percent in recent days at the distributor level.
The current price of $3.86 a gallon is still high by historical levels, but drifting lower as demand fades.
The milk futures contract has risen 6 percent over the past month a half, but the American Restaurant Association expects that to fade due to a larger than expected milk cow herd.
"A more sluggish domestic economy is always bad for milk prices, so we have to treat the recent pullback as a warning sign about the national economy," Colas said. "Moreover, exports of milk products were an estimated 13 percent of production, which means weaker prices may also be a sign of diminished demand in global markets."
Other indicators are confirming what milk is showing, though consumer prices broadly are up 2.7 percent over the past year.
The Chicago Federal Reserve's National Activity Index, though not one of the market's more widely followed barometers, nevertheless posted a minus-0.29 Thursday, indicating economic contraction.
"An index reading of less than zero depicts an economy growing at below trend and easing pressures on future inflation," said Andrew Wilkinson, chief economic strategist at Miller Tabak in New York. "That is a positive development set against the higher inflation projections at yesterday’s (Federal Reserve) meeting although no one wants to see growth tapering off."
One area of which investors should take note: Colas found that demand for organic milk actually has increased 22 percent, translating to higher prices and perhaps indicative of a two-speed recovery where higher-end goods are trending stronger than their lower-cost alternatives.
"Not only are milk prices a useful economic indicator...and a proxy for inflationary expectations... but also a great barometer between a commodity and a differentiated good," Colas said. "Different, in this case, is very good."
********************************************************************************
Could The New York Times Sell Its Scoops to Hedge Funds?
Felix Salmon has raised an interesting question: could The New York Times sell early access to market-moving scoops to hedge funds?
After The New York Times published the results of its investigation of the Wal-Mart bribery case, something like $12 billion came off its market cap.
Clearly, early access to the story would have been very valuable to traders. So, in this age of cash-strapped news organizations, shouldn’t The New York Times be able to monetize the value of scoops by selling early access to hedge funds?
Felix explains:
In a sense, there’s something very economically inefficient about scoops like this one. The NYT story came out in the middle of the weekend, when markets were closed; when they opened on Monday morning, both Walmart and Walmex had billions of dollars shaved off their market capitalizations, but no one was given the opportunity to short those stocks at their prior level. After many months of diligent and valuable work on this story, one would think that a genuinely capitalist economy wouldn’t just leave money on the table like that.
It’s very clear that The New York Times isn’t in the front-running business. In fact, I suspect that the potential market-moving effect of the story played a role in the timing of the publication. By publishing it over the weekend, the editors assured that information would be fully disseminated into the market before anyone could trade Wal-Mart’s stock [WMT 59.12 0.17 (+0.29%) ]. No one received even a momentary edge from asymmetric information.
But let’s say a particularly enterprising publisher took over at the paper and decided to launch a NYT: Frontrunner subscription service.
Would it work? Would it be legal?
Commenters on Felix’s post, particularly Daniel Davies, have argued that the Times and its subscribers would be engaging in illegal insider trading. I don’t think that’s correct.
Let’s take that New York Times story. It’s very clear that reporters at the Times had access to material non-public information about Wal-Mart. Some of this appears to have been acquired from Wal-Mart insiders in breach of their duties of confidentiality owed to their employer.
On the surface, this sounds like the makings of an insider-trading case. You have many of the key elements: (a) non-public information, (b) materiality, and (c) an intentional breach of a duty confidentiality.
There is, however, one element missing: the personal benefit for the insiders providing the information.
In a 1983 case known as Dirks v. SEC, the Supreme Court held that a corporate insider who discloses material nonpublic information to someone who trades on the stock of the insider’s company cannot be held liable unless the tipper benefited or expected to benefit from making the tip. What’s more, the trader also couldn’t be held liable unless the tipper benefited—even if the trader made a profit by trading on the insider information.
The facts of the Dirks case make its applicability to the Wal-Mart case even clearer. Raymond Dirks was a Wall Street stock analyst specializing in the insurance sector. On a spring day in 1973, Dirks got a tip that an insurance and mutual fund company called Equity Funding of America was fraudulently overstating its assets. The tip came from Ronald Secrist, a former officer of Equity Funding, who urged Dirks to investigate.
Dirks flew out to Equity Funding’s Los Angeles headquarters and met with several officers and employees. Senior management denied any wrong-doing—as senior management tends to do. But certain employees corroborated Secrist’s charges.
Throughout the investigation, Dirks discussed the information he was obtaining with a number of clients and investors. Some sold Equity Funding stocks, including five investment advisers who liquidated holdings of more than $16 million. During Dirk’s two-week investigation, the price of Equity Funding stock fell from $26 per share to less than $15 per share.
Dirk’s also contacted the L.A. bureau chief of the Wall Street Journal and shared his information with the paper. The bureau chief thought the allegations were too far-fetched. He was also worried about being sued if the allegations turned out to be false.
The rapid decline in price, with no publicly announced news, led the New York Stock Exchange to halt trading on March 27. Shortly thereafter, California insurance authorities impounded Equity Funding's records and uncovered evidence of fraud. The Wall Street Journal then ran a front page story about the fraud, based mostly on information Dirks had given the paper.
The Securities and Exchange Commission rewarded Dirks’ work uncovering this massive fraud by charging him with insider trading. Although he didn’t trade the stock himself, he passed along the insider “tip” about the fraud. The idea was that train of tipper-tippee liability stretched from Secrist and other tipper employees, to Dirks who was both a tippee and a tipper, to his clients who traded on the information.
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I'm sorry in advance to any females that are offended by these 2 videos. I just couldn't help myself on a Friday.
This is the best burger commercial ever. I know you have all seen it but this is the director's cut.
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Since youtube kept throwing Kate Upton videos at me, I bet you can't win the staring contest...
The first piece is from Krieger's new blog.
The Rebirth of Barter
Posted on April 26, 2012
Justice in the hands of the powerful is merely a governing system like any other. Why call it justice? Let us rather call it injustice, but of a sly effective order, based entirely on cruel knowledge of the resistance of the weak, their capacity for pain, humiliation and misery.
- Georges Bernanos
(1888-1948)
Outwardly we have a Constitutional government. We have operating within our government and political system, another body representing another form of government, a bureaucratic elite which believes our Constitution is outmoded.
- Senator William Jenner
(1908-1985) U.S. Senator (IN-R)
The Final Act of the Uruguay Round, marking the conclusion of the most ambitious trade negotiation of our century, will give birth – in Morocco – to the World Trade Organization, the third pillar of the New World Order, along with the United Nations and the International Monetary Fund.
- Government of Morocco
April, 1994 Source: New York Times, full page ad by the government of Morocco
Before I get into the email I want to remind everyone that I launched a blog a week ago and it can be found here: http://libertyblitzkrieg.com/ I have also recently added a twitter account if you want to get updates on posts that way and there is a button on the right sidebar for that. Ok, now onto the fun stuff…
The Plates of Power are Shifting
What an amazing time to be alive. Whereas in prior decades plans for global dominance by TPTB via a global fiat currency and supranational organizations set up under the guise of “the general welfare” were largely kept hidden from the public, there was always going to be a coming out party where these control-freaks needed to “sell” global bondage to the 99.9%. Whether you believe 9/11 and the collapse of 2008 were planned or just randomly happened is largely irrelevant. What is indisputable at this stage is that these events were both used as the “crises” to announce their plans. 9/11 was the catalyst to sell the sheeple on the police state here in America and in reality across the entire globe. Despite the fact that you probably have a greater likelihood of being hit by lightning while riding a tricycle than being killed in a terrorist attack, heightened fear was encouraged and promoted by the media and our government in order to put in the infrastructure for a total police state. Many people stood up at the time and pointed out that this event was being used to manipulate people into going along with a shredding of the Bill of Rights, but most of us remained completely compliant out of shock and fear. Then, seven years later we had the global financial crisis. While 9/11 played on people’s fear of physical harm, the GFC played on people’s fear of financial harm. As soon as it happened the selling process was on. The sale was that capitalism had failed. We needed more government. More importantly, the Central Planners (the FED and all other Central Banks) were made out to be the heroes. We were told at the time and continue to be told to this very day that if it were not for the decisive action and infinite wisdom of these mandarins we would be back to the stone age. Combined, the attacks of 9/11 and the GFC were used as the vehicles through which to more overtly announce and sell the implementation of the long planned New World Order.
As we know, for every action there is a reaction and I am pleased to say that the reaction from the public has generally speaking (albeit very gradually) been in contrast to what TPTB had hoped for. While I think 9/11 was a great success for them the GFC was not. In fact, I think it was the absurdness of the actions to save the system since 2008 and the clear theft and consolidation of power by the financial elite since that date that has served more than anything else to wake up tens if not hundreds of millions of people throughout the world. This has clearly frustrated the plans of these clowns and their concern was quite evident on the face of The Bernank during yesterday’s press conference. Things are now falling apart so fast for these guys behind the scenes that they are being forced into increasingly desperate action. This increasingly desperate action is then being translated into more sheeple waking up, which in turn is resulting in the undesired response from the public and even sovereign nations themselves.
Nowhere is this becoming more clear than with the whole Iran fiasco, which may end up being one of the biggest geopolitical mistakes in United States history. This should not come as a surprise since as I mentioned recently the people running this country are more cunning and manipulative than they are wise or knowledgeable. They actually collectively remind me of the child King Joffrey Baratheon in HBO’s Game of Thrones. Washington D.C., Wall Street and much of corporate America are being run by petulant, power-lusting, stunted-adults who are incapable of seeing beyond the next move in the game. They are playing checkers while their opponents are playing chess. This is what is so amusing about the whole imminent failure to implement the New World Order. Their parents or those that came before them might have been able to pull it off. They were far smarter. These guys are ten year olds with a crown strutting around with no clothes on.
The Rebirth of Barter
One of the most important articles I have read this week comes from Forbes contributor Gordon Chang. In it he states that China is preparing to avoid U.S. sanctions on Iran by paying for oil with gold. Not only that but he also mentions that China has already been bartering with Iran to get a hold of petroleum. He states:
Read more here: http://libertyblitzkrieg.com/
********************************************************************************
I thought this was a good comment from Stansberry about the WMT scandal. Mostly, it's about the US loving to incarcerate people.
On Tuesday, I stirred the pot by asking who, if anyone, was hurt by Wal-Mart's alleged Mexican bribes… clearly implying the acts hurt "nobody." Many readers were able to let go of their fears about appearing disreputable and gave the matter serious consideration. Bravo to them. They made me proud and happy to do what I do for a living.
Other responses dismissed my question with the glib phrase… "The law is the law." That's what otherwise rational adults sound like when they refuse to take responsibility for determining right from wrong. It's the easy way out of one of life's most important and difficult tasks. To suggest U.S. law is an infallible representation of right and wrong is just silly.
The United States imprisons 700 people for every 100,000 people in the population… That's more than any other country on Earth… more than North Korea… more than Libya… more than Iraq or Mozambique… Pick whatever godforsaken hellhole you like… it doesn't have nearly the per-capita prison population that we do. More than 7 million people in the U.S. are in prison, jail, or on probation. If you say, "the law is the law," you're not even in the conversation.
********************************************************************************
STOCKS AND POLITICS - In the last 50 years (1962-2011), the S&P 500 has been up +21.3% per year (total return) under a Democrat President and a Republican-led Congress, nearly 5 times the +4.5% annual return achieved under a Republican President and a Congress controlled by the Democrats. The stock index gained +11.5% per year when the White House and Congress were controlled by the same political party. The worst stock performance came under a split Congress (up +5.7% per year) regardless of which party controlled the White House (source: BTN Research).
VERY RARE - There are 31 Americans worth at least $10 billion. There are 313 million American citizens. Thus, 1 out of every 10 million Americans is worth at least $10 billion (source: Forbes).
ALMOST FIFTY - Jamie Moyer became the oldest person ever to win a major league baseball game last Tuesday (4/17/12), breaking a 79 ½ year old record when the Colorado Rockies beat the San Diego Padres 5-3 in Denver. At 49 years, 150 days in age, Moyer has thrown 58,753 pitches in his 25-year career (source: MLB).
********************************************************************************
What Falling Milk Prices Say About an Economic Slowdown
The decline of milk prices this year has been a welcome development for consumers pressured by $4 a gallon gas, but could be a bad sign for the economy.
Falling milk prices—particularly over the past decade—have been a warning signal for a slowdown, while rising prices have accompanied upturns in the economy, according to research from Nicholas Colas, chief market strategist at ConvergEx in New York.
"That's good news for this high-profile consumer good and its effect on inflationary expectations," Colas said. "At the same time, milk prices have been cyclical since the Great Depression. The pullback in 2012 could therefore be a useful early warning sign about a slowing U.S., and global, recovery."
Prices pulled back during the recessions of 2002-03 and 2009, while they surged in 2001, 2004, 2007 and 2011.
More recently, milk has been on a slow but steady decline since reaching a historical peak in September, falling nearly 4 percent at the supermarket and nearly 25 percent in recent days at the distributor level.
The current price of $3.86 a gallon is still high by historical levels, but drifting lower as demand fades.
The milk futures contract has risen 6 percent over the past month a half, but the American Restaurant Association expects that to fade due to a larger than expected milk cow herd.
"A more sluggish domestic economy is always bad for milk prices, so we have to treat the recent pullback as a warning sign about the national economy," Colas said. "Moreover, exports of milk products were an estimated 13 percent of production, which means weaker prices may also be a sign of diminished demand in global markets."
Other indicators are confirming what milk is showing, though consumer prices broadly are up 2.7 percent over the past year.
The Chicago Federal Reserve's National Activity Index, though not one of the market's more widely followed barometers, nevertheless posted a minus-0.29 Thursday, indicating economic contraction.
"An index reading of less than zero depicts an economy growing at below trend and easing pressures on future inflation," said Andrew Wilkinson, chief economic strategist at Miller Tabak in New York. "That is a positive development set against the higher inflation projections at yesterday’s (Federal Reserve) meeting although no one wants to see growth tapering off."
One area of which investors should take note: Colas found that demand for organic milk actually has increased 22 percent, translating to higher prices and perhaps indicative of a two-speed recovery where higher-end goods are trending stronger than their lower-cost alternatives.
"Not only are milk prices a useful economic indicator...and a proxy for inflationary expectations... but also a great barometer between a commodity and a differentiated good," Colas said. "Different, in this case, is very good."
********************************************************************************
Could The New York Times Sell Its Scoops to Hedge Funds?
Felix Salmon has raised an interesting question: could The New York Times sell early access to market-moving scoops to hedge funds?
After The New York Times published the results of its investigation of the Wal-Mart bribery case, something like $12 billion came off its market cap.
Clearly, early access to the story would have been very valuable to traders. So, in this age of cash-strapped news organizations, shouldn’t The New York Times be able to monetize the value of scoops by selling early access to hedge funds?
Felix explains:
In a sense, there’s something very economically inefficient about scoops like this one. The NYT story came out in the middle of the weekend, when markets were closed; when they opened on Monday morning, both Walmart and Walmex had billions of dollars shaved off their market capitalizations, but no one was given the opportunity to short those stocks at their prior level. After many months of diligent and valuable work on this story, one would think that a genuinely capitalist economy wouldn’t just leave money on the table like that.
It’s very clear that The New York Times isn’t in the front-running business. In fact, I suspect that the potential market-moving effect of the story played a role in the timing of the publication. By publishing it over the weekend, the editors assured that information would be fully disseminated into the market before anyone could trade Wal-Mart’s stock [WMT 59.12 0.17 (+0.29%) ]. No one received even a momentary edge from asymmetric information.
But let’s say a particularly enterprising publisher took over at the paper and decided to launch a NYT: Frontrunner subscription service.
Would it work? Would it be legal?
Commenters on Felix’s post, particularly Daniel Davies, have argued that the Times and its subscribers would be engaging in illegal insider trading. I don’t think that’s correct.
Let’s take that New York Times story. It’s very clear that reporters at the Times had access to material non-public information about Wal-Mart. Some of this appears to have been acquired from Wal-Mart insiders in breach of their duties of confidentiality owed to their employer.
On the surface, this sounds like the makings of an insider-trading case. You have many of the key elements: (a) non-public information, (b) materiality, and (c) an intentional breach of a duty confidentiality.
There is, however, one element missing: the personal benefit for the insiders providing the information.
In a 1983 case known as Dirks v. SEC, the Supreme Court held that a corporate insider who discloses material nonpublic information to someone who trades on the stock of the insider’s company cannot be held liable unless the tipper benefited or expected to benefit from making the tip. What’s more, the trader also couldn’t be held liable unless the tipper benefited—even if the trader made a profit by trading on the insider information.
The facts of the Dirks case make its applicability to the Wal-Mart case even clearer. Raymond Dirks was a Wall Street stock analyst specializing in the insurance sector. On a spring day in 1973, Dirks got a tip that an insurance and mutual fund company called Equity Funding of America was fraudulently overstating its assets. The tip came from Ronald Secrist, a former officer of Equity Funding, who urged Dirks to investigate.
Dirks flew out to Equity Funding’s Los Angeles headquarters and met with several officers and employees. Senior management denied any wrong-doing—as senior management tends to do. But certain employees corroborated Secrist’s charges.
Throughout the investigation, Dirks discussed the information he was obtaining with a number of clients and investors. Some sold Equity Funding stocks, including five investment advisers who liquidated holdings of more than $16 million. During Dirk’s two-week investigation, the price of Equity Funding stock fell from $26 per share to less than $15 per share.
Dirk’s also contacted the L.A. bureau chief of the Wall Street Journal and shared his information with the paper. The bureau chief thought the allegations were too far-fetched. He was also worried about being sued if the allegations turned out to be false.
The rapid decline in price, with no publicly announced news, led the New York Stock Exchange to halt trading on March 27. Shortly thereafter, California insurance authorities impounded Equity Funding's records and uncovered evidence of fraud. The Wall Street Journal then ran a front page story about the fraud, based mostly on information Dirks had given the paper.
The Securities and Exchange Commission rewarded Dirks’ work uncovering this massive fraud by charging him with insider trading. Although he didn’t trade the stock himself, he passed along the insider “tip” about the fraud. The idea was that train of tipper-tippee liability stretched from Secrist and other tipper employees, to Dirks who was both a tippee and a tipper, to his clients who traded on the information.
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I'm sorry in advance to any females that are offended by these 2 videos. I just couldn't help myself on a Friday.
This is the best burger commercial ever. I know you have all seen it but this is the director's cut.
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Since youtube kept throwing Kate Upton videos at me, I bet you can't win the staring contest...
Thursday, April 26, 2012
The Bernank
Open Letter to the Chief Confidence Officer of the United States of America
Dear Dr. Bernanke,
My nephew is a bad kid. He's into drugs, engages in high-risk sex, and has a steady stream of brushes with the law. But he always manages to avoid prosecution- probably because he is smart and good looking... and he has a rich uncle.
Recently he got into trouble. He was involved in some illegal gambling and had resorted to the Martingale strategy - right up until he ran out of money. Just as he lost that last hand, the hall was raided and he was arrested. I had, in the past, told him that if he ever needed help, he should call. But this time was tough for me. I knew that I could throw money at the situation and the problem would disappear; the gamblers would go away, the police would go away, and there would be no court case. I would basically restore public confidence in this boy by buying his way out of scrutiny. He would then go on to screw up another day - probably in a much bigger way.
The alternative was for me to let him collect his lumps, and watch as he got a taste of where he would end up if uncle was not around to bail him out - or if uncle chose not to bail him out because he was the cause of all his trouble.
I had to decide what the moral thing was for me to do: Shower the situation with money and make it go away; or let him learn a hard lesson - replete with bruises and a likely criminal record.
From the public's point of view, the answer was obvious; society would be better off if I let him take his lumps. He might be scared straight. And a criminal record would constitute a public record - a warning to anyone who took the time to find out about his proclivities.
But personal morality is a different beast. I have a certain loyalty to my brother to think about. And I did promise my nephew that if he ever got into trouble, I would be there for him. At the time, I did not include any contingencies in that promise. And it would break my mother's heart if my nephew went to jail - or if he was beaten up for not paying his debt.
I had to side with my posse, Dr. Bernanke. I bailed out my nephew. I paid off his gambling debt. And I found a lawyer who knows the DA - and the whole problem disappeared. It cost me a few dollars - but my brother is forever grateful. And my mother remains happy and ignorant. The cost to society, on the other hand, is going to be higher; this kid now thinks he's untouchable. Watch out, world.
On the face of it, your and my decision-making processes seem similar. Faced with a moral question of how best to restore confidence following a crisis, you too decided not to let your nephew-equivalents take their lumps; you shoveled money, just like I did, to protect those bad apples... to restore confidence in them... to restore confidence in the system.
There are a few differences in terms of the decision you made and the decision I made. For example, who, for you, is the equivalent of my brother? And who, for you, is the equivalent of my mother? And I was using my own money - thus the money was used in a way that would benefit me and my interests. Whose money were you using?
I am playing with you, Dr. Bernanke. I know where your allegiances lie, and whose money you used; you used my money. And your brothers and nephew are bankers - bad bankers. You took my money, and you funded your posse so that they would not have to face the repercussions of their dangerous ways. That is not moral, Dr. Bernanke. And it is a lot more dangerous than me letting my no-good nephew continue down his self-destructive path. I protected an insignificant fool with my own money, while you took my money and protected a behemoth - a massive, corrupt, and systemically dangerous juggernaut - in a way that ultimately imperils me, my family, and my community.
I may have done something unseemly from a public perspective, but it was my prerogative and I did what I had to do to protect my family. You did something obscene from a public perspective; you used the public's money to protect a corrupt core of powerful criminals who had imperiled our entire economy - and who, thanks to your largess, will eventually do so again. That is not central banking, Dr. Bernanke; that is centralized criminality.
You had a choice when it came to how you were going to restore confidence in our economy. You could have done it in a way that eliminated many of the industry people and practices that led to the crisis - in which case our confidence would arguably be based on having a more sound financial sector; or you could have sought to restore confidence by reinforcing the status quo - systemically dangerous institutions and people who pose a threat to our well-being - by flooding the financial sector with no-strings-attached money. You, somehow, chose the latter approach. You chose to protect the wrongdoers at the expense of the victims, you did it with the victims' money, and you did it in such a way so as to guarantee a future threat to those same victims. That is downright diabolical.
Is there something wrong with you, Dr. Bernanke?
Uncle.
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Mike Krieger's thoughts on the Fed announcement. If you haven't signed up for his email updates you should do so on his site.
I haven’t turned on my television in months other than to watch Game of Thrones on HBO (I highly recommend it if you haven’t seen it although this season has been slow so far) so it was an interesting experience watching CNBC for the first time in ages on the plane. Since markets are solely at the mercy of Central Planners at the moment, when The Bernank speaks on an FOMC day I try to watch.
Despite being someone that holds the Central Banking profession in extremely low regard, every now and again there is a soft spot for in me for these guys as I realize the impossibility of the situation they are trying to manage. Overall, I thought Bernanke looked concerned and timid during today’s testimony. He had the demeanor of someone with the world on his shoulders. Although the testimony itself was a giant yawn (as was the FED statement) all did not seem well to me.
I continue to think that in his mind Bernanke believes the economy needs a lot more stimulus. I don’t think for a second he believes we are in or anywhere close to a self-sustaining recovery. While he tried to toe the line to incorporate the dissenting views of the committee, at times his true bias came out. That is why stocks… http://libertyblitzkrieg.com/
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So I laugh when I see blatant manipulation these days. I've realized it's everywhere in the media. This chart is a perfect example. They are trying to claim that Obama has done a great job in this recovery because we are better than Uk and the Eurozone. Are you kidding me? That's like saying I'm ready for the PGA Tour because I can beat my 4 year old at golf...
You frequently hear people debate the Obama recovery against the Reagan recovery, but it's pretty dicey.
The times were totally different (and the recessions were very different) so you're left with just a lot of speculation and counterfactuals and so forth.
But here's an interesting apples to apples approach.
The below chart was made by Reuters' Scotty Barber, and it shows economic growth in the US, the UK, and Europe.
Now the first thing to note is that the US has recovered WAY better than either the Eurozone or the UK. So if you think Obama has been a disaster, you might first acknowledge that the US has performed better than all its major Western peers.
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Here is another piece discussing the problem that is college graduates.
The USA Today reports graduating class of 2012 is in for a rude awakening as Half of new graduates are jobless or underemployed.
About 1.5 million, or 53.6%, of bachelor's degree-holders under the age of 25 last year were jobless or underemployed, the highest share in at least 11 years. In 2000, the share was at a low of 41%, before the dot-com bust erased job gains for college graduates in the telecommunications and IT fields.
Out of the 1.5 million who languished in the job market, about half were underemployed, an increase from the previous year. Broken down by occupation, young college graduates were heavily represented in jobs that require a high school diploma or less. In the last year, they were more likely to be employed as waiters, waitresses, bartenders and food-service helpers than as engineers, physicists, chemists and mathematicians combined (100,000 versus 90,000). There were more working in office-related jobs such as receptionist or payroll clerk than in all computer professional jobs (163,000 versus 100,000). More also were employed as cashiers, retail clerks and customer representatives than engineers (125,000 versus 80,000).
According to government projections released last month, only three of the 30 occupations with the largest projected number of job openings by 2020 will require a bachelor's degree or higher to fill the position — teachers, college professors and accountants. Most job openings are in professions such as retail sales, fast food and truck driving, jobs which aren't easily replaced by computers.
Useless Degrees
The USA Today talks about the "underemployed". Is that really what's going on?
Just what job does someone majoring in Political Science, English, History, Social Studies, Creative Writing, Art, etc., etc., etc., expect to get?
Arguably, graduates in those majors (and many more) should be thankful to get any job. Therefore, those who do land a job should therefore be considered fully employed, not underemployed.
In turn, this means a college education now has a negative payback for most degrees.
Bledsoe, currently making just above minimum wage, says he has received financial help from his parents to help pay off student loans. He is now mulling whether to go to graduate school, seeing few other options to advance his career. "There is not much out there, it seems," he said.
There is nothing out there for many degrees which means that going to graduate school will do nothing but waste more money. Nurses are still in demand, but technology and engineering majors are crapshoots. If you can land a technology or engineering job it is likely to be high paying, but if not, the next step is retail sales.
Who Benefits From Student Aid?
Students get no benefit from "student aid". Rather, teachers, administrators, and corrupt for-profit schools like the University of Phoenix do.
Obama wants to throw more money at education, and that is exactly the wrong thing to do. Instead, I propose stopping student aid programs and accrediting more online schools to lower the cost of education so that degrees do not have negative payback.
Sadly, there is a trillion dollar student loan bubble, and that debt overhang will negatively impact the economy for years to come. Let's not make the problem worse. It's time to kill the inappropriately named "student aid" program.
Dear Dr. Bernanke,
My nephew is a bad kid. He's into drugs, engages in high-risk sex, and has a steady stream of brushes with the law. But he always manages to avoid prosecution- probably because he is smart and good looking... and he has a rich uncle.
Recently he got into trouble. He was involved in some illegal gambling and had resorted to the Martingale strategy - right up until he ran out of money. Just as he lost that last hand, the hall was raided and he was arrested. I had, in the past, told him that if he ever needed help, he should call. But this time was tough for me. I knew that I could throw money at the situation and the problem would disappear; the gamblers would go away, the police would go away, and there would be no court case. I would basically restore public confidence in this boy by buying his way out of scrutiny. He would then go on to screw up another day - probably in a much bigger way.
The alternative was for me to let him collect his lumps, and watch as he got a taste of where he would end up if uncle was not around to bail him out - or if uncle chose not to bail him out because he was the cause of all his trouble.
I had to decide what the moral thing was for me to do: Shower the situation with money and make it go away; or let him learn a hard lesson - replete with bruises and a likely criminal record.
From the public's point of view, the answer was obvious; society would be better off if I let him take his lumps. He might be scared straight. And a criminal record would constitute a public record - a warning to anyone who took the time to find out about his proclivities.
But personal morality is a different beast. I have a certain loyalty to my brother to think about. And I did promise my nephew that if he ever got into trouble, I would be there for him. At the time, I did not include any contingencies in that promise. And it would break my mother's heart if my nephew went to jail - or if he was beaten up for not paying his debt.
I had to side with my posse, Dr. Bernanke. I bailed out my nephew. I paid off his gambling debt. And I found a lawyer who knows the DA - and the whole problem disappeared. It cost me a few dollars - but my brother is forever grateful. And my mother remains happy and ignorant. The cost to society, on the other hand, is going to be higher; this kid now thinks he's untouchable. Watch out, world.
On the face of it, your and my decision-making processes seem similar. Faced with a moral question of how best to restore confidence following a crisis, you too decided not to let your nephew-equivalents take their lumps; you shoveled money, just like I did, to protect those bad apples... to restore confidence in them... to restore confidence in the system.
There are a few differences in terms of the decision you made and the decision I made. For example, who, for you, is the equivalent of my brother? And who, for you, is the equivalent of my mother? And I was using my own money - thus the money was used in a way that would benefit me and my interests. Whose money were you using?
I am playing with you, Dr. Bernanke. I know where your allegiances lie, and whose money you used; you used my money. And your brothers and nephew are bankers - bad bankers. You took my money, and you funded your posse so that they would not have to face the repercussions of their dangerous ways. That is not moral, Dr. Bernanke. And it is a lot more dangerous than me letting my no-good nephew continue down his self-destructive path. I protected an insignificant fool with my own money, while you took my money and protected a behemoth - a massive, corrupt, and systemically dangerous juggernaut - in a way that ultimately imperils me, my family, and my community.
I may have done something unseemly from a public perspective, but it was my prerogative and I did what I had to do to protect my family. You did something obscene from a public perspective; you used the public's money to protect a corrupt core of powerful criminals who had imperiled our entire economy - and who, thanks to your largess, will eventually do so again. That is not central banking, Dr. Bernanke; that is centralized criminality.
You had a choice when it came to how you were going to restore confidence in our economy. You could have done it in a way that eliminated many of the industry people and practices that led to the crisis - in which case our confidence would arguably be based on having a more sound financial sector; or you could have sought to restore confidence by reinforcing the status quo - systemically dangerous institutions and people who pose a threat to our well-being - by flooding the financial sector with no-strings-attached money. You, somehow, chose the latter approach. You chose to protect the wrongdoers at the expense of the victims, you did it with the victims' money, and you did it in such a way so as to guarantee a future threat to those same victims. That is downright diabolical.
Is there something wrong with you, Dr. Bernanke?
Uncle.
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Mike Krieger's thoughts on the Fed announcement. If you haven't signed up for his email updates you should do so on his site.
I haven’t turned on my television in months other than to watch Game of Thrones on HBO (I highly recommend it if you haven’t seen it although this season has been slow so far) so it was an interesting experience watching CNBC for the first time in ages on the plane. Since markets are solely at the mercy of Central Planners at the moment, when The Bernank speaks on an FOMC day I try to watch.
Despite being someone that holds the Central Banking profession in extremely low regard, every now and again there is a soft spot for in me for these guys as I realize the impossibility of the situation they are trying to manage. Overall, I thought Bernanke looked concerned and timid during today’s testimony. He had the demeanor of someone with the world on his shoulders. Although the testimony itself was a giant yawn (as was the FED statement) all did not seem well to me.
I continue to think that in his mind Bernanke believes the economy needs a lot more stimulus. I don’t think for a second he believes we are in or anywhere close to a self-sustaining recovery. While he tried to toe the line to incorporate the dissenting views of the committee, at times his true bias came out. That is why stocks… http://libertyblitzkrieg.com/
********************************************************************************
So I laugh when I see blatant manipulation these days. I've realized it's everywhere in the media. This chart is a perfect example. They are trying to claim that Obama has done a great job in this recovery because we are better than Uk and the Eurozone. Are you kidding me? That's like saying I'm ready for the PGA Tour because I can beat my 4 year old at golf...
You frequently hear people debate the Obama recovery against the Reagan recovery, but it's pretty dicey.
The times were totally different (and the recessions were very different) so you're left with just a lot of speculation and counterfactuals and so forth.
But here's an interesting apples to apples approach.
The below chart was made by Reuters' Scotty Barber, and it shows economic growth in the US, the UK, and Europe.
Now the first thing to note is that the US has recovered WAY better than either the Eurozone or the UK. So if you think Obama has been a disaster, you might first acknowledge that the US has performed better than all its major Western peers.
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Here is another piece discussing the problem that is college graduates.
The USA Today reports graduating class of 2012 is in for a rude awakening as Half of new graduates are jobless or underemployed.
About 1.5 million, or 53.6%, of bachelor's degree-holders under the age of 25 last year were jobless or underemployed, the highest share in at least 11 years. In 2000, the share was at a low of 41%, before the dot-com bust erased job gains for college graduates in the telecommunications and IT fields.
Out of the 1.5 million who languished in the job market, about half were underemployed, an increase from the previous year. Broken down by occupation, young college graduates were heavily represented in jobs that require a high school diploma or less. In the last year, they were more likely to be employed as waiters, waitresses, bartenders and food-service helpers than as engineers, physicists, chemists and mathematicians combined (100,000 versus 90,000). There were more working in office-related jobs such as receptionist or payroll clerk than in all computer professional jobs (163,000 versus 100,000). More also were employed as cashiers, retail clerks and customer representatives than engineers (125,000 versus 80,000).
According to government projections released last month, only three of the 30 occupations with the largest projected number of job openings by 2020 will require a bachelor's degree or higher to fill the position — teachers, college professors and accountants. Most job openings are in professions such as retail sales, fast food and truck driving, jobs which aren't easily replaced by computers.
Useless Degrees
The USA Today talks about the "underemployed". Is that really what's going on?
Just what job does someone majoring in Political Science, English, History, Social Studies, Creative Writing, Art, etc., etc., etc., expect to get?
Arguably, graduates in those majors (and many more) should be thankful to get any job. Therefore, those who do land a job should therefore be considered fully employed, not underemployed.
In turn, this means a college education now has a negative payback for most degrees.
Bledsoe, currently making just above minimum wage, says he has received financial help from his parents to help pay off student loans. He is now mulling whether to go to graduate school, seeing few other options to advance his career. "There is not much out there, it seems," he said.
There is nothing out there for many degrees which means that going to graduate school will do nothing but waste more money. Nurses are still in demand, but technology and engineering majors are crapshoots. If you can land a technology or engineering job it is likely to be high paying, but if not, the next step is retail sales.
Who Benefits From Student Aid?
Students get no benefit from "student aid". Rather, teachers, administrators, and corrupt for-profit schools like the University of Phoenix do.
Obama wants to throw more money at education, and that is exactly the wrong thing to do. Instead, I propose stopping student aid programs and accrediting more online schools to lower the cost of education so that degrees do not have negative payback.
Sadly, there is a trillion dollar student loan bubble, and that debt overhang will negatively impact the economy for years to come. Let's not make the problem worse. It's time to kill the inappropriately named "student aid" program.
Wednesday, April 25, 2012
Who Got Hurt?
The big news in NWA is obviously the bribery scandal in Mexico. I read a good piece on it yesterday from Stansberry. They asked the question, "Who really got hurt"? It's also not surprising that their competitors there are 8% owners of the New York Times.
Wal-Mart is down another 3% or so today, after falling nearly 5% yesterday. The drop in share price comes after the New York Times published a more than 7,000-word article over the weekend that accused Wal-Mart of $24 million in bribes to Mexican officials. The alleged payoffs helped facilitate the retailer's growth in Mexico. (Wal-Mart de Mexico is the largest private employer in that country.)
Wal-Mart could face billions of dollars in fines. Most disturbing to shareholders, the highest echelons of Wal-Mart's management are alleged to have known details about the scandal as early as 2005… and covered it up instead of reporting it. Even Wal-Mart Chairman S. Robson Walton – son of founder Sam Walton – is alleged to have received an anonymous e-mail about bribes to Mexican officials.
I (Dan Ferris) have thought about this a lot the past two days, since I have Wal-Mart in both my Extreme Value and 12% Letter newsletters. It's perhaps the most well-known of my "World Dominator" stock picks.
I have a lot to say about this, but here's what I'm wondering this morning…
Who got hurt?
Let's say Wal-Mart is guilty of all the accusations… that it spent $24 million bribing Mexican officials to expedite the process of permitting new land for Wal-Mart to build new stores. Who was hurt by that?
The Mexican economy unquestionably benefits from a strong and growing Wal-Mart. The company employs more than 200,000 people in its nearly 2,100 Mexican retail and wholesale locations.
What taxpayers on either side of the border were hurt? Again, the alleged bribes focused on speeding up the permitting and zoning process… bureaucratic constructs of dubious value.
And would-be competitors? In practical terms, anybody with a prayer of competing with Wal-Mart can afford to pay bribes, too. I cannot imagine major Mexican retailers Sears de Mexico and Sanborns (not to mention a slew of smaller competitors) aren't doing exactly the same thing. A reader brings this up in the mailbag (below)… but corruption is notoriously rampant in Mexico. Wal-Mart executives couldn't be the only ones putting cash in those open hands.
A rapidly growing Wal-Mart is great for the company and its shareholders… great for the Mexican economy… and great for the officials who took the bribes since they'd never make that much money otherwise.
I'm not saying bribery is a victimless crime… I'm just having trouble finding the victim.
I imagine we'll get a lot of nasty mail telling me how awful and immoral I am. But I'm just asking a simple question… the kind of question you ask if you're truly paying attention in life. In practical terms… who was harmed by the alleged bribes?
Much of what is illegal is harmful to no one except the government in its attempts to force you to behave a certain way. Most "public corruption" is an offshoot of stifling regulation. If people didn't feel the need to work around government meddling in areas where it offers no value… this "problem" would vanish. Aren't licenses and permits mostly legal means of extorting cash for the public coffers? What if we simply allowed the company that paid the most to develop the land? Wouldn't that be more civilized, since property tends to be traded fairly and lawfully… unless it's stolen by governments and given out in exchange for favors?
One final thought about Wal-Mart. I read a report recently by GMO, the money management firm co-founded by prolific market commentator Jeremy Grantham. The report noted that two-thirds of all corporate value lies 20 years or more in the future. In other words, businesses are valued based on future earnings. Most of that value lies 20 years out.
Will anyone remember the Mexican bribery scandal in 20 years? I don't know… but I doubt it. Even if the fines destroy an entire year of Wal-Mart's operating income (more than $26 billion last year)… the damage to the company's valuation would evaporate after two decades. If the company paid out a dividend of that size, the stock would soar… yet that would have about the same effect on the business' earnings power as a fine the same size.
I imagine the headlines will get worse and a big Wal-Mart executive or two will have to step down. But I doubt this will hurt Wal-Mart's business much. It'll remain a World Dominating, relentlessly growing retail network of more than 10,000 locations worldwide.
This is a letter sent regarding the bribes.
It's simply incredible to read about the Wal-Mart bribery story. What a pile of garbage. Anyone who has ever lived, worked or run a business in Mexico knows this is a way of life. At the local, municipal level, officials regularly charge a fee (mordida) for building permits. That's a fact!. 'Sin pagos no hay permisos.' Which translates into 'no payments, no permits.' It's the same as using a turnpike or toll road in the U.S.
"Now representatives Cummings and Waxman are going to stick their noses in. It just makes me sick. It is astonishing that the U.S. government enforces the FCPA when for decades Washington D.C. has, and continues to use, food, money, weapons etc. to bribe and prop up foreign governments for their support. Talk about hypocrisy! When are Americans going to wake up?
"In addition, the New York Times published this investigative expose. The newspaper is 8.09% owned by Inmobiliaria Carso, a wholly owned investment vehicle of Grupo Carso of Mexico. Grupo Carso also owns Grupo Sanborns and Sears de Mexico, two large retailing operations that are in fierce competition with Walmex. Connecting the dots may be an interesting exercise. Mexican business tactics may have arrived on the U.S. business scene." – Paid-up subscriber Steve
Ferris comment: Kudos to you for making the connection between the Times story and Wal-Mart's Mexican competition. If Wal-Mart is doing it, so are Sears and Grupo Sanborns. I wonder who would be the winner in a Mexico without bribery? It'd be stupid to bet against Wal-Mart. And I agree with you that the U.S. government prosecuting bribery and extortion is particularly rich.
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Schiff Report
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Redneck Skeet Shooting
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Larry Levin Report
Even though there was no U.S. economic data released today, the market found fault with everything from Holland to China. Things looked bleak all over, but of course the only “story” was the Mexican Wal-Mart bribery scandal. Yes, the stock price fell and the implications may be huge for the über-retailer, but Wal-Mart has lagged behind the broader market rally since 2009. Yes, the stock has rebounded about 25%, but it’s by less than a third of the growth experienced by the broader index.
But that doesn’t matter, because the Wal-Mart story is infotainment and that makes for much better television than say the threat of global financial meltdown when the ink runs dry. Bribery and corrupt government officials are sexy - the fallacy of forced liquidity is not.
While the folks on TV may be reporting the wrong story, the folks in the print media are just plain wrong. Case in point, the latest issue of Barron’s where the front cover said “Outlook: Mostly Sunny”
What Barron's is referring to here is the latest Big Money poll that it conducts semi-annually. The actual title of the article is “Reason to Cheer”
Are you kidding, a reason to cheer, about what? Benny and The Inkjets cranking up the printing presses for an impeding QE3...Europe on the brink of financial implosion and wide scale instability...so-so earnings...future scenario’s like MF Global still missing billions because of regulatory malfeasance?
I’ll take a pass on the sunglasses, thanks anyways.
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Are Pawn Shops Running Out of Gold?
Last Thursday, EZCORP Inc., a pawn shop owner and operator in the United States, reported earnings and in that release they had some very interesting things to say that relate to the gold market. Take this line from their press release where they discuss why they are lowering guidance.
This revision in guidance is due to slightly slower than expected growth rates in the U.S. pawn business for both loans and sales (including scrap sales) as a result of customers’ using a greater proportion of general merchandise instead of gold to satisfy their immediate cash needs.
Furthermore, apparently the company had this to say on their conference call: “ ”Frankly, yes, their piggy banks are certainly emptier than they’ve been and what they have, they’re hanging on to.”
Read more here…http://libertyblitzkrieg.com/
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This is a 27 year marine veteran blasting the 2 party system. It's a joke of a way to find a leader.
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The Bernank is going to tell us today that there won't be additional QE. The market isn't going to like it. Metals and their stocks will get hurt some more. People will panic then in about 6 weeks, we will get a surprise of more QE. I don't see how we can keep rates low without it. The Fed bought 62% of all treasuries last year. Who is going to pick up the slack?
Wal-Mart is down another 3% or so today, after falling nearly 5% yesterday. The drop in share price comes after the New York Times published a more than 7,000-word article over the weekend that accused Wal-Mart of $24 million in bribes to Mexican officials. The alleged payoffs helped facilitate the retailer's growth in Mexico. (Wal-Mart de Mexico is the largest private employer in that country.)
Wal-Mart could face billions of dollars in fines. Most disturbing to shareholders, the highest echelons of Wal-Mart's management are alleged to have known details about the scandal as early as 2005… and covered it up instead of reporting it. Even Wal-Mart Chairman S. Robson Walton – son of founder Sam Walton – is alleged to have received an anonymous e-mail about bribes to Mexican officials.
I (Dan Ferris) have thought about this a lot the past two days, since I have Wal-Mart in both my Extreme Value and 12% Letter newsletters. It's perhaps the most well-known of my "World Dominator" stock picks.
I have a lot to say about this, but here's what I'm wondering this morning…
Who got hurt?
Let's say Wal-Mart is guilty of all the accusations… that it spent $24 million bribing Mexican officials to expedite the process of permitting new land for Wal-Mart to build new stores. Who was hurt by that?
The Mexican economy unquestionably benefits from a strong and growing Wal-Mart. The company employs more than 200,000 people in its nearly 2,100 Mexican retail and wholesale locations.
What taxpayers on either side of the border were hurt? Again, the alleged bribes focused on speeding up the permitting and zoning process… bureaucratic constructs of dubious value.
And would-be competitors? In practical terms, anybody with a prayer of competing with Wal-Mart can afford to pay bribes, too. I cannot imagine major Mexican retailers Sears de Mexico and Sanborns (not to mention a slew of smaller competitors) aren't doing exactly the same thing. A reader brings this up in the mailbag (below)… but corruption is notoriously rampant in Mexico. Wal-Mart executives couldn't be the only ones putting cash in those open hands.
A rapidly growing Wal-Mart is great for the company and its shareholders… great for the Mexican economy… and great for the officials who took the bribes since they'd never make that much money otherwise.
I'm not saying bribery is a victimless crime… I'm just having trouble finding the victim.
I imagine we'll get a lot of nasty mail telling me how awful and immoral I am. But I'm just asking a simple question… the kind of question you ask if you're truly paying attention in life. In practical terms… who was harmed by the alleged bribes?
Much of what is illegal is harmful to no one except the government in its attempts to force you to behave a certain way. Most "public corruption" is an offshoot of stifling regulation. If people didn't feel the need to work around government meddling in areas where it offers no value… this "problem" would vanish. Aren't licenses and permits mostly legal means of extorting cash for the public coffers? What if we simply allowed the company that paid the most to develop the land? Wouldn't that be more civilized, since property tends to be traded fairly and lawfully… unless it's stolen by governments and given out in exchange for favors?
One final thought about Wal-Mart. I read a report recently by GMO, the money management firm co-founded by prolific market commentator Jeremy Grantham. The report noted that two-thirds of all corporate value lies 20 years or more in the future. In other words, businesses are valued based on future earnings. Most of that value lies 20 years out.
Will anyone remember the Mexican bribery scandal in 20 years? I don't know… but I doubt it. Even if the fines destroy an entire year of Wal-Mart's operating income (more than $26 billion last year)… the damage to the company's valuation would evaporate after two decades. If the company paid out a dividend of that size, the stock would soar… yet that would have about the same effect on the business' earnings power as a fine the same size.
I imagine the headlines will get worse and a big Wal-Mart executive or two will have to step down. But I doubt this will hurt Wal-Mart's business much. It'll remain a World Dominating, relentlessly growing retail network of more than 10,000 locations worldwide.
This is a letter sent regarding the bribes.
It's simply incredible to read about the Wal-Mart bribery story. What a pile of garbage. Anyone who has ever lived, worked or run a business in Mexico knows this is a way of life. At the local, municipal level, officials regularly charge a fee (mordida) for building permits. That's a fact!. 'Sin pagos no hay permisos.' Which translates into 'no payments, no permits.' It's the same as using a turnpike or toll road in the U.S.
"Now representatives Cummings and Waxman are going to stick their noses in. It just makes me sick. It is astonishing that the U.S. government enforces the FCPA when for decades Washington D.C. has, and continues to use, food, money, weapons etc. to bribe and prop up foreign governments for their support. Talk about hypocrisy! When are Americans going to wake up?
"In addition, the New York Times published this investigative expose. The newspaper is 8.09% owned by Inmobiliaria Carso, a wholly owned investment vehicle of Grupo Carso of Mexico. Grupo Carso also owns Grupo Sanborns and Sears de Mexico, two large retailing operations that are in fierce competition with Walmex. Connecting the dots may be an interesting exercise. Mexican business tactics may have arrived on the U.S. business scene." – Paid-up subscriber Steve
Ferris comment: Kudos to you for making the connection between the Times story and Wal-Mart's Mexican competition. If Wal-Mart is doing it, so are Sears and Grupo Sanborns. I wonder who would be the winner in a Mexico without bribery? It'd be stupid to bet against Wal-Mart. And I agree with you that the U.S. government prosecuting bribery and extortion is particularly rich.
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Schiff Report
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Redneck Skeet Shooting
Larry Levin Report
Even though there was no U.S. economic data released today, the market found fault with everything from Holland to China. Things looked bleak all over, but of course the only “story” was the Mexican Wal-Mart bribery scandal. Yes, the stock price fell and the implications may be huge for the über-retailer, but Wal-Mart has lagged behind the broader market rally since 2009. Yes, the stock has rebounded about 25%, but it’s by less than a third of the growth experienced by the broader index.
But that doesn’t matter, because the Wal-Mart story is infotainment and that makes for much better television than say the threat of global financial meltdown when the ink runs dry. Bribery and corrupt government officials are sexy - the fallacy of forced liquidity is not.
While the folks on TV may be reporting the wrong story, the folks in the print media are just plain wrong. Case in point, the latest issue of Barron’s where the front cover said “Outlook: Mostly Sunny”
What Barron's is referring to here is the latest Big Money poll that it conducts semi-annually. The actual title of the article is “Reason to Cheer”
Are you kidding, a reason to cheer, about what? Benny and The Inkjets cranking up the printing presses for an impeding QE3...Europe on the brink of financial implosion and wide scale instability...so-so earnings...future scenario’s like MF Global still missing billions because of regulatory malfeasance?
I’ll take a pass on the sunglasses, thanks anyways.
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Are Pawn Shops Running Out of Gold?
Last Thursday, EZCORP Inc., a pawn shop owner and operator in the United States, reported earnings and in that release they had some very interesting things to say that relate to the gold market. Take this line from their press release where they discuss why they are lowering guidance.
This revision in guidance is due to slightly slower than expected growth rates in the U.S. pawn business for both loans and sales (including scrap sales) as a result of customers’ using a greater proportion of general merchandise instead of gold to satisfy their immediate cash needs.
Furthermore, apparently the company had this to say on their conference call: “ ”Frankly, yes, their piggy banks are certainly emptier than they’ve been and what they have, they’re hanging on to.”
Read more here…http://libertyblitzkrieg.com/
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This is a 27 year marine veteran blasting the 2 party system. It's a joke of a way to find a leader.
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The Bernank is going to tell us today that there won't be additional QE. The market isn't going to like it. Metals and their stocks will get hurt some more. People will panic then in about 6 weeks, we will get a surprise of more QE. I don't see how we can keep rates low without it. The Fed bought 62% of all treasuries last year. Who is going to pick up the slack?
Friday, April 20, 2012
Golden Opportunity
No commentary today, the pieces speak for themselves.
THE GOLD MARKET
Monday, 16th April 2012
Please note that this information expresses the views and opinions of Seabridge Gold management and is not intended as investment advice. Seabridge Gold is not licensed as an investment advisor.
It sometimes seems to us that no investment attracts more negative commentary than gold. In the past six months, investors have been treated to yet another round of high-profile analyses declaring that the gold bull market is dead. Since these analysts are not on record as having predicted the gold market’s consecutive 10 year bull run and its gain of more than 600%, why would anyone listen to them? But investors do listen to this nonsense and so it needs to be addressed.
Let’s be clear that short-term chart patterns are not going to tell you if the gold price has peaked. For the gold bull market to die, we believe the dollar has to reverse its multi-year downtrend; the dollar actually has to increase its purchasing power and its reliability as a store of value, rendering gold unnecessary as an investment. A reversal in the fortunes of the dollar requires a revolution in US fiscal management, a sea-change in monetary policy and an enormously painful reset of America’s mind-boggling sovereign and consumer debt load. No doubt these things will occur at some point and then we will need to consider the end of the gold bull market. But not any time soon.
Gold is not up because it is a speculative darling. It is up because fiat currencies and the securities denominated in them are down in real terms; the alternatives are losing value measured against real things. Or as Jim Grant says (and we have been saying for at least as long), gold is a reciprocal of confidence in the world’s fiscal and monetary authorities and there is no bull market in this form of confidence. In other words, gold is up by default, a long, slow, drawn-out default in the alternatives which, in our view, will last for many more years.
Misconceptions du jour
In 2012, gold has been laboring to overcome two misconceptions: the US economy is in recovery (which means that the Federal Reserve will begin to reverse its accommodative policies); and the European debt crisis is resolved, at least for the next several years. Both are illusions.
The economic bulls point to such factors as 'slow but steady' job growth, consumer deleveraging in the real estate market and a rebound in vehicle sales as evidence that the economic recovery has underlying strength. But the latest numbers are not supportive. Consumers are once again depleting their savings to increase spending at a faster rate than growth in income. The deleveraging which is absolutely required to reduce the burden of unmanageable debt has been postponed, providing an illusion of renewed prosperity. The facts: subprime is back, supporting the car market. At one time, you only needed a pulse to buy a house in America. Now, that's all you need for a new truck. Nothing has been learned. We are still trying to re-inflate the credit bubble with more cheap credit and pretending that this is how sustainable recoveries are made. Mortgage debt is down largely due to write-offs on defaults, not pay-downs, leaving behind a smaller pool of homeowners who are still frozen in place by far too much debt. Foreclosures are on the rise again.
But the proof of a deepening recession is in the employment numbers. John Hussman's April 9, 2012 newsletter is a good place to start. He notes that since the recession officially ended in June 2009, total non-farm payrolls in the US have grown by 1.84 million jobs. However, employment of workers 55 years of age and over has increased by 2.96 million jobs while employment among workers under age 55 has actually contracted by 1.12 million jobs. This is not the message you hear from the White House.
Hussman writes: "The over-55 cohort has suffered an assault on its financial security: a difficult trifecta that includes the loss of interest income, the loss of portfolio value, and the loss of home equity. All of these have combined to provoke a delay in retirement plans and a need for these individuals to re-enter the labor force...In short, what we've observed in the employment figures is not recovery, but desperation...and explains why real disposable income has grown by only 0.3% over the past year." And what is to become of an unemployed generation of young people saddled with $1 trillion in student loans?
This was not a normal recession and it has not ended. In our view, the economy is not bouncing back. We will not return to the 'normal' of 10 years ago because that 'normal' was really an enormous debt bubble of historic proportions which will not be repeated in our lifetimes.
Does this look like a sustainable recovery?
There are 242 million working-age Americans and 100 million of them are not working. The Federal government reports that only 13 million of these people are actually unemployed. There are more than 2 million fewer Americans working full time today than there were 10 years ago.
Prior to 2008, US deficits never exceeded 4% of GDP but now they exceed 9%. This unsustainable spending gives the illusion of an economic recovery but not the savings and investment needed for real growth.
The US Federal Government borrowed $1.3 trillion last year, 36 cents for every dollar it spent. The Federal Reserve last year purchased 61% of total net Treasury issuance. (Source: The Center for Financial Stability). Washington is living on printed money.
The average annual deficit from 2000 through 2008 was $190 billion. Since 2008, the annual deficit has averaged $1.3 trillion.
The US national debt increased $5.6 trillion in the last three and a half years. It took 211 years to accumulate the first $5.6 trillion of debt.
The national debt will reach at least $20 trillion by 2015. If interest rates normalized to the same level they were in 2007 (5%), annual interest expense would be $1 trillion or 45% of current tax revenue. Interest rates cannot be allowed to rise and therefore more quantitative easing is inevitable.
The logical consequence of this fiscal nightmare is a future funding crisis for Washington. In the March 29 edition of Barron's online, Randall W. Forsyth reports on comments by Stephanie Pomboy, head of MacroMavens advisory. Noting that Uncle Sam is currently borrowing some $1.1 trillion a year of which foreign creditors are buying just $286 billion, Pomboy says "I'm no mathematician, but that seems to leave $800 billion of 'slack' (of which the Fed graciously absorbed $650 billion last year). Barring a desire to pay the government 1% after inflation, there is NO profit-oriented or even preservation-of-capital-oriented buyer for Treasuries," she writes. "For the life of me, I can't understand why NOBODY is talking about this???!!!"
The US government is addicted to its exorbitant privilege of printing the world's reserve currency and shipping it abroad for goods and services. It is a privilege that has been supported by foreign central banks buying US debt for the better part of the last 30 years and it works as long as exporting countries take the dollars and reinvest them in US capital markets. This may now be changing as Pomboy notes. Foreigners have lost interest in US Treasuries. China, the largest foreign holder of US dollars, reduced its purchases in the past year and Japan, the second largest holder, actually repatriated funds. If the Fed is also not there to buy Treasuries and fund the federal deficit, who is? That's a question Bill Gross of Pimco, the world's largest bond fund, has been asking. He expects more quantitative easing soon, as do we. A much weaker dollar lies ahead, in our opinion.
Does this look like a Greek rescue?
While investors contemplate a difficult time ahead for Spain and Italy, the real and pressing issue in the Euro Zone is...Greece. You thought it was fixed? Read on. The continuing saga of the second Greek 'bailout' provides the evidence as to why you should not trust statements from the European Union (EU). Yes, senior officials have declared the European debt crisis to be over, with their example being Greek. It is not over.
"The Second Economic Adjustment Programme for Greece, March 2012", a 195-page official document from the European Commission which describes the terms and conditions for the latest Greek bailout, contains this exact quote: "Disbursements to Greece by the EFSF and the IMF will still be conditional on compliance with conditionality". (p45, PDF version)
The first disbursement to Greece under this new arrangement was made on March 20, 2012. Disbursements are paid quarterly which means that June 20 is the date of the next disbursement. Greece was originally supposed to receive E74 billion in the first tranche (p46) but it received just E7.5 billion. To meet its cash obligations to the tiny minority of private sovereign creditors who, under the original terms of their bond purchase, were entitled to full payment under the March bond swap, the Greek government reportedly drained the accounts of the country's largest universities and regional hospitals held at the Bank of Greece -- an amount estimated by one source to total some E1.4 billion. These institutions are now effectively insolvent. The next bond swap for E450 million (issue XS0147393861) is due and payable in cash on May 15. Attempts to settle this issue for less have reportedly been rejected.
Of the E7.4 billion it received in the first tranche, a Greek government official stated that Greece would use this money to pay E4.66 billion to the European Central Bank and other Euro Zone national central banks for the capital amount of a three-year bond that expired in late March. This left E2.74 billion for the Greek government to live on for the next three months. If you believe the 1% deficit forecast for 2012 (complete nonsense on p89), Greece has a shortfall of E1.25 billion per month which consumes what remains of the first disbursement from the EU & IMF. But, alas, there are E5.2 billion in Treasury bills due in April and May. How is this sustainable? (See "Greek Government Robbed Public Iinstitutions to Complete Bond Swap" and "Crunch Time for Greece").
The most amazing aspect of this second Greek bailout is that the country's debt has INCREASED. Private holders of Greek debt were forced to take E105 billion in write-offs but with the addition of the new loan of E130 billion, gross debt has increased E25 billion. The total debt of Greece (sovereign, municipal, corporate and bank) has increased from E912 billion to E937 billion. Borrowing your way out of insolvency is never easy. With a collapsing economy and surging unemployment, more loans will surely be required.
If the EU cannot rescue tiny Greece, how can it save Spain or Italy? Greece may well prove to be the catalyst for the bursting of the global sovereign finance bubble just as Lehman was for the banks in 2008. How much bond market confidence has been lost by the fact that the European Central Bank and other EU institutions did not take a write-down on their Greek debt?
This is what real inflation looks like
In our view, Gold's highest and best use is as a store of wealth especially when compared to fiat currencies and financial assets. The physical gold supply is growing at about 1.5% per year and really can't expand any faster.Michael Pollaro estimates that money supply for the US, Europe and Japan combined is now increasing at nearly 10% annually with infinite upside from there.
Traditional measurements of money supply probably understate the problem. According to the March 30, 2012 edition of the Artemis Capital Management newsletter, "the pace of global monetary stimulus has been astounding reaching almost $9 trillion in total expansion over the past three and a half years in the greatest period of fiat money creation in human history. Let me put these numbers into perspective. Collectively global central banks have created enough fiat money (over the past three and a half years) to buy every person on earth a 55" wide-screen 3D television."
But the best evidence of inflation is the growth in US dollar-denominated claims...the supply of debt-based financial assets. Let's look at US Total Credit Market Debt. In 1980, it was $4.7 trillion. Today, US Total Credit Market Debt is $57.3 trillion, an increase of 1,119%. All of this debt is somebody's asset and sits on the books of lenders and investors. Meanwhile, the US gold reserve (282 million ounces) has increased in value by about 100% to $465 billion over the same period. It would now take a gold price of more than $203,000 per ounce for the US gold reserve to provide 100% coverage of total US debt.
We do not know how much confidence investors in US credit markets will lose and how much insurance coverage they will demand. The risks must seem rather low to them at present and there are ways to hedge other than gold...like Credit Default Swaps which are issued in vast and unregulated quantities by banks and hedge funds. But debt has grown three times faster than the economy which must service and back this debt. Too much debt has gone to support consumption and non-productive investment. Credit creation is faltering when it must continue to grow rapidly just to roll over existing debt and keep the game going. The conclusion, in our view, is default either by repudiating the debt or eroding its value through monetary debasement.
We believe credit expansion is the inflation that gold must eventually backstop in the event of a collapse of confidence in the financial system. The question is, what are the owners of $57.3 trillion in debt-based 'assets' willing to pay for the one asset that backs itself, cannot be printed and cannot default? And where do you think central banks will deploy their US$10 trillion in rapidly growing reserves when each of them is attempting to devalue the currencies they issue? (Hint: a growing number are now buying gold).
Keep your gold
As we see it, the world's fiscal and monetary authorities have done nothing to earn your confidence. Should you trust them with your savings? Do you think their paper, issued in ever greater amounts, is a safe place to be? The dollar has steadily lost value for more than a hundred years. That's what a bear market really looks like. By comparison, gold looks pretty good to us.
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THE TAX SYSTEM EXPLAINED IN BEER! (Economics Applied to Society)
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.
If they paid their bill the way we pay our taxes, it would go something like this.
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20". Drinks for the ten men would now cost just $80.
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men? The paying customers? How could they divide the $20 windfall so that everyone would get his fair share?
They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.
And so the fifth man, like the first four, now paid nothing (100% saving).
The sixth now paid $2 instead of $3 (33% saving).
The seventh now paid $5 instead of $7 (28% saving).
The eighth now paid $9 instead of $12 (25% saving).
The ninth now paid $14 instead of $18 (22% saving).
The tenth now paid $49 instead of $59 (16% saving).
Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.
"I only got a dollar out of the $20 saving," declared the sixth man. He pointed to the tenth man, ´but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar too. It's unfair that he got ten times more benefit than me!"
"That's true!" shouted the seventh man. "Why should he get $10 back, when I got only $2? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!"
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier. Which is exactly what's beginning to occur.
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Here is a spot on comment I got from one of my readers regarding the USPS piece yesterday.
Due to our use of USPS I've followed their problems for several years. Their answer is always to increase postage, which is completely counter intuitive. Seriously, in today's age is there any mail that you couldn't wait an extra day to receive? I would hate to not receive my J Crew until Friday. Why not go to a MWF delivery model and cut 30% from the budget? Oh wait, your article hit on it, too many unions and levels of bureaucracy...
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Oh to be a secret service agent. This is one of the 20 "escorts" they paid for in Columbia.
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F**King, Austria Looks to Change Their Name
The prank calls were the last straw.
The Sun reports that residents of F--king, Austria are set to vote on whether to change their town's name.
And just to be clear, we are dashing out the "u" and "c" for the sake of our more sensitive readers. This town bears the same name as one of those words you're not supposed to mention on TV or in the classroom.
For residents of this Central European town, it's been hell -- and that should not be confused with a small hamlet in Michigan that's actually called "Hell."
The constant sign-stealing and mockery from tourists have rubbed many locals the wrong way.
"The only problem is that we need all of the F--king residents to agree to the name change," Mayor Franz Meindl told the Sun. "Everyone needs to agree for it to happen."
The Telegraph writes that the village of 104 residents was pretty much unknown until U.S. troops were stationed in the area at the end of WWII.
The paper describes how the town got its name in the first place:
Experts say the town’s name is derived from Focko, a 6th Century Bavarian nobleman, and the modern spelling was adopted in the 18th Century.
The Register reports that the town considered changing its name in 2005, but that the citizens voted against renaming the town.
"We had a vote last year on whether to rename the town, but decided to keep it as it is," then-Mayor Siegfried Hauppl said following the 2005 vote. "After all, F--king has existed for 800 years, probably when a Mr F--k or the F--k family moved into the area. The 'ing' was added as a word for settlement."
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Krieger has a new blog site. Be sure to set up to get email updates at the bottom of his site.
He said to his friend, "If the British march
By land or sea from the town tonight,
Hang a lantern aloft in the belfry arch
Of the North Church tower as a signal light,
One if by land, and two if by sea;
And I on the opposite shore will be,
Ready to ride and spread the alarm
Through every Middlesex village and farm,
For the country folk to be up and to arm."
- Henry Wadsworth Longfellow from the poem “Paul Revere’s Ride”
Welcome to My Blog: www.libertyblitzkrieg.com
The world is a very dangerous place at the moment and it is becoming more treacherous with each passing day. The reason for this is because the self-proclaimed “global elite” or TPTB, whatever you want to call them, have declared war on the rest of us. It is not just financial and economic war but it is also a moral and spiritual one. The game is being played on many levels and most of humanity remains completely unaware of it (although I would say a higher percentage of us are aware than ever before in recorded history thanks to the internet). When people look back at what has happened in the past decade or so and wonder why the welfare-warfare state continues to grow despite who sits in the Presidency the answer becomes clear. The leadership in the United States of America, and in reality pretty much every government on the planet, could care less about the advancement of their people. Back in 2008 they weren’t interested in saving the economy. They simply wanted to steal everything in sight using the government as its tool…and boy did they. The political leadership in America today (with some exceptions of course) represents the lowest common denominator of our Republic. They collectively possess a cunning political mindset coupled with a total absence of empathy and a lack of hesitation to engage in ruthless behavior to maintain power. Meanwhile, our corporate leadership (particularly now that Steve Jobs has passed) are collectively a bunch of cost-cutting, share repurchasing, quarterly EPS obsessed cowards that couldn’t and wouldn’t want to innovate themselves out of a paper bag. They surround themselves with “yes” men and with a few exceptions dare not to speak out about the crimes being committed against the citizenry by the political class for fear of losing their positions in the socio-economic structure. In short, they are cowards. Then of course there is the top of the power pyramid in today’s world. At the apex lies (pun intended) the Central Bankers (Planners) of the world. There is no group of people to whom I feel more disdain. I firmly believe they must face trial for crimes against humanity once their sick game plays out. This group of people literally control the entire global economy via their privilege to print however much currency they want whenever they want to. This is a group of insanely egotistical, mathematical robots who think they can excel model and print the world into utopia. In reality, all they are doing is transferring what is left of the middle class’ wealth into the pockets of the super rich who use 0% money to engage in leveraged speculation on financial assets and then get bailed out by the taxpayer when their bets fail.
One Million Paul Reveres
It was last night in 1775 that Paul Revere made his famous midnight ride to warn the colonists that “the British are coming.” Amongst other things, the colonists were concerned that the crown was going to disarm the citizenry and arrest John Adams and John Hancock. It is auspicious that I am launching my blog on the 237th anniversary of his legendary warning. It was late last year that in an interview I said what we need are one million Paul Reveres on the internet in order to get the word out globally and unite against the tiny minority that is doing all this harm to our species. It is as a result of my never-ending determination to win this fight that I have decided to start this blog.
With that out of the way, I want to introduce you to the site. This project is long overdue but I think the time is now right to take things to another level and provide a platform for more people to hear my thought process on a more frequent basis. I have never had my own presence on the web before and technology does not come naturally to me so this will be a gigantic learning process. Any advice or suggestions from people that have gone down this road would be greatly appreciated. This will be a work in progress and I have no idea what path it may lead me down. I am keeping all options on the table but here is how I envision it working for now.
My weekly emails will be posted to the site first and then will be emailed out later (maybe a few hours later or maybe a day later I am not sure yet). I will also be posting news items that I think are important and not being covered by other sites along with “My Two Cents”. I have already posted several examples of this on the blog. I will not be posting news all day, rather more likely two or three items a day on topics I think are worth digging into. I will also try to do a “Thought of the Day,” which will usually come out near the close of U.S. markets. That said, if there really is nothing to say on a particular day I won’t say anything. There are other things I am considering and as I decide to do them I will let everyone know. You can also set up to receive email updates when I post something new and that can be found on the right sidebar. The site also has pretty much everything I have written since 2010 and all the interviews I have done.
Winning the Lightning War
At this time, I would like to thank all of those in the struggle with me and the rest of free (and wanting to be free) humanity. In particular, I want to thank Tyler Durden and the team at www.zerohedge.com and Max Keiser and Stacy Herbert of www.maxkeiser.com for both the support they provided to my writing from the very beginning and their tireless struggle to shine some light of truth in a world filled with propaganda and nonsense.
While these are dangerous times, these are also times of great opportunity. It is only in times like these that we can change the world…for better or worse. Our enemies want increased global centralization of political and economic power. We want the opposite. We want freedom. Freedom of speech. Freedom to use whatever money we want to use not have some digit garbage they create shoved down our throats. Freedom to pick whatever job we want and the freedom to live how we want to live. Please join me in the Liberty Blitzkrieg!
www.libertyblitzkrieg.com
THE GOLD MARKET
Monday, 16th April 2012
Please note that this information expresses the views and opinions of Seabridge Gold management and is not intended as investment advice. Seabridge Gold is not licensed as an investment advisor.
It sometimes seems to us that no investment attracts more negative commentary than gold. In the past six months, investors have been treated to yet another round of high-profile analyses declaring that the gold bull market is dead. Since these analysts are not on record as having predicted the gold market’s consecutive 10 year bull run and its gain of more than 600%, why would anyone listen to them? But investors do listen to this nonsense and so it needs to be addressed.
Let’s be clear that short-term chart patterns are not going to tell you if the gold price has peaked. For the gold bull market to die, we believe the dollar has to reverse its multi-year downtrend; the dollar actually has to increase its purchasing power and its reliability as a store of value, rendering gold unnecessary as an investment. A reversal in the fortunes of the dollar requires a revolution in US fiscal management, a sea-change in monetary policy and an enormously painful reset of America’s mind-boggling sovereign and consumer debt load. No doubt these things will occur at some point and then we will need to consider the end of the gold bull market. But not any time soon.
Gold is not up because it is a speculative darling. It is up because fiat currencies and the securities denominated in them are down in real terms; the alternatives are losing value measured against real things. Or as Jim Grant says (and we have been saying for at least as long), gold is a reciprocal of confidence in the world’s fiscal and monetary authorities and there is no bull market in this form of confidence. In other words, gold is up by default, a long, slow, drawn-out default in the alternatives which, in our view, will last for many more years.
Misconceptions du jour
In 2012, gold has been laboring to overcome two misconceptions: the US economy is in recovery (which means that the Federal Reserve will begin to reverse its accommodative policies); and the European debt crisis is resolved, at least for the next several years. Both are illusions.
The economic bulls point to such factors as 'slow but steady' job growth, consumer deleveraging in the real estate market and a rebound in vehicle sales as evidence that the economic recovery has underlying strength. But the latest numbers are not supportive. Consumers are once again depleting their savings to increase spending at a faster rate than growth in income. The deleveraging which is absolutely required to reduce the burden of unmanageable debt has been postponed, providing an illusion of renewed prosperity. The facts: subprime is back, supporting the car market. At one time, you only needed a pulse to buy a house in America. Now, that's all you need for a new truck. Nothing has been learned. We are still trying to re-inflate the credit bubble with more cheap credit and pretending that this is how sustainable recoveries are made. Mortgage debt is down largely due to write-offs on defaults, not pay-downs, leaving behind a smaller pool of homeowners who are still frozen in place by far too much debt. Foreclosures are on the rise again.
But the proof of a deepening recession is in the employment numbers. John Hussman's April 9, 2012 newsletter is a good place to start. He notes that since the recession officially ended in June 2009, total non-farm payrolls in the US have grown by 1.84 million jobs. However, employment of workers 55 years of age and over has increased by 2.96 million jobs while employment among workers under age 55 has actually contracted by 1.12 million jobs. This is not the message you hear from the White House.
Hussman writes: "The over-55 cohort has suffered an assault on its financial security: a difficult trifecta that includes the loss of interest income, the loss of portfolio value, and the loss of home equity. All of these have combined to provoke a delay in retirement plans and a need for these individuals to re-enter the labor force...In short, what we've observed in the employment figures is not recovery, but desperation...and explains why real disposable income has grown by only 0.3% over the past year." And what is to become of an unemployed generation of young people saddled with $1 trillion in student loans?
This was not a normal recession and it has not ended. In our view, the economy is not bouncing back. We will not return to the 'normal' of 10 years ago because that 'normal' was really an enormous debt bubble of historic proportions which will not be repeated in our lifetimes.
Does this look like a sustainable recovery?
There are 242 million working-age Americans and 100 million of them are not working. The Federal government reports that only 13 million of these people are actually unemployed. There are more than 2 million fewer Americans working full time today than there were 10 years ago.
Prior to 2008, US deficits never exceeded 4% of GDP but now they exceed 9%. This unsustainable spending gives the illusion of an economic recovery but not the savings and investment needed for real growth.
The US Federal Government borrowed $1.3 trillion last year, 36 cents for every dollar it spent. The Federal Reserve last year purchased 61% of total net Treasury issuance. (Source: The Center for Financial Stability). Washington is living on printed money.
The average annual deficit from 2000 through 2008 was $190 billion. Since 2008, the annual deficit has averaged $1.3 trillion.
The US national debt increased $5.6 trillion in the last three and a half years. It took 211 years to accumulate the first $5.6 trillion of debt.
The national debt will reach at least $20 trillion by 2015. If interest rates normalized to the same level they were in 2007 (5%), annual interest expense would be $1 trillion or 45% of current tax revenue. Interest rates cannot be allowed to rise and therefore more quantitative easing is inevitable.
The logical consequence of this fiscal nightmare is a future funding crisis for Washington. In the March 29 edition of Barron's online, Randall W. Forsyth reports on comments by Stephanie Pomboy, head of MacroMavens advisory. Noting that Uncle Sam is currently borrowing some $1.1 trillion a year of which foreign creditors are buying just $286 billion, Pomboy says "I'm no mathematician, but that seems to leave $800 billion of 'slack' (of which the Fed graciously absorbed $650 billion last year). Barring a desire to pay the government 1% after inflation, there is NO profit-oriented or even preservation-of-capital-oriented buyer for Treasuries," she writes. "For the life of me, I can't understand why NOBODY is talking about this???!!!"
The US government is addicted to its exorbitant privilege of printing the world's reserve currency and shipping it abroad for goods and services. It is a privilege that has been supported by foreign central banks buying US debt for the better part of the last 30 years and it works as long as exporting countries take the dollars and reinvest them in US capital markets. This may now be changing as Pomboy notes. Foreigners have lost interest in US Treasuries. China, the largest foreign holder of US dollars, reduced its purchases in the past year and Japan, the second largest holder, actually repatriated funds. If the Fed is also not there to buy Treasuries and fund the federal deficit, who is? That's a question Bill Gross of Pimco, the world's largest bond fund, has been asking. He expects more quantitative easing soon, as do we. A much weaker dollar lies ahead, in our opinion.
Does this look like a Greek rescue?
While investors contemplate a difficult time ahead for Spain and Italy, the real and pressing issue in the Euro Zone is...Greece. You thought it was fixed? Read on. The continuing saga of the second Greek 'bailout' provides the evidence as to why you should not trust statements from the European Union (EU). Yes, senior officials have declared the European debt crisis to be over, with their example being Greek. It is not over.
"The Second Economic Adjustment Programme for Greece, March 2012", a 195-page official document from the European Commission which describes the terms and conditions for the latest Greek bailout, contains this exact quote: "Disbursements to Greece by the EFSF and the IMF will still be conditional on compliance with conditionality". (p45, PDF version)
The first disbursement to Greece under this new arrangement was made on March 20, 2012. Disbursements are paid quarterly which means that June 20 is the date of the next disbursement. Greece was originally supposed to receive E74 billion in the first tranche (p46) but it received just E7.5 billion. To meet its cash obligations to the tiny minority of private sovereign creditors who, under the original terms of their bond purchase, were entitled to full payment under the March bond swap, the Greek government reportedly drained the accounts of the country's largest universities and regional hospitals held at the Bank of Greece -- an amount estimated by one source to total some E1.4 billion. These institutions are now effectively insolvent. The next bond swap for E450 million (issue XS0147393861) is due and payable in cash on May 15. Attempts to settle this issue for less have reportedly been rejected.
Of the E7.4 billion it received in the first tranche, a Greek government official stated that Greece would use this money to pay E4.66 billion to the European Central Bank and other Euro Zone national central banks for the capital amount of a three-year bond that expired in late March. This left E2.74 billion for the Greek government to live on for the next three months. If you believe the 1% deficit forecast for 2012 (complete nonsense on p89), Greece has a shortfall of E1.25 billion per month which consumes what remains of the first disbursement from the EU & IMF. But, alas, there are E5.2 billion in Treasury bills due in April and May. How is this sustainable? (See "Greek Government Robbed Public Iinstitutions to Complete Bond Swap" and "Crunch Time for Greece").
The most amazing aspect of this second Greek bailout is that the country's debt has INCREASED. Private holders of Greek debt were forced to take E105 billion in write-offs but with the addition of the new loan of E130 billion, gross debt has increased E25 billion. The total debt of Greece (sovereign, municipal, corporate and bank) has increased from E912 billion to E937 billion. Borrowing your way out of insolvency is never easy. With a collapsing economy and surging unemployment, more loans will surely be required.
If the EU cannot rescue tiny Greece, how can it save Spain or Italy? Greece may well prove to be the catalyst for the bursting of the global sovereign finance bubble just as Lehman was for the banks in 2008. How much bond market confidence has been lost by the fact that the European Central Bank and other EU institutions did not take a write-down on their Greek debt?
This is what real inflation looks like
In our view, Gold's highest and best use is as a store of wealth especially when compared to fiat currencies and financial assets. The physical gold supply is growing at about 1.5% per year and really can't expand any faster.Michael Pollaro estimates that money supply for the US, Europe and Japan combined is now increasing at nearly 10% annually with infinite upside from there.
Traditional measurements of money supply probably understate the problem. According to the March 30, 2012 edition of the Artemis Capital Management newsletter, "the pace of global monetary stimulus has been astounding reaching almost $9 trillion in total expansion over the past three and a half years in the greatest period of fiat money creation in human history. Let me put these numbers into perspective. Collectively global central banks have created enough fiat money (over the past three and a half years) to buy every person on earth a 55" wide-screen 3D television."
But the best evidence of inflation is the growth in US dollar-denominated claims...the supply of debt-based financial assets. Let's look at US Total Credit Market Debt. In 1980, it was $4.7 trillion. Today, US Total Credit Market Debt is $57.3 trillion, an increase of 1,119%. All of this debt is somebody's asset and sits on the books of lenders and investors. Meanwhile, the US gold reserve (282 million ounces) has increased in value by about 100% to $465 billion over the same period. It would now take a gold price of more than $203,000 per ounce for the US gold reserve to provide 100% coverage of total US debt.
We do not know how much confidence investors in US credit markets will lose and how much insurance coverage they will demand. The risks must seem rather low to them at present and there are ways to hedge other than gold...like Credit Default Swaps which are issued in vast and unregulated quantities by banks and hedge funds. But debt has grown three times faster than the economy which must service and back this debt. Too much debt has gone to support consumption and non-productive investment. Credit creation is faltering when it must continue to grow rapidly just to roll over existing debt and keep the game going. The conclusion, in our view, is default either by repudiating the debt or eroding its value through monetary debasement.
We believe credit expansion is the inflation that gold must eventually backstop in the event of a collapse of confidence in the financial system. The question is, what are the owners of $57.3 trillion in debt-based 'assets' willing to pay for the one asset that backs itself, cannot be printed and cannot default? And where do you think central banks will deploy their US$10 trillion in rapidly growing reserves when each of them is attempting to devalue the currencies they issue? (Hint: a growing number are now buying gold).
Keep your gold
As we see it, the world's fiscal and monetary authorities have done nothing to earn your confidence. Should you trust them with your savings? Do you think their paper, issued in ever greater amounts, is a safe place to be? The dollar has steadily lost value for more than a hundred years. That's what a bear market really looks like. By comparison, gold looks pretty good to us.
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THE TAX SYSTEM EXPLAINED IN BEER! (Economics Applied to Society)
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.
If they paid their bill the way we pay our taxes, it would go something like this.
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20". Drinks for the ten men would now cost just $80.
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men? The paying customers? How could they divide the $20 windfall so that everyone would get his fair share?
They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.
And so the fifth man, like the first four, now paid nothing (100% saving).
The sixth now paid $2 instead of $3 (33% saving).
The seventh now paid $5 instead of $7 (28% saving).
The eighth now paid $9 instead of $12 (25% saving).
The ninth now paid $14 instead of $18 (22% saving).
The tenth now paid $49 instead of $59 (16% saving).
Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.
"I only got a dollar out of the $20 saving," declared the sixth man. He pointed to the tenth man, ´but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar too. It's unfair that he got ten times more benefit than me!"
"That's true!" shouted the seventh man. "Why should he get $10 back, when I got only $2? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!"
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier. Which is exactly what's beginning to occur.
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Here is a spot on comment I got from one of my readers regarding the USPS piece yesterday.
Due to our use of USPS I've followed their problems for several years. Their answer is always to increase postage, which is completely counter intuitive. Seriously, in today's age is there any mail that you couldn't wait an extra day to receive? I would hate to not receive my J Crew until Friday. Why not go to a MWF delivery model and cut 30% from the budget? Oh wait, your article hit on it, too many unions and levels of bureaucracy...
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Oh to be a secret service agent. This is one of the 20 "escorts" they paid for in Columbia.
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F**King, Austria Looks to Change Their Name
The prank calls were the last straw.
The Sun reports that residents of F--king, Austria are set to vote on whether to change their town's name.
And just to be clear, we are dashing out the "u" and "c" for the sake of our more sensitive readers. This town bears the same name as one of those words you're not supposed to mention on TV or in the classroom.
For residents of this Central European town, it's been hell -- and that should not be confused with a small hamlet in Michigan that's actually called "Hell."
The constant sign-stealing and mockery from tourists have rubbed many locals the wrong way.
"The only problem is that we need all of the F--king residents to agree to the name change," Mayor Franz Meindl told the Sun. "Everyone needs to agree for it to happen."
The Telegraph writes that the village of 104 residents was pretty much unknown until U.S. troops were stationed in the area at the end of WWII.
The paper describes how the town got its name in the first place:
Experts say the town’s name is derived from Focko, a 6th Century Bavarian nobleman, and the modern spelling was adopted in the 18th Century.
The Register reports that the town considered changing its name in 2005, but that the citizens voted against renaming the town.
"We had a vote last year on whether to rename the town, but decided to keep it as it is," then-Mayor Siegfried Hauppl said following the 2005 vote. "After all, F--king has existed for 800 years, probably when a Mr F--k or the F--k family moved into the area. The 'ing' was added as a word for settlement."
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Krieger has a new blog site. Be sure to set up to get email updates at the bottom of his site.
He said to his friend, "If the British march
By land or sea from the town tonight,
Hang a lantern aloft in the belfry arch
Of the North Church tower as a signal light,
One if by land, and two if by sea;
And I on the opposite shore will be,
Ready to ride and spread the alarm
Through every Middlesex village and farm,
For the country folk to be up and to arm."
- Henry Wadsworth Longfellow from the poem “Paul Revere’s Ride”
Welcome to My Blog: www.libertyblitzkrieg.com
The world is a very dangerous place at the moment and it is becoming more treacherous with each passing day. The reason for this is because the self-proclaimed “global elite” or TPTB, whatever you want to call them, have declared war on the rest of us. It is not just financial and economic war but it is also a moral and spiritual one. The game is being played on many levels and most of humanity remains completely unaware of it (although I would say a higher percentage of us are aware than ever before in recorded history thanks to the internet). When people look back at what has happened in the past decade or so and wonder why the welfare-warfare state continues to grow despite who sits in the Presidency the answer becomes clear. The leadership in the United States of America, and in reality pretty much every government on the planet, could care less about the advancement of their people. Back in 2008 they weren’t interested in saving the economy. They simply wanted to steal everything in sight using the government as its tool…and boy did they. The political leadership in America today (with some exceptions of course) represents the lowest common denominator of our Republic. They collectively possess a cunning political mindset coupled with a total absence of empathy and a lack of hesitation to engage in ruthless behavior to maintain power. Meanwhile, our corporate leadership (particularly now that Steve Jobs has passed) are collectively a bunch of cost-cutting, share repurchasing, quarterly EPS obsessed cowards that couldn’t and wouldn’t want to innovate themselves out of a paper bag. They surround themselves with “yes” men and with a few exceptions dare not to speak out about the crimes being committed against the citizenry by the political class for fear of losing their positions in the socio-economic structure. In short, they are cowards. Then of course there is the top of the power pyramid in today’s world. At the apex lies (pun intended) the Central Bankers (Planners) of the world. There is no group of people to whom I feel more disdain. I firmly believe they must face trial for crimes against humanity once their sick game plays out. This group of people literally control the entire global economy via their privilege to print however much currency they want whenever they want to. This is a group of insanely egotistical, mathematical robots who think they can excel model and print the world into utopia. In reality, all they are doing is transferring what is left of the middle class’ wealth into the pockets of the super rich who use 0% money to engage in leveraged speculation on financial assets and then get bailed out by the taxpayer when their bets fail.
One Million Paul Reveres
It was last night in 1775 that Paul Revere made his famous midnight ride to warn the colonists that “the British are coming.” Amongst other things, the colonists were concerned that the crown was going to disarm the citizenry and arrest John Adams and John Hancock. It is auspicious that I am launching my blog on the 237th anniversary of his legendary warning. It was late last year that in an interview I said what we need are one million Paul Reveres on the internet in order to get the word out globally and unite against the tiny minority that is doing all this harm to our species. It is as a result of my never-ending determination to win this fight that I have decided to start this blog.
With that out of the way, I want to introduce you to the site. This project is long overdue but I think the time is now right to take things to another level and provide a platform for more people to hear my thought process on a more frequent basis. I have never had my own presence on the web before and technology does not come naturally to me so this will be a gigantic learning process. Any advice or suggestions from people that have gone down this road would be greatly appreciated. This will be a work in progress and I have no idea what path it may lead me down. I am keeping all options on the table but here is how I envision it working for now.
My weekly emails will be posted to the site first and then will be emailed out later (maybe a few hours later or maybe a day later I am not sure yet). I will also be posting news items that I think are important and not being covered by other sites along with “My Two Cents”. I have already posted several examples of this on the blog. I will not be posting news all day, rather more likely two or three items a day on topics I think are worth digging into. I will also try to do a “Thought of the Day,” which will usually come out near the close of U.S. markets. That said, if there really is nothing to say on a particular day I won’t say anything. There are other things I am considering and as I decide to do them I will let everyone know. You can also set up to receive email updates when I post something new and that can be found on the right sidebar. The site also has pretty much everything I have written since 2010 and all the interviews I have done.
Winning the Lightning War
At this time, I would like to thank all of those in the struggle with me and the rest of free (and wanting to be free) humanity. In particular, I want to thank Tyler Durden and the team at www.zerohedge.com and Max Keiser and Stacy Herbert of www.maxkeiser.com for both the support they provided to my writing from the very beginning and their tireless struggle to shine some light of truth in a world filled with propaganda and nonsense.
While these are dangerous times, these are also times of great opportunity. It is only in times like these that we can change the world…for better or worse. Our enemies want increased global centralization of political and economic power. We want the opposite. We want freedom. Freedom of speech. Freedom to use whatever money we want to use not have some digit garbage they create shoved down our throats. Freedom to pick whatever job we want and the freedom to live how we want to live. Please join me in the Liberty Blitzkrieg!
www.libertyblitzkrieg.com
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