The Coming Depression: See It Clearly Through Historical Eyes 105 comments
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Over 95% of investors claim not to have seen the current downturn coming nor do they accept the probability of a coming depression (at least they did not by the end of 2007). There continues to be conversation whether we are near a bottom. Much money on the sidelines is eagerly waiting to go back into the market or more likely, existing investments with big book losses waiting for the market to recover. Yet when our probable course is viewed in historical terms, there is a very clear and likely path, much further reduction in the value of everything particularly including real estate, equities, bonds and most commodities (gold is shaping up as a hedge against the problems). What does history tell us?
Most views of history do not go back further than 5 years. In late 2007, I went to numerous prominent investment advisors to look for suggestions. Not one of them gave me recommendations where they would provide investment records that went back more than 5 years, the bottom of the 2002 downturn (Very convenient! I would call this deceptive advertising). The truth is that you need to look at investment histories over three hundred years for many realities to simply jump out at you. You see clearly that history repeats. You see clearly during three hundred years that there are major repeating cycles. You see clearly that ideas like buy and hold make no sense when you look at things over several decades. You see clearly that diversification does not really work when measured in terms of decades. (Commodities almost always bottom within three months of major bottoms of stock indexes.)
History needs to be looked at in two terms. Numerical terms of what has happened to the markets and descriptive terms of what has happened to the market.
Let's look first at a numerical description of the market. I am using a chart courtesy of James Flanagan of Gann Global Financial. This shows commodity prices from 1730 to present. You can clearly see the repetition of cycles in the prices of commodities.
Another excellent source of similar material is from Bob Prechter of Elliot Wave Theory. Both of these men provide excellent historical data on stock indexes, bonds, commodities and many other asset classes. As you look at their charts, you simply cannot avoid the conclusion that there are up and down cycles that have repeated many times over the last several hundred years. We are now in a major down cycle when the above chart is updated through February 2009.
Now let's look at descriptions of previous historical financial bubbles and crashes. While there are numerous excellent books, I particularly like "Devil Take the Hindmost, A History of Financial Speculation" by Edward Chancellor. His book starts will the tulip bubble in Holland in 1630. The book ends with a description of the Japanese Bubble of the 1980s (highly relevant since this is the strategy our government has chosen to peruse as a solution to our problems and this book gives some clear historical description of how it is likely to end). He also finishes with some description of the early problems with derivatives from the 1990s which are highly relevant as we can see how our earlier problems with derivatives ended and therefore where our current problem with derivatives will likely end.
Nearly all the bubbles in history seem to have three aspects in common,
1) A dramatic increase in the money supply (including money created via derivatives, private equity and hedge funds),
2) Usually a wonderful new financial instrument to facilitate this increase in the money supply (this time it is derivatives, where the Mortgage Backed Securities have already exploded. One particular aspect of derivatives is the Credit Default Swaps which is an economic nuclear bomb with the potential to explode through counter party failures) and
3) An easing of credit standards which ultimately leads to much bad credit (we seem to have already lost something like a trillion dollars with several more trillions to be written off as we go through the process with fatal consequences for many banks and financial institutions).
While they may seem like three different issues (increased money supply, new financial instruments and credit quality), in practice they are intimately related to one another in creating their nefarious effects on the world economy.
This is not a happy scenario. But we do no one a favor to pretend the cycle does not exist and that we are not in a major down cycle. If I am correct in the assertions made in this article, it raises serious doubts about the effectiveness of the Obama plan to fix the economic problems of the country.
Disclosure: No positions
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This article has 105 comments:
"The truth is that you need to look at investment histories over three hundred years for many realities to simply jump out at you. You see clearly that history repeats."
Amen, brother. Human memory seems exactly one generation in length, and this is a major problem. Let me add my somewhat more strident opinion to yours: Wall Street is populated by a critical mass of 30- and 40-something young "investor class" people which have lived their entire adult lives in an environment where the economy is only strong, except when it briefly weakens only to quickly strengthen again when the Fed works its magic. This group has failed miserably, and continues to fail, at every step of the way, at recognizing this downturn for what it is. The time period they have lived in, interestingly, corresponds exactly with Nixon closing the gold window in 1971 and the Fed pursuing its magical inflationary policies.
Their sentiments often expressed here can be summarized thus: "When can we get back to the party?" The answer "Not in your lifetime" passes like a neutrino into one ear and straight out the other, hitting nothing in between.
Roughly translated it said...."Wealth doesn't last past the third generation".
Wealth is created by human beings. Human beings are faulty creatures. Hard lessons learned are forgotten over the generations. Similar mistakes therefore are made time and time again, just about the time that the first generation that experienced the consequences dies off, the second generation who learned and avoided those mistakes are now exiting the work force and the third, ignorant generation comes online to repeat the mistakes of the dying first generation.
Shampoo, rinse, repeat.
Love that line...."passes like a neutrino.....hitting nothing in between."
Priceless!
I rarely see reference to Edward Chancellor's excellent book, which I believe must not have been widely read amongst our mainstream punditry. I think it is "required reading" for investors, especially those who question the msm chorus. It was prescient about the dot-com bubble, as it was published in 1999, before the burst, so it was probably written earlier.
A quote from the Chapter on The South Sea Scheme, which Chancellor attributes to Adam Anderson, an officer of the South Sea Company, is eerily applicable to our times:
" that the year 1720 ' .... may serve for a perpetual memento to the legislators and ministers of our own nation, never to leave it to the power of any, hereafter, to hoodwink mankind into so shameful and baneful an imposition on the credulity of the people, thereby diverted from their lawful industry' .."
Substitute 2005 for 1720, "Housing Bubble" for "South Sea Scheme", mortgage lenders & brokers for South Sea promoters, and it all seems familiar, except that "our legislators and ministers" seem intent to continue "imposing on the credulity of the people"!
I agree. But what I fail to see in your article is any reference to the paradigm shifts or the seismic changes that have always marked movements out of deep recessions in the past.
The climb out of our current predicament will require both recognitions of these changes and policies that are suited to them.
If we think we can simply spend our way out of this mess in the same way we have done so in the past, we are mistaken. On the other hand, policies and stimulus packages that address fundamental weaknesses in our economy and that target areas of future potential growth and leadership through tax cuts &etc. will do much to get us back on track.
"This group has failed miserably, and continues to fail, at every step of the way, at recognizing this downturn for what it is."
It is the front-end of the Baby Boomers (55-63 year old), not the tail-end, gen X, and Ys. We are not the "Hippies" who over indulged at every turn of our lives. And if you have some evidence to the contrary, remember we were the student to our older siblings.
The 30 to 40 years are not the people in power or were not ones in power when the mess began. Could it have been your generation by chance? Remember that these problems began over 25 years ago.
In addition, there have been many papers on depression cycles which note that the US enters a depression roughly every 75 years. Greenspan financially postpone the last one so it didn't occur on his watch.
This is good data and food for thought. I also worry that policy makers will not see beyond the short-term horizon. The one critical difference between these cycles of the past and the current situation is overpopulation and the degree to which violence can now be employed to impose solutions. Unemployment in the billions, mass starvation, pestilence, environmental catastrophe, and anarchy may produce irrepressible violence. The upturn after such an event may be far into the future. The last cycle that occurred with these criteria in the equation led to the Dark Ages.
I'd be very slow to argue that any of these spikes were due to speculation.
We have evolved a culture that is sound bite based and in which the most vocal majority constantly shouts down those who disagree with them. We have a financial media focused on selling people stocks rather than providing them with information. All of this conspires to keep people buying into myths. I heard these myths recited time and time again as the markets declined, like a Gregorian chant or a prayer "stay in for the long term, too late to sell, long term perspective, must stay in the market, diversified - I'll be saved". People fail to read and apparently never learned in school how to actually analyze data or analyze an argument for correctness. If they had much misery would have been averted.
I agree with your conclusion. Perhaps against the odds the US pulls a miracle out but I doubt it. I think the crisis has occurred at a point coincident with a fundamental shift in the center of world commerce occurring. When we emerge from the crisis we will be a major but not the major player in the world. The center of gravity will have shifted to Asia.
Especially with borrowed spending, IF they can even get the money.
History, while important to recognizing where we are at, is immaterial in finding a path out of this mess this time.
The underlying "bubble," which is still unrecognized, and nothing is being done to fix it, and many forces are at work making it worse.
I'm speaking of jobs. With nearly every other downturn in the West, there were always jobs to go back to, after bottom was reached and growth began again.
This time there are no jobs to go back to and present policies (many protectionist against ignorant and uneducated consumers) and tax issues are shutting down our bosses. In droves, and silently for years.
This bubble produced record profits and record tax revenues. The irony is that the off shoring of our jobs and the associated profits covered the fact that millions of Americans had gone from taxpaying, contributing members, to underemployed and government subsidized.
Now that the excess cash has been cleared away, the real horror will show itself. There are no jobs to go back to and "green" energy and government run health care cannot produce enough jobs to get us back to even.
China is the country set to make a comeback. They produce real things and have the West by the balls.
Good luck to us all.
I see nothing in it that would tell me when to get fully invested in this market, nor do I see anything in your article that would indicate you are willing to make any such predictions.
That would be a smart move on your part and quite revealing as to how much practical, useful information you really think these "cycles" tell us.
Nothing like having your cake and eating it, too. That's a winner if I've ever heard of one.
But there's more! You conclude by saying:
"If I am correct in the assertions made in this article, it raises serious doubts about the effectiveness of the Obama plan to fix the economic problems of the country."
So let me get this straight. You are saying that these cycles you see, going back hundreds of years, portend the future success of what the government might do now? You realize, of course, that if the government was going to take say, a much different action, that your "model" would still raise the same doubts about its success, too? In other words, no matter what the government does, or doesn't do, it probably won't work, because of what your cycles tell us.
Now, I know you haven't thought this through, because any logical person would see the complete irrationality of such thinking. So please, tell us you were wrong, so we don't have to put your name on the "Never Read Another Article From These People" list.
And while there are many different types of business, market, and asset price cycles, only one, thus far, has led to a depression.
This cycle is likely to unfold in a more familiar way..........continued stresses on earnings and valuations.
Henry Ford made the car more reliable than the horses by revving an engine up full throttle. See what brake down. Replace the part and run the engine full throttle again.
You have to work out the business until you can offer up the very best that their money can buy. Isn't it economic recovery a capitalist society?
The thrust of the article is that business cycles busts are usually created by excesses of money creation, new financial instruments which facilitate the money creation and decreasing credit quality. There is historical statistical and descriptive evidence to support this position, which the article briefly refers to, but which is amply supported from numerous areas.
A "solution" to these boom and bust cycles must be related and effective with the true problems. President Obamas's polices are equivalent to giving a drunk some "hair of the dog", i.e. more liquor. If the problem is excess money, poor credit and out of control financial instruments (derivatives), the solution is not to give more money and create more bad credit.
The Fed, particularity under Alan Greenspan and now with Mr Bernanke, is to print money to get out of problems. While this is a short term solution, up to a certain point, when applied in great excess it creates the type of problem we have today.
To be specific, the money creation policies currently being employed run the risk of creating hyperinflation, a problem far more serious than we currently have. They do not have any reasonable prospect, in my opinion, of solving the current problem other than deferring the problem somewhat and ultimately making it much worse.
These are the lessons we can learn from history, including very recent history.
On Feb 23 09:16 AM You're Kidding wrote:
> You say you see cycles in the above chart...
>
> I see nothing in it that would tell me when to get fully invested
> in this market, nor do I see anything in your article that would
> indicate you are willing to make any such predictions.
>
> That would be a smart move on your part and quite revealing as to
> how much practical, useful information you really think these "cycles"
> tell us.
>
> Nothing like having your cake and eating it, too. That's a winner
> if I've ever heard of one.
>
> But there's more! You conclude by saying:
>
> "If I am correct in the assertions made in this article, it raises
> serious doubts about the effectiveness of the Obama plan to fix the
> economic problems of the country."
>
> So let me get this straight. You are saying that these cycles you
> see, going back hundreds of years, portend the future success of
> what the government might do now? You realize, of course, that if
> the government was going to take say, a much different action, that
> your "model" would still raise the same doubts about its success,
> too? In other words, no matter what the government does, or doesn't
> do, it probably won't work, because of what your cycles tell us.
>
>
> Now, I know you haven't thought this through, because any logical
> person would see the complete irrationality of such thinking. So
> please, tell us you were wrong, so we don't have to put your name
> on the "Never Read Another Article From These People" list.
>
cyclingscholar
"The thrust of the article is that business cycles busts are usually created by excesses of money creation, new financial instruments which facilitate the money creation and decreasing credit quality."
But the sole graphic supporting your article is of commodities, with every pre-2000 spike occurring close to the fiercest wars in American history, and with the end of the fixing of certain commodities prices in 1971. What does this have to do with the thrust of the article?
"If the problem is excess money, poor credit and out of control financial instruments (derivatives), the solution is not to give more money and create more bad credit."
But the engorged derivative markets you describe no longer exist. At this point, do you think expanding the publicly-created money supply is going to suddenly give new life to the dangerous markets that brought about our current crisis? Of course not. The days of that kind of speculation are over.
"The Fed, particularity under Alan Greenspan and now with Mr Bernanke, is to print money to get out of problems."
Do you have any evidence to support your notion that the Fed's "printing money"?
"While this is a short term solution, up to a certain point, when applied in great excess it creates the type of problem we have today."
Wait, you said that it was the derivatives, part of an massively expansive definition of the privately-created money supply, that's at the heart of the problem. Are you now saying Fed-created money's the cause?
"To be specific, the money creation policies currently being employed run the risk of creating hyperinflation, a problem far more serious than we currently have."
Except, of course, for the fact that private sector money supply growth has gone negative, so that the expansion of the Fed's balance sheet has not caused inflation. If anything, it's prevented deflation. Look at the Fed's balance sheet. Its growth over the past year is, for the most part, very easy to unwind, and so is unlikely to lead to inflation if managed properly on the back end of the recession.
"They do not have any reasonable prospect, in my opinion, of solving the current problem other than deferring the problem somewhat and ultimately making it much worse."
How do you know that they haven't ALREADY had a large positive impact on the problem? What would have happened if the commercial paper market had remained effectively shut down after October? What would have happened if the Fed hadn't opened the floodgates to other central banks? Without the Fed's actions to date, things would likely be much, much worse than they are now.
It sounds like you think a deflationary environment isn't such a bad thing.
At least it's good to know what is coming.
However, I don't believe events 300 years ago are a valid indication of current or future events. Times are completely different now: Worldwide overpopulation, increasing resource shortages, globalization and national interdependance, technology, etc. There are plenty of present reasons to expect future recessions and depressions without relying on charts going back centuries.
(George Sanatayana, The Life of Reason)
"History will be kind to me, for I intend to write it." - Winston Churchill-
!Blackstone!
>>> "If the Obama Stimulus Plan is the wrong medicine for what's ailing our economy, what's the right cure? " >>
The thing that makes economics more of an art than a science is that conditions out in the real world are always changing. Wnile a laboratory experiment controls the circumstances, "the economy" at any given time is largely unique. Factors may be somewhat similar to other times, but economies do not duplicate.
And the fact that economic cycles do not recur at precise intervals does not invalidate the cycles.
Looking at the mass of derivatives we have currently and the direction we're in, it is probable that there's a long downside left in this cycle. And there probably isn't a "cure". The idea that there is some magic "right" thing to do to fix everything is a myth. A very popular myth. Especially among our "leaders". The mantra of our leaders is "We can't just do nothing" when doing nothing and letting the markets work their way out of it is probably as good a tactic as any.
If humans were so damn smart they wouldn't create messes like this in the first place.
putting the economic trends aside what strikes me is the added
cost of living over the last 30 years. Oil, water, food, raw materials..
More people and less resources..has to effect the true standard
of living for the majority of people.
On Feb 23 09:11 AM investfarm wrote:
> On Oct. 31, 1936, President Franklin Delano Roosevelt, seeking a
> second term in office, delivered his final major campaign speech
> before the November elections, to a large, enthusiastic crowd at
> Madison Square Garden in New York City.
>
> ``For twelve years,'' the President declared, ``this Nation was afflicted
> with hear-nothing, see-nothing, do-nothing Government. The Nation
> looked to Government, but the Government looked away. Nine mocking
> years with the golden calf and three long years of the scourge! Nine
> crazy years at the ticker and three long years in the breadlines!
> Nine mad years of mirage and three long years of despair! Powerful
> influences strive today to restore that kind of government, with
> its doctrine that that Government is best which is most indifferent.
>
>
> ``For nearly four years, you have had an Administration which instead
> of twirling its thumbs has rolled up its sleeves. We will keep our
> sleeves rolled up.
>
> ``We had to struggle with the old enemies of peace--business and
> financial monopoly, speculation, reckless banking, class antagonism,
> sectionalism, war profiteering. They had begun to consider the Government
> of the United States as a mere appendage to their own affairs. We
> know now that Government by organized money is just as dangerous
> as Government by organized mob.''
>
> FDR stated proudly, ``Never before in all our history have these
> forces been so united against one candidate as they stand today.
> They are unanimous in their hatred for me--and I welcome their hatred.''
>
>
> - The American Liberty League -
>
> FDR was not talking in abstract about some amorphous conspiracy of
> Wall Street bigshots. He was referring, specifically, to the American
> Liberty League (seekingalpha.com/symbo...), an organization
> founded in 1934 with the explicit objective of destroying the New
> Deal, defeating FDR in his 1936 reelection bid, and imposing an outright
> Fascist regime in America, through the ballot box if possible, through
> military coup or assassination, if necessary.
>
> The leaders of the American Liberty League were not silver-shirted
> rabble, or Southern racists, although they unhesitatingly bankrolled
> those would-be-Fascist hooligans. They were the giants of Wall Street
> and America's major industrial and raw materials combines: the Morgans,
> the du Ponts, the Pews, the Harrimans, the Mellons, the Weirs, the
> Warburgs, the Rockefellers. Their hatred of FDR, and all he stood
> for, cast them as enemies of the American people, and the Federal
> Constitution, with its General Welfare clause.
>
> By the time Roosevelt delivered his Madison Square Garden speech,
> the McCormack-Dickstein Committee (officially, the House of Representatives
> Special Committee To Investigate Nazi Activities in the United States),
> had delivered its final report. That February 1935 document, based
> largely on the testimony of Gen. Smedley Darlington Butler, concluded,
> ``Evidence was obtained showing that certain persons had made an
> attempt to establish a Fascist organization in this country. There
> is no question but that these attempts were discussed, were planned,
> and might have been placed in execution when and if the financial
> backers deemed it expedient.''
>
> While the final McCormack-Dickstein Committee report did not mention
> the Liberty League by name--largely due to fears of retribution--one
> of the leading conspirators, named by Butler and other witnesses,
> in their much-publicized testimony before the Committee, was Grayson
> Mallet-Prevost Murphy, the treasurer of the League.
>
> A director of the J.P. Morgan-controlled Guarantee Trust, Anaconda
> Copper, Goodyear, and Bethlehem Steel, Murphy had been in Paris in
> 1919 for the founding of the American Legion, and had poured $125,000
> of his own money into the organization, several of whose leaders
> were later fingered by Butler as a pivotal part of the scheme to
> stage a Fascist coup in Washington, on behalf of the Morgan interests
> and allied Wall Street and industrialist circles.
>
> As early as 1922-23, the National Commander of the American Legion,
> Col. Alvin Owsley, declared, ``If ever needed, the American Legion
> stands ready to protect our country's institutions and ideals, as
> the Fascisti dealt with the destructionists who menaced Italy. Do
> not forget that the Fascisti are to Italy what the American Legion
> is to the United States.''
>
> One of the operatives deployed by Murphy and Robert Sterling Clark,
> heir to the Singer Sewing Machine fortune, who was assigned the task
> of recruiting the decorated General Butler to the Fascist coup plot,
> was Gerald MacGuire. In late August 1934, according to Butler's testimony
> before the McCormack-Dickstein Committee, he met with MacGuire at
> the Bellevue Hotel in Philadelphia, where MacGuire, just back from
> an extended trip to Europe, spelled out more details of the coup
> plot, and fully unfurled its overtly Fascist character. MacGuire
> told Butler that the ``veterans organization'' that they wanted him
> to head would be modeled on the French Croix de Feu (Cross of Fire),
> a notorious group of pro-Fascist French World War I veterans. ``Now,
> that is our idea here in America--to get up an organization of that
> kind,'' MacGuire told Butler.
>
> To boost his credentials with the still-dubious general, MacGuire
> boasted that, while in Europe, searching for an organization upon
> which to model their own plan, he had operated out of the Paris headquarters
> of J.P. Morgan & Harjes, the French branch of the original Drexel
> Morgan bank, which had been established in the 19th Century.
>
> While the Croix de Feu, which failed in several coup attempts in
> France in the 1930s, was the model that the Morgan interests attempted
> to emulate, their unambiguous goal was to establish a Mussolini-style
> Fascist financiers dictatorship over the United States. Pennsylvania
> Republican Sen. David A. Reed, a leading figure in the Liberty League,
> had delivered a speech on the floor of the U.S. Senate in May 1932,
> in which he declared, ``I do not often envy other countries their
> governments, but I say that if this country ever needed a Mussolini,
> it needs one now.''
>
> For a period of time, the ALL was stigmatized for its links to the
> Fascist coup plot exposed by General Butler and the McCormack-Dickstein
> Committee. But, with the 1936 Presidential elections looming, the
> League launched a vicious propaganda campaign against FDR and the
> New Deal.
>
> - Anti-Prohibition Roots -
>
> The American Liberty League was ostensibly a new organization, when
> the founding press release was issued in August 1934, as President
> Roosevelt was returning from vacation in Hawaii. But, in fact, the
> ALL was merely a make-over of the Association Against the Prohibition
> Amendment (seekingalpha.com/symbo...), a big business and
> Wall Street-sponsored organization, devoted to the repeal of the
> 18th Amendment, banning the production and sale of alcoholic beverages.
> The AAPA was a front for the same J.P. Morgan Wall Street and British
> interests that would later launch the Liberty League.
>
> Why attack Prohibition? According to the AAPA's own literature and
> newspaper ads, and a U.S. Senate investigation, the banning of alcoholic
> beverages in the United States had caused a skyrocketing of corporate
> and personal income taxes, to make up for the lost tax revenues on
> legal booze. The Wall Street gang behind AAPA argued that liquor
> should once again be legalized, and highly taxed, allowing for the
> elimination of all corporate and income taxes.
>
> The 21st Amendment to the Constitution was ratified on Dec. 5, 1933,
> repealing the 18th Amendment, which had established Prohibition in
> January 1919. The AAPA shut down a few months later, and soon after
> that, the American Liberty League, with virtually the same officers
> and the same Wall Street backers, opened up for business, occupying
> an entire floor of the National Press Building in Washington, D.C.,
> and employing 200 full-time staff, at their peak of operations. This
> time, the target of the Morgan gang was not the repeal of corporate
> and personal income taxes, but the President of the United States
> and his hated New Deal policies.
>
> - A Morgan Cabal -
>
> Between 1934 and 1940, the American Liberty League waged a relentless
> smear campaign against Roosevelt. Financed by some of America's wealthiest
> Anglophile families, led by the du Ponts, the Mellons, the Pews,
> and the Morgans, the League raised a reported $1.2 million, largely
> in the initial years of operation. In 2008 dollars, as measured in
> nominal GDP per capita, that $1.2 million would today be worth over
> $1 billion.
>
> Thirty percent of all the funds for the Liberty League came from
> Irénée, Lammot, and Pierre du Pont. The fourth big funder of the
> League was John Raskob, the executive of J.P. Morgan, General Motors,
> and DuPont, who had become the national chairman of the Democratic
> Party (1928-32) and had led the campaign to deny the Presidential
> nomination to FDR at the Chicago Convention in June-July 1932.<br/>
>
> The president of the League was Raskob's proteégeé Jouett Shouse,
> who was Assistant Secretary of the Treasury under Woodrow Wilson,
> had been a leader of the Association Against the Prohibition Amendment,
> along with Raskob, and had led the floor fight in Chicago in 1932
> against FDR. The secretary of the League was Capt. William H. Stayton,
> who had been the AAPA founder and president, and was an honorary
> president of J.P. Morgan. The treasurer was the already-mentioned
> Fascist coup bankroller, Grayson Mallet-Prevost Murphy.
>
> The executive committee of the League included Ireéneée du Pont,
> and John W. Davis, the J.P. Morgan lawyer and 1924 Democratic Party
> Presidential nominee, whom the Harriman family's Eugenics News dubbed
> ``best adapted by heredity'' to be President.
>
> Other directors were: Alfred E. Smith, former governor of New York,
> 1928 Democratic Party Presidential candidate, and, by then, a wholly-owned
> J.P. Morgan operative, who also led the campaign to block FDR from
> the 1932 nomination; Pauline Sabin, Morton Salt heiress and the wife
> of Charles Sabin, president of Guarantee Trust; and New York banker
> James Wolcott Wadsworth, Jr.
>
> The National Advisory Board was led by Frederic Reneé Coudert, the
> founder of the J.P. Morgan law firm, Coudert Brothers; Edward Francis
> Hutton, founder of E.F. Hutton brokerage house, chairman of General
> Foods, and a director of Manufacturers Trust Company and Chrysler
> Motors; and Philadelphia attorney James Montgomery Beck, who was
> also implicated in the Fascist coup plot exposed by General Butler.
> A radical states-rights anti-Federalist, Beck was such a raving Anglophile
> that, in 1914, he was elected to the English bench at Gray's Inn,
> London--the first foreigner to be so honored in 600 years.
>
> Coudert, Beck, and Davis would launch the American Liberty League's
> Lawyers' Vigilance Committee, along with Raoul Desvernine, general
> counsel to U.S. Steel, and later, the president of Crucible Steel.
> The Vigilance Committee was a group of 50-60 top Wall Street lawyers,
> who led the assault against the New Deal as unconstitutional--in
> what can only be described as a scandalous repudiation of the General
> Welfare clause in the Preamble to the U.S. Constitution.
>
> - Manipulating the Opinion Shapers -
>
> While financing an alphabet soup of states-rights, racist, and other
> populist anti-FDR ``grass roots'' hate groups, the American Liberty
> League focused most of its energies on black propaganda assaults
> against FDR, using its access to the media, powerful Wall Street
> law firms, and vast Congressional lobbying capabilities against the
> New Deal.
>
> With a relatively bottomless pool of cash, ALL churned out 135 propaganda
> pamphlets between August 1934 and September 1936. The pamphlets were
> delivered to the Washington, D.C. bureaus of 350 newspapers, all
> of the press associations, key editors and editorial writers, every
> member of the House of Representatives and Senate, and 7,500 college
> and university libraries. Countless radio stations offered free air
> time to League spokesmen.
>
> The assault on President Roosevelt reached a crescendo on Jan. 15,
> 1936, when, on the eve of that year's Presidential election campaign,
> the League sponsored a banquet at Washington's Mayflower Hotel. It
> was billed as the kick-off of a frontal attack on FDR and the New
> Deal, aimed at either denying Roosevelt the 1936 Democratic Party
> Presidential nomination, or assuring his defeat in the November elections.
> The keynote speaker was FDR's former close political ally, turned
> Morgan stooge, Al Smith. The ballroom of the Mayflower was sold out,
> overflow crowds, totaling 2,000 people, spilled into the hotel lobby,
> and the Smith diatribe was broadcast nationwide over the radio.<br/>
>
> Smith launched into a vicious personal assault against FDR, accusing
> him of waging a Communist plot against America. ``There can only
> be one capital, Washington or Moscow,'' Smith ranted. ``There can
> be only the clear, pure, fresh air of free America, or the foul breath
> of communistic Russia. There can be only one flag, the Stars and
> Stripes, or the flag of the godless Union of the Soviets. There can
> be only one national anthem, The Star-Spangled Banner or the Internationale.''
>
>
> The Smith speech threw down the gauntlet to FDR: The New Deal was
> a socialistic intervention to prevent the free markets from ``naturally''
> solving the crisis. The new regulatory institutions, creating a social
> safety net for the general population, were in violation of the Constitution.
> The attacks ran the gamut, from accusing FDR of being a bigger Fascist
> than Mussolini or Hitler, to being a bigger Communist than Josef
> Stalin.
>
> The archive of the American Liberty League's pamphlets and leaflets,
> speeches and radio broadcasts, shows them to be, to this day, the
> wellspring of every attack against Franklin Roosevelt and his New
> Deal/American System approach to political economy.
>
> Roosevelt and his allies pushed back hard against Smith and the American
> Liberty League, assailing them as ``economic royalists'' and nailing
> Smith, Raskob, and Shouse as traitors to the new Democratic cause.
> FDR led the charge, continually boasting that he took pride in the
> fact that the pirates of Wall Street and international finance considered
> him their greatest enemy. When Democrats gathered in Philadelphia
> in the Summer of 1936, FDR was nominated for reelection by an overwhelming
> voice proclamation.
>
> In November 1936, FDR defeated Republican candidate Alf Landon by
> the most lopsided margin in American history. FDR won 60.8% of the
> popular vote, won the Electoral College by 523-8, and only lost in
> two of the 48 states, Maine and Vermont.
>
> Following the FDR victory, the Liberty League scions resorted to
> flat-out economic and political warfare against the New Deal, waging
> court fights, continuing the propaganda assault against New Deal
> spending, and maintaining the most vicious personal attacks against
> the President. Despite this, and despite a Wall Street assault on
> the FDR programs, which led to a scaling back and temporary fall-back
> in job-creation and economic recovery in 1937-38, by 1939, the Bureau
> of Labor Statistics estimated that, during the height of the New
> Deal, from 1933 to 1937, the Roosevelt policies had created an average
> of 7.1 million jobs per year, between Federal infrastructure projects,
> private sector jobs, producing the needed bills-of-materials, and
> consumer sector jobs, providing goods and services. The nation had
> been transformed, by such programs as the Tennessee Valley Authority,
> which had been a target of one of the Liberty League's most vicious
> tracts.
>
> The League formally shut down operations in 1940. But, with the death
> of FDR five years later, it resurfaced through figures like Dean
> Acheson (who resigned from FDR's Treasury Department as part of the
> Liberty League's efforts to sink Roosevelt from inside the Democratic
> Party and his own administration), who would be a dominant figure
> in the Truman Administration, and a leader of a resurgent Morgan-du
> Pont cabal.
>
> - Fast Forward ... -
>
> The political heirs of the American Liberty League have come back
> from the grave, particularly since the November 2008 Presidential
> elections, and the departure of the Bush-Cheney regime. During the
> eight years of Bush-Cheney, the pro-Fascist faction of the American
> Establishment had enjoyed its greatest grip on power in decades.
> George W. Bush is, himself, the grandson of Prescott Bush, Harriman
> banker, one-time U.S. Senator, and leader of the Wall Street Anglophile
> faction that bankrolled Hitler's rise to power in Germany, and then
> financed Nazi Germany's rearmament for war.
>
> Now, with the greatest financial crisis in history overtaking the
> Obama Administration, the latter-day American Liberty Leaguers are
> leading an assault against the legacy of Franklin Delano Roosevelt.
> The objective is clear: to make sure that President Obama does not
> go with an FDR solution to this even greater crisis.
>
> The retooling of the Liberty League propaganda machinery did not
> begin on Jan. 20, 2009 with the Obama inauguration, however. A decade
> ago, when then-President Bill Clinton, along with his Secretary of
> the Treasury Robert Rubin, faced with a string of global financial
> shocks, began promoting the need for a ``new global financial architecture,''
> to crack down on unbridled speculation, a vicious assault on the
> Presidency was mounted, unprecedented since the time of the Al Smith
> tirade against FDR. And as in the 1930s, turncoat Democrats, led
> by Vice President Al Gore and Connecticut Sen. Joseph Lieberman,
> tried to sink the Clinton Presidency from within.
>
> - Liberty League Successors -
>
> Beginning even before the Liberty League shut its doors, a new network
> of Wall Street think tanks came into being; they exist, to this day,
> to carry on the dirty work of the ALL. In 1938, the American Enterprise
> Association (seekingalpha.com/symbo...) was founded by top
> corporate executives from General Mills, Chemical Bank, and Bristol
> Meyers, along with a New Deal defector to the Liberty League cause,
> Raymond Moley. They soon set up a Washington, D.C. office, the American
> Enterprise Institute (seekingalpha.com/symbo...), to make
> sure that the New Deal and war-time Roosevelt mobilization and regulatory
> measures were rolled back in the postwar period.
>
> Today, AEI, along with the Heritage Foundation and the Cato Institute,
> are the drivers of the campaign to pillory the FDR tradition through
> a revival of the very lies that filled the pages of the American
> Libery League pamphlets.
>
> Exemplary of the current drive are two recent books, drawn heavily
> from the Liberty League propaganda archives, trashing FDR, and anyone
> alive today who might consider modeling a program upon the successes
> of the New Deal and the World War II Arsenal of Democracy mobilization.fn1
>
>
> In 2003, Cato Institute libertarian propagandist Jim Powell penned
> FDR's Folly--How Roosevelt and His New Deal Prolonged the Great Depression.
> The book was the product of exhaustive direction from Milton Friedman
> and James Buchanan, two leading figures within the pro-Fascist Mont
> Pelerin Society, and was boosted by two top figures from the Cato
> Institute, David Boaz and Ed Crane.
>
> In 2007, Amity Shlaes, then a fellow at the American Enterprise Institute,
> and a former London Financial Times and Wall Street Journal reporter,
> penned The Forgotten Man--A New History of the Great Depression,
> in which she, too, trashed FDR and the New Deal, for prolonging the
> Great Depression, by interfering in financial markets. Her arguments,
> like those of Powell, were taken, almost verbatim, from the Liberty
> League works. Her book was published by Lord Beaverbrook proteégeé
> Rupert Murdoch's company HarperCollins. Murdoch, along with Richard
> Mellon Scaife, of the Mellon family (Andrew Mellon, Treasury Secretary
> during the 1920s, was an American Liberty League member), bankroll
> AEI, Heritage, and Cato, along with the Pew Charitable Trust, the
> family trust of Sun Oil's J. Howard Pew, a member of the American
> Liberty League's Advisory Council and Executive Committee
Here is what we can do. We can apply the lessons of communications infrastructure to power and transportation.
Problem: Moving a ton to move a person at 1,000 watt-hours per passenger-mile (bus, car, planes and train).
Solution: Move only the person at 130 watt-hours per passenger-mile (Personal Rapid Transit).
Background:
Mobilizing to fight World War I, bureaucracies institutionalized the great innovations at that time of Ford, Edison, Bell and the Wright Brothers. Locked in place for a century was a mandate to use 1,000 watt-hours per passenger mile. Population grew from one to six billion, exhausting the Earth's resources. Net Oil Exports stopped growing in 2005 (Peak Oil), forcing the downward spiral of foreclosures, financial collapse, jobs collapse, and soon food distribution collapse. We must either reduce watt-hours per passenger mile, or nature will forcibly reduce the number of passengers. Peak Oil and Global Warming are civilization killers we created by infrastructure we planned.
Performance Standards replaced central Planning of communications infrastructure in 1984. Unleashing innovation, jobs and wealth boomed as we replaced Bell's century old analog technology with the Internet and cell networks. Performance Standards can repeat that success in power and transportation infrastructure.
Here is what we can do. We can apply the lessons of communications infrastructure to power and transportation.
Problem: Moving a ton to move a person at 1,000 watt-hours per passenger-mile (bus, car, planes and train).
Solution: Move only the person at 130 watt-hours per passenger-mile (Personal Rapid Transit).
Background:
Mobilizing to fight World War I, bureaucracies institutionalized the great innovations at that time of Ford, Edison, Bell and the Wright Brothers. Locked in place for a century was a mandate to use 1,000 watt-hours per passenger mile. Population grew from one to six billion, exhausting the Earth's resources. Net Oil Exports stopped growing in 2005 (Peak Oil), forcing the downward spiral of foreclosures, financial collapse, jobs collapse, and soon food distribution collapse. We must either reduce watt-hours per passenger mile, or nature will forcibly reduce the number of passengers. Peak Oil and Global Warming are civilization killers we created by infrastructure we planned.
Performance Standards replaced central Planning of communications infrastructure in 1984. Unleashing innovation, jobs and wealth boomed as we replaced Bell's century old analog technology with the Internet and cell networks. Performance Standards can repeat that success in power and transportation infrastructure.
If you match the commodity chart against GDP growth you get a very interest chart that indicates that Obama's inflationary stimulus can restart the economy if he does enough of it.
Of course, looking at a few more charts says buy Gold and sell most stocks.
I suggest anyone looking for a long term look at the markets and history look up "4th turning" on Google. It sounds weird but it's about generational patterns in history and there is plenty of research to show that we repeat generational patterns and we are cleary in a "4th turning", which is a crisis era in which we should expect great change. The last crisis era was about 80 years ago but now most of those people who learned the hard lessons are gone.
Here's a few possible solutions:
Do nothing - Things will suck for 10-20 years
Do what is currently happening - Things perhaps will suck anywhere from 2-20 years
War - Things will suck for 5-10 years
Unknown tech breakthrough - Things will suck from 2-10 years
There are no solutions because no one can agree on anything. Any of the above solutions would work to get things back on track in 1-2 years if everyone just agreed on them. Too bad now all you have is a mindset to fight anything. That will lead to losses across the board like in the past.
Once you lose everything there is nowhere to go but up...The only question now is how long it will take to go to 0 and whether the end game is war, anarchy, etc and whether the Good will standup to defeat the Bad.
With a lot of our bailout efforts...
We're trying to bail out the Titanic with a teacup.
Wealth is created and wealth is destroyed. We've held our cycle to actually be remarkably stable in the past couple of decades, actually, in terms of the macroeconomic data, but this "stability" is done through human efforts.
Eventually, we inevitably screw up.
"Do you have any evidence to support your notion that the Fed's "printing money"? :
Absolutely: research.stlouisfed.or...[1][id]=M1
You will note the sudden rise on the right side of the graph. This occured almost entirely in the second half of 2008. Recently there has been a downturn as the major banks "parked" some of the money back in the Fed at 0.5% interest, but there are indications that the Fed is about to open the floodgates once again. Now, I'm aware that money velocity is way down, which mitigates the inflationary effects, but there's no question the Fed has created $trillions in just the last 6 months or so.
Massive inflation and dollar devaluation ahead. You have been forewarned.
research.stlouisfed.or...
I don't see how major tax increases can be avoided, as painful as they will be. It seems purely delusional to view the last 30 years or so as anything but a period of major, deferred, tax increases. Mr. Lou (above) is right, at least one generation has failed miserably to act with anything resembling restraint or responsibility.
It is also worth remembering that the highest effective marginal tax rates immediately following WW2 were well north of 80%. Ouch.
The relatively modern (post 1980) "discoveries" of The Laffer Curve and Hauser's Law aside, it does seem that taxes must go up, probably by a lot. It will suck, and it will hurt, and it will slow the economy. Probably just a coincidence that Laffer's/Hauser's theories gained acceptance along with trickle down as the GI generation departed to parts unknown, and politics became increasingly driven by the Boom generation. Someone was always going to have to pay. . .Now we know who that someone will be. I just wonder how long it will take, and if it will have to wait for the Boom's political dominance to subside. I guess time will tell.
On Feb 23 08:38 AM know nothing wrote:
> All the Obama plan is doing, is forcing a equallibrium distrubution
> of wealh. By welfare programs for the poor, bailouts of the incompetent,
> and taxing the people who were able to manage their investments.
> Raising taxes on buisnesses and individuals, to pay off the deficit,
> will be the final nail in the coffin. Almost everyone is loosing
> wealth in this enviroment, now to raise taxes on the few winners
> that are left, will cripple buisness development,and job development.
>
>
For instance humanity was lucky enough to avoid (barely) a full scale nuclear war between the old Soviet Union and the United States. But had such a war occurred it would have had planetary effects like no other war ever before in human history. (such as a 10,000 year nuclear winter of radioactivity)
So anyone who might have said..."we have seen many other wars before and every time someone somewhere had said it would bring about the end of the world and then it didn't ...and we are all still here"....would have reasoned in a materially incorrect manner.
(because wars with bows and arrows or spears and swords don't bring about the end of the world -except the very local and circumscribed "world"-...(i.e. the one most people inhabit physically and mentally)....but wars with 10,000 H bombs on both sides do)
There are some other realities that also are brand new which are already here or are just around the historical corner.
For instance we are either at "peak oil" already or soon will be. And also at many "peak critical commodities". This will be yet another brand new historical situation.
The current extent and depth of globalization is a third such brand new historical situation or phenomenon. (though it's true that there has been lesser globalization for 500 years already).
So what markets have done over the past 300 years may turn out to be extremely relevant or extremely irrelevant "depending".
"Depending on what" one could ask?.....
Depending on a complex set of numerous interactive factors and variables with dynamics that we scarcely understand and with feedback loops and amplifications that we understand even less.
Which is why very few people have got a (real) clue as to how this whole thing is going to turn out. And if someone says it will turn out "this way"
or "that way"....the fact that their guess may even well turn out right, does not mean in the least that the reasoning by which they arrived at their conclusion was also correct.
At least the above is how I see it. (and of course I may have reasoned dead wrong too)
The depression may have not been recognized by the investement camps but it was predicted by my grandfather in 1957 when he told me that by 2010 you will see a depression that will make the depression of the 30's seem like a sunday school picknic.
Here is the cause of our boom / bust economy:
THE TEN MEMBER BANKS OF THE FEDERAL RESERVE
All owned by the Rothschilds
Rothschild Bank of London
Warburg Bank of Hamburg
Rothschild Bank of Berlin
Lehman Brothers of New York
Lazard Brothers of Paris
Kuhn Loeb Bank of New York
Israel Moses Seif Banks of Italy
Goldman, Sachs of New York
Warburg Bank of Amsterdam
Chase Manhattan Bank of New York
The Federal Reserve is neither Federal nor does it have any reserves. It continues to create money out of thin air in order to indebt America.
Do we really want to trust the sovernty of our nation to the House of Rothchild? Or are we going to go back to the gold standard and return the authority to coin money back to the people to whom it properly belongs via the United States Treasury?
I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
Thomas Jefferson, Letter to the Secretary of the Treasury Albert Gallatin (1802)
Looks like Thomas Jefferson even forsaw what is happining now!!!
On Feb 23 07:52 AM css1971 wrote:
> Pre 1971, money was tied to gold. Not the case now. The governments
> can now inflate as much as they like. What we get since then is not
> a depression, we get stagflation instead.
On Feb 23 07:52 AM css1971 wrote:
> Pre 1971, money was tied to gold. Not the case now. The governments
> can now inflate as much as they like. What we get since then is not
> a depression, we get stagflation instead.
So, where's the hope:
1. Prosperity means being able to provide abundant goods and services to the population. Technology and globalization represent a greater ability to do so.
2. We will eventually return to our senses, and reward those who produce wealth rather than those who primarily consume it. It will take an election cycle or two, but the American public will recognize the obvious truth. If one believes in democracy.
> Absolutely: research.stlouisfed.or...[1][id]=M1
Thanks for playing, but M1 is not the same as currency in circulation, which has to be what is meant by the Fed "printing money." Look up the currency series. Once you've got the graph, change the view to logarithmic (the only logical way to view growth over time). You'll note that the growth of the monetary base has been remarkably consistent over time, with a gradual decline in the growth rate starting around 2005. By the end of 2007, currency growth was actually negative, and much if not all of the growth in currency later in 2008 could easily be called "catch up" to the long-run growth path. What's left - maybe 5% growth? This is going to cause hyperinflation? If you overlay the M1 graph here, you'll see that there' certainly more at work in the growth of M1 than currency.
Now add to this series the adjusted monetary base, which is currency plus bank deposits at the Fed (plus an adjustment to account for effects of reserve requirement changes). You'll see a dramatic spike in about September, which is the banks increasing deposits at the Fed, as you mentioned in response to the Fed offering interest on deposits for the first time.
But this doesn't fully explain the growth of M1, as the monetary base is a separate measure.
Now let's go ahead and look at M1. M1 is basically currency and checkable deposits. If currency doesn't account for the growth in M1, then checkable deposits must. So where did this increase come from? From the Fed intervening in credit markets when the banks stopped servicing them. Remember the commercial paper facility? This is basically bank lending that was being done by the Fed. The Fed's increased certain other lending facilities as well. This will increase M1 because the Fed is taking deposits from the banks, which needed to keep them on the balance sheet for capital, and lending those deposits again. That lent money is spent, deposited, etc., growing M1.
>Recently there
> has been a downturn as the major banks "parked" some of the money
> back in the Fed at 0.5% interest...",
Look carefully at the timing of the growth in the Fed's balance sheet.
>...but there are indications that
> the Fed is about to open the floodgates once again.
Since they didn't flood anybody with anything, that would not be "again."
> Now, I'm aware
> that money velocity is way down, which mitigates the inflationary
> effects, but there's no question the Fed has created $trillions in
> just the last 6 months or so.
Balance sheet: www.federalreserve.gov.../. Just not true.
> Massive inflation and dollar devaluation ahead. You have been forewarned.
And you have been provided with sufficient sourcing to educate yourself.
On Feb 23 08:11 AM Sentinel wrote:
> The ancient Chinese knew about economic cycles long before Elliot
> Wave or Kondratieff Wave theory.
>
> Roughly translated it said...."Wealth doesn't last past the third
> generation".
>
> Wealth is created by human beings. Human beings are faulty creatures.
> Hard lessons learned are forgotten over the generations. Similar
> mistakes therefore are made time and time again, just about the time
> that the first generation that experienced the consequences dies
> off, the second generation who learned and avoided those mistakes
> are now exiting the work force and the third, ignorant generation
> comes online to repeat the mistakes of the dying first generation.
>
>
> Shampoo, rinse, repeat.
The banks and Wall St. can't be blamed for trying to cover up the corpse for the past couple of years... Doing so kept the country from a full fledged panic given the terrorism paranoia. But by letting the downturn catch so many unawares... The problems are definitely going to be exacerbated.
Given the current internecine warfare in Washington... The best bet at this time will be to take paper assets and convert them to food, supplies and a dependable vehicle that one can put to work.
WOW!!! Having attended college in the late 60's, your comment brings to mind some of the more euridite members of the SDS (Students for a Democratic Society) I ran into.
On Feb 23 09:11 AM investfarm wrote:
> On Oct. 31, 1936, President Franklin Delano Roosevelt, seeking a
> second term in office, delivered his final major campaign speech
> before the November elections, to a large, enthusiastic crowd at
> Madison Square Garden in New York City.
>
> ``For twelve years,'' the President declared, ``this Nation was afflicted
> with hear-nothing, see-nothing, do-nothing Government. The Nation
> looked to Government, but the Government looked away. Nine mocking
> years with the golden calf and three long years of the scourge! Nine
> crazy years at the ticker and three long years in the breadlines!
> Nine mad years of mirage and three long years of despair! Powerful
> influences strive today to restore that kind of government, with
> its doctrine that that Government is best which is most indifferent.
>
>
> ``For nearly four years, you have had an Administration which instead
> of twirling its thumbs has rolled up its sleeves. We will keep our
> sleeves rolled up.
>
> ``We had to struggle with the old enemies of peace--business and
> financial monopoly, speculation, reckless banking, class antagonism,
> sectionalism, war profiteering. They had begun to consider the Government
> of the United States as a mere appendage to their own affairs. We
> know now that Government by organized money is just as dangerous
> as Government by organized mob.''
>
> FDR stated proudly, ``Never before in all our history have these
> forces been so united against one candidate as they stand today.
> They are unanimous in their hatred for me--and I welcome their hatred.''
>
>
> - The American Liberty League -
>
> FDR was not talking in abstract about some amorphous conspiracy of
> Wall Street bigshots. He was referring, specifically, to the American
> Liberty League (seekingalpha.com/symbo...), an organization
> founded in 1934 with the explicit objective of destroying the New
> Deal, defeating FDR in his 1936 reelection bid, and imposing an outright
> Fascist regime in America, through the ballot box if possible, through
> military coup or assassination, if necessary.
>
> The leaders of the American Liberty League were not silver-shirted
> rabble, or Southern racists, although they unhesitatingly bankrolled
> those would-be-Fascist hooligans. They were the giants of Wall Street
> and America's major industrial and raw materials combines: the Morgans,
> the du Ponts, the Pews, the Harrimans, the Mellons, the Weirs, the
> Warburgs, the Rockefellers. Their hatred of FDR, and all he stood
> for, cast them as enemies of the American people, and the Federal
> Constitution, with its General Welfare clause.
>
> By the time Roosevelt delivered his Madison Square Garden speech,
> the McCormack-Dickstein Committee (officially, the House of Representatives
> Special Committee To Investigate Nazi Activities in the United States),
> had delivered its final report. That February 1935 document, based
> largely on the testimony of Gen. Smedley Darlington Butler, concluded,
> ``Evidence was obtained showing that certain persons had made an
> attempt to establish a Fascist organization in this country. There
> is no question but that these attempts were discussed, were planned,
> and might have been placed in execution when and if the financial
> backers deemed it expedient.''
>
> While the final McCormack-Dickstein Committee report did not mention
> the Liberty League by name--largely due to fears of retribution--one
> of the leading conspirators, named by Butler and other witnesses,
> in their much-publicized testimony before the Committee, was Grayson
> Mallet-Prevost Murphy, the treasurer of the League.
>
> A director of the J.P. Morgan-controlled Guarantee Trust, Anaconda
> Copper, Goodyear, and Bethlehem Steel, Murphy had been in Paris in
> 1919 for the founding of the American Legion, and had poured $125,000
> of his own money into the organization, several of whose leaders
> were later fingered by Butler as a pivotal part of the scheme to
> stage a Fascist coup in Washington, on behalf of the Morgan interests
> and allied Wall Street and industrialist circles.
>
> As early as 1922-23, the National Commander of the American Legion,
> Col. Alvin Owsley, declared, ``If ever needed, the American Legion
> stands ready to protect our country's institutions and ideals, as
> the Fascisti dealt with the destructionists who menaced Italy. Do
> not forget that the Fascisti are to Italy what the American Legion
> is to the United States.''
>
> One of the operatives deployed by Murphy and Robert Sterling Clark,
> heir to the Singer Sewing Machine fortune, who was assigned the task
> of recruiting the decorated General Butler to the Fascist coup plot,
> was Gerald MacGuire. In late August 1934, according to Butler's testimony
> before the McCormack-Dickstein Committee, he met with MacGuire at
> the Bellevue Hotel in Philadelphia, where MacGuire, just back from
> an extended trip to Europe, spelled out more details of the coup
> plot, and fully unfurled its overtly Fascist character. MacGuire
> told Butler that the ``veterans organization'' that they wanted him
> to head would be modeled on the French Croix de Feu (Cross of Fire),
> a notorious group of pro-Fascist French World War I veterans. ``Now,
> that is our idea here in America--to get up an organization of that
> kind,'' MacGuire told Butler.
>
> To boost his credentials with the still-dubious general, MacGuire
> boasted that, while in Europe, searching for an organization upon
> which to model their own plan, he had operated out of the Paris headquarters
> of J.P. Morgan & Harjes, the French branch of the original Drexel
> Morgan bank, which had been established in the 19th Century.
>
> While the Croix de Feu, which failed in several coup attempts in
> France in the 1930s, was the model that the Morgan interests attempted
> to emulate, their unambiguous goal was to establish a Mussolini-style
> Fascist financiers dictatorship over the United States. Pennsylvania
> Republican Sen. David A. Reed, a leading figure in the Liberty League,
> had delivered a speech on the floor of the U.S. Senate in May 1932,
> in which he declared, ``I do not often envy other countries their
> governments, but I say that if this country ever needed a Mussolini,
> it needs one now.''
>
> For a period of time, the ALL was stigmatized for its links to the
> Fascist coup plot exposed by General Butler and the McCormack-Dickstein
> Committee. But, with the 1936 Presidential elections looming, the
> League launched a vicious propaganda campaign against FDR and the
> New Deal.
>
> - Anti-Prohibition Roots -
>
> The American Liberty League was ostensibly a new organization, when
> the founding press release was issued in August 1934, as President
> Roosevelt was returning from vacation in Hawaii. But, in fact, the
> ALL was merely a make-over of the Association Against the Prohibition
> Amendment (seekingalpha.com/symbo...), a big business and
> Wall Street-sponsored organization, devoted to the repeal of the
> 18th Amendment, banning the production and sale of alcoholic beverages.
> The AAPA was a front for the same J.P. Morgan Wall Street and British
> interests that would later launch the Liberty League.
>
> Why attack Prohibition? According to the AAPA's own literature and
> newspaper ads, and a U.S. Senate investigation, the banning of alcoholic
> beverages in the United States had caused a skyrocketing of corporate
> and personal income taxes, to make up for the lost tax revenues on
> legal booze. The Wall Street gang behind AAPA argued that liquor
> should once again be legalized, and highly taxed, allowing for the
> elimination of all corporate and income taxes.
>
> The 21st Amendment to the Constitution was ratified on Dec. 5, 1933,
> repealing the 18th Amendment, which had established Prohibition in
> January 1919. The AAPA shut down a few months later, and soon after
> that, the American Liberty League, with virtually the same officers
> and the same Wall Street backers, opened up for business, occupying
> an entire floor of the National Press Building in Washington, D.C.,
> and employing 200 full-time staff, at their peak of operations. This
> time, the target of the Morgan gang was not the repeal of corporate
> and personal income taxes, but the President of the United States
> and his hated New Deal policies.
>
> - A Morgan Cabal -
>
> Between 1934 and 1940, the American Liberty League waged a relentless
> smear campaign against Roosevelt. Financed by some of America's wealthiest
> Anglophile families, led by the du Ponts, the Mellons, the Pews,
> and the Morgans, the League raised a reported $1.2 million, largely
> in the initial years of operation. In 2008 dollars, as measured in
> nominal GDP per capita, that $1.2 million would today be worth over
> $1 billion.
>
> Thirty percent of all the funds for the Liberty League came from
> Irénée, Lammot, and Pierre du Pont. The fourth big funder of the
> League was John Raskob, the executive of J.P. Morgan, General Motors,
> and DuPont, who had become the national chairman of the Democratic
> Party (1928-32) and had led the campaign to deny the Presidential
> nomination to FDR at the Chicago Convention in June-July 1932.<br/>
>
> The president of the League was Raskob's proteégeé Jouett Shouse,
> who was Assistant Secretary of the Treasury under Woodrow Wilson,
> had been a leader of the Association Against the Prohibition Amendment,
> along with Raskob, and had led the floor fight in Chicago in 1932
> against FDR. The secretary of the League was Capt. William H. Stayton,
> who had been the AAPA founder and president, and was an honorary
> president of J.P. Morgan. The treasurer was the already-mentioned
> Fascist coup bankroller, Grayson Mallet-Prevost Murphy.
>
> The executive committee of the League included Ireéneée du Pont,
> and John W. Davis, the J.P. Morgan lawyer and 1924 Democratic Party
> Presidential nominee, whom the Harriman family's Eugenics News dubbed
> ``best adapted by heredity'' to be President.
>
> Other directors were: Alfred E. Smith, former governor of New York,
> 1928 Democratic Party Presidential candidate, and, by then, a wholly-owned
> J.P. Morgan operative, who also led the campaign to block FDR from
> the 1932 nomination; Pauline Sabin, Morton Salt heiress and the wife
> of Charles Sabin, president of Guarantee Trust; and New York banker
> James Wolcott Wadsworth, Jr.
>
> The National Advisory Board was led by Frederic Reneé Coudert, the
> founder of the J.P. Morgan law firm, Coudert Brothers; Edward Francis
> Hutton, founder of E.F. Hutton brokerage house, chairman of General
> Foods, and a director of Manufacturers Trust Company and Chrysler
> Motors; and Philadelphia attorney James Montgomery Beck, who was
> also implicated in the Fascist coup plot exposed by General Butler.
> A radical states-rights anti-Federalist, Beck was such a raving Anglophile
> that, in 1914, he was elected to the English bench at Gray's Inn,
> London--the first foreigner to be so honored in 600 years.
>
> Coudert, Beck, and Davis would launch the American Liberty League's
> Lawyers' Vigilance Committee, along with Raoul Desvernine, general
> counsel to U.S. Steel, and later, the president of Crucible Steel.
> The Vigilance Committee was a group of 50-60 top Wall Street lawyers,
> who led the assault against the New Deal as unconstitutional--in
> what can only be described as a scandalous repudiation of the General
> Welfare clause in the Preamble to the U.S. Constitution.
>
> - Manipulating the Opinion Shapers -
>
> While financing an alphabet soup of states-rights, racist, and other
> populist anti-FDR ``grass roots'' hate groups, the American Liberty
> League focused most of its energies on black propaganda assaults
> against FDR, using its access to the media, powerful Wall Street
> law firms, and vast Congressional lobbying capabilities against the
> New Deal.
>
> With a relatively bottomless pool of cash, ALL churned out 135 propaganda
> pamphlets between August 1934 and September 1936. The pamphlets were
> delivered to the Washington, D.C. bureaus of 350 newspapers, all
> of the press associations, key editors and editorial writers, every
> member of the House of Representatives and Senate, and 7,500 college
> and university libraries. Countless radio stations offered free air
> time to League spokesmen.
>
> The assault on President Roosevelt reached a crescendo on Jan. 15,
> 1936, when, on the eve of that year's Presidential election campaign,
> the League sponsored a banquet at Washington's Mayflower Hotel. It
> was billed as the kick-off of a frontal attack on FDR and the New
> Deal, aimed at either denying Roosevelt the 1936 Democratic Party
> Presidential nomination, or assuring his defeat in the November elections.
> The keynote speaker was FDR's former close political ally, turned
> Morgan stooge, Al Smith. The ballroom of the Mayflower was sold out,
> overflow crowds, totaling 2,000 people, spilled into the hotel lobby,
> and the Smith diatribe was broadcast nationwide over the radio.<br/>
>
> Smith launched into a vicious personal assault against FDR, accusing
> him of waging a Communist plot against America. ``There can only
> be one capital, Washington or Moscow,'' Smith ranted. ``There can
> be only the clear, pure, fresh air of free America, or the foul breath
> of communistic Russia. There can be only one flag, the Stars and
> Stripes, or the flag of the godless Union of the Soviets. There can
> be only one national anthem, The Star-Spangled Banner or the Internationale.''
>
>
> The Smith speech threw down the gauntlet to FDR: The New Deal was
> a socialistic intervention to prevent the free markets from ``naturally''
> solving the crisis. The new regulatory institutions, creating a social
> safety net for the general population, were in violation of the Constitution.
> The attacks ran the gamut, from accusing FDR of being a bigger Fascist
> than Mussolini or Hitler, to being a bigger Communist than Josef
> Stalin.
>
> The archive of the American Liberty League's pamphlets and leaflets,
> speeches and radio broadcasts, shows them to be, to this day, the
> wellspring of every attack against Franklin Roosevelt and his New
> Deal/American System approach to political economy.
>
> Roosevelt and his allies pushed back hard against Smith and the American
> Liberty League, assailing them as ``economic royalists'' and nailing
> Smith, Raskob, and Shouse as traitors to the new Democratic cause.
> FDR led the charge, continually boasting that he took pride in the
> fact that the pirates of Wall Street and international finance considered
> him their greatest enemy. When Democrats gathered in Philadelphia
> in the Summer of 1936, FDR was nominated for reelection by an overwhelming
> voice proclamation.
>
> In November 1936, FDR defeated Republican candidate Alf Landon by
> the most lopsided margin in American history. FDR won 60.8% of the
> popular vote, won the Electoral College by 523-8, and only lost in
> two of the 48 states, Maine and Vermont.
>
> Following the FDR victory, the Liberty League scions resorted to
> flat-out economic and political warfare against the New Deal, waging
> court fights, continuing the propaganda assault against New Deal
> spending, and maintaining the most vicious personal attacks against
> the President. Despite this, and despite a Wall Street assault on
> the FDR programs, which led to a scaling back and temporary fall-back
> in job-creation and economic recovery in 1937-38, by 1939, the Bureau
> of Labor Statistics estimated that, during the height of the New
> Deal, from 1933 to 1937, the Roosevelt policies had created an average
> of 7.1 million jobs per year, between Federal infrastructure projects,
> private sector jobs, producing the needed bills-of-materials, and
> consumer sector jobs, providing goods and services. The nation had
> been transformed, by such programs as the Tennessee Valley Authority,
> which had been a target of one of the Liberty League's most vicious
> tracts.
>
> The League formally shut down operations in 1940. But, with the death
> of FDR five years later, it resurfaced through figures like Dean
> Acheson (who resigned from FDR's Treasury Department as part of the
> Liberty League's efforts to sink Roosevelt from inside the Democratic
> Party and his own administration), who would be a dominant figure
> in the Truman Administration, and a leader of a resurgent Morgan-du
> Pont cabal.
>
> - Fast Forward ... -
>
> The political heirs of the American Liberty League have come back
> from the grave, particularly since the November 2008 Presidential
> elections, and the departure of the Bush-Cheney regime. During the
> eight years of Bush-Cheney, the pro-Fascist faction of the American
> Establishment had enjoyed its greatest grip on power in decades.
> George W. Bush is, himself, the grandson of Prescott Bush, Harriman
> banker, one-time U.S. Senator, and leader of the Wall Street Anglophile
> faction that bankrolled Hitler's rise to power in Germany, and then
> financed Nazi Germany's rearmament for war.
>
> Now, with the greatest financial crisis in history overtaking the
> Obama Administration, the latter-day American Liberty Leaguers are
> leading an assault against the legacy of Franklin Delano Roosevelt.
> The objective is clear: to make sure that President Obama does not
> go with an FDR solution to this even greater crisis.
>
> The retooling of the Liberty League propaganda machinery did not
> begin on Jan. 20, 2009 with the Obama inauguration, however. A decade
> ago, when then-President Bill Clinton, along with his Secretary of
> the Treasury Robert Rubin, faced with a string of global financial
> shocks, began promoting the need for a ``new global financial architecture,''
> to crack down on unbridled speculation, a vicious assault on the
> Presidency was mounted, unprecedented since the time of the Al Smith
> tirade against FDR. And as in the 1930s, turncoat Democrats, led
> by Vice President Al Gore and Connecticut Sen. Joseph Lieberman,
> tried to sink the Clinton Presidency from within.
>
> - Liberty League Successors -
>
> Beginning even before the Liberty League shut its doors, a new network
> of Wall Street think tanks came into being; they exist, to this day,
> to carry on the dirty work of the ALL. In 1938, the American Enterprise
> Association (seekingalpha.com/symbo...) was founded by top
> corporate executives from General Mills, Chemical Bank, and Bristol
> Meyers, along with a New Deal defector to the Liberty League cause,
> Raymond Moley. They soon set up a Washington, D.C. office, the American
> Enterprise Institute (seekingalpha.com/symbo...), to make
> sure that the New Deal and war-time Roosevelt mobilization and regulatory
> measures were rolled back in the postwar period.
>
> Today, AEI, along with the Heritage Foundation and the Cato Institute,
> are the drivers of the campaign to pillory the FDR tradition through
> a revival of the very lies that filled the pages of the American
> Libery League pamphlets.
>
> Exemplary of the current drive are two recent books, drawn heavily
> from the Liberty League propaganda archives, trashing FDR, and anyone
> alive today who might consider modeling a program upon the successes
> of the New Deal and the World War II Arsenal of Democracy mobilization.fn1
>
>
> In 2003, Cato Institute libertarian propagandist Jim Powell penned
> FDR's Folly--How Roosevelt and His New Deal Prolonged the Great Depression.
> The book was the product of exhaustive direction from Milton Friedman
> and James Buchanan, two leading figures within the pro-Fascist Mont
> Pelerin Society, and was boosted by two top figures from the Cato
> Institute, David Boaz and Ed Crane.
>
> In 2007, Amity Shlaes, then a fellow at the American Enterprise Institute,
> and a former London Financial Times and Wall Street Journal reporter,
> penned The Forgotten Man--A New History of the Great Depression,
> in which she, too, trashed FDR and the New Deal, for prolonging the
> Great Depression, by interfering in financial markets. Her arguments,
> like those of Powell, were taken, almost verbatim, from the Liberty
> League works. Her book was published by Lord Beaverbrook proteégeé
> Rupert Murdoch's company HarperCollins. Murdoch, along with Richard
> Mellon Scaife, of the Mellon family (Andrew Mellon, Treasury Secretary
> during the 1920s, was an American Liberty League member), bankroll
> AEI, Heritage, and Cato, along with the Pew Charitable Trust, the
> family trust of Sun Oil's J. Howard Pew, a member of the American
> Liberty League's Advisory Council and Executive Committee
"I don't see how major tax increases can be avoided, as painful as they will be."
Frankly, I don't see how they can be implemented. Certainly not now, as they would sink the economy. And since we now have a critical mass of voters who literally live entirely off the efforts of others, who is going to do the work? I don't pose this question lightly. Seventy years ago America had a work ethic. Now we have an entitlement ethic.
Also consider this: who exactly is going to work harder and have less to show for it when the stolen proceeds are being used to pay McMansion mortgages, in some cases nicer homes than what I'm living in, for people who should never have been enabled to buy them in the first place? I'm not. I'm SURE I'm not, do you understand?
Who exactly is going to work harder and get less, when need supplants merit as the ultimate distributor of goods and services? We the producers are tired of being robbed. Half the nation works hard and puts the goods on a pile, while the other half walks past the pile, takes stuff and walks away. I ain't doing it anymore.
Do Americans have any idea how fast their population is growing? Or how many impoverished people are flowing into the country creating the growth? It's astounding. The 60s generation is like the last generation of the Roman Empire who lived off the achievements of their forebears and gave away the empire to hoards of Germans and others in a non-violent invasion.
The point of learning from history so as not to repeat it. Pity there's less interest in that!
"The Americans can always be counted on to do the right thing...after they've exhausted all other options"
On Feb 23 08:48 PM Lucmee wrote:
... The best bet at this time will be to take paper assets and convert them to food, supplies and a dependable vehicle that one can put to work.
When you relate the spikes to Wars of various types (Commodities.Revolutio... Civil, World), I think you are mistaking Cause for Effect. These wars all RESULTED from the instabilities in the economic systems. They were not the cause. WWII took place because of the Depression, instabilities in the money supply, and onerous reparations.
You've got the Cart-before the horse, I'm afraid
On Feb 23 08:11 AM Sentinel wrote:
> The ancient Chinese knew about economic cycles long before Elliot
> Wave or Kondratieff Wave theory.
>
> Roughly translated it said...."Wealth doesn't last past the third
> generation".
>
> Wealth is created by human beings. Human beings are faulty creatures.
> Hard lessons learned are forgotten over the generations. Similar
> mistakes therefore are made time and time again, just about the time
> that the first generation that experienced the consequences dies
> off, the second generation who learned and avoided those mistakes
> are now exiting the work force and the third, ignorant generation
> comes online to repeat the mistakes of the dying first generation.
>
>
> Shampoo, rinse, repeat.
I have recently finished an in depth study of the historical, economic and financial reason of wars and war-profiteering, and of the premises that have “molded” the minds of these war-profiteers. The study has a clear link with the present financial and economic crisis and inflation. And last but not least, by unraveling this reason of wars, I have been able to formulate measures in order to evolve to a peaceful, ecological and inflation free world that would be to the advantage of all of mankind.
The study can be accessed via this link:
www.scribd.com/people/...
I hope this information can be of some value to you.
Feel free to forward this information to others. I think people all over the world will appreciate some information that explains why things happen the way they do.
Kind regard
Geert Callens
On Feb 23 07:52 AM css1971 wrote:
> Pre 1971, money was tied to gold. Not the case now. The governments
> can now inflate as much as they like. What we get since then is not
> a depression, we get stagflation instead.
you line about the 3 generations it takes before those hard lessons are lost so reminded me of the opening line in the "Lord of the rings"
"Much that once was is lost for none now live who remember it"
such is life I suppose, especially in this society where so many people take pride in their ignorance.
very well written and researched article.. I am forwarding it to all my friends.. a great read!
So are you saying the Obama plan will work?
What about the fact that after raising the decifit with his spending plan to push his adjenda, he now wants to cut the decifit to a point still not lower than if his plan was not implemented.
Will his plan work?
On Feb 23 09:11 AM investfarm wrote:
> On Oct. 31, 1936, President Franklin Delano Roosevelt, seeking a
> second term in office, delivered his final major campaign speech
> before the November elections, to a large, enthusiastic crowd at
> Madison Square Garden in New York City.
>
> When you relate the spikes to Wars of various types (Commodities.Revolutio...
> Civil, World), I think you are mistaking Cause for Effect. These
> wars all RESULTED from the instabilities in the economic systems.
> They were not the cause. WWII took place because of the Depression,
> instabilities in the money supply, and onerous reparations.
> You've got the Cart-before the horse, I'm afraid
Let's try not to be afraid. What I wrote follows. Where exactly did I imply that any of these wars had no economic causes?
"Okay, so looking at the chart you provide, before 2000 we have commodities price spikes during the Revolutionary War, the War of 1812, the Civil War, World War I, World War II, and during the 1970's inflation. I'd be very slow to argue that any of these spikes were due to speculation."
Now, without a better look at the data, it's impossible to know for sure, but logically commodities should spike during wartime, when government demand is far higher than at any other time. But this is really irrelevant to the discussion. The author seemed to be intimating that the commodities spikes were the result of speculation, when it seems apparent to me that this is not the case.
During 2001 - 2008, the US lost 25% of its manufacturing base. There's the trouble.
We have millions of American citizens, who formerly worked hard and earned a decent living. People like me, who earned degrees in engineering, or computer science, or whatever, and worked in their fields for years. We were good at our jobs. Then Bush got elected, signed trade agrements, and our jobs were sent to India. We were told to become janitors or flip burgers.
As a result, many people couldn't pay their mortgages or credit cards, and it contributed to the mess.
THERE ARE NO JOBS.
We have no way to recover. There are no jobs. We have skilled industrious people with nothing to do except post on message boards. THERE ARE NO JOBS. Bush sent them to India and China.
IBM has been firing Americans and then offering them jobs in India. Check it out.
THERE ARE NO JOBS.
I chuckle when I see people complaining about all the unemployed Americans who don't contribute anything. People talk about "those who add to the pile (of production) and those who just take stuff off the pile." Guess what? I would be very glad to produce. I would like to work my rear end off. THERE ARE NO JOBS. My career got sent to India, and there is nothing else to do.
The United States will never be a good country again. We don't have enough jobs to feed our people. We cannot support our population, because there are not enough jobs. There is nothing to do.
I defy anyone to point out companies that are actually in strong hiring mode, for real jobs at substantial wages, who will hire people that don't have a strongly specialized background for that particular industry. NOTE: I had a strong background for my industry, and my industry was outsourced. I have nothing to do. I want to work. But: THERE ARE NO JOBS.
How can a country that doesn't produce anything be prosperous? How can you put millions of people out of work, and expect to prosper?
Millions of Americans are going to **STARVE TO DEATH***. There are no jobs.
If you don't agree -- show me the jobs!!!
The discovery of universal gravitation by Johannes Kepler established implied evidence which brought the achievements of Johannes Kepler to the verge of the related discovery of the principles of physical space and physical time. The obstacle to that further discovery was, chiefly, the grabbing of political power over science by the circles associated with the leadership provided by Paolo Sarpi, most notably Sarpi’s relevant leading lackey, Galileo Galilei.
The most crucial aspect of that wrecking of modern science, was the introduction of the mechanistic method in mathematics for which Galileo was merely typical, together with the spread of the influence of the hoaxsters Rene Descartes and the avowed Cartesian of Paris-based, Venetian pedigree, Abbé Antonio Conti. The most crucial of the sly tricks involved in these hoaxes was the hysterical insistence, by the opponents of Kepler, Fermat, and Leibniz, on the empiricist’s presumption that the “infinitesimal,” as defined by the Leibniz discovery of the calculus, did not exist.
Although the entirety of the cult of the black-magic specialist Isaac Newton documented no physical research at all, the overt admission of the fact that was the issue of the followers of Sarpi against competent science, which was uttered by a series of Eighteenth-century hoaxsters associated with the notorious Leibniz-hater Voltaire, such as France’s Abraham de Moivre, D’Alembert, Leonhard Euler, and Euler’s protégé Joseph Lagrange. As de Moivre himself formulated the hoax’s pivotal assertion, the argument was that the efficient physical infinitesimal of Leibniz’s discovery of the catenary-cued, universal physical principle of physical least action, depended upon the evidence of an allegedly “imaginary” magnitude. Euler’s argument to this effect, in supporting the hoax by de Moivre and D’Alembert, was the most obvious case of crude, barefaced lying of the most blatant sort. Euler’s hoax led to that of the Duke of Wellington’s sometime assets, Laplace with his silly “three-body” concoction and the hoaxster, and plagiarist (as, explicitly, of the original work by Niels Henrik Abel) Augustin Cauchy.10
However, to understand how that fraud of the Eighteenth-century empiricists came into being, one has to look back toward the actual roots of empiricism in the work of Sarpi, Sarpi’s resurrection of the slop of that medieval irrationalist William of Ockham. This is a typical case of the type in which a criminal incriminates himself by leaving behind thorough evidence of not only his criminal act, but proof of the criminal intent which preceded the act.
In the history of known Egyptian and European science since the program of Sphaerics associated with the Pythagoreans, Socrates, and Plato, the concept of leading science, had been discovery of universal physical principles validated by methods of what Riemann was to identity as unique experiments, experiments whose success defines universal and closely related principles of scientific work. In contrast to that competence, the fraud Laplace sought to simply destroy existing scientific evidence by unproven methods, an incompetence he sought to evade by manufacturing the hoax called “the three-body problem” - - perhaps a celebration of the Duke of Wellington, Laplace, and Cauchy, all in the same bed.
In the comparable clinical case, of Sarpi’s embrace of the medieval Ockham, Sarpi excluded physical-experimental proof (as such proof was exemplified by the work of such Cusa followers as Leonardo da Vinci and Kepler), in favor of certain types of apparent coincidences. If the concocted scheme could be caused to appear to be plausible, and Sarpi and his accomplices chose to profess that they admired it, it could be adopted, by aid of richly lying assertions contrary to reality.
The idea of “proof” which Sarpi’s Ockhamite followers, the empiricists, employed came to be mathematical formulas decreed to be self-evidently plausible in the opinion of an influential set of hoaxsters, without any reference to experimental or comparable proof of principle. The entirety of all of what was claimed as “original work” of the Newton school and its Eighteenth and Nineteenth centuries’ followers, was of that cast. Thus, mathematical formulas were crafted and employed as substitutes for crucial kinds of experimental principles. On the basis of that method, actual principles, such as the principle of universal gravitation discovered by Kepler, were denied in a completely arbitrary way.
The most consequential aspect of such frauds by the empiricists, mechanists (such as Ernst Mach), and worse positivists (such as Bertrand Russell, Norbert Wiener, and John von Neumann), have that common feature.
It was the latter reductionist methods, which came to political power through the establishment of Sarpi’s influence expressed in the contemporary ideology of the virtually world-wide British (drug-pushing, financier-oligarchical... empire, which used that power of imperial financier practices, such as the financial-derivatives frauds which have bankrupted the world’s financial-monetary system today, to achieve world empire of Venetian-style oligarchical-financier power.
From the standpoint of natural law, the crucial feature of the imperial system which has recently entered the final phase of its existence as a breakdown-crisis of the present world financial system, is its prohibition against any systemic consideration of the principles of physical economic practice on which the immediate continuation of civilized life upon this planet now immediately depends.
On Feb 23 09:05 PM old trader wrote:
> investfarm,
>
> WOW!!! Having attended college in the late 60's, your comment brings
> to mind some of the more euridite members of the SDS (Students for
> a Democratic Society) I ran into.
actually analyze data or analyze an argument for correctness. If
they had much misery would have been averted..."
No, unfortunately my wife is too busy being forced by the Fed's to teach anti-bullying lessons (god forbid their feelings get hurt), and AIDS education to 8 year olds (important, but to 8 year olds? Difficult to teach kids about an STD when you can't mention sex...Duh!).
Not too mention the Every Child Left Behind Act forces teachers to teach kids to pass a test, not too actually learn the subject matter (b/c losing funding is the primary concern, not teaching the kids). Then, when you get to college you get indoctrinated by a host of whacko hippie crackpot professors that can't cut it outside the Ivory Towers.
Unfortunately, if we want our children to have common sense they aren't going to learn it in school. But, then again how many Americans possess anything resembling common sense (e.g. I make $60K so if I take out a $2000 mortgage and a $500 car lease theirs plenty left over for vacation & fun...oops did I forget I have to eat, fill gas in the car to go to work, pay the electric, cable & phone bill).
That's my rant for today, thanks and happy investing!!
On Feb 23 09:10 AM kelm wrote:
> A truly well written article and one which I have to say "amen" to.
>
>
> We have evolved a culture that is sound bite based and in which the
> most vocal majority constantly shouts down those who disagree with
> them. We have a financial media focused on selling people stocks
> rather than providing them with information. All of this conspires
> to keep people buying into myths. I heard these myths recited time
> and time again as the markets declined, like a Gregorian chant or
> a prayer "stay in for the long term, too late to sell, long term
> perspective, must stay in the market, diversified - I'll be saved".
> People fail to read and apparently never learned in school how to
> actually analyze data or analyze an argument for correctness. If
> they had much misery would have been averted.
>
> I agree with your conclusion. Perhaps against the odds the US pulls
> a miracle out but I doubt it. I think the crisis has occurred at
> a point coincident with a fundamental shift in the center of world
> commerce occurring. When we emerge from the crisis we will be a major
> but not the major player in the world. The center of gravity will
> have shifted to Asia.
On Feb 24 09:49 AM igriot wrote:
> Great article. We obviously need more historical perspective. Have
> you read Recipe For Disaster: The Formula That Killed Street? www.wired.com/techbiz/...
Since our government doesn't seem to have any answers except for trying to create a positive number by adding two negative numbers (Debt + Debt = More Debt), then I'll take the liberty to prescribe our problems.
Our #1 problem is that our currency is based entirely on perception and not backed by anything (gold, silver, etc, although one might argue its now being backed by the mortgages of the American people) other than the "Good Will" of the American people. I could care less if it's backed by gold. It's not backed by anything, therefore what is it worth? It's worth whatever people PERCEIVE its worth. Thankfully, we've convinced the rest of the world our Dollar is worth something special, because pre-1971 we could at least point to something (gold) as opposed to saying "trust us, it's worth something" like we do today.
Our #2 problem is that our currency apparently grows on trees, so we have allowed banks to operate at a 10% fractional reserve capacity in order to "free us" to spend ourselves right into debt. What does that mean? It means if I deposit $100,000 into a bank, then a bank can turn-around and loan out $1,000,000 in loans (doesn't matter whether they're sub-prime or not). So, where did that other $900,000 come from? The answer is that it was created out of "thin air". And, guess what? The FED didn't even have to physically print it. It just "appeared".
Our #3 problem is the securitization of the #2 problem, which is closely linked to the derivatives market that few people--including our govt--understand. Problem #2 seems acceptable until you realize banks have been selling those sub-prime loans on the open market (to the rest of the world), and then repeating the same process over and over and over with the same $100,000 I gave them in the first place. Does anyone else see a problem with this? The debt (aka notes, paper, etc) the banks have been selling is so toxic, it has infected the entire global economy. Not only have we made the American people slaves to their debt, but we've enslaved the rest of the world to the American people's debt.
Problem #4 - Credit default swaps. We allowed AIG--and others--to underwrite trillions of dollars of toxic paper transactions. Guess who owns 80% of AIG? That's right, the US govt. That means the US govt owns 80% of AIG's debt. They've "borrowed" $150 billion and are asking for more. Scary, isn't it?
Problem #5 - Debt, more debt, and more DEBT. Now, the American people own their personal debt--which is at a historical high--, the debt of the banks--which is at a historical high and happens to be the debt of every other citizen--, AND we own the debt of the Federal government--which is also at a historical high. I recently heard the entire wealth of the world might be around $60 Trillion. I haven't heard the latest figure for the federal debt, but it was approximately $45 Trillion last I heard. Umm??? How are we going to pay this back, exactly?
At the root of all these problems is good ol' fashioned GREED. I could keep going on-and-on about stimulus packages, TARP #1, TARP #2, bailout x, bailout y, inflation, deflation, stagflation, hyperinflation, ponzi schemes, ponzi economies, socialism, balance sheet transparency, etc, etc. We--and I stress the fact that it's you and me--are in for some hard times. Whether it's a "depression" by someone else's definition, I'll leave that up to the "experts" who put us in this place to begin with. We're still Americans, which means we still have some freedom, but we're in debt. No big news there, right? But, when you're indebted to someone, you're enslaved to the lender. It's a biblical truth even my atheist friends are willing to admit.
So, what are "the principles of physical economic practice"? Inquiring minds want to know. . .
BTW, the understanding of the nature of the infinitesimal, or should I say, the lack thereof, is one reason why we have an "energy problem" and why there are "haves" and "have-nots" in society, IMHO.
See: fractalicawakening.com...
On Feb 23 09:10 AM kelm wrote:
> A truly well written article and one which I have to say "amen" to.
>
>
> We have evolved a culture that is sound bite based and in which the
> most vocal majority constantly shouts down those who disagree with
> them. We have a financial media focused on selling people stocks
> rather than providing them with information. All of this conspires
> to keep people buying into myths. I heard these myths recited time
> and time again as the markets declined, like a Gregorian chant or
> a prayer "stay in for the long term, too late to sell, long term
> perspective, must stay in the market, diversified - I'll be saved".
> People fail to read and apparently never learned in school how to
> actually analyze data or analyze an argument for correctness. If
> they had much misery would have been averted.
>
> I agree with your conclusion. Perhaps against the odds the US pulls
> a miracle out but I doubt it. I think the crisis has occurred at
> a point coincident with a fundamental shift in the center of world
> commerce occurring. When we emerge from the crisis we will be a major
> but not the major player in the world. The center of gravity will
> have shifted to Asia.
"Our #1 problem is that our currency is based entirely on perception and not backed by anything other than the 'Good Will'" of the American people."
Doesn't sound like a problem to me! Imagine, the world's reserve currency is valuable because WE say it is. How is this not a good thing?
"It's not backed by anything, therefore what is it worth?"
How about "more than any other currency in the world?"
"It's worth whatever people PERCEIVE its worth."
As opposed to being worth whatever people PERCEIVE specie to be worth. No difference - it's a confidence game either way.
"Thankfully, we've convinced the rest of the world our Dollar is worth something special, because pre-1971 we could at least point to something (gold) as opposed to saying 'trust us, it's worth something' like we do today."
Actually, we were off the gold standard in 1933. The subsequent Bretton Woods system, that ran until 1971, was related to exchange rates and the ability of governments to exchange gold. It had nothing to do with backing the currency.
"It means if I deposit $100,000 into a bank, then a bank can turn-around and loan out $1,000,000... So, where did that other $900,000 come from? The answer is that it was created out of 'thin air'."
Sigh. I guess I could explain why this is wrong a thousand times and there would still be people who believe it. The mechanism is quite simple, quite logical, and has been functioning in very much the same way for CENTURIES, regardless of whether money was backed by gold or not. Please go here: www.colorado.edu/Econo..., scroll down to "How Banks Create Money," and expand your mind.
"Our #3 problem is the securitization..."
Without securitization, all credit growth - including worthy credit growth - would be stunted. This process is not, in and of itself, a problem in the least - it improves the efficiency of credit markets.
"Problem #4 - Credit default swaps."
Again, there's nothing inherently wrong with credit default swaps - they can be perfectly useful, legitimate insurance transactions. Apparently, however, the private sector was unable to manage the risks involved in them.
"Problem #5... Now, the American people own... the debt of the banks..."
Nope, sorry. You need to learn just the tiniest bit about corporate law.
"I haven't heard the latest figure for the federal debt, but it was approximately $45 Trillion last I heard."
Uh, no. Please do some fact-checking. The scary number you're trying to use certainly includes somebody's estimate of what the government's current estimated liability is for social security recipients over the course of the next <unknown number of> years. IF nothing is changed. What are the chances of this? The national debt is about $11T.
"I could keep going on-and-on..."
But please don't. At least not until you research it a little more.
I think if you're going to rudely push wildcat's statement aside it is you who should do some fact checking on the matter. You make it sound as if because we don't know the number it might as well be 0 and thus we're left with just $11 trillion in debt.
Really?
On Feb 24 03:13 PM BS Detector wrote:
> "I haven't heard the latest figure for the federal debt, but it was
> approximately $45 Trillion last I heard."
>
> Uh, no. Please do some fact-checking. The scary number you're trying
> to use certainly includes somebody's estimate of what the government's
> current estimated liability is for social security recipients over
> the course of the next <unknown number of> years. IF nothing is
> changed. What are the chances of this? The national debt is about
> $11T.
>
If we need to pay it back in the future, then it's debt...whether you know how long you'll need to pay it back or not. At least, that's what my bank and credit card companies keep telling me. They don't let me ignore the amount just because I'm not sure when I'll pay it back.
On Feb 24 04:16 PM naidle wrote:
> It may be an estimate but I'd have to favor the words of David Walker,
> the former U.S. Comptroller-General with matters such as this. To
> ignore future debt of major Gov programs is flat out misleading.
>
>
> I think if you're going to rudely push wildcat's statement aside
> it is you who should do some fact checking on the matter. You make
> it sound as if because we don't know the number it might as well
> be 0 and thus we're left with just $11 trillion in debt.
>
> Really?
>
>
>
> It may be an estimate but I'd have to favor the words of David Walker,
> the former U.S. Comptroller-General with matters such as this. To
> ignore future debt of major Gov programs is flat out misleading.
Well, I don't know what the number's based on, but here's a scenario for you. Let's suppose that Social Security is set to run out of money in 2042. That's quite a few years from now, and is the SOONER of the two government estimates of which I'm aware, and this estimate is based on CURRENT tax and benefit levels, and other assumptions. Let's imagine that the cost once 2043 comes is, I don't know, $1T/year, and that we're counting the entire projected deficit, which occurs over something like 34 years until the baby boomers all die off.
Does it make more sense to assume that we are in $34T of additional debt or to assume that we're going to do SOMETHING in the next 33 years to change this potential outcome? Do you really think we should equate a possible liability more than three decades away with debt we currently have?
> I think if you're going to rudely push wildcat's statement aside
> it is you who should do some fact checking on the matter.
I was making an assumption - wildcat provided no information whatsoever regarding the number. How exactly can I research something which could, for all I know, have come out of your orifice? I do know, however, that it is wildly inaccurate. How do I know this? Because the correct answer is $10,839,526,591,486.90 (www.treasurydirect.gov...).
There, there's a fact checked for you.
> You make it sound as if because we don't know the number it might > as well be 0 and thus we're left with just $11 trillion in debt.
"Just" $11T?
The liability can't be counted with any degree of certainty whatsoever. So equating it to debt currently on the books is foolish. It's not debt. It won't be for AT LEAST three decades. The sky is not falling.
A little harsh don't you think? Let's agree to disagree without challenging people's intellects. I know full well that 1933 was the last of the gold standard. "Pre-1971" includes all steps taken by our govt to distance itself from gold and fashion our current fiat currency while implementing the Bretton Woods system. And, I understand no one is going to come knocking on my door if the US govt defaults on the loans its made to the banks. It'll be far more severe than that. But, yes, you're right; I probably won't be going to bankruptcy court. Thanks, that's helpful.
3 million people in the United States are recently without jobs in large part as a result of the system you're defending. And, the number is going up. 20 million people in China are without jobs. I stress that these were PEOPLE, not statistics we can sit at home and talk about with no remorse. Why would you defend the very mechanism that created this?
I said the ROOT of all the problems we have has been GREED. I didn't say do away with the dollar, even though I think our currency should have value apart from perception. You're fine with that. Okay, good for you. I also didn't say do away with securitization. I said we allowed banks to securitize toxic paper and create credit when they shouldn't have. (Freddie Mac and Fannie Mae are perfect examples).
You cannot convince me that the way out of debt is to go deeper into debt. I'm suggesting our problems are related to debt, and the current system and policies support DEBT. And, the treachery we've seen particularly in the financial sector is related to GREED.
AIG, BAC, and C must look like "strong buys" right now...given your responses, I'd say go for it.
On Feb 24 03:13 PM BS Detector wrote:
> wildcat wrote:
>
> "Our #1 problem is that our currency is based entirely on perception
> and not backed by anything other than the 'Good Will'" of the American
> people."
>
> Doesn't sound like a problem to me! Imagine, the world's reserve
> currency is valuable because WE say it is. How is this not a good
> thing?
>
> "It's not backed by anything, therefore what is it worth?"
>
> How about "more than any other currency in the world?"
>
> "It's worth whatever people PERCEIVE its worth."
>
> As opposed to being worth whatever people PERCEIVE specie to be worth.
> No difference - it's a confidence game either way.
>
> "Thankfully, we've convinced the rest of the world our Dollar is
> worth something special, because pre-1971 we could at least point
> to something (gold) as opposed to saying 'trust us, it's worth something'
> like we do today."
>
> Actually, we were off the gold standard in 1933. The subsequent
> Bretton Woods system, that ran until 1971, was related to exchange
> rates and the ability of governments to exchange gold. It had nothing
> to do with backing the currency.
>
> "It means if I deposit $100,000 into a bank, then a bank can turn-around
> and loan out $1,000,000... So, where did that other $900,000 come
> from? The answer is that it was created out of 'thin air'."
>
> Sigh. I guess I could explain why this is wrong a thousand times
> and there would still be people who believe it. The mechanism is
> quite simple, quite logical, and has been functioning in very much
> the same way for CENTURIES, regardless of whether money was backed
> by gold or not. Please go here: www.colorado.edu/Econo...,
> scroll down to "How Banks Create Money," and expand your mind. <br/>
>
> "Our #3 problem is the securitization..."
>
> Without securitization, all credit growth - including worthy credit
> growth - would be stunted. This process is not, in and of itself,
> a problem in the least - it improves the efficiency of credit markets.
>
>
> "Problem #4 - Credit default swaps."
>
> Again, there's nothing inherently wrong with credit default swaps
> - they can be perfectly useful, legitimate insurance transactions.
> Apparently, however, the private sector was unable to manage the
> risks involved in them.
>
> "Problem #5... Now, the American people own... the debt of the banks..."
>
>
> Nope, sorry. You need to learn just the tiniest bit about corporate
> law.
>
> "I haven't heard the latest figure for the federal debt, but it was
> approximately $45 Trillion last I heard."
>
> Uh, no. Please do some fact-checking. The scary number you're trying
> to use certainly includes somebody's estimate of what the government's
> current estimated liability is for social security recipients over
> the course of the next <unknown number of> years. IF nothing is
> changed. What are the chances of this? The national debt is about
> $11T.
>
> "I could keep going on-and-on..."
>
> But please don't. At least not until you research it a little more.
Then I read the posts from the left wing wackos, right wing wackos, anti semitic wackos, & plain vanilla wackos.
Now I know how we got to this economic conundrum. The US is full of wackos who elect politicians who are stupider, crazier, & lazier than they are. Little wonder the mess.
Ayuh
> On Oct. 31, 1936, President Franklin Delano Roosevelt, seeking a
> second term in office, delivered his final major campaign speech
> before the November elections, to a large, enthusiastic crowd at
> Madison Square Garden in New York City.
> .........................
When attempting to make a point it is sometimes best to summarize and then provide hyperlinks to the article. DON'T copy and paste huge amounts of material.......or we're going to fine you. $$
> I know full well that 1933 was
> the last of the gold standard. "Pre-1971" includes all steps taken
> by our govt to distance itself from gold and fashion our current
> fiat currency while implementing the Bretton Woods system.
Okay, sure. But how random it is that you chose the year Nixon nixed Bretton Woods. I mean, why didn't you say pre-2005? Your explanation above would be just as apt.
While you were looking up the gold standard, did you also read up on the money multiplier?
> I understand no one is going to come knocking on my door if the US
> govt defaults on the loans its made to the banks.
How exactly does a LENDER default on loans?
>Why would you defend the very mechanism that created this?
Because the things you're talking about - specifically your "#3 problem" credit securitization - have contributed substantially to higher economic growth than otherwise would have been possible. Sure, people have lost jobs. But some people wouldn't have had jobs in the first place, or wouldn't have been as productive as they would otherwise have been. Credit securitization is vital to an efficient credit market. Doesn't mean I think it doesn't need regulation.
> I also didn't say do away with securitization.
Fine. My mistake. I thought you meant it when you said "Our #3 problem is the securitization of the #2 problem."
> You cannot convince me that the way out of debt is to go deeper into
> debt.
Strange, did you think I was trying to convince you of that?
> AIG, BAC, and C must look like "strong buys" right now...given your
> responses, I'd say go for it.
What a very strange way to end. I mean, is this an insult? But since you asked, I think AIG and C are worthless, and that BAC will survive. But at this point, I'd stick with JPM, USB, GS, MS, and WFC. Oh, and I'm long the PGF, which is a preferred financial ETF. I don't believe many governments will allow the preferred dividends to go away, as there will be no other way for banks to raise private capital. I've got a pretty good paper loss on that to date, FWIW. And I've lost lots of money in the last year, so clearly I'm no seer.
Actually, a Nobel prize winning economists disagree with you sir, since,
according to the Nobel prize winner below credit securitization bought few benefits to most people, are now threatening the world economy, and the financial innovation (complexity) involved was merely a way to pad profits and hide them from the eyes of regulators.
"U.S. cannot go back to old ways, top economists say"
news.yahoo.com/s/nm/20...
"
Stiglitz said that, under the guise of innovation, banks discovered new ways of taking risks that brought few benefits to most people and are now threaten the entire global economy.
"
"
He argued that talk of increasing transparency is actually an effort to divert attention from the real issue: financial complexity designed to pad profits and hide them from the eyes of regulators.
"
And in regards to the necessity of credit itself:
" Jaguar Inflation"
mises.org/story/3329
"
Twentieth-century macroeconomic theory — both Keynesian and monetarist — championed the idea that a growing economy needs easy credit. But this is a false theory. Credit should be supplied by the free market, in which case it will almost always be offered intelligently, primarily to producers, not consumers.
"
So, these experts where not paid attention to last time, maybe they will be now...
User 270430 wrote:
> BS Detector said : " Credit securitization is vital to an efficient
> credit market."
>
> Actually, a Nobel prize winning economists disagree with you sir
> [that credit securitization is vital to an efficient credit market],
> since, according to the Nobel prize winner below credit securitization bought
> few benefits to most people, are now threatening the world economy,
> and the financial innovation (complexity) involved was merely a way
> to pad profits and hide them from the eyes of regulators.
Your citation doesn't even state that credit securitization is what Stiglitz is talking about. You may find that he thinks this, though I think it more likely that he was saying that banks took good ideas (like securitization) and ran amok with them. And, of course, I never said that there were not excesses, or that banks didn't use vehicles unwisely. I said that in and of itself, credit securitization is not only not bad, but that it improves the efficiency of a credit market.
> And in regards to the necessity of credit itself:
An amusing little tale, certainly, but not really applicable to this discussion. Also, the author does not say that credit is unnecessary. He also leaves out parts of the story where it's convenient: he writes "Prices would be lower because credit would not be competing with money to bid up these goods," but he doesn't mention that lower prices would mean less profit, which would tend to lead to less choice, innovation, and employment, and lower wages.
Things move in cycles of boom and bust. Check.
And?
Oh that's it?
Well, then I'll offer this: just as good times don't last forever, neither do bad times. When we speak of bubbles, we're speaking of economies and societies which are dynamic, and where promotion and optimism overshoot.
Consider how the various societies with celebrated bubbles did after:
1) Holland (Tulips). Remained extremely wealthy trading nation. Today one of the wealthiest nations in per capita GDP
2) England (South Sea Bubble) . . . the next 150 years after the collapse of the South Sea Bubble were ones of extraordinary productivity, industrial and financial success
3) United States
Panic of 1819
Panic of 1907
Crash of 1929
Suffice to say that while each of these crises was devastating, the nation went on to dramatic growth in each case afterward. The time to recovery varied from 1 to 10 years (for GDP)
Crash of 2008-2009
No one knows when our recovery will come. Historical data suggests a "worst case" of 10 years for GDP (during the Great Depression).
My guess?
We've had a lot of "zombie industries" for too long (eg autos); the Panic of 08-09 is forcing us to deal with stuff we've swept under the carpet. As horrible as it is, I'd bet that the long overdue rationalization of the auto industry, and finance, will pay enormous long term dividends to US productivity and wealth.
wildcat wrote: "If we need to pay it back in the future, then it's debt...whether you know how long you'll need to pay it back or not. At least, that's what my bank and credit card companies keep telling me. They don't let me ignore the amount just because I'm not sure when I'll pay it back."
Thank you for illustrating my point perfectly. Your credit card statement includes only money that you've actually borrowed, not potential future debt. Unless you have the Carnac credit card, that is.
I have my cell phone and other bills set up to automatically be changed to my credit card. By your logic, these potential future costs should be treated equivalently to charges already on my statement.
What nonsense.
My suggestion of how to fix it. . . .DO NOTHING!
There is no gain without pain. Maybe this will teach the spoiled American and 2nd generation chirldren to work a bit harder and study a bit longer. And maybe it will teach the unions that if you ask for too much you get nothing as the job is shifted overseas. Maybe the true story of the global economy is that you have to move to where the jobs are. Not being lazy sitting in a home you cant afford having 16 children and invetro fertilization while you are on Social Security.
Get real, grow up, be strong like our grandparents! It is funny the day our first lady was finally proud of her country was the first day I was ashamed. Times are tough, things are bad, vote in the socialists who will give out free stuff for everyone! Do not worry about we will let the rich pay for it. As for bailing out wall street, at least at one point the banks and wall street had and made money. UNLIKE ALL THE PEOPLE WHO GOT SUB-PRIME MORTGAGES!~
However lets just for argument sake consider the possibility that we have had our 50% drop in equity values and 70% drops in many commodities.
What if the worst of the declines are what is being reported now from late 2008. Maybe the 90% of citizens who are current on or out of debt completely and saving money will start to find values?
Further lets consider an interconnected world with multinational companies and their worldwide sales. Perhaps their stocks are at good value. Maybe stocks like PG, CSCO, JNJ, HON, MMM, KO among others.
You may be correct about this being the beginning of the end. It is important to consider such a possibility. At the same time things are never as bad as they look when your dropping or as good as during a raging bull.
Since the end of the world only comes once and the outcome isnt good I think I will put some chips on a different alternative as well.
Outsurcing and Globalization. While it has happened still largely on the sidelines (IT, customer support, manufacturing) it has introduced an anemia into this economy. Unfortunately, the hardships will probably accelerate this trend. In this light, I support the policies of the POTUS to try to re-establish an educational, infrastructure, healthcare standard to reach in the intermediate term from which then to launch the hard competition that awaits this country globally. Unfortunately, it might not be enough to do the trick in reality. In the meantime this country is experiencing a "the hunter becomes the hunted" moment. Clarity will be required as first step.
Unlike the bunch of whiners like you, I'll admit that we are responsible for electing the wrong people to run this country over and over and over again.
This is where you should direct your rant - ALL of us (you as well) are guilty of electing people to make decisions for us who should never have been elected in the first place!
On Feb 24 12:22 AM mallarde wrote:
> I would blame the Baby Boomer generation before people in the 40s
> and 30s. I consider the 60s generation to be the most self-absorbed,
> reckless and selfish generation in the last 100 years. I believe
> they took a magnificent jewel of a country, put it down, abused it,
> thrashed it, got rich off it and now are in the process of giving
> it away.
>
> Do Americans have any idea how fast their population is growing?
> Or how many impoverished people are flowing into the country creating
> the growth? It's astounding. The 60s generation is like the last
> generation of the Roman Empire who lived off the achievements of
> their forebears and gave away the empire to hoards of Germans and
> others in a non-violent invasion.
The "unfunded" portion of the deficit, which includes social security that they've been robbing for years, is approximately $45 Trillion. If I add those correctly that equals $57 Trillion - but who's counting an extra Trillion here or there?
On Feb 24 04:16 PM naidle wrote:
> It may be an estimate but I'd have to favor the words of David Walker,
> the former U.S. Comptroller-General with matters such as this. To
> ignore future debt of major Gov programs is flat out misleading.
>
>
> I think if you're going to rudely push wildcat's statement aside
> it is you who should do some fact checking on the matter. You make
> it sound as if because we don't know the number it might as well
> be 0 and thus we're left with just $11 trillion in debt.
>
> Really?
>
>
>
"What we get since then is not a depression, we get stagflation instead."
The most probable economic scenario will be: a depression with hyperinflation. Something similar to what took place in Soviet Union 20 years ago.
The last 1930s Great Depression was very different from what we are facing now. It was a "controllable" depression. We are about to experience an uncontrollable depression with social unrest.
What is wrong with abandoning fair value accounting - at least for a while - and allow buyers and sellers to establish value for these assets? By forcing valuations without having an active market the effect has caused a spiraling down of asset values. If allowed to continue the case for a depression may be unavoidable. However, if it does occur, it may be caused by the adherence to "fair value accounting" as much as anything else.
And our government would rather throw ridiculous amounts of money - that we don't have - at holders of "toxic assets" and stubbornly clinging to the notion of "fair value accounting" that most know isn't working.
It is a direct assault on free markets and the capitalist principles that have brought our country to the prominence it has enjoyed for a long time.
Seems to me that the elimination of "fair value accounting" wouldn't cost the taxpayer anything and would, eventually, allow for the re-emergence of capitalism - a concept we've drifted a long way from in the past 6 months