...defense systems set to "Hair Trigger"
- So there I am, looking like an idiot, huddled in the famous Secret Mogambo Bunker (SMB), doors locked, defense systems set to "Hair Trigger" and I am waiting for the end of civilization due to the continuing insanity of monetary, ummm, insanity. But then I saw that the Federal Reserve did not increase Total Fed Credit last week, and indeed actually shrank credit by $2.6 billion, which ain't a lot, I'll admit, but it's like taking a girl home after a first date and trying to kiss her goodnight, and she gives you a little peck on the cheek. It ain't much, but it is better than the usual, which involves a lot of screaming and her dialing 911, and I'm running down the street, and here come the cops cars careening up with their stupid flashing lights and their stupid bullhorns yelling "Hold it right there Mogambo, you stinking pervert!"
So while Total Fed Credit didn't go down by much, it is MUCH better than the alternative, which, after 18 years of the horrid Alan Greenspan at the helm of the Federal Reserve, is to always increase money and credit with every breath, day and night, which inflates both total debt and the money supply, which devalues the money, which inflates prices, which makes poor people do terrible things in their frantic desperation. As I learned when my wife woke up the morning after our wedding, "frantic desperation" seems to involve a lot of horrified screaming and hurling sharp cutlery in my direction. So I have a fear of people in the throes of "frantic desperation" which explains why I am in full lock-down mode here in the Mogambo Fortress Of Steel (MFOS), and I am sure that I don't have to remind you to not make any sudden moves, sucker. And keep your hands out in the open where I can see them.
I actually turned off the perimeter-scanning radar set when I also saw that the Fed did not buy much government debt, either, only about $511 million, which I realize is not a lot of money to them or to an important big shot like you, but to the mentally-ill street bum segment of the population, it represents almost 150 million bottles of really cheap wine, which, among the folks in my crowd, is enough to last almost all weekend.
So I was pretty calm by the time I saw that the Treasury issued $2.5 billion in actual cash last week, which is irritating as hell, knowing that the CIA is probably using that money to fund the ugly things they do "to make the world safe for democracy by killing them."
Another thing that is weird is that the Monetary Base seems stuck around here. But since I have no idea what this means, I will simply file it is that big stack of stuff I call "Things I don't understand, but may have some importance that completely eludes me."
- The monstrous trade deficit got worse, and it was a tidy $66 billion in September, although Barron's has the merchandise trade deficit at $71 billion. A lot of the trade deficit was caused, as usual, by our gluttonous imports of oil. But about 80% of the change in the deficit ($2.3 billion's worth) was in the area of non-petroleum goods, especially in the area of advanced technology (computers, biotechnology, information technology, aerospace materials, etc.). AmericanProgress.org reports "deficit in these products increased by $2.3 billion in September to its second highest level on record, $5.6 billion." In short, the level of American exports in advanced technology had the biggest drop in 4 years.
And in that vein, Paul Collins calculates that this $66 billion trade deficit is a lot, and he compares this to "The value of all of Iowa's farmland is $85.7 billion. So the trade deficit for the month was equal to the value of 77% of Iowa's farmland."
Then, for good measure, he throws in "the value of all Kansas farmland is $124.1 billion. So, simply by giving foreigners all Iowa and Kansas farmland, we can cover our trade deficit for a bit over three months at current rates." But, lest you think that this is all bad news, there is a strange silver lining. He says "This has the fringe benefit that U.S. taxpayers will no longer have to pay billions of dollars of agricultural subsidies to farmers in these states." Hahaha!
So, getting back to the money, $66 billion more dollars went overseas in September. Beyond the obvious work-safety issues of having all those dollars scattered everywhere, carpeting the floor and people tripping over them, what in the hell are they doing with them all? Even foreign central banks have apparently had enough of our stupid debt, as their buying of our debt through the Fed dried up completely last week, even though they have money out the wazoo. Huh? I can't believe that stupid foreigners are NOT buying our debt! I mean, they have been buying it by the freaking tanker-load for years, and we just had the worst trade deficit ($66 billion in September) in history, and so they have all got to be up to their knees in dollars!
Normally, foreigners would use the dollars to buy US debt. But Martin Weiss notes that the debt auctions conducted by the Treasury are not as popular as they once were. He notes that last Wednesday, "most of the usual buyers from abroad failed to show up. Or if they came at all, it was with a lot less money in their pockets. Instead of bidding for almost 46% of the Treasury's 5-year notes like they did last month, they bid for only 21% of the notes. Treasury-bond prices plunged."
I don't know why the foreigners are not buying US government debt. Maybe it has something to do with the question posed by ContraryInvestor.com, which is "for how much longer will foreign buyers of US Treasuries be willing to accept negative real returns at what is now close to being the case across the entire Treasury curve?" Ahhh! I think I am seeing the problem! Investing a dollar's worth of buying power only to wind up with 90 cents of buying power is the kind of stupidity that made The Mogambo famous! And believe me, nobody wants to emulate THAT reputation!
So what in the hell ARE they doing with all that money they are earning? The fact that the stock market went up last week, surprising the hell out of me, may hold part of the answer; they may be literally buying the little part of industrial America that they don't already own. So maybe it is just some more, as Bill Buckler of the Privateer.com commented, of "the US has ended up consuming its once massive manufacturing machine."
To show you why this is bad, let me quote a passage from Warren Buffet, as highlighted in the book "The Demise of the Dollar" by Addison Wiggin, which shows why a continually-growing net ownership of American assets is bad news. "As that ownership grows, so will the annual net investment income flowing out of this country. That will leave us paying ever-increasing dividends and interest to the world, rather than being a net receiver of them, as in the past. We have entered the world of negative compounding-goodbye pleasure, hello pain."
But don't think that the Federal Reserve will be any help, as they are completely clueless, as I can easily prove by quoting from a dispatch from AFX. "The U.S. growing current account deficit is not troubling, said William Poole, the president of the St. Louis Federal Reserve Bank, on Wednesday. Poole said the U.S. current account deficit is being driven by foreign demand for U.S. assets rather than by any structural imbalance in the U.S. economy." Hahahaha! This Poole character is the big cheese at one of the Fed banks, and he says things as silly as this? Hahahaha! We are giving foreigners tons of dollars for stuff, and when they try and get rid of some of that huge pile of bucks, it is because of "foreign demand for U.S. assets"? Hahahaha!
Still laughing, I switched the intruder-targeting computers back on when I saw that the debt of the US continues to expand into the stratosphere. In the last two weeks alone, the Gross National Debt has ballooned by $37 billion freaking dollars! Two lousy weeks!
To show you that Addison Wiggin is not just a great writer of books, he also reads stuff, and since hears us talking about this federal debt thing, he tells us that he has learned that "The Levy Institute estimates that the amount we will owe to foreigners will hit $8 trillion dollars by 2008. That's 60% of current GDP."
- Puru Saxena, editor and publisher of Money Matters, writes "For years now, we have been told repeatedly that the root cause of Japan's economic problems is deflation. We have been forced into thinking that deflation is the culprit. Allow me to share a secret - the central banks want you to believe that deflation is a total disaster so that they can freely print more money, thereby creating inflation. After all, who benefits from the monetisation of the economy?" I raise my hand, because I know this one! It's the banks! And the government! The banks and the government! In fact, I was ready with a nice quote from Graham Birch, one of the managers of Merrill Lynch's Gold & General Fund. He said "Banks are like drug dealers hanging outside schools tempting children with crack cocaine."
But I don't get called on,
even though, as I said, I knew the answer and had this delicious
quote. Instead, Mr. Saxena, ignoring me, goes serenely goes on,
"Despite all the brainwashing, close inspection reveals
that Japan never really had any deflation! The truth is that
throughout the past 15 years, Japan's money supply has continued
to grow (inflation). Japan has witnessed inflation and not deflation
since 1980. Sure, Japanese asset prices have fallen since 1990,
but the cause is not deflation as advertised by the establishment.
In fact, a sharp rise in interest-rates was the trigger, which
caused the Japanese stock and property bubbles to burst."
- Ben "Big Bonehead" Bernanke, the incoming new chairman of the Federal Reserve, is on record as being the champion of "inflation-targeting", which is the new code-word for "I'm going to kill you with inflation because I don't care about any of you American pigs." This ridiculous philosophy may not work like he figures, if we can believe Randy Buss, of Der Invest Informant, who quotes Professor Antony Mueller, who is an Adjunct Scholar of the Ludwig von Mises Institute, as saying, "The size of the debt level relative to the productive base at the peak of the boom will make monetary policy ineffective once the contraction phase takes hold." Well, perhaps that is why the Fed is so desperately trying to keep this contraction ("deflation") from taking hold in the first place, by creating inflation, which will kill us just as fast.
Max Fraad Wolff has had enough of listening to me run my loud mouth and not making any sense, and he stands up to explain "Standard fiscal and monetary policy work to attack inflation by pushing economic activity toward recession. Likewise, fiscal and monetary policy introduces inflationary pressure to fight recession." Well, I gotta admit that he IS a lot more succinct in his explanation, but without the use of screaming, or swearing, or breaking furniture or even vowing blood oaths of revenge. As such, it seems to lack that sense of, umm, mortal despair and homicidal outrage that it really calls for.
So, in my snippy little childish way, I say "So?" Without missing a beat, Mr. Wolff, with a momentary flash of exasperation at my abysmal stupidity, explains that "Stagflationary dynamics occur when a growth recession - or worse - occurs alongside upward price pressure, inflation. Policy markers face unique challenges and enhanced prospects of failure in such an environment. Given the normally poor record of policy makers, this is scary. As price pressures persist alongside rising trade and federal spending imbalances into 2006, stagflation lurks. Keep your eyes out for data that suggests cooling growth and rising prices. When it rains it pours."
None of this is lost on Jim Puplava, which I can prove by directing your attention to his essay "The Two Bens" on his www.financialsense.com site, in which he contrasts Ben Franklin and Ben Bernanke, which I am sure has Mr. Franklin rolling over in his grave at the comparison, sort of like I hate it when my neighbors compare me to a diseased sewer rat, only not as cuddly. Some things never change, as you can gather from his writing that "From the birth of this nation to the present, the government would from time-to-time resort to debasement of the currency in time of war or in time of economic duress. We find it always ends with the same consequences: debasement of the currency and concomitant inflation. Despite the best efforts of government alchemists, the result is always the same in the end - inflation. The only limit to the quantity of money created is the destruction of its value."
To prove the accuracy of his words, Mr. Puplava writes that "Through September, the PPI was up 6.7% year-over-year, while the CPI was up by 4.7% over the same period. Even worse for Americans, who now import more of what they consume, import prices are up 9.9% over the last 12 months." This level of inflation should have the Federal Reserve jumping out of the windows in shame, or jumping out of the windows to escape the incessant screaming of The Mogambo about this inflation conflagration, that THEY caused, that is destroying our money.
And now the new report of producer prices showed that prices jumped 0.7% in October, which is worse than anyone (except you and me) expected. The so-called "core" inflation (minus the pesky volatile items like food and energy) was, I guess, relatively tame for finished goods. But intermediate goods had prices that were up a smoldering 1.2%, and intermediate goods were smoking red hot, up a full 3% for the month.
And it is even worse than that in actuality, as he suggests when he says "Today the true rate of inflation is running well over 7%" which one can see when calculating the Consumer Price Index "as it was originally constructed before the government began to tinker with the index to keep the truth from us. When one undertakes this exercise, we realize that the CPI "closely relates to what most Americans experience daily in their lives." And I don't know what you are experiencing in YOUR life, but around here the bills are showing AT LEAST that much inflation!
Then he unleashes the bombshell; "Deflationists and inflationists do agree on one thing: the U.S. is headed for another recession. Given the under-reporting of inflation, which overstates GDP, we may already be entering one. The only difference between the two camps is how it unfolds. As the U.S. enters into recession, tax revenues will decline and government spending will increase as a result of rising entitlements. Deficits will get bigger and the U.S. will have to borrow and monetize more of its debt. War, entitlements, and lack of fiscal restraint means more debt, more borrowing and debt monetization. Eventually the dollar is going to collapse through the weight of the twin deficits. Inflation-not deflation-will be the result."
John Hussman, PhD, of the Hussman Funds, has a slightly different take on all this. Oh, he agrees with everyone else that I am a big stupid idiot, but where he takes exception is "It seems to be taken as an article of faith that the Fed determines inflation, but in fact inflation is not so much a monetary phenomenon as a fiscal one. It is essentially a reflection of unproductive government spending. Moreover, the belief that you should respond to inflation by tightening monetary policy is in some cases very dangerous. If you look closely at the data, you'll find that economic growth and inflation over the same period actually have a negative correlation." So, as the Federal Reserve starts trying to foment more and more and more inflation, they are actually hurting growth? Hahahaha! I was right! We are freaking doomed!
And it will get worse faster than we think, according to Marc Faber, of the famous BloomGloomDoom.com site, who writes "So, at latest by the middle of next year, I would expect the Bernanke money printing press to shift into high gear. This should lead to more consumer price inflation, a weakening US dollar and tumbling bond prices. From a longer term perspective, I expect Mr. Bernanke will be the greatest disaster that has ever hit the US bond market in the 200 years of capitalistic history."
I raise my hand to ask, "Why do you think this?" With a look of obvious disgust on his face, he reveals that he knows that I am far too stupid to understand, but being the gentleman that he is, he condescends to explain, "The US has no other option but to print money. Otherwise their illusionary wealth collapses and drags down the economy in a deflationary apocalypse. So, Mr. Bernanke will print money."
So what does one do? With the agility of a lithe jungle cat, I instantly leap to my stinky Mogambo feet (SMF) and exclaim, "Buy Gold!" And if you think gold is a great investment and that you ought to be out buying some more gold right now instead of sitting there reading the stupid Mogambo Guru and saying hurtful things like "This guy's an idiot!", then Bud Conrad had an interesting article on the DailyReckoning.com site, entitled "Measuring Gold's Link to Inflation." He notes that the "PPI and gold move together. You can also see that the trend is currently in place for both higher inflation and higher gold prices."
Although the PPI has been going up, he cautions us that "Of course, forecasting PPI inflation is no easy matter. But the chart does tell us emphatically that when we see growing forces for inflation-rapid expansion in the money supply engineered by the Federal Reserve, artificially low interest rates, growing government deficits, unsustainable trade imbalances and currency competition-we should expect rising gold prices."
And since we are speaking of commodities, the "commodities expert" at the DailyReckoning.com site, Kevin Kerr, says "So while bonds and once coveted shares sink, commodity prices continue to explode with growth. Many analysts predict they will continue to rise, because of growth in demand and dwindling supplies." And not only that, but all the inputs into growing or mining commodities (energy, tools, materials, wages, governmental fees, taxes, etc) are all rising, too! The computer-like mind of the Mogambo (CLMOTM) instantaneously concludes that (to use the precise economic terminology) there is no freaking way in hell that commodity prices can NOT go up.
Just about that time, Doug Casey and Bud Conrad of the International Speculator have finished writing on the wall by the phone, "the Mogambo is a big stupid moron." While I am distracted, trying to scrub those insulting (but, alas, true) words from the wall, they say "when we see growing forces for inflation-rapid expansion in the money supply engineered by the Federal Reserve, artificially low interest rates, growing government deficits, unsustainable trade imbalances and currency competition-we should expect rising gold prices."
- In case you think that I am just being a paranoid lunatic about corruption being everywhere at the end of long, credit-fueled booms (like the one we just went through), perhaps you should take note of a study by Neil Pearson, associate professor Allen Poteshman, and Ph.D. student Sophie Xiaoyan Ni, published in the October issue of the Journal of Financial Economics. In it, they take took a look, via a mathematical analysis, of data from the Chicago Board Options Exchange that covered trading from 1996 through 2002.
They said "big investment banks that trade for both themselves and customer accounts often steer the markets by selling options on specific stocks a few days before expiration. Then they trade the stock itself so the price finishes 'out of the money' at expiration, meaning the options they sold won't be exercised." That allows the financial firms to keep the premiums they collected on the options! Talk about your grubby frauds!
Mr. Pearson, apparently always ready with an understatement (although he is always "too busy" to loan me a lousy five bucks), figures that this is "an extremely profitable business" for the investment banks. Well, duh! That's why they do it!
How grubby! How corrupt! How sad. Perhaps in the same vein, Peggy Noonan, famous columnist, seems to have some ESP or something, because she can apparently see into my puny Mogambo brain (PMB), and says "I think that a lot of people are carrying around in their heads, unarticulated and even in some cases unnoticed, a sense that the wheels are coming off the trolley and the trolley off the tracks. That in some deep and fundamental way things have broken down and can't be fixed, or won't be fixed any time soon." Well, speaking for myself, I certainly think EXACTLY that way! And so will you, very soon! And maybe a lot of OTHER people are feeling that way, too, and that is why they are suddenly depressed, and that is why they are not spending spending spending anymore.
Alert reader Thomas W. has read this Noonan screed and writes "The unease she describes I believe is palpable. I am starting to feel as if I /we are living the early chapters of Atlas Shrugged - our post-FDR quasi-socialist economy deteriorating, awaiting some unforeseen, probably random (though inevitable) precipitating event (such as Long Term Capital Management) to give us our 'Weimar Moment,' finally shoving us over the debt precipice we've been dancing about." Then he ends, in keeping with this "Atlas Shrugged" thing, epigrammatically with "Who Is Mogambo Galt?" Hahaha! Who indeed!
- "The End of Pensions" by Roger Lowenstein makes the case that "corporate pensions are underfunded to the tune of $450 billion. Public (government) pensions are underfunded at LEAST another $300 billion." Barclay's Global Investors say they are using more "realistic assumptions," and they figure that "the total underfunding in all public plans is on the order of $460 billion. If this figure is even close to true, future taxpayers will be hopelessly in hock to the police, firefighters and teachers of the past."
No kidding! And I don't know how it is around where you live, but around here the pensions of the City employees, invested in the stock market, are GUARANTEED to go up by 9% a year! And if the pension fund manager fails to do that, then they get to raise my property taxes to make up the difference! What a scam!
While this may have made sense in the old days when public employees were paid very little (but were compensated in other ways by the full pension and virtual assurance of lifetime employment) but these days public employees have market-rate wages, and benefit packages that are so damned generous that they are not even available, anywhere, in the private sector. That is why I never fail to stand up and say that government employees are the most overpaid, over-compensated, under-utilized, overly-coddled bunch of greedy losers in America today, and I am jealous that I can't get a job like that.
In fact, in contrast to government pensions that are as unending as they are lavish, the average 401(k) retirement account has only about $50,000 in it, and about a third of them have less than $35,000! Retirement? Hahaha! Forget about it, dude!
- Alert Reader Shelby calculates that "the value of the dollar relative to economic production (i.e. the standard of our living) has decreased by 35%. Since 1959, the central bank has stolen 35% of our hard-earned wealth, or 0.65% per year compounded.
"But it gets much worse if you make same calculation for more recent periods, which shows that the problem is accelerating: 1971 forward: 0.97% per year compounded; 1990 forward: 0.88% per year compounded; 2000 forward: 2.90% per year compounded!!!" Note the use of three exclamation points. Perhaps seeing my approval at his clever use of this literary device, he goes on to write, "2005 forward: 4.68% projected for one year!!!!!!!!!!" Ten exclamation points! Ten! Now THAT is real emphasis!
- A lot has been made of the cryptic Federal Reserve press release that simply read "On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release."
I am not, as you would expect, all that upset. For one thing, they are still going to report the components of M3 money supply in the quarterly Z1 report (so they say). And for another, the stuff that make M3 out of M2 is the addition of very large time-deposits and other things that are, in reality, very illiquid. So, I can understand them making the argument that something so illiquid is NOT part of the money supply. It is, instead, an asset, not money. So not reporting M3 is, arguably, a non-event, since they are still reporting M1 and M2.
But, then again, the essential paranoid Mogambo (EPM) asks, "Why now?" And I SURE don't like the non-reporting of repurchase agreements, which ARE money by the very fact that they are repos! That is the whole freaking point of repos! So maybe I was wrong, because now I really AM starting to get steamed up about this non-reporting crap!
Robert McHugh is not amused at my naiveté, and says, "Why? It's simple, really. So that the Plunge Protection Team can hide its market manipulative, equity buying activities. You see, one of the key differences between M-2 (which it appears they will report) and M-3, is repurchase agreements."
Quickly trying to change the subject so I don't embarrass myself any more, let's go on and talk about this non-reporting of the Eurodollar, which are merely dollars in European banks. Why not report THAT? Surely money is money, right? Well, from the Economist magazine we read that "although the bulk of OPEC's surplus revenues has so far gone into dollar-denominated assets, those assets are increasingly held outside of the United States." So, maybe the Fed doesn't want us to know, as if we didn't already know, that all the money of the USA is being sent overseas! Hahaha! Too late, dudes! WE ALREADY know, and that is why we are so freaking angry!
- On a lighter note, Marcy C., who spends her time playing bass and sending me jokes, sent me a Law of the Universe that perfectly describes both governmental and Federal Reserve policy. It is the "Law of Logical Argument: Anything is possible if you don't know what you are talking about." Hahaha! Exactly!
- To all of you who wrote ("Hey! Moron!"), I admit that I accidentally misquoted Gresham's Law in a recent interview with John St. George, and that I should have said that "Bad money drives out good money" instead of the other way around, which is, as was pointed out so often, so rudely, and by so many, wrong.
- I am still pounding the table in my enthusiasm for gold and silver (and oil). And while I can go on for hours and hours WHY I am this way (mostly brain damage), I will instead take the lazy way out ("It's The Mogambo Way!") and merely quote from Addison Wiggin's book, "The Demise Of The Dollar." He writes that it is history repeating itself. "We see repeatedly from history that when countries are on the gold standard, they thrive - and when they go off the gold standard, that move leads to trouble." I will stop the tape to caution you to note the use of the word "repeatedly," which is distinctly different from "sometimes", or "usually", or "often." For the slower students, and for those of you who cannot understand plain English when I am talking while eating a pizza like this, I will reiterate that he said "repeatedly." Okay, now that you are clued in here, let's return to the presentation. "The problems seem to appear," he goes on to say, "after 30 years. So if we count from the Nixon decision of 1971 to go off the gold standard, we should expect to see problems after 2001. It was in 2002, in fact, when the value of gold started rising. So the 30 years of prosperity after removal of the gold standard have come to an end."
In short, governments are always the same, and that is why there is such a thing as historical imperative, which, according to my wife, directly corresponds to "He was an idiot as a kid, he was an idiot as an adult, he was an idiot yesterday, he is an idiot today, and he will be an idiot tomorrow, too."
Notwithstanding the "idiot" thing, the gold story gets even better! ResourceInvestor.com reports that "Addressing delegates to the LBMA Precious Metals Conference on its last day, Russia's Head of External Reserves Management, Maria Guegina, said gold reserves as a proportion of all reserves may be doubled. Noting that Russia presently has 5% of its national reserve portfolio invested in gold, Guegina said, '10% of gold in reserves would be appropriate.' " The Russkies are going to double their official gold holdings? Wow! Doubling! And to add a little icing to the cake, they also note that "The bank is also encouraging the development of the Russian domestic gold market to be a fully functioning financial market akin to bonds and currencies. Russia presently has 500 tonnes (17.64moz) of gold in reserves which it segregates as monetary gold, allocated gold and term deposits." So they are going to suck up another 500 tonnes? Why am I thinking about the supply/demand dynamic all of a sudden?
And from FreeMarketNews.com we learn that the Russians aren't the only ones who are considering increasing their central bank stash of gold. Citing a report in the Mining Weekly, FreeMarketNews.com reports "The central bank in South Africa - the world's largest producer of gold - might increase its gold reserves, its head said yesterday, but gave few details. 'As part of our reviews on composition of our gold holdings, we may even consider increasing our gold holdings,' said Reserve Bank Governor Tito Mboweni in a prepared text of a speech at a precious metals conference in Johannesburg."
Of course, neither of these two guys mentioned that China has already started encouraging its people to buy gold. I figure that they way it will work is that the Chinese people dutifully buy the gold, then the government confiscates all the gold (ala FDR, that traitorous commie bastard!) and declares a gold standard with it! And Russia, seeing the writing on the wall, is countering that move by accumulating gold of its own. And the American government is colluding with them, so that they will not destroy our stupid, debt-addled, over-priced-everything economy just because they can, and they will be kind to us because the Fed is still (we think) sitting on a big, big, big pile of gold left over from the FDR confiscation, and they want that, too! Ha! How's THAT for conspiracy?
- I am tickled, and frightened, to see that Vermont is considering seceding from the Union and "return to its natural status as an independent republic as it was between January 15, 1777 and March 4, 1791." As justification, they quote Thomas Jefferson in the Declaration of Independence, "governments are instituted among men, deriving their just powers from the consent of the governed; that whenever any form of government becomes destructive of these ends, it is the right of the people to alter or to abolish it ..."
Naturally, this leads them directly to "A Declaration of Independence by the People of the Sovereign State of Vermont" In it they note that "Vermont has suffered, as have other states, from the debilitating effects ofbig government, andthe United States government has become too big, too centralized, too powerful, too intrusive, too materialistic, too impersonal, too grasping, too militarized, too imperialistic, too violent, too undemocratic, too corrupt, and too unresponsive to the needs of individual citizens and small communities.
"The free people of Vermont have reached a turning point: whether to fight for 'liberty and justice' or to trade in their heritage for the shackles known as progress. It is not progress. It is comfort. It is an illusion. We, the people reject a system of intrusive federal control that is antithetical to a prosperous way of life, and to the well being of a sovereign state."
Bravo! Bravo! Well said! And I hope it works out better for them than it did for the Confederacy in 1861!
But why are they seceding? For the same reason all desperate people eventually get desperate; they don't have enough money anymore because the government is so big, so greedy, so rapacious and so ridiculous. This secession stuff is right out of the "How States React To Inflation" handbook, which is a lot better than the remedies in the "How Poor People React To Inflation" handbook, which usually involves a lot of prostitution, burglaries, begging, bank robberies, rioting, burning things to the ground and calling me up begging for a loan, which is the ugliest part of it all, because they aren't going to get a dime out of me, but when I politely tell them to go to hell, they get all huffy!
It's the same with the Muslims of France, who are busily burning the place down and demanding autonomy; get the damned government out of our faces because we are sick and tired of being broke! And it is going to get a lot worse before this is all over.
- If you think that the housing bubble is still bubbling, then I suggest that you pass that bottle of vodka over here, sober up, and listen to a reader who wrote to Martin Weiss. "I've been in the insurance agency business for nearly 20 years, in North Atlanta," he starts out. "We have been the leading agency in writing new home insurance applications for the company that we represent for several years. Our realtors and loan originators are complaining about things being so slow. You can see the fear in their eyes and hear it in the tone of their voice. One of the subdivisions that we call on averaged 20+ closings per month in 2004. Now, it has dwindled to just 4.
"Our late payments are at a record level. We are calling the insureds, and they are complaining about money being so tight. One can hear the despair in their voice as well."
And speaking of housing, we get a funny email from Phil S., who got some inadvertent truth-in-advertising. In the offices of a mortgage loan company hangs a sign that says "Ask about our plans for owning your home." Hahaha! This must be a leftover from the days when Alan Greenspan urged people to buy houses with adjustable rate mortgages just as interest rates started rising! Hahaha! We don't have to ask! We already know the bank's plans for owning our homes!
And, as a personal aside, to show you how bad things are getting in the housing market, I am now receiving about three cold calls a week from boiler room hustlers, trying to interest me in some fabulous investment in real estate. This is entirely new, and, I assume, ominous. Darkly ominous.
****Mogambo sez: All lease rates on gold have suddenly turned up after bottoming, and so it must be time for gold to rise, according to the new Stupidest Mogambo Timing System Yet (SMTSY). Buy!
Nov 15, 2005