[4] Money Matters - Outline of a Depression

Writes James Grant, courtesy of the Ludwig von Mises Institute:

ECONOMISTS cannot reliably forecast recessions. Nor can they detect for certain when a recession is in progress. Only after the fact do the official cyclical timekeepers identify the beginning and ending dates of a slump.

Though deficient in the powers of foresight and observation, economists do believe they know how to treat an economy on the brink of recession, as this one seems to be. They administer what non-economists know as the “hair of the dog that bit you.”

But booms not only precede busts, they also cause them. Bargain-basement interest rates are a potent stimulant. Borrowing more than they might at higher rates, people stretch. Businesses stock up on labor, machinery and buildings. Consumers buy cars and houses — houses, especially, these past five years. The G.D.P. takes flight.

Then unwelcome facts intrude. Easy money, it seems, was an illusion. Society was not so rich as it seemed. The prosperous future for which people had collectively prepared is slow to arrive. The inflation rate picks up. Supposedly creditworthy consumers and businesses turn out to be risky. They were creditworthy only so long as lenders were willing to advance them more and more funds at those ever-so-affordable low rates.

Now what to do? Why, slash interest rates to coax forth still more lending and borrowing. It’s the customary curative, seemingly as humane as it is politic.

And if recessions served no useful purpose, it might be. But recessions do. On Wall Street, they speak of “corrections.” What corrections correct are errors in judgment. So do recessions.

They allow the sorting out of boomtime error. They permit — indeed, force — the repricing of inflated assets. In a downturn, previously overpriced businesses, houses and buildings are made affordable again.

Naturally, people hate these painful, salutary interludes. Nobody likes insecurity, bankruptcy and joblessness. So the Fed keeps slashing interest rates. And this balm does mitigate the suffering. Homeowners and businesses refinance their debts. Fewer houses are thrown on an overstocked market.

Observe, however, that the great preceding illusion is undispelled. Prices have not come down as they should have. Neither has indebtedness. The architecture of the economy remains as it was. Land, labor and capital are still structured for an imagined glittering future.

Presently, a new upcycle does begin, but it’s slow off the mark. The world’s top economy seems curiously sluggish. And the economists and politicians ask, “What happened to America’s dynamic economy?” The answer: It’s wrapped in the coils of debt.

[88 ] News from Absurdistan - Cathedrals of Insanity

From EU Referendum:


Despite advice from their own civil servants that it is simply unachievable, it looks like this mad government is set to go for the EU target of 20 percent renewable energy supply by 2020.

This is from Business Secretary John Hutton who is telling us that every household in Britain could be powered by off-shore wind farms, with up to 7,000 turbines installed around the UK's coastline.

At the moment, a mere two percent of Britain's power comes from renewables – and much of that from landfill methane, with providing less than 1 gigawatt. But the government is now looking for around 34 gigawatts - which using current technology would mean introducing some 7,000 turbines.

Asked whether having a wind installation every half-mile around the coast was acceptable, Mr Hutton replied: "It is going to change our coastline, yes for sure. There's no way of making the shift to low carbon technology without making a change and that change being visible to people."

The worst of it though is that this madcap idea simply cannot work. With an average load factor of around 35 percent, alternative generation capacity will have to be built for the two-thirds of the time when the wind farms are producing no electricity at all – at ruinous cost.

But an even bigger problem is that, when highly variable wind power approaches ten percent of total production, it risks destabilising the grid, precipitating total collapse of the system.

Furthermore, in the highly corrosive maritime atmosphere, equipment is expected to last far less than its land-based equivalents, increasing downtime and costs dramatically.

And all this to deal with the miasma of global warming – a fantasy of our ruling classes which defies logic. The vision, therefore, is of a world gone mad – to which these cathedrals of insanity will bear witness.

Ron Paul - The March of Honesty

From my friends at RedStateEclectic:

By Lawrence W. Lepard

I recently spent a significant sum of money running a full-page advertisement in USA Today supporting the candidacy of Ron Paul for President of the United States. Several people have asked me why I did it, so I have decided to explain my reasoning.

I believe that as American citizens we stand at an important crossroads in history. We are faced with a very important decision that will have repercussions for many, many years. We need to make a decision as to what we want America to represent, and to become. History will record the outcome of our decision. If we blow it, many more innocent people will die, and history will not be kind. As I say to my closest friends, I do not want to have to explain to my grandchildren that I was one of the “good Germans.”

Let me state it clearly. The America that I grew up in believed in the rule of law, not men. The America that I grew up in believed in telling the truth. The America that I grew up in believed in following Judeo/Christian values, and yet made room for those of different faiths and backgrounds. The America I grew up in had a religious flavor, but we were wary of those who wore their religion on their sleeves. The America that I grew up in believed in the golden rule: treat people the way we would like them to treat us. The America that I grew up in believed that you did not lie, cheat or steal. The America that I grew up in believed in the inherent goodness of most men, but recognized that evil exists. Nevertheless, the America that I grew up in did not believe in an eye for an eye. It believed in protecting oneself from evil, but in the process of doing so we were cautioned not to become what we were protecting against. In short, the America that I grew up in was a place where one could be proud of one’s country, and thankful to the men and women who had sacrificed so much in the past to give us this heritage.

I wake up today as a 50-year-old husband and father of three, and I wonder where that America has gone. I see a President who called the U.S. Constitution “just a goddamned piece of paper.” He replaced a President who blatantly lied to the American public. Admittedly the lie was about something that was none of the Public’s business. However, when a country is led by a liar, it lowers that country’s level of discourse and makes lying seem acceptable. It is not. Are these the best leaders this Country can produce? I see that the prior President’s wife running for President with the attitude that because her husband was elected, she too deserves to be President. Says who? Do Americans really believe she will act in our best interest given all the money she has received from the military industrial complex? I see the U.S. involved in an aggressive undeclared war against a country that did not represent a threat to us in any way. Deliberate lies were told to get this war started. To date the outcome of this war is that between 100,000 and 1.0 million innocent people have died. These figures are between 30 and 300 times the number of people killed in 911. Do two wrongs make a right? Furthermore, the majority of the 911 hijackers were Saudis. Not Iraqis. We are allies with Saudi Arabia and yet Saudi Arabia is far from being a democracy. Yet we went to war to create a democracy in Iraq and set an example for the Middle East. The hypocrisy is staggering. The mistakes that were made are criminal. Why anyone believes one thing that is said by the people who lied us into this war is a mystery to me. We would be greeted as liberators. No. Oil revenues will pay the cost. No. A secular democracy will emerge and be an inspiration for other countries. No. The list of misjudgments goes on an on. If they were a baseball team one would be forced to wonder “can anyone here play this game?”

The civilian Iraqis killed by our preemptive war: were they collateral damage or is that just a euphemism for murder? Has anyone taken the time to look at their pictures on the web? I wonder how their relatives and friends feel about the United States? I wonder if they are more or less likely to become terrorists as a result of the actions of the United States. I see a Country that has violated the Geneva Conventions. I see a Country that has violated the Christian doctrine of “just war”. I see a Country that has started a war that is illegal under international law. As President Eisenhower said, “Preventive war was an invention of Hitler. Frankly, I would not listen to anyone who seriously talked about such a thing.” I see a flock of Presidential candidates, most of whom voted for this war and many of whom believe “all options should be on the table” in dealing with Iran. For those who are not current on this subject, that language is code for: we should be prepared to attack Iran with conventional or nuclear weapons.

Think about that for a moment. Leaders in this Country are actually talking about using a nuclear weapon against a country that has not attacked us. Are they insane? I hear Neocon pundits calling for the beginning of World War III. I see a Country that has suspended habeas corpus. I see a Country that has stripped its citizens of the Constitutional protections against an overreaching government. I see a Country that has sanctioned “rendition” which is just another term for the kidnapping of anyone, anywhere, throughout the world, and then spiriting them off to a remote location where they can be subject to “enhanced interrogation techniques”. Which we are told are not torture. Another lie. I see a Country that has engaged in torture. Hell, one leading Presidential candidate wants to “double Guantanamo” and thinks his son’s campaigning for him is equivalent to serving in the military. Of course, he got a deferment to avoid serving in Vietnam. I see a Country where the top advocates of war have never fought in one. Worse yet, they sought and obtained deferments when others were fighting. You cannot make this stuff up. The irony is incredible. If there is karma in the world, we are surely screwed.

I see a Country that thinks that it owns and controls the world. I believe this is ethically wrong. Furthermore, we cannot afford it, so even attempting to run the world is pointless. I see a Country that thinks it should have bases in the Middle East for the next fifty years. I see a Country where the dominant political party, the Neocons, believe the world is a dark and evil place. I believe the people who feel this way are projecting their own views onto the rest of the world. They need therapy. I see a Country that has adopted the Old Testament view of an eye for an eye. If we adopt this view we are on the road to becoming a modern day Pottersville. In short, I see a Country that has lost its soul. Out of malfeasance, fear, ignorance, or incompetence we have implemented the wrong policies and taken the wrong course. Since this is true, then effectively the terrorists are winning. God surely has a great sense of humor. Irony abounds.

Is it possible that America has lost its soul? As citizens each and every one of us is somewhat responsible for the acts of our government. All it takes for evil to flourish is for good people to do nothing. So, has America lost it soul: yes or no? I would submit that while the current U.S. Administration and the vast majority of the Senate and Congress have lost their souls, the American people have not. We were lied to. Nearly 70% of the American population is against this war, and yet the war goes on. The vast majority of the American people want peace. People know what is right, yet the government does the wrong thing. How can this be? We are supposed to be a government OF, FOR and BY the People. Are we? What do you think? Is the government the American people? Does it really represent the American people? Do you think the U.S. government should kill innocent Iraqis to make us safer? Would you advocate killing a man who lives down the street because you think he might do you harm in the future, even though he has done nothing to you yet? Do you think the 2 million dead Vietnamese citizens died in a cause that was just for either side? That is what we are about to find out.

I will say it right now, clearly and loud: THE FEDERAL GOVERNMENT WE HAVE TODAY DOES NOT REPRESENT ME. I FURTHER BELIEVE THAT IT DOES NOT REPRESENT A MAJORITY OF AMERICANS. The huge disconnect between what a majority of this country wants and what our government is doing is the elephant in the room that no one will discuss. I cannot in good conscience condone or support the policies of the Neocons, the military industrial complex, or the oil industry. I do not believe in “Full Spectrum Dominance”. I do not believe “We Are The Indispensable Nation”. I do not believe we are “History’s Actors.” I do not believe we can “Make Our Own Reality”. I do not believe we should be an Empire. I think we have great power and military superiority, and that with these come enormous responsibility. We are a Constitutional Republic. I do not believe we need to have strategic influence all over the world. I believe there is a power higher than my government and that the Founders drew upon this power when they drafted the Declaration of Independence and the U.S. Constitution. We hold these truths to be self evident, that all men are created equal. That reads “all men.” Not “all Americans.” All men have god given rights. Governments are made to protect these rights, not destroy them. Until recently, I believe the American government did a good job of protecting these rights if you were an American. For many years now I believe the American government has used a different standard or play book when dealing with foreign countries and foreign citizens. But that is a story for a different essay.

If it sounds like I am mad, then that is right. I am mad as hell and I am not going to take it anymore. (Source: Howard Beale: Network) I am mad that my money becomes worth less every year because the Federal Reserve can print money out of thin air. I am mad that the U.S. Government inflation statistics are a lie, thanks to Bill Clinton’s changing of the CPI calculation. I am mad that this change and the Federal Reserve have put the economy on a roller coaster leading to a boom and bust cycles that benefit financiers at the expense of the middle class, retirees and the poor. I am mad that Wall Street titans and speculators have been rewarded while savers and honest labor have been punished. I am mad that honesty is considered quaint and naïve by the political classes. I am mad at the arrogance of those who hold power in Washington, DC. I am mad that the actions of some men in my Country have taken away the moral high ground that the U.S. used to occupy. I am mad that my tax dollars are used for weapons rather than for peaceful purposes. I do not want the blood of innocents on my hands. I do not agree with many of Michael Moore’s positions, but his statement “dude, I want my country back” resonates with me. I believe that it resonates with a large portion of the American voter base.

Individual Americans are great people. If 70% of this country is opposed to the war then there is still hope. Of course the mainstream media, the press and the vested industrial and political interests would have us all believe that we cannot make a difference. They say we need to listen to them as they tell us who the next President will be. We have to choose between the two candidates they will serve up to us. We are told who the two front runners are, and we are discouraged from looking elsewhere. Why bother, they say? No one else even stands a chance. Maybe so, maybe not. This time I think they have gone too far. I would submit that the outcome of this election it is not so clear. The establishment dam has sprung a leak. The leak may be small now, but it is growing. It is growing exponentially. The word is spreading. The candidates who represent change are moving up. The candidates who represent the status quo are moving down (Rudy Guiliani and Hillary Clinton). Even Rudy is being forced to talk about what a great religion Islam is in order to soften his “ kill’em all, and let god sort them out message.“

The lines could not be more clearly drawn.

Ron Paul’s message is clear and beautiful and true. It resonates with people. You hear it and you say, “that’s right, that’s what I believe”. This is why his poll numbers are rising faster than any other candidate. Yet, the media still ignores him or treats him poorly. It is beautiful irony that every attack on him only brings him more attention as intelligent Americans wonder, “who is this guy that everyone keeps attacking……I wonder if there is a reason”. They say he cannot win. They say he is a fringe candidate. They say he will lose big. I disagree. First, I think there is a very good chance he will be our next President. Second, I think he has won, even if he does not win. Why? Because he has put the Freedom message out there. It is like a virus. It is spreading. It cannot be stopped. I believe history will record the Ron Paul Freedom Movement as a seminal political event in the history of U.S. politics. It is an honor to support this man. We should be so lucky as to have him for our President.

Having said that, we could all help history along a little bit by supporting the Ron Paul campaign. My favorite movie is “It’s A Wonderful Life.” To me, the message of that movie is that we all make a difference. Individually, none of us have the power of the Neocons and the political classes, but collectively they are supposed to work for us. If we self -organize and unite, we have them badly out numbered. They are terrified, believe me on this. And it is happening. The growth in this movement is exponential. We can and will win this struggle. Anyone who tells you otherwise is a defeatist or is working for the other side. I ran the USA Today Advertisement because I wanted to plant a seed and make a difference. WE ALL MAKE A DIFFERENCE. Every conversation, every person converted, every e-mail , every effort, it all counts. The internet is what has made it possible. What a beautiful thing. The trend is really changing and it is fun to watch the old guard struggle as their fortress crumbles.

So what can you do?

Coming up this December 16th we are holding a one day Fund Raiser for Ron Paul. The last time we did this over 37,000 people donated $4.3 million dollars, or an average of $116 per person. That made this event the largest one day political fund raiser in history. On December 16th we will raise even more money. Every contribution counts. Ten dollars is not too little. Each contribution represents another American who has said, enough is enough. I am mad as hell and I am not going to take it anymore. Think about it, what is freedom worth? I would submit that it is priceless. If you care about the future of this Country, I know that Ron Paul will not let you down. If you care about our troops, then you must vote for Ron Paul. They will come home and defend America, not someone else’s country. Ron Paul has more donations from active military personnel than all the other candidates combined. Why do you think that is? Have you heard about it from the Mainstream Media? I think not.

This is it folks. Once in a lifetime. You will never see another politician with more integrity, and a better message or track record. Rarely has our Country been so far off track. Our Founding Fathers pledged their lives, fortunes and sacred honors in order to establish this Nation. Perhaps we have taken for granted the risk they took and the sacrifices they made. But we are being called. We are being tested. How will we answer? Will we meet the test or will we fail? Each of us makes a difference.

So what are you going to do? Are you going to be a Loyalist or a Patriot? Are you going to storm the ramparts or huddle with the bourgeoisie? Are you going to stick your neck out or be a turtle. Americans are brave people. I believe we can set this country back on the right track and that we will all be better off for doing so. We can show the evil men who call themselves Neocons that this great country will not be hijacked by people who call themselves Christians but are anything but. In short, we can say to the two entrenched political parties: we will not be governed by liars and fools. You can no longer piss on our leg and tell us it is raining. The criminal gang which includes Dick Cheney and the Neocons will be reviled in history for the actions they have taken and America will experience a renaissance of Peace, Freedom and Prosperity.

The danger to our Republic is real—we must act now!

Remember, each one of us makes a difference.

If you agree please support Ron Paul by pledging to donate to his campaign on December 16th at www.teaparty07.com. Also, please vote for Ron Paul in your State Republican Primary and encourage your friends and neighbors to do the same.

You can also learn more at http://www.ronpaullibrary.org/index.php about Ron Paul's positions on the issues that concern you.

Ron Paul - The People Are Running for President

From Disinter:

Carl Fiser writes:

Ron Paul, like Ling, is a great truth-teller. His voting record is one of the most consistent this writer has ever seen. No flip-flops are to be found. As well, he is a courageous and wise man, and a heck of an economist. Just ask the Wall Streeters. However, he bears to his fellow countrymen (and countrywomen), an empty pot. He can’t claim to have brought you wars or higher taxes, which we now have. He never brought you an unbalanced budget, which is a perennial joke. He never voted himself a wage increase and, to this day, gives back part of his salary every year. He has always voted to preserve the Constitution, cut government spending, lower healthcare costs, end the war on drugs, secure our borders with immigration reform and protect our civil liberties. Sorrowfully, he was outvoted or shot down on all measures. The Constitution has been chiseled down, government spending is through the roof, healthcare costs are out of control, the war on drugs keeps getting less effective, immigration issues remain unresolved and our civil liberties have been crimped for our own safety. I’ll just throw in that Ron Paul opposes regulation of the internet, which has been a revolution in the exchange of ideas, this article being a case in point.

He continues with this most interesting point:

The eye-popping reality of the situation is this. No longer can it be said that Ron Paul is running for President. Amazingly enough, his candidacy has been hijacked, and it appears now that the people are running for President. . . through Ron Paul! That’s the true revolution about which your neighbors are speaking.

Very true.

[87] News from Absurdistan - Easy Money, Easier Than Ever

RedStateEclectic has this important observation to offer:

From Bloomberg.com, an arcane article which is actually HUGE news, and even though they explain it as though it were impossible to understand, which it isn't.

Bottom line: The federal reserve is going to start allowing banks to directly borrow from the Federal Reserve through the discount window instead of borrowing from each other(because the banks will not lend to each other FOR FEAR OF BANKRUPTCY!.)The inability of the banks to lend to each other is the central problem right now. They don't trust each other one bit. So in comes the Federal Reserve with a "handful of credit card applications" and a sweetheart of a deal. "Hey, big boy, BORROW THE MONEY DIRECTLY FROM US AT ONLY a 1/4 of a percent penalty (usually its a FULL PERCENTAGE POINT) and you can have all the liquidity you want."

IT'S DIRECT, BAREFACED INFLATION!! They aren't even going to bother trying to hide the inflation anymore. They'll just start printing the money AND DROPPING IT FROM HELICOPTERS... Hence the term "Helicopter Ben" - (Ben Bernanke was quoted as saying this before he became Fed Chair.) Ay carumba. No me gusta.

[86] News from Absurdistan - Sorry, Folks: Got That One Wrong, Too: World War Is Off

This one refers to US Intelligence Services pointing out recently that the presumed nuclear threat posed by Iran is not quite, well, what it was supposed to look like.

Farideh Farhi, at our group blog, Global Affairs, says she listened to Bush's press conference on Tuesday -- which was full of implausible statements -- and now wants to know what George W. Bush has been smoking. Uh, I don't think that substance is typically smoked so much as snorted. Or maybe his current favorite is just a stong bottle of beer.

The Los Angeles Times notes a controversy over what the president knew and when he knew it:

' Seven weeks ago, Bush said that in the interest of "avoiding World War III" Iran should be prevented from gaining the knowledge needed to make a nuclear weapon. That was roughly two months after J. Michael McConnell, the director of national intelligence, reported to Bush that he had "some new information" about Iran.

"He didn't tell me what the information was; he did tell me it was going to take awhile to analyze," the president said. He said he was not briefed on the report until last week, and that in the interim no one had suggested that he tone down his language.

Sen. Joseph R. Biden Jr. of Delaware, chairman of the Senate Foreign Relations Committee and a candidate for the Democratic presidential nomination, expressed incredulity that Bush, "who gets briefed every morning, who is fixated on Iran," had not sought details of the new assessment after learning of it in August.

"I can't believe that," he said in a phone call with reporters. '

Washington insiders say that Director of National Intelligence Mike McConnell would certainly have been kept in the loop by the analysts producing this NIE. McConnell briefs Bush and said this summer he had new evidence coming in.

At his press conference Bush reverted to his old ploy of declaring people and things dangerous even when there is no objective measure of such things. He used to say that Saddam Hussein had been "dangerous" even when it was discovered that Saddam had no chemical, biological or nuclear research facilities. Now Iran is intrinsically dangerous, regardless of whether it has a weapons program or not. Does anyone still believe this sort of essentializing and fear-mongering?

Bush's circle is like a medieval court with scheming courtiers. His subordinates apparently routinely do things that he doesn't (and the other courtiers don't) know about until later. Take for instance when then Secretary of Defense Donald Rumsfeld ordered the Iraqi army dissolved, with Bush only discovering it afterwards.

My guess is that Admiral William J. Fallon, the CENTCOM commander now, and the Chairman of the Joint Chiefs of Staff, Admiral Michael Mullen, may well have cooperated with figures in the intelligence world to get this report written and some of it released, especially since Congress had mandated that it be completed and its findings conveyed to them by a date certain.

Gareth Porter reported that 'A source who met privately with Fallon around the time of his confirmation hearing and who insists on anonymity quoted Fallon as saying that an attack on Iran "will not happen on my watch". Asked how he could be sure, the source says, Fallon replied, "You know what choices I have. I'm a professional." Fallon said that he was not alone, according to the source, adding, "There are several of us trying to put the crazies back in the box." '

Mullen has worried that the way the US military is bogged down in Afghanistan and Iraq will prevent Washington from replying decisively to any other foe or crisis.

Snow Bush with some occasional hints that the NIE has some new findings, sure that he won't bother to ask for details or read any actual document (he seldom does), then you could spring this thing on the Cheneyites and blindside them.

Cheney clearly was making a push for war on Iran this fall. The real puzzle is how the NIE got past his team of plumbers, which still informally includes convicted perjurer Scooter Libby. That's why I say there was moxie behind this NIE, of the sort an admiral has, or better two admirals.

[85] News from Absurdistan - The Rule Of Irrelevance: The Last Refuge of the Shallow

Earnestness is the last refuge of the shallow, suggested Oscar Wilde, and he was being mild in view of what we are dealing with here - from the Kennebec Journal:

As I watched the Republican and Democratic debates on television, I found it interesting that the candidate most ignored by the media, Congressman Ron Paul, was the only candidate with a different message. In fact, he was the only candidate with a message. All other candidates simply parroted the same old same old. The only difference being in the way they would execute their version of the same old same old.Ironically, as long as I can remember, no matter which party raises up the newest president, nothing changes as far as policy is concerned. And where is it leading us? I see industry moving out of the country at alarming rates. Masses of illegal immigrants swarm across our unprotected borders while our military is used to protect the borders of foreign countries and big oil. I see a policy of endless preemptive war against an undefined enemy. I see the United States being dictated to by the United Nations. I see dangerous legislation, such as the "Patriot Act," eroding our constitutional rights, passed by a Congress who swore an oath to protect those rights, and I see debates with candidates who argue with each other as to how best to continue these policies.I hope the American people will tire of the media choosing our leaders and listen to the message of and look up the record of this 10-term congressman from Texas and vote Paul for president. Robert WallaceFarmingdale