40 Years in the Desert

In modern America, I'll bet everyone, even the most ardent atheists, have heard the story of the Exodus and the 40 years the Israelis spent wandering the desert.  Thanks to Charlton Heston's portrayal of Moses and Cecil B. DeMille's production of The Ten Commandments, it's not just young kids in parochial school who learn this.  Even I knew the highlights of this story in my most atheistic days. 

Something that is glossed over is a simple question: why 40 years wandering the desert?.  And, no, it's not because Moses wouldn't stop to ask for directions, in the words of the "men are so stupid" joke.   

40 years was so that the generation that knew only slavery in Egypt would die off.  In their place would be a generation born during the Exodus, who were accustomed to depending on God every day, for their only food was manna from heaven that was provided every day, except the sabbath.  It would be a generation that had never known slavery, only dependence on God, but was otherwise self-directing.  It wasn't right to put a generation into the promised land that only knew how to be slaves.  A generation that knew how to decide things for themselves, with prayerful requests, of course, would be much better custodians of the land. 

Where am I going?  Why this story?  Although it was a couple of days ago, I just saw Brock's posting over at Free North Carolina, "We're in Trouble"  It's a 5 minute video with an economics teacher from Valencia College in Florida talking about his students' definition of the American dream, which includes getting you and I to provide their medical care, give them a job, pay for their house downpayment, and a lot of other things that don't seem to appear anywhere in our founding documents. 

You see, it so happens it's 40 years since the 1960s radicals, like Bill Ayers, and his crowd, took over education.  It's long enough for the generation that taught any real values to have died off (or retired) - for the most part.  It's long enough so that every kid coming out of the public schools in the USSA has been marinated in socialism for their entire education - provided largely by educators who have marinated in socialism their entire lives.  A child starting school in 1970 would have graduated college in 1987 (on average); they've been soaked in socialism for over 40 years. 

Is it any wonder this is what they produce?  Is it coincidence?  Yeah, I don't think so, either.  We have a lot of teaching to do. 

Go watch the video on Brock's page

Charlton Heston as Moses, with his two iPads.

Predator/Prey Ratio

A key term in population biology is predator to prey ratio, a measure of how much prey it takes to support a predator.  Usually:

predator/prey ratio = predator weight x number / prey weight x number

A low predator to prey ratio means big efficient predators.  A large ratio of predators to prey is found in cold-blooded predators like spiders.  An African lion in the savannah has a predator to prey ratio of about 1%.  A spider is more like 20% - 20 times more weight in spiders per weight of prey than the lion.  The spider is inefficient: it puts out a web and catches what it can.  If you've ever been in a wooded area when fog conditions were right, you might have noticed an astonishing number of webs, attesting to how many spiders there are per acre. (Large dinosaurs like T-Rex have a ratio much closer to the African Lion than the spiders - source)

Enter the government ruling class.  A group of predators (or parasites) likened to ticks by Barry Ferguson at Financial Sense.  Like all inefficient predators, the number of ticks feeding on your blood and my blood, is quite high.

Ticks are parasitic blood sucking arachnids. Their existence is dependent upon latching on to another animal with a blood circulation. We humans can be targets but our dog friends are especially vulnerable to attack. Ticks find a victim, burrow into the epidermis, suck until they are engorged, drop off, digest, and repeat. This is now the story of our existence as it pertains to our governments. We are the dog. They are the tick. There are more of them than us. Their goal is to bleed us dry. There is now an adversarial relationship between the governed and the governors.

As Thomas Jefferson once noted, ‘When the government is fearful of the people, you have liberty. When the people are fearful of the government, you have tyranny.’

And since I'm an incurable wise ass, a link to my favorite nature video of all time.

How John Corzine Could Be Archduke Ferdinand

The assassination of Archduke Ferdinand was, by everything I've read, not regarded as an important event beyond the immediate area.  A minor incident in history except for being widely recognized as the trigger that led to World War I - recognized in hindsight, I might add.  World War I led inexorably to the Weimar Republic, which led inexorably to Hitler, and World War II.  The world is still not fully recovered from WWII, and, like the first dark ages, it may never really recover, it's just that after some number of centuries, the silt of history will cover the damages over.  All because some minor royal figure was assassinated in a province with ambitions for independence. 

And so it seems with MF Global.  It looks as though the collapse of MF Global is quietly leading to the collapse of the world's banking systems.  That will wreak damages as bad as any war.  In the wake of the damages done by the collapse of MF Global, many smart people are starting to recommend getting out of equities or any form of paper.  The first I read was Ann Barnhardt, in this piece from 11/17, where she declares she is closing her capital management business:

The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy.

Many followed.  On this page, I wrote about the fundamental dishonesty of our financial system (link to Bayou Renaissance Man) and how MF Global Eff'ed Gerald Celente.  Denninger has written on this, as have many others (too many to link to).

Tuesday, Gonzalo Lira writes that he thinks we're on the verge of a global run on the banks, which would precipitate collapse. The problem is how the "system" handled the theft of customers' money:

Brokerage firms hold clients’ money in what are known as segregated accounts. This is the money that brokerage firms hold for when a customer makes a trade. If a brokerage firm goes bankrupt, these monies are never touched—because they never belonged to the firm, and thus are not part of its assets.

Think of segregated accounts as if they were the content in a safety deposit box: The bank owns the vault—but it doesn’t own the content of the safety deposit boxes inside the vault. If the bank goes broke, the customers who stored their jewelry and pornographic diaries in the safe deposit boxes don’t lose a thing. The bank is just a steward of those assets—just as a brokerage firm is the steward of those customers’ segregated accounts.

But when MF Global went bankrupt, these segregated accounts—that is, the content of those safe deposit boxes—were taken away from their rightful owners—that is, MF Global’s customers—and then used to pay off other creditors: That is, JPMorgan.

and describes how 40,000 customers of MF Global were robbed of their segregated accounts to the tune of billions of dollars (legally, due to rehypothecation).  Lira goes on to say:

As I write this, a lot of investors whom I know personally—who are sophisticated, wealthy, and not at all the paranoid type—are quietly pulling their money out of all brokerage firms, all banks, all equity firms. They are quietly trading out of their paper assets and going into the actual, physical asset.
...
Now, because of this open kleptocracy and cronyism being shown by the financial authorities in the wake of the MF Global bankruptcy, we’ve been obliged to put together a new Scenario, devoted exclusively to preparing for a run on the markets: What to do in order to protect your assets from regulatory malfeasance, if there is a system-wide MF Global-type breakdown and a subsequent run on the entire financial system.

And there will be such a run on the system: It’s only a matter of time. In fact, the handling of the MF Global affair has sped up the timeframe for this run on the system, because the forward-edge players—such as Demeester, myself, and my other acquaintances who understand the implications of the bankruptcy—realize that the regulators will side with the banksters, and not the ordinary investors: So we are preparing accordingly.

Gonzalo Lira is in the financial business: his job is to plan for scenarios like this.  The fact that the planners, and the savvy investors he writes of, along with Ann Barnhardt, Karl Denninger, and more, can see that the banking system is sliding into collapse, is dire warning to all of us.

John Corzine, as seen by Chip Bok, at Town Hall.

A Sunrise Major Comet

OK, now I'm jealous of the folks living in Australia.  Folks in the southern hemisphere are being treated to a sunrise display of a major comet, Comet Lovejoy.  These pictures from the Andes will give you an idea of what it's like on these early summer mornings for observers in dark locations.

(source - copyright Guillaume Blanchard)

Comet Lovejoy is unusual in a couple of ways - besides being a bright, naked eye comet.  First, it was discovered by an amateur astronomer: Terry Lovejoy (who describes his discovery here).  While comets were often discovered by amateurs patiently searching the sky every night, the advent of satellites to automate the search has meant that most comets are now discovered by robots.  Second, Comet Lovejoy survived a close brush with the sun.  The space geeks who keep up with Soho, the solar observing satellites, have seen dozens of comets crash into the sun, and it is a remarkable comet that survives the encounter. 

As far as I can tell, the northern hemisphere will completely miss this comet.

I first got interested in astronomy as 7th grader, and played in the evenings with a small refractor, eventually getting a 4" reflector.  I learned I had just missed what many consider the best comet of the 20th century, Ikeya-Seki in 1965, a comet so bright, it could be seen in broad daylight if you masked the sun with your hand!  Some years later, a major comet became visible in late 1969 and into 1970.  Comet Bennett was visible in the mornings before school, and it was a companion every clear morning throughout the winter and into spring.  More history here.

Could the US Return to a Gold Standard?

“That if any of the gold or silver coins which shall be struck or coined at the said mint shall be debased or made worse as to the proportion of fine gold or fine silver therein contained, or shall be of less weight or value than the same ought to be pursuant to the directions of this act, through the default or with the connivance of any of the officers or persons who shall be employed at the said mint, for the purpose of profit or gain, or otherwise with a fraudulent intent, and if any of the said officers or persons shall embezzle any of the metals which shall at any time be committed to their charge for the purpose of being coined, or any of the coins which shall be struck or coined at the said mint, every such officer or person who shall commit any or either of the said offences, shall be deemed guilty of felony, and shall suffer death.” –Chap. 16 , Section 19 of the Coinage Act of 1792, passed by the United States Congress on April 2, 1792.  (source)

While driving home the other day, I heard Dick Morris talking about presidential politics.  Nothing new there; this is the guy who helped get Bill Clinton elected, then had "an awakening" and became a conservative.  He was talking about Ron Paul in this instance, calling him an "appalling <blank>hole", then ripping Dr. Paul a new one for advocating a return to the gold standard.  His rip was classic "barbaric relic" rhetoric, about how we got off the gold standard because it "held our economy back", and "the US economy shouldn't depend on some miner in South Africa" succeeding in a gold mine.  Just look at the increase in wealth since we got off the gold standard!

Then he went on to add a disclaimer that, sure, Bernanke has printed too much money and the Fed was troublesome, but "there's a big gap between abstention and alcoholism" and we simply need to be somewhere between those two limits.  (That's his actual quote, as best as I can recall).

For a little necessary background, the term "barbaric relic" for gold is from John Maynard Keynes himself, and has been widely parroted by those opposed to a "real money" standard.  "Seriously, Muffy, no civilized, advanced society need be bound by having actual, physical, gold, must they?  Why, gold is what caused the Spanish to rape and pillage South America, the pursuit of El Dorado, after all!" To keep this down under a million words, I won't get into Ron Paul or any of the other candidates' politics: that's not the point of this. 

The point of this is "could we go back on a gold standard"? (and when I say gold standard, understand it could be any commodity that people value; anything but fiat paper that can be printed in infinite amounts).  Perhaps the place to start is the converse, why did the world go off the gold standard?  From where I sit, they did that so that government spending, and therefore government, could grow essentially without limit.  Is that a good thing?  As one of my heroes, the (now-retired) Mogambo Guru once put it,

Whether or not this theory is true, I don’t know, but I don’t think so, as I have never read anything like, “From the moment that the government started creating and spending large amounts of money, everything got better and better, and the more money that was created for the government to spend, the better things got, until they reached Utopia and everybody lived happily ever after.”

If we were on a gold standard, we would need to spend less - but we wouldn't necessarily have to balance the budget.  Some debt - my rough guess: 20% of GDP - would be possible, as long as other nations and people felt that the interest we paid was reasonable and they were confident they'd get it back.  The free market would have to set interest rates, not Helicopter Ben (or his ilk).  You can bet your butt our interest rates would be much higher and the monetary shenanigans the Fed creates wouldn't be possible.  In turn, that means it would be harder for the government to fund wars or an ever-growing entitlement state; the quantity of gold would have to expand to increase the money supply. Increasing our money supply – the thing that Morris thinks has improved the economy – has (IMO) led to the gradual decline of the middle class.

Buried in Morris' assumptions is that if we go back to the gold standard, we go back to the 1972 dollar, but why would that be?  We could declare a dollar to be worth any amount of gold we wanted between 1972's $35/ounce and today's number of dollars divided by the amount of gold we have.  In other words, 1972's $35/oz - meant each dollar bill was backed by 1/35 oz of gold. According to Wikipedia, the US claims 147.2 million ounces of gold in Ft. Knox.  The amount of dollars in circulation is harder to know, but there are some available estimates of that, called the M1 money supply.  If we simply divided the 2.2 trillion dollars in the M1 money supply by the amount of gold in Ft. Knox, that would bring the price of gold to $14,900 per ounce, so each dollar would be backed by 1/14,900 of an ounce (around 2 milligrams).  I have seen writers suggest that the M1 supply is drastically under reported; that would increase that $14,900 price.  Likewise, if there is less gold in US hands, that also acts to increase the price - which reduces the amount of gold behind each dollar. I'm sure you've heard the people who speculate that there is no gold in Ft. Knox and the Fed took it all.  That would make gold almost unobtainable in dollars. 

Gold at about $15,000/oz. would shake the jewelry business to its core, making gold only practical for plating, if that, and making platinum, palladium and silver the jewelry metals.  (I'm sure you've seen rhodium plated items, often considered cheap jewelry, but rhodium costs about as much as platinum).  Platinum is currently cheaper than gold; they crossed this past summer (IIRC) for the first time I can recall.  The market for scrap gold, the rings and things that people have and just keep for no particular reason, would probably drop well below that price as the supply would spike like crazy - as would theft of gold jewelry.  There are still many industrial uses for gold; it's used in electronics for plating contacts of many kinds, in optics, and dental work, of course.  Electronics would either increase in price, or alternatives would be found - probably less reliable alternatives.  I believe the price of gold would cascade into the other metals, too, but can't predict how much they'd go up. 

Backing the dollar with $15,000/oz gold wouldn't affect today's prices in fiat dollars, like going to $35/oz gold would.  It wouldn't scale prices to 1971 levels; your $250,000 house wouldn't suddenly be priced at $583 (the same ratio as 35/15000).  I think that sort of disruption is what people opposed to the gold standard are thinking of.  If we said dollars had to be backed at $35/oz of gold, we'd either have to drastically multiply our supply of gold (not bloody likely) or drastically decrease the number of dollars.  That would be quite a disruption. But any move in the direction of a new standard would cause disruptions world wide - and guess what? they're happening already. 

Note that we haven't devalued the dollar with respect to 1972, we just pegged it in place to the current supply of gold we have.  Devaluing the dollar from being backed by about 900 milligrams of gold to 2 milligrams is what the Fed has been doing since we got off the gold standard, and ultimately since their formation in 1913. The dollar has about 3% of the value it had when the Federal Reserve started. While it's true (as Morris said) that Bernanke has been printing too much money, the majority of that decrease in value, percentage-wise, was long ago and was handed to Bernanke by Alan Greenspan.  When the full series is plotted, you see that the dollar is worth about 5 cents in 1913.  When you look at this plot, you can see that Bernanke has decreased the value of the dollar, but most of the damage was done by his predecessors.  This is one of the arguments against what Dick Morris said.

So when Dick Morris or anyone says our economy has grown since 1972, has it really grown, or is it just inflation - the same as devaluing the dollar?  Another aspect of the Fed's action and the way the government reports statistics is that it's harder to tease this information out.  Inflation has the effect of making the economy look better and the country look richer, while it's actually robbing the people.  You have more dollars, but more are required to buy what you need.  This appearance of a growing economy is what the government wants, though – the better to fool you with.  Most people don't think of this: they see their house price is up, or the Dow is hovering around 12,000 and never think that without the last year's inflation alone, the Dow would be about 11,000.

One way to measure whether or not wealth is actually increasing or if you're just seeing inflation is to divide GDP by the population: normalize GDP per capita.  Porter Stansberry's research group produced this chart of an inflation adjusted GDP per capita.  It shows that the per capita GDP went down drastically during the 70s (Nixon and Carter) with a strange, but short, reversal in about 1977 and slowly increased until around 9/11/01 (through Reagan, Bush 1 and Clinton).  Since the middle of Bush 2's term, wealth has been in a nose dive and is now the lowest it has ever been. 

Stansberry's graph only extends back to about 10 years before the final death of the gold standard, not to the start of the Federal Reserve Bank.  Nevertheless, it completely disproves Morris' statement that getting off a gold standard has led to increased wealth.  

This plot is an example of one of the most important ideas in economics, the marginal utility function.  The simple idea here is that if you have one dollar, another dollar is very useful; but if you have a billion dollars, the next dollar doesn't have much utility – and that's the hole that Bernanke finds himself in now.  He has flooded the world with dollars, and there simply isn't much more utility in the next dollar being created.  The next round of QE – whatever they call it – can't be as useful as the first one.  Which wasn't very useful.

It has been said that an ounce of gold buys today about what it did at any point in the past.  Stephen Harmston, former economist at Bannock Consulting, wrote that “across 2,500 years, gold has retained its purchasing power, relative to bread at least” which is seemingly proved when one considers that “It is said that an ounce of gold bought 350 loaves of bread in the time of Nebuchadnezzar, king of Babylon, who died in 562 BC” which is roughly what it buys today, a stretch of 2,500 years.  With some judicious selection of the exact brand of bread, you get remarkably close to 350 loaves (and I'm sure there was some variation in what a loaf of bread cost even in King N's day).  Likewise, you'll hear that an ounce of gold would buy a good toga and sandals in pre-Christian Rome, and buys a well-tailored suit and shoes today, or you'll hear that a $20 gold piece bought an 1851 Colt Single Action Army revolver, and today buys a good grade 1911.  The point of all of these is that the price of gold is a standard by which other things can be measured.  Sure, technology marches along and brings down the cost of some things, but most things that increase in price over the long term do so because the currency inflates.  

It is not true that a gold standard removes inflation and deflation, and it's not true that depressions are impossible with a standard.  The 1800s had a few periods of inflation over 5%, including a big jump for the civil war, to over 25%; but after those inflation periods, the government took their medicine and dialed back the spending to reign things back in.  In 1895 during a bad depression, J.P. Morgan personally bailed out the US; in 1907, Morgan and John Rockefeller bailed out the country together (ref).  In those cases, the Federal government was small enough that individuals, although millionaires, could bail it out.  So even though the gold standard could not prevent inflation and deflation, the standard kept inflation and recession under more control, so that they weren't as bad as they could have been.  In 1900, the “cost of living” was actually lower than it was in 1800, a reflection of improved productivity in farming and other aspects of life.

 

It's hard to actually get numbers because the way the statistics were kept over the years has varied.  The Federal Reserve Bank of Minneapolis has calculated a time series and posted it.  I take this with a grain of salt because I can't help but believe they do things to make themselves look better.  For last year, for example, they use an inflation value of 1.7%, which certainly uses the BLS statistics, not the way it was calculated before.  Shadowstats, using the 1980s algorithm, says the rate was closer to 10% which would make these plots look even worse for the Fed.  That said, I think these plots don't make them look good at all, so just look at these and say “it's really worse than that”.    

The increase in the "CPI since 1800" plot shows the compound interest effect of that "Inflation Since the Birth of the Fed" graph almost always being centered above zero, and especially since the final decoupling of the gold standard in 1971.  Note how in the 1800-1912 period, the inflation graph stayed centered around zero more of the time.  

The Keynesians are right about one thing: there is nothing inherent to gold that makes it a standard.  Nothing besides the fact that people have always valued gold, wanted gold, and very probably always will.  A currency does not need to be based on a gold standard.  As I've said before, we could have a fiat dollar and just not debase it.  Our leaders and central bankers would have to not play politics with the dollar, not use the printing press to buy votes, not try to change the dollar's value to tweak other countries (cough - China - cough) and they would have to live within a constrained budget.  They should not be allowed to print money to fund foreign wars or the welfare state.  All they would have to be would be grown up, mature leaders.  

In other words, we're screwed.  We could and should return to a gold standard. The details will be messy and need to be watched like a hawk.  But these are messy times, and they're fixin' to get messier. 

Word

And that word is "arrogant".  A couple of looks at illustrious leader:

Michael Ramirez, from Investors Business Daily, and Townhall.com

Merry Christmas, Happy Channukah

or whatever you choose to celebrate.  You can change the words, but you can't change my warmest wishes for everything good for you and those you cherish. 

Churches, like all groups, have personalities, and in the one I attend, it would be remarkable to toss a wadded up paper ball and not hit an engineer, nurse, doctor, or a techie professional.  Or an insurance agent, lawyer, paralegal, IT pro, or small business owner...  It's not news to this bunch that Jesus was probably born in the spring (or fall, depending on whom you read), that the December 25th date comes from adapting to the Roman Saturnalia or other pagan holidays; nor would they be shocked if you told them Christmas has more secular than holy traditions associated with it.  Not that we don't joyously celebrate the reason for the season, but Easter is a bigger holiday than Christmas for the simple reason that everyone has a birthday, but only one man in history has ever come back.  

That said, while the idea that there's a war on Christmas is sometimes ridiculed, there really is an intentional attack on Christmas in the public square.  It's part of the larger attempt to destroy western culture.  The bright guys at Washington Rebel (Morgan Freeburg, in this case) have some good observations on this.  They start out with the story that elected Congress Critters have been forbidden to use the term Merry Christmas in their mailings to constituents:

This is a constant in the War on Christmas. It’s a bunch of “can’t can’t can’t” with no purpose to it at all.

Two. And this is a bit more subtle: The congressmen, who are elected to their positions and are therefore accountable to the will of the electorate, are told what they can & cannot do by people who are not similarly elected, and therefore are not similarly accountable. There isn’t much point to noticing that, except for one thing…

…this, too, is a constant in the War on Christmas. Useless rules, which because of their uselessness are completely arbitrary, since they function as ethereal guardrails marking the edge of a highway that doesn’t have any such edge. And although they are arbitrary, they are enforced, ...

A perfect example is the "three reindeer rule".  The war on Christmas can be tracked to the 1950's "Communist Agenda".  This was entered into the Congressional Record in 1963, from a book written by an FBI agent in 1958.

27. Infiltrate the churches and replace revealed religion with "social" religion. Discredit the Bible and emphasize the need for intellectual maturity which does not need a "religious crutch." (see Jim Wallis and the Social Justice in churches movement)
28. Eliminate prayer or any phase of religious expression in the schools on the ground that it violates the principle of "separation of church and state.

I would have been as skeptical as anyone, five years ago, if someone told me communists still existed and were still trying to destroy the west.  Now that I've seen it, I don't doubt it.  Maybe the groups that want to destroy us don't all want communism, maybe they just want to be god-emperors themselves.  But it is clear they are doing all they can to implement these two items from 50+ years ago. 

When asked to define the American religion, Benjamin Franklin said, "I believe in one God, the creator of the universe. That he governs by his providence. That he ought to be worshipped. That the most acceptable service we render to him is doing good to his other children. That the soul of man is immortal, and will be treated with justice in another life respecting its conduct in this."  There is no denomination mentioned there. 

"And the Grinch, with his Grinch-feet ice cold in the snow, stood puzzling and puzzling, how could it be so? It came without ribbons. It came without tags. It came without packages, boxes or bags. And he puzzled and puzzled 'till his puzzler was sore. Then the Grinch thought of something he hadn't before. What if Christmas, he thought, doesn't come from a store. What if Christmas, perhaps, means a little bit more."
-- Dr. Seuss

A Quick Recommendation

In my favorite regular reads was Gardenserf's Plot - "was" because Chris is taking his blog down and stopped adding to it a few weeks ago.  For another week or so, he has a link up to Amazon, where he sells a compilation of blog posts called Roadkill Medicine. 

Do yourself a favor and spend the 99cents on yourself for the Kindle version or buy the paperback.  If you don't have a Kindle reader, Amazon gives away a Kindle application for your just about every platform. 

I'm not quite halfway through it, and it's good stuff. 

FUJIGM

FUJIGM - pronounced foo-jig-'em - is an acronym I first heard about 35 years ago, and it was probably old back then.  Roughly translated, it stands for (to heck with) yoU, Jack, I Got Mine (how's that for keeping a G-rated blog?).   

The FUJIGM attitude is one of our country's biggest problems.  It's the reason for fights over retirement benefits, it's the reason for social programs and "entitlements" (speaking of obscenities...) it's one of the main reasons why the market crashed in 2008, and it's a main reason it's getting ready to crash even worse in the coming months.

Porter Stansberry, who runs a large investment advisory firm, published a long column this month on the coming crash.  He calls it "The Corruption of America".  Kevin, over at the Smallest Minority linked to it twice, saying, "If you read nothing else this weekend, read this".  I agree.  Long but very worthwhile. 

I've been working on a long uberpost on what it would really mean to go back to a commodity standard, and it's a bit of a slog, but Stansberry addresses some of that in here.  He addresses the decline in standard of living in the US and talks about how difficult that is to actually quantify, largely because of the way the government keeps statistics.

Unfortunately, it's a harder question to answer than it should be. The problem is, we don't have a sound currency with which to measure GDP through time. Until 1971, the U.S. dollar was defined as a certain amount of gold. And the price of gold was fixed by international agreement. It didn't actually begin to trade freely until 1975. Therefore, the value of the U.S. dollar (and thus the value of U.S. production, which is measured in dollars) was manipulated higher for many years.

Even today, our government's nominal GDP figures are greatly influenced by inflation. The influence of inflation is particularly pernicious in GDP studies. You see, inflation, which actually reduces our standard of living, drives up the amount of nominal GDP. So it creates the appearance of a wealthier country... while the nation is actually getting poorer.

The ruling class prefers this lie because it makes them look better.  See, GDP has gone up and the DJIA is above 12,000 - you're better off.

How does this lie tie in to the title?

You see, I believe the decline of our country is primarily a decline of our culture.

We have lost our sense of honor, humility, and the dedication to personal responsibility that, for more than 200 years, made our country the greatest hope for mankind. I want to detail some of the factors that gave rise to the current entitlement society. We have become a country of people who believe their well-being is someone else's responsibility.

Curing FUJIGM is easy - in the same way running a marathon is easy - if you put one foot in front of the other long enough, you'll get there.  And, for some, it requires the same amount of effort to always live a life beyond reproach, to not only care about getting your own.  To put other people's concerns, at the very least, as high in priority as your own.  Duty, honor, humility and personal responsibility. 

Duty is the most sublime word in our language. Do your duty in all things. You cannot do more. You should never wish to do less. - Robert E. Lee 

Chevy Volt - As Subsidized As the East German Trabant?

According to the Michigan Capitol Confidential, each Volt may be costing US taxpayers $250,000.

Maybe I should say that again:  every Chevy Volt may be costing US taxpayers $250,000!!! 

Sorry for shouting.

Each Chevy Volt sold thus far may have as much as $250,000 in state and federal dollars in incentives behind it – a total of $3 billion altogether, according to an analysis by James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy.

There are some reasons to think that those incentives and subsidies may not all be paid out, and the cost won't be that bad, and even some reasons to think that $250,000 is an underestimate, leading Hohman to conclude with:

“This might be the most government-supported car since the Trabant,” said Hohman, referring to the car produced by the former Communist state of East Germany.

Our philosopher kings, our superiors in every way, have decided and acted.  You bitter clingers should just be thankful they are willing to lead us.

Read the whole thing, if you've got a strong stomach. 

The Democratic War on Science

It was a DNC throwaway talking point during the W administration to talk about the Republican war on science, implying that because Republicans didn't want to vivisect school children, they were opposed to any sort of intellectual advancement. 

Here's a key, in case you haven't noticed: politicians always accuse each other of doing what they know they would do (or are actually doing at the moment) in the same circumstances.  The classic example is when each party accuses the other of "playing politics".  Of course they are, scooter, and so are you!

Borepatch links to Northern Blogger (2 cents) on an alarming use of the Obama Justice department to shut down research that might contradict Global Warming Climate change bad thing of the week.

Climategate II has taken a very chilling turn.  One that to my mind raises far greater issues than the idiocy of AGW and the great hoodwink.  The Obama administration's criminal division of the Justice Department sought and executed search warrants against Wordpress, the blogging software company that hosts several of the blogs where the anonymous "FOIA" posted a link to the zipfile that contained the second batch of incriminating emails from Mann and the boys.  Worse, it participated in a physical raid and seizure at home of the blogger who goes by Jeff Id at NOconsensus.wordpress.com, where all of his computers and his router were taken.  His was the first blog to upload the link, probably because he lives in a time zone five hours ahead of the others.  He was assured that he was not a suspect, but they nonetheless had armed agents serve the warrant and seize the instruments of his blogging.  Others whose files were ordered frozen at Wordpress were Steve McIntyre at ClimateAudit.org and Tallbloke’s Talkshop at tabloke.wordpress.com.

Borrowing more from Borepatch this time,

Why?

The most recent Climategate emails show clearly that the scientists were pressured by politicians to come out with more extreme results - to hype the Global Warming panic.  The emails show that environmental activists were in positions of responsibility in the governments involved. They show that the World Bank was involved in writing parts of the IPCC reports - and even peer-reviewed articles published in Science and Nature (the most prestigious scientific journals).

In short, the global power elites were involved in the minutiae of the content of scientific journals, trying to make sure that the "science was settled" that we were in a crisis.

Why?

To add a little "value" of my own, back when he was at Fox, Glenn Beck did a full expose' on the Chicago Climate Exchange that was gearing up to trade papal indulgences, er, carbon credits. He called it Crime Incorporated, a name used for the mafia ("organized crime") in the past.  The usual players were involved (Center for American Progress, the Apollo Alliance, and so on) and some new ones, Joel Rogers to name the big guy. It's not hard to find details but this place seems to hit the major points. After the Cap and Trade bill didn't make it through the congress, the CCX quietly reorganized.

The really important thing is this: the scheme of paying penance for carbon was estimated to be a $10 trillion dollar per year market that they were going to make up new from whole cloth. All of those principals, Goldman Sachs, Joel Rogers, main democratic donors like Soros, and lots of others, were set to skim "whole number percents" from that 10 Trillion dollars.  You can bet large chunks of that payola was going to end up in DNC coffers by their behavior. 

When a scam that big, a scam that required years of work to get established is threatened, do you expect them to pick up their ball and go home?  Do you honestly think they're going to play nice? They're going to do anything, step on anyone, and I daresay kill anyone that needs to be gotten rid of so that they can make their billions. It is organized crime in every sense of the word. 

Joel Rogers, of the University of Wisconsin.  Go look up some of his talks to crowds.  Not surprisingly (considering he's from Wisconsin) he appears to be a virulent communist dedicated to the destruction of the west - as long as it involves massive transfer of money into his pockets along the way. 

Has The US Federal Reserve Moved to Nigeria?

I got this incredible Nigerian-style letter in the mail.  Sure seems like a scam. What do you think? 

Federal Reserve Bank of America
33 Liberty Street,
New York, NY 10045.
Our Ref: FRB-75BFNYUS2011

Attention Honorable Beneficiary


Payment Release Instruction From Federal Reserve Bank of New York.


Acting on our capacity as the international correspondent bank to the International Monetary Fund Organization, this is to officially notify you that we have received a confirmation advice from the International Monetary Funds External Auditors Committee, World Bank, United Nations Organization and the Federal Reserve Bank of America respectively via International Payment Voucher Number: IMF/FRBWDC/BOA-93WB82UN567-G requesting our bank to direct the HSBC BANK USA N.A, a subsidiary of the Federal Reserve Bank of America to disburse your due wining/inheritance and contract payment valued at Seven Million Three Hundred Thousand United States Dollars (US7.3M) in your favor via their branch in New York.

In consideration of the above, you have been issued with this Exclusive Reference Identification Number (IMF/FRB-NY/9USXX10751/09), Vide Transaction No.: WHA/EUR/202 and Transfer Allocation No.: FRB/X44/701LN/NYC/US, Password: 339331, Pin Code: 78569, Certificate of Merit No: 104, Release Code No: 0876; Immediate HSBC BANK USA N.A. Telex Confirmation No: -222568; Secret Code: XXTN014. Having received these vital payment numbers, you are instantly qualified to receive and confirm your payment within the next 72hrs. as necessary clearance has been granted from the International Monetary Funds External Auditors to release the funds to you with immediate effect.

In view of this directive received from the International Monetary Funds (IMF), we have on our own part verified your payment file as directed to us, and your name is next on the list of outstanding fund beneficiaries to receive their payment at this Third quarter of year 2011. With that being done, you are required to urgently contact the HSBC BANK USA N.A. in New York through their International Funds Release Supervisor:

Contact Person:NELSON ALEN.
(Head, Funds Release Supervisor)


And reconfirm your international payment voucher number and your reference identification number respectively before that office with a view to the final remittance approval and subsequent crediting of your bank account to the tune of funds as stated herein.

We wish to inform you of the need for you to also re-confirm the following information before the HSBC BANK USA N.A. in New York to enable the officer in-charge to proceed with the preliminary arrangements that will enhance the immediate release of your funds. Owing to security reasons, be clearly informed that we will not respond to any phone calls/general inquiries placed to our bank with regards to the remittance of your funds by beneficiaries as we are barred from doing so, you are therefore advised to communicate only with the accredited officer for further remittance advice.



1) Full Name:
2) Full Address;
3) Your contact telephone and fax number;
4) Your Age and Profession;
5) Copy of any valid form of your Identification;
6) Your Bank name;
7) Your Bank Address;
8) Account name and Number;
9) ABA/Routing Number;
10) Swift or Sort Code/IBAN;


Thank you for your anticipated co-operation.
TREAT AS URGENT.

DR HICK WHITE

TRANSFER DEPARTMENT.

FEDERAL RESERVE BANK OF NEW YORK

Maybe it really is the Fed. At the rate they're spending money, they've got to get something to back it with. Maybe it really is Zimbabwe Ben...

(from the lovely and talented JDA)

It's Insult Eric Holder Day!

I'm sure you've seen the reports that Eric Holder, that pathetic, incompetent excuse for attorney general, has written an op ed for the NY Crimes saying the reason he's in trouble is bloggers?  No Lawyers, Only Guns and Money ran a nice summary on this,

But Mr. Holder contended that many of his other critics — not only elected Republicans but also a broader universe of conservative commentators and bloggers — were instead playing “Washington gotcha” games, portraying them as frequently “conflating things, conveniently leaving some stuff out, construing things to make it seem not quite what it was” to paint him and other department figures in the worst possible light.

ooooh!  It's the bloggers!  Not his incompetence, or the insane plan to sell enough guns to the drug cartels to make it look like American gun stores were the problem, and get support for gun control.  No siree.  And not that, it's because ... wait for it... he's black!

Mr. Holder said he believed that a few — the “more extreme segment” — were motivated by animus against Mr. Obama and that he served as a stand-in for him. “This is a way to get at the president because of the way I can be identified with him,” he said, “both due to the nature of our relationship and, you know, the fact that we’re both African-American.”

(emphasis in the original blog)

I think Sean from the NC Gun Blog has the best summary in the comments:

So Holder was willing to cause the deaths of hundreds of Mexicans by selling arms to their killers. He did this in the hopes of drumming up support for gun control here. He decided that the deaths of a bunch of foreigners was the price he was willing to pay for a domestic agenda. He looked at the dead Mexicans as tools to get what he wanted.

I think I know who the racist is in this scenario, and it isn't us.

Listen, Mr. Holder, I don't know or care what gum ball machine you got your law degree out of, but you are a despicable human being.  The only race that matters to me is the human race, and you discredit that in everything you do.  You deserve not just impeachment, but a real grand jury investigation and, if things are truly the way they look, the same life imprisonment any common criminal would get.   

Pollution and the Environmentalist

Contrary to what they want you to believe, the greenies (or whatever you call the "environmental movement") are not at all opposed to pollution, they just don't want to have to look at it.  In other words, it's not OK to drill for oil in North Dakota where you might expose Americans to a spill, but it is OK to drill for oil in Nigeria or Venezuela, where you'll only expose little brown people.

This is the biggest secret to understanding the greenies and it affects them all.  They just want to feel good about themselves and feel superior to you; pollution is secondary.  If the thing that makes them feel good actually generates more pollution than the alternative, that's alright, as long as they don't have to see it.   

In today's Town Hall columns, Amy Oliver and Michael Sandoval write a great column on this topic, "Green Technology that Pollutes the Planet".  Greenies just want to feel good about themselves?

The New York Times reported in 2007 that the number reason why people buy the Toyota Prius is “it makes a statement about me.”

They don't care that it helps the environment or saves the polar bears or snail darters, they care if it might impress total strangers with how wonderful they are.

And Mary Gatch of Charleston, S.C., explained, “’I felt like the Camry Hybrid was too subtle for the message I wanted to put out there…I wanted to have the biggest impact that I could, and the Prius puts out a clearer message.’”

While I believe that wanting to impress total strangers so badly you'd spend extra money for a car that probably isn't cost efficient for you is a sign of some underlying pathology, I wouldn't want it outlawed.  It's just that the statement that they're trying to project is "I'm wonderful", but the one I'm receiving is "you're a neurotic asshole".

The article has a lot of thorough research into the facts and figures behind how much pollution is generated by the so-called green technologies, from the coal needed to charge a Prius' or Volt's batteries (which really is more hybrid than electric car), to the sulfuric acid, flue dust, and radioactive waste from rare earth metal production - used in the motors of electric cars.   

 Nissan Leaf - America's most popular coal-fired car. 

It's a little long, but you should read the whole thing. 

It's silly to have to say this, but I'm adamantly in favor of more efficient and lower environmental impact life - but the whole picture, the total life cycle costs of the products, not just something to say "I'm better than you because I care".  I'm an engineer, and inefficiency bothers me; seeing more waste and pollution generated so that some neurotics can try to impress each other almost make me sick.  

Sunburned

You'd think that after living in Florida since I was three, I'd know to always have sunscreen and a hat, but no....  Went fishing this morning, and stayed out longer than anticipated.  Sunburned arms, neck and head.  It's not quite the shortest day of the year - that's still four days away - but it's within seconds of that amount of daylight.  Only two or three hours in the sun did it. 

Silly little trout ... that bucktail is almost as big as you are.  Leave them alone - they're nothing but trouble.  (Of course I released it).

I Just Want To Welcome My New Neighbors

In case you missed it, Colt Manufacturing has announced they will be moving into an available building in Kissimmee, Florida next year.  Since the building is vacant, moving in and starting up shouldn't be a problem, and they could be in production by this time next year.  Colt's Press Release is more concise than I'll be, so:

Colt’s Manufacturing Company is pleased to announce that the company will continue its progressive momentum by opening a new facility in Kissimmee, Florida.  The new 16,000 square foot facility will allow Colt’s Manufacturing Company to expand into new markets and business lines in parallel with the company’s existing 100,000 square foot facility in Connecticut.  Specific information on facility renovations and employee requirements will be determined over the course of the next several months.

Welcome to the neighborhood, folks!  They're not next door neighbors, but close enough to visit.

Kissimmee is about an hour's drive away from the castle.  It adds another gun maker, certainly a legendary, historic company, to the state, the producer of many of the truly iconic guns in history.  Also in the area are Kel Tec, closer, in Cocoa, and Scyy, farthest away in Daytona Beach.  Sccy ("Sky") produces a couple of little polymer carry pistols that are sold widely around here; their founder is rumored to have left Kel Tec to go it on his own. 

That's all I can think of, and ignores Taurus down in Miami.  We need a Montana-style firearms independence law, here.  We could be self-sufficient. 

A Colt 1851 Navy Richards-Mason Conversion revolver from Antique Arms.

In the weird, wacky, wonderful world of the Internet, there's a chance a manager from Colt could come across this.  Offers for tours are always welcome! 

Maybe It's An Old Meme

but they told me if I voted for John McCain, Camp Gitmo would be used for American citizens taken off the streets and made to "disappear".  That American citizens would be accused of being terrorists or being accessories to terrorism and thrown in prison without due process and no recourse to a lawyer, judge or the legal system. 

Turns out, they were right. (that link is to the regular Obama peg boys at CBS - but more here and here)

We Have a New Executioner

On July 8, 2010, I wrote on the recess appointment of Dr. Donald Berwick to the head of Medicare/Medicaid Services, "Meet Your Executioner". I still think there's a lot of important information on the mindset of the administration and their plans for Obamacare in that piece.  For one thing, Dr. Berwick voiced opinions that seem to express that supply and demand doesn't function in health care, claiming that the UK's National Health Service was better than ours.

You see, Dr. Berwick is a big fan of the British National Health System.  That's novel because most of the British people are not fans of the NHS, and you have to go a long way (apparently, all the way to Harvard) to find someone who is in favor of it.  In a speech marking the 60th birthday of the NHS, he praised the it for deliberately creating scarcity: "You [the NHS] plan the supply; you aim a bit low; historically, you prefer slightly too little of a technology or service to much too much and then you search for care bottlenecks and try to relieve them."  In a time when the largest wave of retirees in US history hits the Medicare system, the fed.gov has cut the budget for the system by half a trillion dollars ($525 Billion).  The only conclusion is that life will be worse for us than for those who were in the system before us.  This is in complete agreement with the trend of this administration, which (as far as I can tell) is completely dedicated to making all of our lives more miserable. 

Dr. Berwick has left his position - I can't truthfully tell you how much damage he has done, but this gentleman claiming to be Neurosurgeon called into Mark Levin's radio program, saying that under the new care guidelines, if a 70 year old presents in the ER with a bleeding brain, surgeons will not be "allowed" to try to save that person's life.  In Berwick's place, the Obama administration has appointed Marilyn Tavenner, former head of the Hospital Corporation of America.  Mrs. Tavenner is extremely unusual for an Obama appointee: she has worked in industry for most of her life - her background was as an ICU RN, not an academic like Berwick - and she actually appears competent.  As you well know, such attributes are unheard of in this administration. 

It is worth mentioning that part of her job is to clean up Medicare fraud, and she worked for HCA when it was under investigation for the largest Medicare fraud in US history.  HCA ultimately paid a $1.5 billion fraud.  As that American Spectator piece (previous link) says,

There is no indication that Tavenner was directly involved in HCA's billing skullduggery. However, after the Berwick controversy, it's surprising that even the famously tone deaf Obama would nominate someone with such problematic ties to the industry she will regulate. These ties have also been ignored by most major media outlets, whose coverage of Tavenner has consisted primarily of puff pieces focusing on her early years as a nurse. This contrasts sharply with the coverage received by Republican Rick Scott, who was the CEO of HCA during the investigations. Scott was never implicated in the fraud scheme either. But it did happen on his watch, and every "news" story written about him while he was running for Governor of Florida insinuated that he was somehow involved in the fraud.

 The important question is whether or not she's an upgrade from Donald Berwick,

There is no sign, however, that she holds different views than her controversial predecessor. She spoke to the National Association of Medicaid Directors last month and echoed refrains often heard from Berwick. Her position on giving the states control of their own Medicaid programs, which are funded by state as well as federal funds, is virtually identical to that of the good doctor: "That approach would simply dump the problem on states and force them to dump patients, benefits or make provider cuts or all the above." In reality it won't necessarily force them to do any of these things. It would, however, allow the states to develop creative ways of covering the poor, reduce administrative costs, and reduce the coercive power of Washington over the states. One suspects that the last is Tavenner's primary concern.

Tavenner wrote an op-ed for the Washington Examiner, full of the glib, hard to decode statements that bureaucrats make.  I keep hearing from Washington how wonderful things are while every doctor I know says the cuts to Medicare patients are so great they are refusing new patients. 

Is she an improvement over Donald Berwick?  It would be hard not to be, but I don't see as much written by her and about her.  It will take more research. 

In the meantime, Mrs. Tavenner, folks would appreciate if you don't piss on us and tell us it's raining. 

It's Not Just the NDAA - It's Happening Now

There's a lot of talk about the current National Defense Authorization Act of 2011, NDAA, currently in House/Senate reconciliation.  This is the bill that gives the administration the authority to use the Military to arrest and indefinitely detain American citizens on American soil.  Retired US Marine 4-Star Generals Charles Krulak and Joseph Hoar wrote an opinion piece for the New York Times urging the president to veto this bill.

Some claim that this provision would merely codify existing practice. Current law empowers the military to detain people caught on the battlefield, but this provision would expand the battlefield to include the United States — and hand Osama bin Laden an unearned victory long after his well-earned demise.

With one small difference - use of the regular military - it's here now.  Arctic Patriot wrote in "It Can't Happen Here" about a friend of a friend who has been arrested in an armed SWAT raid in front of his children, and wife, while staying at AP's friend's house.  This man is being held in prison with no charges and no arrest and no prospect of release.  AP's link is to Patriot's Lament, who writes "It Won't Happen in America - Yeah, Well It Just Did" (on Dec 6):

I have 8 children, all of them watching the scene unfold before their eyes. Dozens of agents wearing body armor and carrying machine guns, swarm around our house.
I think over my options, (there is only one, they kill kids) and I walk to the door, and yell loud enough for the thugs outside and my family inside to hear, "It's the FBI , don't be scared, just be quiet and sit down!" I open the door and am looking at Michael Anderson's wife. They have her in front of them, between us, and she is crying.

The last update to the story was this past Monday:

Michael had his hearing today, a week after his arrest. Still no charges. He was not released and no bail was allowed. He will be flown to Anchorage in cuffs and made to testify at a grand jury. He was promised, (insert very loud laughing here) that he will be released afterwards and will be free to go.

I don't see a whole lot of difference between being held without charges in a prison in Anchorage than in a prison in Gitmo.  It's a chilling story, especially in the context of the NDAA containing wording that says if you have more than a seven days worth of food, or some amount of "weather proof" ammunition, you might be considered a terrorist, taken away and held without access to any legal way out.  

I Like to Break My Leg!

Those of you who aren't southerners might not have heard the expression "like to" in place of the more grammatically correct "almost" or "just about" with the past tense of the verb.  In this case, "I like to break my leg" translates as "I just about broke my leg".  One of my favorite stories comes from talking with a new hire from upstate New York (long ago, but not that far away) who said someone had come up to him and said, "I like to break to my leg".  On his first job in the south, he had no idea what the guy was telling him.  He didn't know if he should say, "my, what a strange hobby" or - if the guy had said, "I would like to break my leg" - he should have said, "help yourself, but try not to make a mess".  Seeing the perplexed look on the new guy's face, the southerner said, "no, I like to break my leg over there" and showed the newbie a tripping hazard in his work area that the newbie should get fixed. 

So yesterday, I like to break my leg.  I was doing some work on a surface that was not very stable but fairly slippery and fell in such a way as to smash the middle of my left shin on the edge of a metal box.  Almost instantly, it popped up to the size of a hamster under the skin on the front of my shin.  While I thought it might be broken, by the time a few hours of ice packs, elevation, and compression were done with, I became convinced it wasn't anything that required a trip to the doc.  It actually isn't that bad to walk on now. 

But I have refreshed my understanding of another saying: "that's gonna leave a mark".

Newt Gingrich vs. Rosie O'Donnell

(Rosie when captured in Rawalpindi by Pakistani police, 2003)

I'm not much of a fan of Newt Gringrich, but in a smackdown between Newt and Khalid Sheik O'Donnell, I'll go with the Newt every time.  He may be a faux conservative, and a despicable human being, but he's the brightest guy on stage whenever those debates are going on. 

H/T to the inimitable Frank at IMAO, for the story that in an interview on the closing Joy Behar show, Rosie suggested Newt should read a book.  Srsly.  Equally absurdly, she thinks he knows nothing about history.

Rosie, sweetie, I will take a $5 bet that Newt has written more books on history than you've read! 

Edit: 1735 - Dang that typo monster...

The European Pinata is About to Split Open

Over a year ago, I reported about a paper from giant French bank Societe Generale,  that said their customers should prepare for global economic collapse.  I don't expect you to remember that, but I point this out because they were downgraded by Moody's Friday, along with BNP Paribas, and Credit Agricole, three of the biggest banks in France. Interestingly, Moody's said they took into account that these banks will probably receive "state support" (read that as "bail out with taxpayer money") if the situation worsens.  I assume that means their situation is worse than the rating they were given, and without the prospect of free money, these banks would have been knocked down even more.

If you look around, the signs of imminent collapse are everywhere.  The Telegraph is reporting that the whole Eurozone banking system in on the verge of collapse.  You've seen mention of the runs on banks in Greece, right?  Eurozone companies are closing - either going out of business outright, or moving offices into Germany and the few places with half a chance of surviving.  Just a week ago Tuesday, I reported on an article that the UK foreign office was contingency planning how to get expats out of European countries and home, after the collapse.

You know, the whole MF Global thing in last night's post is an important part of the collapse, too.  When Ann Barnhardt did her famous "going Galt" post, she talked at length about how the destruction of MF Global is not just screwing over customers and stealing their money, but destroying faith in free markets.  Stock, commodity and other markets can't operate in a corrupt system - that's one reason there was never a giant Moscow stock exchange.  They require faith in fair rules and a stable system.

The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy. 

A side effect of MF Global is the destruction of the markets that are propping up what's left of the EU.  The world economies are highly linked - you know you and I are paying for EU bailouts with our tax money through the IMF. It's not a conspiracy theory that the system was built as cold war Mutually Assured Economic Destruction.  The EU does not go down without taking us with them.

Bottom line: the collapse of the Euro can not be stopped. This will lead to, at a minimum, a severe recession in this country, although I think that's optimistic and the chance of US economic collapse is very high - we're not exactly a wealthy nation, you know.  I mentioned the GBTV interview with Jim Rogers that supports this belief before, and it's worth watching.  Apparently, non-members can view the video because others have linked to it as well.  It's in several segments, and I don't know that they're all viewable, but watch what you can.  

Just Tuesday, I noted that while driving home, I heard Stuart Varney opine that this Friday (yesterday), they would pass some sort of financial austerity, and by Monday the streets of the European capitals would be burning.  Well, Friday there was an agreement of sorts - an agreement to plan to make a plan.  The DJIA reacted with a pop of 187 points.  On Monday, we'll find if Varney got it all right and the streets of Europe are on fire.

Michael Ramirez, Investor's Business Daily/Townhall.com

John Corzine Channels Steve Martin

Former US senator John Corzine was brought before the congress to testify about his theft the "loss" of a couple of billion dollars of his customer's money, and channeled a couple of old Steve Martin routines.  First the "I forgot" routine.

You can be a millionaire.. and never pay taxes! You say.. "Steve.. how can I be a millionaire.. and never pay taxes?" First.. get a million dollars. Now.. you say, "Steve.. what do I say to the tax man when he comes to my door and says, 'You.. have never paid taxes'?" Two simple words. Two simple words in the English language: "I forgot!" How many times do we let ourselves get into terrible situations because we don't say "I forgot"? Let's say you're on trial for armed robbery. You say to the judge, "I forgot armed robbery was illegal." Let's suppose he says back to you, "You have committed a foul crime. you have stolen hundreds and thousands of dollars from people at random, and you say, 'I forgot'?"  Two simple words: Excuuuuuse me!!"

While what Corzine wasn't exactly I forgot, it's in the same spirit. 

The former head of Goldman Sachs said “I simply do not know where the money is or why the accounts haven’t been reconciled” before adding that as CEO of MF Global Holdings, he is ultimately responsible.

The "I don't know" reminds me of Steve Martin's old "Fred's Bank" routine

... you have to name a bank that ["Security First Trust and Federal Reserve."] because nobody's gonna put their money in "Fred's Bank." "Hi, I'm Fred, I have a bank. You got $1500? …ahhh, I'll put here … in my white suit." Steve Martin 

I remember watching him frantically going back and forth, saying, "I'll put it here! No, wait... I'll put it here!!" before settling on his white suit pocket.

Associated Press adds,

Yet Corzine says he accepts responsibility for the firm's risky bets, and its customers' losses weigh on his mind "every day — every hour."

Poor baby!  I bet there's a lot of people who would like to introduce him to things to weigh on his mind, like a Looney Tunes-style anvil dropped on his head.

Wars and Rumors of Wars

I should have linked to this yesterday, but Bayou Renaissance Man, one of my daily reads, devoted his entire blogging effort for the day to the prospects of regional or global war breaking out within the next few months to a year.  The takeaway conclusion:

I'd love to be proved an alarmist: but in the light of all the elements I've outlined above, I don't think I am. If there isn't at least one war in the nations and areas I've mentioned, within the next year, I'll eat crow right here on this blog, with all due contrition. However, I somehow don't think that will be necessary . . .

Down through history wars have been a last resort of the ruling classes to keep their jobs (and heads) when they destroyed economies.  I'd like to know why we should expect different things this time. 

Forecast for Tonight

Forecast for tonight is Busy. Continued busy with a sudden drop off of in busyness accompanied by loss of consciousness later this evening. 

Thursday will be busy with busyness increasing to fully occupied by the evening. 

Busyness levels should return to normal by the weekend. In the interim, a little diversion.

(Lisa Benson at Town Hall - too right for comfort)