Bernanke Has Positioned Himself And The Federal Reserve As Public Enemy Not Public Servant

I supported the actions of the Federal Reserve as a matter of practicality when this crisis first hit. But since then, it's resistance to reform of banks and the Federal Reserve and its silence on the disgusting behavior of Wall Street and resistance to breaking up large banks has instead turned into crooked capitalism. Extortion of society's values and money. The Federal Reserve must be overhauled. And so must the banking system. Ben Bernanke's recent op-ed in the Washington Post is ridiculous. Where has the Washington Post allowed equal space for a reasoned counter response? That Bernanke cites the general consensus on the role of central banking around the world as the basis for his positions is nearly criminal in my opinion. Since when do I, as an American, care at all what central bankers in corrupt countries like China, Russia and Abu Dhabi believe? None of these crooked "governments" and many more with central banks have a constitutional republic or any form of democracy. They are run by goons and hoodlums. Often killing millions upon millions of their own citizens and secretly sending people to far off prisons in the middle of the night. Frankly, I don't give a rat's ass what any central bankers in these countries believe is appropriate for monetary policy. And if that is what Bernanke thinks, I could care even less what his position is.

Bernanke offers no substantive defense of his position other than this is the way it should be. That the Federal Reserve sat on their hands while the economy melted up then came to the rescue of morally bankrupt behavior on Wall Street while doing nothing to help main street is unconvincing. His defense of the Federal Reserve is a little like killing little old grandmothers then paying on their life insurance policies. And indeed the Federal Reserve policies are indeed negatively impacting many of our elderly who rely on safe investments for income. Bernanke has taken away their income and instead has rewarded the crooks on Wall Street.

We should instead be investigating criminal activity on Wall Street including an audit of all activity of the Federal Reserve. Any engineer clearly understands when a system doesn't work, you do a root cause analysis and fix the root causes. Government hasn't really adopted this position but they have realized change needs to be made. That change right now is as foundationally political as it is anything else but let's be clear. The Federal Reserve in its current structure is part of the problem. Even if Ben Bernanke is a decent person, which I am sure he is. He's too much of a bureaucrat and central banking wonk with a very biased view. Because of his handling of this problem and his resistance to any meaningful reforms, he is center stage to being part of the problem. His resistance to change has put him center stage as public enemy rather than public servant.

Bernanke argues the Federal Reserve didn't do all it could to restrain financial speculators who destroyed much of our savings. Is that a joke? The Federal Reserve did absolutely nothing to restrain financial speculators. Then it rewarded them with a 100% return on their investments and saddled little old grandmothers with the bill. Grandmothers often unable to pay their heating bills and buy groceries. (I'm making a point if you cannot tell. The Federal Reserve needs to be transformed to serve the citizens of this country. And, most importantly, those least able to speak for themselves. That's mostly the impoverished as opposed to often vociferous grandmothers.)

Bernanke goes on to argue that Federal Reserve expertise is necessary to manage our complex financial institutions. This is the most heinous of his remarks. We don't need any regulation to oversee complex financial institutions. Instead, we need to ban the complexity of institutions meant to safeguard our money. To ban complexity used only to speculate with and ultimately lose our money. The money in financial institutions is society's money. It is not theirs to speculate with.

Finally, Bernanke argues the Federal Reserve is highly transparent. That is a joke.

Bernanke serves the wrong master. He is a public servant and takes an oath to serve the people. How has again enabling the crooks on Wall Street to again speculate with our money and pay themselves hundreds of billions of dollars in taxpayer money, courtesy of Ben Bernanke, for destroying our economy, in any way serving the people?

This video has floated around the net for the last six months. When one watches it, the first conclusion one must draw is the Federal Reserve is clearly broken and Bernanke is in a bubble of his own. One of a false reality.

Sustainable Economics And Sustainable Energy Update

It has been a while since we talked about the concept of sustainable economics. Yet it has been a topic of many posts on here over the last few years. There is no better time than during the mini-crisis which has developed in Dubai to dust off the topic. Let's do a short review for new readers.

When peak oilers were yapping about the world running out of oil & carbon-based energy, we were remarking years before that the world was experiencing an unprecedented capacity glut. When oil was peaking we were talking about the impending collapse in commodities, the Middle East and China. We also had a few detailed posts discussing the dynamics involving the world's engineers, scientists, business executives and entrepreneurs which were being unleashed on the energy productivity dilemma. And, we put up quite a few lengthy posts on what this meant to the American economy. We also talked about the impact it would have on the OPEC cartel and an eventual brutal response from American inventiveness.

If the U.S. can stem the tide of energy imports, it will account for trillions upon trillions of dollars which will instead be invested in industries within the United States. Many of those industries will be sustainable. ie, A renewable annuity creating sustainable economics and sustainable employment. It isn't a matter of if but when. Not only will the direct costs of energy imports be mitigated but so too will the trillions of military dollars and foreign aid spent protecting our energy supply lines. That means the future of the U.S. economy will eventually see a massive swell involving tens of trillions of dollars which is now exported out of our country. And, I do mean tens of trillions of dollars. In other words, for most of the tyrannical, repressive, crooked and often outright evil OPEC goons, it sucks to be you. Not yet. But all in due time. (Ever thought about what impact these dynamics will have on the U.S. dollar? Or plans to move away from the dollar and eventually develop a pan Arabian peninsula currency? Or any other yapping commentary so readily available from the mindless financial press?)

There are many unnerving dynamics we have written of which are likely to develop between now and some future end state including our anticipated bust in oil prices. We bounced off of the downside oil target we wrote of in 2007 and have shot higher but eventually I believe $10-20 per barrel dollar oil is quite plausible. And well before the U.S. is substantially energy independent. That ties in with the bust in the Middle East which we have also written about quite extensively.

Don't be fooled with the fear mongering that the U.S. is going to lose this race to the Chinese or the Germans or anyone else. That is completely ridiculous fear mongering. First off, the U.S. can set any economic policy it sees fit. ie, We control our own destiny as a self-determined society regardless of any nonsensical economic ideology which has gained hold in today's world. Secondly, other nations have plenty to keep burgeoning industries humming domestically if they so choose. And, thirdly, the U.S. is and will remain the dominant hotbed of invention and scientific research. Today the U.S. still accounts for one third of all scientific research for the entire world. A number that far exceeds our measured GDP impact on the global economy. A number which more appropriately indicates the dominance of the American economy. And, in fact, much of the research done outside of the United States is funded by American capital in the form of multi-national businesses. The United States is and will remain the dominant economy in the world for a long, long time. The doomsayers predicting the rise and replacement of the U.S. with China are kidding themselves. The U.S. is re-inventing itself as I type this. It's a slow, brutal and ugly process but the wheels of democracy are starting to churn with more vigor. All while the rest of the world continues down the path of the status quo only to be eventually caught as deer in the headlights. Foolishly anticipating a continuation of today's economic ideology.

All of this is simply a rehash of posts we have put up over the last four years. But what is new with this post is below.

On the cover of November's Scientific American is a plan to become completely energy independent in the next twenty years. Right plan? Wrong plan? Who cares. The plan isn't likely to be financially achievable nor is it technologically desirable but that is really irrelevant on some level. What is relevant is the world has made tremendous scientific progress in a short period of time and that trend is going to gain even more momentum in coming years. I'd encourage you to run down to the news stand and pick up a copy. If not, the authors have been kind enough to post some of their work on the net for our review.

This is an opportunity for government to play a major role in constructing a new economy. Not necessarily just by direct involvement but then we should be open to any type of solution which benefits democracy. As an example, we could let "as-is" capitalism develop this transformation in the form of monopoly utilities, mega corporations and the same old same old. Or we could incent entrepreneurs, monetization of new technologies by the creation of small businesses and have cities or government only grant contracts to small businesses thus incenting business creation and a more democratic implementation of capital creation. We could go a step further and require much of any operational businesses to be local thus creating sustainable jobs not just for the U.S. but for individual communities. Or, frankly, we could have individual cities work in concert with local cooperatives to invest in sustainable energy businesses owned by local communities and or businesses. The solutions are endless. How they are implemented should be accomplished in a thoughtful manner. They should be skewed to enhance democracy and new capital formation. If that involves capitalism, so be it. But solutions don't need to in fact be capitalistic to be democratic or to help transform the economy and create sustainable industries and employment. From my perspective, a key component that must be part of most sustainability initiatives is localization. Localization is a big deal on here. Whether anyone realizes it yet, it is a substantial future of the American economy.

People who say the technology isn't ready may be correct on some level. Biofuel research hasn't led to solutions which are able to be monetized as of yet, as an example. Future invention will replace much of what is currently under development. But really, who cares? Scientific research never reaches an end state. Did you wait until 2009 to buy a quad core Windows 7 laptop or did you start reaping the benefits with a Commodore 64 back in 1982?

If businesses or solutions provide a quantifiable return on investment to measurable problems, incent the market and let American invention and creativity determine what is possible.

The financialization of the American economy is over. Period. Wall Street and their beholden politicians and lobbyists are trying to keep the fraud alive but they will fail. If you work in the financial industry and you aren't in a traditional banking role, you might start considering a new career. Say .... basket weaving. We have been writing about this coming dynamic for four years but the future will have marginal use for many of today's financial talents. Pushing paper around does not increase the capital stock of society. A fact not an opinion. And that means just like Wall Street's undue political influence over the American economy forced countless millions of people to retrain for new, generally less economically-valuable careers, so to will the economy force this change on the financial community. Who will retrain our financial community? Why of course, it will be the same self-important pinheads at Harvard and other elite institutions who were so necessary to the financialization of our economy in the first place. And what will they be teaching? They will be teaching the undoing of their complicity over the last twenty years. Reprogramming the ridiculous theories and notions they stuffed into so many heads in the brainwashing that the new economic rock stars would be bankers. That Wall Street would become the economy. A role Wall Street still attempts to play today. A completely preposterous notion that has absolutely no validity.

What is old becomes new again. What is new often becomes worth substantially less. And so the cycle turns again and again.

The Federal Reserve Gulag Endlessy Reiterates Need For Independence

We have remarked on here countless times over the years that bureaucracies will first seek to sustain themselves in times of crisis. This exact dynamic is why the U.S. government feels the need to step up the level of spending of our money as it sees fit during this crisis.

One such bureaucracy we have lighted where this dynamic is likely to unfold is the communist party in China as its economy and social structure starts to fray. Speaking of communism, Bernanke is out once again stating that economic stability of the U.S. will be impaired by attempting to make the Federal Reserve an institution which embraces democratic ideals. A completely preposterous position which has absolutely no intellectually-reasoned support. The American people are not children who need a parent to manage their lives. We are only capable of reason when we are educated with truth. We already know the outcome when the Federal Reserve operates as it has. As a structure supporting anti-democratic and anti-capitalist corporate socialism. Let's try democracy with an institution that is supposed to work for the betterment of society. A monetary authority that is accountable to the sovereign of this country. A monetary authority which is accountable to the sovereign through the U.S. Congress, as the Constitution tells us it should be.

Ben Bernanke attempting to save the structure of the Federal Reserve as it now exists is no different than the leaders of the Soviet Gulag government agency rationalizing the need to enslave dissent and undesirables. Similarly, the Federal Reserve Gulag rids society of economic opportunity and the achievements of our citizens by keeping the jack boot of a private banking system on the neck of the American people. Clearly an anti-democratic bureaucracy which needs to be reformed. And if Ben Bernanke doesn't understand this concept, maybe he should take some time to inform himself of the basic ideals of democracy, the need for transparency to perpetuate a democracy and the need for a society to be educated and informed in order for democracy to survive.

These calls for independence by central bankers exposes their desire to perpetuate a bureaucracy and their power base rather than a desire to serve democratic ideals. The Federal Reserve must be audited.

Final Remarks About The Dubai Mess

An update some hours after the original posting.... I forgot to include this in the post but doesn't the report out of England a few months ago citing secret discussions of Middle Eastern economies conspiring to replace the dollar in oil exchange seem just a little ludicrous now? And so do the discussions of a pan Arabian peninsula currency. Would anyone accept a pan Arab currency for global exchange? Please. These are some of the most systemically corrupt, indebted, puppet economies on earth. They make the U.S.'s problems seem comparatively insignificant.

It seems we are already seeing many in the financial community discount the recent Dubai announcement as "manageable". How often have we heard this one? This from an industry which has completely mismanaged risk and society's money. An industry which clearly doesn't understand what "manageable" means.

Supposedly the current crisis is associated with the Palm development. I'm sure most everyone is aware of the man-made residential islands but if not, there is a nice Youtube video showing the level of the development's hubris and extravagance. It's no irony that much of Dubai's development was to become the playground for the world's mega rich and it is indeed the mega rich who are losing massive sums of wealth - a timeless sign of the foolishness of the human ego. When in history has humanity every achieved a life of permanent leisure? I seriously doubt if the Palm will ever become anything other than an unfulfilled fantasy. It could easily end up being consumed by the ocean due to neglect. Just like failed societies from times past.

Goldman Sachs has been very active in the oil fiefdoms over this cycle. And, in fact, opened their offices in Dubai right at the peak of globalization. We wrote of Morgan Stanley and Goldman Sachs' foolish involvement in the Middle East before the global economy collapsed.

While CNBC was taping from the United Arab Emirates and fawning over their perceived brilliance, we were also writing of its impending doom. CNBC has literally been on the wrong side of every trade be it fawning over the brilliance of private equity, hedge funds, China, the Middle East, housing executives, mortgage bankers, Wal-mart and on and on. Each were glorified at the very peak of their bubble.

The trivialization of the coming crises in the Middle East continues with this Dubai default. It won't be trivialized before it is all over. These pseudo nations are likely to experience decades of economic consequences associated with their incredibly foolish behavior. That is, if they don't experience outright collapse.

The Original Black Friday

For those who live outside of the U.S., the day after Thanksgiving (yesterday) is dubbed Black Friday in celebration of the starting Christmas shopping season. The vast number of non-restaurant retailers see a disproportionate amount of their entire annual sales for the Christmas holiday season. Some up to 40%. Add back to school and the number is well over 50% of annual holiday sales for the majority of soft goods and some hard good retailers.

Nothing like starting Black Friday off with a wallop. With global markets down substantially both yesterday and today and with Dubai's coming sovereign debt default (a near certainty for a very large number of emerging markets in my estimation) what psychological effect will this have on an already weak American consumer? We can expect it to be substantial.

That brings us to the original Black Friday. Not the start of the Christmas shopping season but one of the greatest financial crises in American history. Again, caused by the Wall Street Banksters. It's quite ironic that we see both the retail and financial Black Friday now converging on the same day for the first time in history.

From my many bearish posts on gold, you might infer the original Black Friday might actually be in play again in modern times ...... It is again financial speculation that is the primary driver for gold's ascent. More on that in a future post where we again reaffirm our negative position on the shiny yellow metal.

As we have said countless times over the years, the world is not as it appears. As it reveals itself, most everyone will be caught completely off guard.

Dubai's Debt Implosion Is Right On Time

Well, that couldn't have been any more timely. After we took a few more timely jabs at the Middle East fiefdoms over the last few days, Dubai obliges by asking for a debt reprieve for six months. Dubai's move raised concerns about debt across the Gulf Region. Prices to insure debt from Abu Dhabi, Qatar, Saudi Arabia and Bahrain all rose by double-digit percentages Thursday. Ya think? What fantasy planet have the Wall Street carnival barkers been living on as they again drove credit spreads to levels as thin as before this crisis? When the same monkeys that created the crisis are still running the zoo, we can expect that same monkey-behavior .......

Right after the banksters honor this request, I want the same favor. Except rather than a reprieve, I would prefer that my debt be put onto the back of the American taxpayers. You know. Just like the banksters. You all don't mind bailing me out, now do you? I can assure you that I would be much more grateful than Wall Street was. I would actually thank you. Something the sociopaths on Wall Street didn't seem capable of.

Debt repudiation seems to have a viral effect, eh? In other words, what we are witnessing is the breakdown of the rule of law. The government provided the precedence as we highlighted in our finance industry control fraud post. It's consequences will likely be substantially greater now that our government has failed to prosecute fraud or enforce the rule of law. Who really knows where this dynamic will end? As Americans see their burdens become greater through higher taxes, higher fees and higher costs across the board because of fraud and the lack of enforcement of the rule of law for a handful of connected companies or individuals, we could easily see a wholesale crisis where society chooses to apply the same arbitrary laws to their own situation. Newton's Third Law - for every action there is an opposite and equal reaction.

Aren't you glad Wall Street, American mega banks and American mega corporations have invested all of the capital you provided them to invest in these crackpot countries? Ummm ..... do you think we might be witnessing a little of "once bitten, twice shy" on a global macro level?

A Pilgrim's Thanksgiving Reminder To Algore, DICK Cheney, Central Bankers, Wall Street Mobsters, Crooked Lobbyists And WTO Pinheads - NO MORE KINGS

Many will remember Schoolhouse Rock from the 70s. One of the most popular videos on Youtube for a reason- many of us crazy Americans actually believe this stuff.

A Presidential Address On Thanksgiving Day

"It is this work that I most want us to do: to banish rancor from our words and malice from our hearts; to close down the poison spring of hatred and intolerance and fanaticism; to perfect our unity north and south, east and west; to hasten the day when bias of race, religion, and region is no more; and to bring the day when our great energies and decencies and spirit will be free of the burdens that we have borne too long."-- President Lyndon B. Johnson

The Skyscraper Indicator Revisited

We have written of the skyscraper indicator - an anecdotal indicator of humanity's incredible ego - a handful of times over the years. While we were talking of impending doom, the financial world and media were in awe of the tremendous economic growth in emerging markets. Needless to say, they were completely duped. Even today the financial world is only awakening to a recent "real estate" bubble in China. That is purely preposterous. China doesn't have a real estate bubble. China's entire economy is the greatest economic bubble the world has ever seen and it has been building for more than a decade. Real estate is a rounding error. Just as real estate is clearly not the foundational problem with the U.S. economy - something we have said repeatedly over the years. Something the financial wizards on Wall Street or media incredibly have not picked up on yet.

Given our last post on Dubai, let's give a quick update with a site we have linked to in the past. The site lists the tallest buildings in the world sliced a few different ways. One is the tallest buildings under construction in 2009. The graphic linked to below requires you to scroll left and right to see the entire first page. Funny how 23 of the top 25 buildings are in markets where we wrote incessantly about impending doom while the world was partying hard. And most still don't get it. The human ego won't allow them to acknowledge the monstrosity of the crisis that faces these countries. The same ego which created the problem in the first place.

- 8 of the top 25 tallest buildings under construction in 2009 are in China.

- 13 of the top 25 are being built in the Middle East.

- 2 of the top 25 are being built in Russia

Dubai - You Buy It, You're Responsible For It

The coming disaster of Middle Eastern oil fiefdoms have been on our radar maps for a long time. Dubai, home to the modern-day Tower of Babel (the Burj Dubai is hubris defined, just as Babel) has already collapsed and had to be bailed out by Abu Dhabi. In fiefdoms, possession is nine tenths of the law, so it appears "you bought it, you're responsible for it" now applies. Something Abu Dhabi may end up regretting. Or may take Abu Dhabi down with it.

.......... It's amazing that a single city with approximately half a million native inhabitants and another one and one half million servants can consume itself with $80 billion in debt ........... Just as with Lloyd Blankfein, they must have been doing Allah's work.

Dubai is fiscal lunacy defined. The party in the Middle East and Dubai is just starting. Grab some popcorn, sit back and enjoy the fireworks.

Moodys Downgrades Mexico

One of our main themes on here has been that emerging markets are going to see a complete bust - a position we have held for years. Mexico is one emerging market we have highlighted repeatedly as headed for the scrap heap.

Mexico is a wildly corrupt country that has been propped up for decades by its neighbor to the north. The wonderful people of Mexico deserve so much more than the systemic corruption of their government. Without U.S. investment, loans and bailouts, Mexico would have collapsed decades ago. In fact, they already have.

A stable Mexico is in the best interest of the United States. Washington surely realizes this. That is why misguided policies have perpetuated a failed state status for decades. As we have highlighted, Mexico is in the middle of a civil war of sorts with the corrupt elements in its society. Volatility in Mexico could get much worse before this cycle is over.

Remember as well, we have highlighted that much of the world has been bailed out by the U.S. in the past but that this dynamic would likely not continue because the U.S. will be busy bailing out itself.

The Peso, being linked to the global Frankenstein driven primarily by Wall Street, has rallied from the exact date as the S&P bottom. All while the dollar has has declined. No coincidence when you realize how Frankenstein was constructed. The problem is Frankenstein is dead on the operating table. When the eye of the storm passes, fundamentals will resume. At that time, I expect another very hard leg down in the peso.

A sovereign debt downgrade, reflecting fundamentals, starts the process for this eventuality.

Former Fed Bureaucrat Kroszner- Deer In The Headlights - Tells Us Exactly Why The Fed Should Be Audited Via His Inability To Answer A Basic Question

"The mass of men serve the state thus, not as men mainly, but as machines, with their bodies. They are the standing army, and the militia, jailers, constables, posse comitatus, etc. In most cases there is no free exercise whatever of the judgement or of the moral sense; but they put themselves on a level with wood and earth and stones; and wooden men can perhaps be manufactured that will serve the purpose as well. Such command no more respect than men of straw or a lump of dirt. They have the same sort of worth only as horses and dogs. Yet such as these even are commonly esteemed good citizens. Others--as most legislators, politicians, lawyers, ministers, and office-holders--serve the state chiefly with their heads; and, as the rarely make any moral distinctions, they are as likely to serve the devil, without intending it, as God. A very few--as heroes, patriots, martyrs, reformers in the great sense, and men--serve the state with their consciences also, and so necessarily resist it for the most part; and they are commonly treated as enemies by it." -- Henry David Thoreau

Randall Kroszner is a poster child as to why transparency, accountability and a free flow of ideas are demanded to maintain a free society. Mr. Kroszner is a typical bureaucrat. He defends the status quo with great vigor yet cannot provide a reasoned analysis why. I'll tell you the reason why. It's the exact same reasons Thoreau cited more than one hundred and fifty years ago. That Kroszner cannot answer the most basic question as to why the Fed should not be audited is indeed all the validation a free society needs to audit the Federal Reserve.

Kroszner continues to brainwash students as a teacher. Brainwash them into believing the Federal Reserve is independent, that the Congress granted the Federal Reserve powers for virtuous reasons rather than under the duress of undue banking lobbyists, and that a rule of law is somehow better served when a free society has no idea what that rule of law is and when decisions about our future, our savings and our society are made without our knowledge. Kroszner is an elitist who obviously does not believe in the Constitution or democracy. He defends neither. Instead he defends a failed ideology and bureaucracy with no accountability to the American people.

The fact is our Constitution granted monetary authority to the Congress so the American people would have direct control over our finances. Not outsources to private crooks and central banking idiots.

If the American people knew what was going in our government, in the Federal Reserve and in this crisis, and we encouraged fresh ideas from society, we would rapidly find answers to deal with our problems. Problems created by bureaucrats like Kroszner. The free flow of ideas, of invention, of creativity are not only what drive a vibrant economy, they are mandatory for a properly functioning democratic government. We've already seen what bureaucrats like Kroszner are capable of, ie trashing our society, let's embrace democratic ideals to solve our problems. Let's take back our democracy and our government. Obviously through peaceful methods.

Jamie Dimon As Treasury Secretary? You Have Got To Be Kidding Me.

Timothy Geithner is in serious political trouble. Sharks in both parties have started feeding, reinforcing the mantra in Washington, "if you want a friend, get a dog". Geithner, per se, is not the problem. But as head of the New York Federal Reserve, he oversaw the biggest financial fraud in history. And, his post was the one of primary regulator. Frankly, I would be surprised if he survives. Once personal distractions become the primary source of news rather than political strategy, it's almost always time for someone to go. Geithner just can't get past this. He was part of the problem. For political reasons, I seriously doubt he can be part of the solution. Of course, the current administration should have known this. They were too beholden to Wall Street and seriously miscalculated the mindset of an enraged American public.

So now it appears they are considering an equally terrible mistake. Jamie Dimon's name has all of a sudden come across the headlines as a replacement for Geithner. Political hacks testing the waters for a Geithner resignation? The New York Post is a wonderful rag. And, I think this comment from a reader to said story sums it up perfectly.

trainwreck

11/23/2009 6:33 AM

yea, that is what this country needs, another crooked banker running our monetary policies. How is it Dimon is never accountable for the frauds committed by his firm and yet is given accolade when something goes well? How has Dimon and Chase treated the small businesses and consumer when it comes to lending? That would be his policies as treasury as well!

I have a better idea. Wall Street is the consumate good ole boy's club. How about an anti good ole boy's club nomination to clean it up? And someone with a proven desire to serve the public? Elizabeth Warren? Brooksley Born? Sheila Bair? Can you imagine the response on Wall Street? I doubt there would be any more back slapping sessions at the Treasury. Indeed this is exactly what this country needs. A return to serving the public, someone who believes in transparency and someone willing to buck the massive Wall Street money machine to restore virtuous governance.

Frontline On November 24th - The Tyranny Of The Credit Card Industry Courtesy Of Washington Politicians

Link here.

Climategate - Is The Evidence For Humanity's Involvement In Climate Change An Elitist Sham?

Elitists love to impose their self-aggrandizing importance and perceived intellectual superiority upon society. The reality is almost always something different. It seldom involves an intellectually-reasoned or science-based argument at all. Which is the reason why no other society than democracy has ever survived. Elitism is the greatest repression of human achievement to ever be perpetrated on humankind. And as we have cited hundreds of times in the last four years, the American people are in a fight for their ideals against the powers of elitism both from the left and the right. Elitists have been and continue to attempt to hijack democracy.

It's been a while since we have talked about global warming on here. As a contrarian, I remain dubious as to humanity being the primary cause. Is humanity contributing to climate change? That's undeniable. How much is the issue at hand. Is is one one-thousandth of one percent? Five percent? We simply don't know. But I believe more scientific data supports the planet is doing what the planet will do regardless of humanity. And thousands of scientific experts agree with that perspective.

Mind you, I do not belong to the Luddite movement as defined by many equally ridiculous anti-science politicians who eschew tree hugging, protecting the whales, attempting to stem the spread of genetically-modified foods, dealing with pollution, etc. Because we are slowly destroying the beauty of nature and if we don't wake up, we may end up destroying ourselves. As comedian George Carlin said, the earth will do just fine. It's only a matter of whether we survive our own foolishness. But these are separate issues. It's common sense to paint ourselves into the future health of our planet. But it is elitist political ideology which has generally forwarded the premise that humanity is the primary input to climate change.

Al Gore, as an example, knows about as much about the science of global warming as he does about the science of the internet. He claimed the internet as his invention and claims to understand the science behind global warming as well. Hogwash. He has repeatedly shown he has little reverence for science as it pertains to this issue. Gore's recent remarks that the earth's crust, core or whatever is several million degrees shows his utter scientific ignorance. (That's only a few million degrees hotter than the "surface region" of the sun. Same elitist megalomania that led this same dimwitted politician, with no scientific training in college or after the fact, to claim authorship of the internet. Doh!) Gore is driven by a biased political ideology rather than an unbiased search for scientific truth that is validated on some level by the public discourse and scientific peer review. If he supported science, he wouldn't try to quell its dissent. And he most certainly has as witnessed countless times including a link below.

The only thing worse than a politician who believes they are capable of setting scientific agendas is one who eschews science all together. We see both of these dynamics at work today as often countering forces. Both our prior President and current President are guilty of attempting to either stop science or determine its future.

When all of humanity becomes gripped by a scientific movement led by a politician, a politician with zero scientific training, my radar goes up. When this same politician wins a Nobel Prize based on work that indicts humanity as the main cause of that pseudo-scientific/pseudo political movement - climate change - my radar goes up a little more. When he wins an Academy Award for the same work, it's anecdotally a near certainty the movement is dubious. Tie that in with the work of many scientists that clearly refutes political claims made by said politician and one has the makings of a great hoax.

Here is what you may not read in the mainstream media. An acknowledgement by a well-respected top government scientist who was fired because he challenged Al Gore on the science behind his global warming claims. Science that a politician refused to consider because it would interfere with policy. Policy is doublespeak for ideology or doctrine. Doctrine is completely rejected by science. Instead, it is a form of control or social conditioning. Were Gore in search of the truth he would have embraced public dialog and the work of this scientist or any other scientific claim to determine truth. The goal of science is to determine truth. The goal of many politicians is to set ideology. What we see in Gore's actions are more than telling. It's also interesting that Gore seems to be positioned to profit handsomely from his views with an investment in a carbon trading company. And Gore's partner in his investment? Why none other than a former Goldman Sachs senior executive. And the idea for carbon trading? None other than now imprisoned Enron executives. Truth is undeniable. So is transparency. Funny how that works.

Many scientists are now attributing the change in climate to changes in the earth's core, solar activity and extra terrestrial energy sources. While we don't understand the causes of these dynamics, we do understand their impacts quite well - something doctrine clearly doesn't care one bit about. Yet the reality is forces of nature are many millions of magnitudes more powerful than any possible effect humanity could have on this planet. Could these forces be intertwined with human involvement? Sure. They most certainly are. And we should be very concerned about the state of the planet. But here are a few remarks from 650 of the top scientists refuting the conclusions by many politicians plus a link to their full report available from the U.S. Senate Committee on the Environment.

“I am a skeptic…Global warming has become a new religion.” - Nobel Prize Winner for Physics, Ivar Giaever.

"Warming fears are the “worst scientific scandal in the history…When people come to know what the truth is, they will feel deceived by science and scientists.” - UN IPCC Japanese Scientist Dr. Kiminori Itoh, an award-winning PhD environmental physical chemist.

“Many [scientists] are now searching for a way to back out quietly (from promoting warming fears), without having their professional careers ruined.” - Atmospheric physicist James A. Peden, formerly of the Space Research and Coordination Center in Pittsburgh.

“It is a blatant lie put forth in the media that makes it seem there is only a fringe of scientists who don’t buy into anthropogenic global warming.” - U.S Government Atmospheric Scientist Stanley B. Goldenberg of the Hurricane Research Division of NOAA.

“The models and forecasts of the UN IPCC "are incorrect because they only are based on mathematical models and presented results at scenarios that do not include, for example, solar activity.” - Victor Manuel Velasco Herrera, a researcher at the Institute of Geophysics of the National Autonomous University of Mexico

I really appreciate the last remark. It reminds me of the faith in the completely unscientific scientific models and the associated voodoo science that has tanked Wall Street and our economy. Deficient models. More appropriately termed "Garbage In => Garbage Out" or GIGO theory.

Alternatively, if you are convinced that the world is warming and it's a long term climate change caused primarily by humanity, are you sure it's based on incontrovertible science? How many scientists have you seen espouse this view and where did you see them? Television? Is the corporate media performing in a self-serving role rather than educating society? Of course they are. When politicians and power-seekers determine the course of action in science we seldom seek truth and enlightenment but rather ideology.

It's a noble cause to clean up the planet and embrace sustainable ecological economics. But, to use policies of fear and tax penalties that will impose greater burdens on citizens and businesses exactly at a time when they can't afford it, is not the right strategy. Instead it is an ideology. We, through our government, should provide incentives for society and business to innovate. Then we can all reap the benefits of job creation, sustainability and improved ecology.

There have been many claims by scientists and many seekers of truth that climate data is being manipulated to support an elitist agenda. A few days ago the term Climategate was coined to describe some level of misinformation about climate change has been hacked and has now entered the public domain. Let's watch and see how deep this Climategate goes. Transparency is a beautiful thing. It's the very basis of democracy and the enemy of ideology.

Debauched Hubris Defined - Royal Caribbean's Oasis Of The Seas

Royal Caribbean's announcement of the Oasis of the Seas is similar in concept to our posts on the popularity of the Hamptons well before this crisis developed. The traffic jams in the Hamptons were reminiscent of similar hubris experienced before the collapse of 1929. A life of extreme leisure and excessive "play time" for pushing around paper on Wall Street is surely a sign of imminent collapse. We were right. And, Wall Street still is far from out of this crisis. The timeless reality as defined by the Four Noble Truths is that life means suffering. And suffering is caused by attachment. And nothing could define this more accurately than the attachment of extreme leisure. That we had achieved some new level of prosperity. Especially while doing nothing productive to achieve it.

The Oasis of the Seas is the world's largest cruise ship. Royal Caribbean is taking delivery of this and a sister ship at the very peak of the largest financial bubble in history. History will not look kindly on Royal Caribbean's tremendous failure in management.

The amount of new cruise ship capacity which has come on line in recent years and is expected to come on line in future years bears no resemblance to sustainability. This is the cruise industry's equivalent of Airbus's A380 mega passenger airplane announced at the height of hubris as the technology bubble was popping. The A380 is also likely to become an enormous bust with a long term, if not permanent shift in globalization dynamics. Traffic counts will never develop to sustain the A380. Airbus would be headed for eventual bankruptcy were they not heavily subsidized by the European Union. That still might happen. And I fully expect Royal Caribbean could easily end up there as well.

There Is No America. There Is No Democracy.

It's been a while since we have posted a video from the movie Network. Network was a prescient movie made at the peak of America's sovereignty - a nation reliant on itself. The movie's creators were surely brilliant. Entertainment has become reality.

Federal Reserve Audit Back On? Society Must Maintain It's Pressure On Congress.

After a few flippant responses, my freshman Congresswoman alerted me last night that she now supports an audit of the Federal Reserve. I'm sure the barrage of correspondences and the responses at the public health care forums held by Congresspeople gave her a new perspective on reality. Serve the will of the people or find a new job. And, I told her in very clear terms I would do anything and everything within my power to make sure she finds a new job if she didn't support this audit.

I am amazed at the ridiculous arguments trying to keep the American people from knowing what is going on at the Federal Reserve. In a democratic society, a society of self-rule, how can there be any argument given to secrecy in government? That is not self-rule unless it involves giving up military information that may jeopardize human lives in the time of war.

This morning Senator Judd Gregg but forth a brain dead argument as to why we should not audit the Federal Reserve. That is, that Congress should not be involved in monetary policy. That is completely hilarious and a ruse. The countless billions of dollars that line our Congresspeople's pockets courtesy of Wall Street mobsters guarantees that Congress is already primarily responsible for monetary policy by setting the rules to the economy and banking. Judd Gregg needs to wake up or find a new job. The Federal Reserve's autonomy is a feint. A ruse. A lie.

The Constitution of this country provides Congress with monetary authority. Many of our founding fathers warned of private banksters ever gaining control of our monetary policy. They saw the evil that was the banking system in England - a major motivator for the American Revolution. The Federal Reserve has no Constitutional authority not granted to it by the Congress. None. The Congress is the voice of the people. As elected officials, they are accountable to the people. The Federal Reserve has no accountability to the people. This is purely circular reasoning to protect the crooked racket in Washington.

The Federal Reserve has enabled the crooks on Wall Street and given them countless trillions of our money. As a free society, we demand to know what is going on at the Federal Reserve. It is our authority. As a free people, we serve no master. No master. None. We serve a rule of law set forth by the people. If the Wall Street mobsters dismantled our laws and We the People now demand a new law, ie an audit of the Federal Reserve, our public servants are responsible for executing that law.

The crooks and liars will surely try to quell this audit again. We must keep the pressure on until the act has passed.

Interactive National Unemployment Report By County

Link here.

Crimes Against Humanity - A Record 50 Million Americans Facing Hunger While Wall Street Pays Record Taxpayer-Funded Bonuses For Fraud

The government releases statistics that 50 million Americans are facing issues of hunger according to Public Broadcasting.

Stench - The "Money Committee" And The Soviet Democratic And Soviet Republican Political Stooges Put Forth Morally-Bankrupt Financial Reform

William Greider is a name many people won't recognize. Yet he is a wise old owl. Greider predicted this crisis more than a decade ago. At the time, elitist pinheads like Paul Krugman laughed at Greider and poked fun at his views. The main reason? Greider didn't have the pedigree of an elitist. The same elitist mindset which is pervasive in Washington. Elitists don't believe in democracy. They mouth it yet believe society needs to be led around by their nose.

Who's laughing at Greider now? His journalism seldom has few equals.

Take a look at what Greider is saying about financial reform coming out of the House of Representatives. It aligns well with our positions. But there is a lot of seamy new information on the morally-bankrupt Washington rot.

The problem with America is not Wall Street per se. It is Washington. It is the insatiable desire for massive sums of money needed to run national monopoly political parties. Money best provided by mega corporate monopolies and oligopolies with enormous spending power. How does a corporate firm achieve such spending power? By destroying competition. That's where the corruption in Washington comes in. In return for destroying economic competition and removing regulations, Washington gets what they want. The end result of massive profits.

Nancy Pelosi's recent remarks hoping for the recovery of the Republican party are very telling. Without a Republican party, the Democratic party would likely collapse as well. For instead of the lock on power, control and ideas a two party system provides, new ideas front independent voices would challenge the power structure and corruption so deeply seeded in Washington. To expose the reality. That is, most Washington politicians have no ideas. The emperor has no clothes. They were elected because they were good "yes" stooges who would fall in line with their Soviet political bosses.

Our government has the intellectual diversity of the Soviet Politburo. Political stooges ensure only those willing to accept intellectually deficient party ideology get money to win national elections. And, then those Congresspeople become beholden to party power stooges like Rahm Emanuel. So, when it's time to fall into line, dissent is marginalized or money is not provided to win re-election. The two party system has become one of cronyism and massive fraud where the diversity of democracy is not tolerated.

Washington is morally bankrupt and does not represent the diversity of ideals or inventiveness or virtues held by Americans regardless of race or creed.

Combine that with what we see on Fox, MSNBC and CNN 24-hour news - countless political stooges with titles of consultants and advisors providing useless and mindless Orwellian-brainwashed ideology pawned off as insightful commentary. Unfortunately, the commentary seldom has merit because it's purely political ideology. Brainwashing. Group think. What does a political consultant know about health care reform other than what is written on their cliff notes. Cliff notes provided by the party power bosses? Or how to fix the economy? Or for that matter anything other than politics? A major contributor to why debate in the mainstream media is so utterly worthless.

The U.S. is failing because we are run by Soviet-style political structure that is corrupt. Soviet-style political structure which does not reflect the ideals of its people. Neoliberal Soviet-style political structure which serves the interest of an elitist class. Just as in the Soviet Union. It's no coincidence the results are turning out to be the same.

Want to enforce anti-trust law? Break up the two party political structure and outlaw political parties. Force individuals to run for political office based on merit. On their inventive ideas and desires to serve society with dignity and honor. And require all national election funding to be funded publicly.

Every single problem in the American economy can be fixed by reforming Washington. Because every single problem in the American economy was created in Washington. Solutions will be found by electing people who will do the will of the American people. Whatever that will shall be. We need a return to representative government. Not a government run by Soviet-style stooges who suppress virtue, individual achievement, creativity, democracy and excellence of a free society in favor of the corruption, cronyism and favoritism of the Politburo.

It's good to be the king. Not much longer though.

The Affordable Health Care Debate - Two Perspectives

I suspect very few people really know what fear is until they either have a family member who is critically ill or they themselves are ill. Making that situation unbearable is no access to affordable health care or the fear of wondering how one will ever be able to provide this service of human dignity. In many regards, health care serves the common good much more so than other public services such as police, water service, public parks, access to education or whatever.

We can debate the best method of making affordable health care available to Americans. Personal responsibility is important but then there are millions of Americans that are personally responsible yet either do not subsist on a living wage or cannot find employment to be responsible. This is a dynamic which is almost completely avoidable and a direct result of failed government policy. Policy of Washington elitists.

We should have a substantial health care debate based on merit and reason. But, today we don't have that. Instead what we have are those who are generally uninformed yet believe they have all of the answers they need, ie government mandates and those who will use fear and terror to push an ideological agenda against any kind of reform.

I thought the comparisons here were rather interesting. One is from a citizen suffering a life-threatening illness. A citizen most of us know well. And, another is a politician who has spent his life on the payroll of special interests. Special interests which seek to destroy many of the social programs our society has come to expect. As an example, Social Security.

How do we define ourselves as a society? Do we in fact define ourselves as how we treat the least amongst us? As a society, we have paid trillions of dollars over the last decade or so to people who have decimated our society and threatened our social programs under the guise of individual liberty. In a society which can afford to pay a small group of people trillions of dollars for adding little value to society, do we decide to offer people a living wage? Or access to affordable health care? What could be more democratic than to remove any fear of ever wondering if you are able to provide a basic human dignity to your family? Every family?

Housing Starts EXPECTEDLY Fall Again

Once again, a myth we have hammered on for years - the Federal Reserve does not control the economy. Those blowing smoke about a recovery have one data point to support their claim. The Federal Reserve's involvement in bailing out criminal bankers. If monetary policy was the determinant of prosperity, we would never have a recession or depression. Credit can juice the system for some period of time but it is the American people who determine prosperity through their creativity and industriousness. Contrarily, politicians and central bankers more generally destroy creativity and industriousness through unintended consequences of their actions.

So, even though the Wall Street Journal reports housing starts unexpectedly fell, the question is who thought it was unexpected? Politicians and central bankers? I seriously doubt the engine of growth - the people of this country - thought it unexpected because they are filing bankruptcies in record numbers.

Something to think about..... For those who can't wait to take advantage of the Federal government's housing tax credit - aka Cash for Clunkers applied to housing - we wrote on here a long time ago (When the world was still partying) that housing prices could drop to 1995 levels. I still believe that is quite possible.

Transparency International's Global Corruption Map

Link here.

JP Morgan, UBS And Bank Of America Sued Over Conspiring To Rig Derivatives

More good news from our predatory banking system. Banking should exist to enrich the capital stock of society. Not to continually prey on it.

Russia Won't Diversity Currency Reserves Away From Dollar

Much to the chagrin of dollar bears.

Sheila Bair On PBS

Not everyone in Washington is morally bankrupt. That's typically reserved for politicians, lobbyists, political parties and many "think tanks". The vast majority of government workers are quite capable public servants. It's those seeking power, authority and control which I worry about. Those who seek to dominate their fellow man were we not protected from them by a rule of law. Those who should be least trusted without extreme scrutiny, transparency and oversight.

Many people have tried to lump Sheila Bair into the Washington mess. Bair was actually out in front of the curve on some of these issues. By years in some instances. Yet, the politicians didn't want to listen - a regular pattern of fraud and corruption. I think Sheila Bair was a quite competent executive at Treasury and now at the FDIC. She has been willing to publicly criticize policy she believes may be problematic without overly politicizing her perspectives. In other words, watching out for the common good as an honest public servant.

She recently gave an in depth interview at PBS Online Newshour where she admitted TARP was a failure. Recently Bair has been critical of allowing large banks to remain in existence as well as other systemic problems that have manifested themselves in this crisis.

Is The U.S. Military Knowingly Participating In An Illegal Extortion Racket Of Taliban Drug Dealers Using Billions Of American Taxpayer Dollars?

The entire print story is here.

Visit msnbc.com for Breaking News, World News, and News about the Economy

Nations Pledge To "Refrain From Raising New (Trade & Investment) Barriers"

Hahaha. More Big Lies and propaganda. The news is always absurd when we see G20 bureaucrats or some subset of the G20 meet for tea and crumpets. We are about to enter a game where sovereignty of free nations gains substantial momentum against the economic con game we are now witnessing.

Now smile pretty for the picture.

Can it be that it was also so simple then, or has time re-written every line? Memories of the smiles we left behind. Misty water-colored memories of the way we were. Globalization is dead............

Ron Paul - Is The Federal Reserve Audit Dead? And Some Timely Ramblings On Regulations.

There is no doubt that many of the Washington elite do not want the Federal Reserve to be audited regardless of whatever support they may give. ie, Moving their lips. As we have questioned before, there are likely to be many dirty secrets within its walls. Just as are within the walls of many opaque Washington institutions. If I were to guess, those secrets would have little to do with today's financial fiasco and more to do with profligate international meddling by Washington politicians - international briberies, paying off international hoodlums and corrupt governments, etc. A few people have written of this type of policy in Washington but it has yet to really gain momentum in the mainstream.

Apparently, Ron Paul's audit is dead. Or so it appears from his remarks. That is, until we hit the next phase of this crisis and public outrage hits another high note. Potentially a permanent one until real change is dealt with in Washington.

What's also interesting in this video is Paul's disdain for government regulation. That the market is all seeing and knowing. And, also a general perspective that ideally the government should have no role in social programs. There is a difference between keeping people down with a private banking system, ie his desire to gain transparency in the Federal Reserve, and government or society's support to a family with a special needs child, as an example. Or someone who has experienced life-altering trauma defending our country.

I like Ron Paul immensely because he is honest and seeks nobility in government. Not because of his views on society or economics. His views on government's role in society, social contracts and regulation are dubious at best and voodoo at worst. Those who advocate no government regulation, views advocated by many interpretations of Austrian economics, are supporting positions of ideology rather than understanding economics or markets from a mathematical, market theory or gaming theory perspective. In other words, his perspectives are not borne out by sound science.

The argument that regulations don't work so we shouldn't have them is a common argument by many Austrian ideologues. In fact, what we have witnessed for the last thirty years is Austrian economics in action as it pertains to a debate of "free markets" versus regulations. It doesn't matter if we are talking about the FDA, the EPA, anti-trust laws, banking regulations, financial market regulations, trade within the American economy or with other nations, medical insurance or any other regulation. These agencies and the associated rules of engagement in the economy have been gutted. The movie Food Inc highlighted, as an example, that FDA inspections have dropped by approximately 35,000 annually since the mid 70s while our population has exploded. It's no coincidence that we have increasing incidents associated with the safety of our food. Our economy does not simply suffer from Wall Street run amok. It suffers from corporations run amok due to the dismantling of regulation. Aka free market ideology supported by many Austrian economics ideologues. Free market ideology not supported by sound science.

This isn't anarchy central where those most willing to trample their fellow man win the game - yet that is exactly the free market ideology we see today. We live in a society which is subservient to a rule of law set forth by a free nation. That includes in the game of economics. When these laws, ie regulations, are dismantled, we end up with a lawless economic system which is only limited by the animal spirits of nature. Do anything and everything to destroy or be destroyed.

In the free market anything is possible. And, that is exactly what we have been witnessing.

Jamie Dimon Doesn't Understand Basic Math Or Our Laws On Too Big To Fail

“Artificially limiting the size of an institution, regardless of the business implications, does not make sense,” he writes. “The goal should be a regulatory system that allows financial institutions to meet the needs of individual and institutional customers while ensuring that even the biggest bank can be allowed to fail in a way that does not put taxpayers or the broader economy at risk.”

Dimon's ego obviously leads him to write this op-ed in the Washington post. An opinion filled with a tremendous lack of understanding of economics, systemic risk or American anti-trust laws. Is it any surprise that the banksters have created such a crisis when their leadership is so uninformed?

We have written repeated posts on monopoly over the last four years. The dynamic of monopoly and oligopoly goes well beyond the obvious impacts as we have highlighted. They depress competition and ingenuity, they depress wages, they depress economic opportunity, they unduly influence political policy, they depress the ability of democracy to work in our economy and on and on. The list is literally endless. Given a day I could probably come up with a list of fifty very negative impacts on America by allowing JP Morgan Chase to continue to exist. Maybe you could cite even more reasons.

The fact that Dimon argues against anti-trust laws that are over 100 years old and is allowed to do so in a major American newspaper without an opposing rebuttal is more validation of the golden rule - those who have the gold make the rules. Every major oligopoly and monopoly in America today is breaking our laws by being allowed to exist. Laws that politicians choose not to enforce for their own personal financial gain. Why is this any different than arguing for the legalization of theft in a major newspaper? Theft is also illegal. And, monopoly allows firms to steal from society - the reason we have one hundred year old anti-trust laws.

There is absolutely no way Dimon can mathematically deny the impacts of monopoly and oligopoly. It is ego and ego alone which drives an unscientific plea to allow his firm to continue to operate at the expense of democracy in this country. And at the expense of taxpayers.

The problem with allowing bureaucrats to control the microphone, be they Washington politicians or corporate stewards is that few truly understand what impacts their decisions have on society. Nor do they care. A major reason why concentrated power is always destructive. Even if it is well intentioned. Dimon proves this point in spades.

The only way to have a thriving democracy is to have public discourse of opposing views to hone the blade of excellence. Where is the rebuttal given front page exposure in the Washington Post?

Change You Can Believe In - Our Queen Mother And Overlord, Nancy Pelosi, Reaffirms Her Desire To Send People To Prison For Being Poor

After I posted the prison for poor people health care remark there were many news sources that downplayed such a possibility including Speaker Pelosi's web site.

But our queen mother affirms that the Stasi will in fact regulate her health care plan. A plan she herself called a Christmas present for the American people. I find her rationalization in this video rather interesting. And generally based on substantial mistruths. That she believes people simply waltz into emergency rooms to get health care because they don't want to pay for insurance, and then stick society with the bill is preposterous. People generally end up in the emergency room because they cannot afford insurance. The only way society gets stuck with that bill is if collection agencies can't suck the last ounce of dignity and self-respect out of said person. So, effectively what Pelosi is stating is that those nusance poor people are sucking our health care system dry. Now they'll instead be mandated to buy insurance they already can't afford. Or, go to prison for effectively being poor.

We have a predatory private health care system that is now being replaced with a predatory public health care system. Change you can believe in.

What ever happened to concepts of progressivism and conservatism which place the rights of the people at the center of Washington's debate? It's quite simple. As Republican and Democrat elitists, our overlords, have grabbed control of our country, we instead see liberalism and neoliberalism as the only two choices in Washington.

As one of the video commenters remarked, maybe we should send Congress to prison for getting our country in this situation and racking up trillions of dollars in debt. Which is the greater offense? Not being able to afford your health care premium or racking up tens of trillions of dollars in debt?

Here It Comes

We have been writing for four years that rising nationalism is coming. And since this crisis started we have posted many rising tensions as they develop. Russia has already slapped enormous tariffs on many foreign goods and China isn't far behind. China already has one of the most closed anti-competitive markets in modern history in this racket elitists and ideologues call "free trade". The term Free Trade is a perfect example of Hitler's propaganda technique termed the Big Lie. (A tactic also used extensively in George Orwell's mind-controlled society, Oceania in his novel 1984.) In other words, if you repeat a completely preposterous lie enough, the general population will come to accept it as true. At least until they are jolted into reality. Any other Big Lies you can think of in today's Orwellian world? They are countless. Almost all are propagated by media, the financial engine, politicians and mass marketers.

Accommodative monetary policy and quantitative easing are nothing more than pretty words for nationalistic monetary policy - a race to the bottom of the barrel being undertaken in some form by every major economy on earth. Who will win that race to make its economy more competitive in this world of "free trade"? In neoliberal economics embraced across the world today, destroying one's currency is a primary requirement to attract unregulated global capital - a dynamic we have been critical of on here. Hence our many remarks about a race to the bottom of the barrel. Everyone is attempting to devalue their currency in a strategy embraced by the mentally-challenged economics community, financial mobsters, central bankers and political stooges benefiting from multi-national business "contributions". Contributions which specifically assist in setting policies friendly to "free trade".

China is in a substantially unique position in that it has benefited more than any country in modern history from an influx of foreign capital, foreign investment and foreign know-how. This is easily seen in the fact that somewhere north of 80-85% of exports out of China are from foreign multi-national firms, something we have highlighted often over the last four years.

Dominant technology and manufacturing firms from Japan, Taiwan, America, Europe and other countries have plowed substantial knowledge into China allowing for a metamorphosis of knowledge that would have taken fifty to one hundred years to develop itself. Instead this transfer of knowledge has taken place in a little more than a decade. National sovereignty, intellectual property rights and national wealth are irrelevant in this neoliberal economic charade. Instead the world has become a playground for banksters and multi-national firms using national wealth to speculate across the globe regardless of the consequences, benefits or costs.

China's policies are turning nationalistic just as we said they would. And they have far and away the most to lose by doing so. Foreign investment and technology transfer could suffer substantially leading to the depth and length of any substantial downturn. China must have continued access to foreign know-how or lose any momentum gained by heretofore foreign investment. China's comparatively stagnant domestic economy, weak research infrastructure and other substantial dynamics require continued outside investment for any level of sustainability. The U.S., as an example, still dominates global scientific research spending one out of every three dollars. Add in Europe and Japan and the remainder of scientific research around the world is a rounding error. In fact, much of China's research is actually intellectual property of foreign multi-national businesses with facilities in the country.

As China's economy collapses, a knee-jerk reaction from communist leaders would be to devalue their currency as is the policy accepted by the status quo of every economy on earth. But, now with fickle international investors having much to lose in China, such a move would have the effect of destroying returns on capital. A death knell for future investment. So, a much more palatable approach to is to accomplish the same objective without appearing to harm foreign investors. Foreign investors are substantially more important in today's economic landscape than national sovereignty, whether trade is free or fair or otherwise, etc. That "palatable" approach would obviously be to subsidize exports and increase regulation of imports in lieu of overtly devaluing the yuan. This is something we have obviously highlighted before but is very relevant to this post.

China has no alternative other than to do something to stem the collapse of its economy and corresponding massive loss of jobs while attempting to retain future foreign investment.

The actions of Chinese officials are becoming more overt. As an example, a recent trade filing showed that import tariffs were raised on nylon for no other reason than they are hurting domestic nylon suppliers. Much of China's economy has always been predicated on this type of protection but now the press is finally picking up on it. Future actions will almost assuredly be even more flagrant as it pertains to today's economic ideology.

This brings us back to a point we have made on here before. The yammering ideologues citing Smoot-Hawley tariffs as a cause of the Great Depression are completely ridiculous. Just as today, global trade collapsed at the start of the Great Depression. Tariffs were a response to the race to the bottom of the barrel we have highlighted above. A strategy employed by all nations at the start of the Great Depression. Just as today. And many countries were more vigilant than others in their race to the bottom of the barrel because they had accumulated such substantial debts from World War I. In order to repay these international debts, they had to do anything possible to keep their economies humming. Even if that meant selling goods below cost. Sound familiar? Smoot-Hawley as a cause of the Great Depression is one of the biggest Big Lies of our time. A Big Lie perpetuated by ideologues and special interests and mouthed by idiots doing their will. It is completely ridiculous. Global demand had already evaporated and there was massive excess supply just as today - a dynamic we have written of for four years. So, embracing the same neoliberal economics as we see today, will the outcome be different? Is the recession over? Or are we witnessing more Big Lies?

Not only is China going to experience a depression but I have complete confidence the communist government will make exactly the wrong trade and economic decisions which will lead to maximum economic pain. And most likely semi-permanent to permanent flight of foreign capital and investment.

You won't read any of this elsewhere. That's a good thing. Because the entire economics community, political leadership and Wall Street mobsters have succumbed to the Big Lie. A dynamic created by incredible hubris and ego. The truth is almost never is it seems.

This past week China takes another step in creating their own destiny by putting an even tighter yoke on an already very closed market.

Party hard! And buckle up.

Goldman Sachs' Letter To The Editor

More of God's work. Link here.

Toyota Bags Formula One

Formula One has the potential to implode over the coming year with only three major manufacturers still committed to the sport. Toyota, BMW and Honda are out. Ferrari is threatening to leave. Renault is going to decide its future by the end of the year. Formula One's program costs are absolutely outrageous. Some have put estimated costs of funding a two car team at upwards of $300-400 million a year. The corresponding quantifiable benefits are dubious.

Quite some time ago we remarked that leisure and entertainment businesses were likely to see a seminal shift in coming years. I have had this discussion with friends and they have generally looked at me in disbelief when I have remarked compensation numbers in the leisure and entertainment industries could drop by 90% in extreme cases - a point we have made on here before.

People are simply well too naive about reality. Hollywood entertainers, professional athletes and others involved in the leisure business making $15, 20, 30 or more million a year are living through their own bubble that is simply not sustainable. People have become so accustomed to this dynamic over the past few decades that they don't stop to think about the unsustainable economics. I would classify this in the same vein of the advertising bubble we have written extensively about. ie, People are simply well too naive as to sustainable economics.

Another example I am dubious about is the completion of Disney's newly announced plans for a new Shanghai theme park. Between future social volatility and China's coming economic strife, it's highly probable Disney will eventually cancel these plans. Since leaders at Disney are well unaware of these future dynamics, plans will continue until some marked event awakens them to reality. For a small stipend, I would gladly share a presentation of my work with Disney's board of directors. Actually, a nice barter would be unlimited lifetime access to the wonderful Disney properties. Obviously including airfare. Haha.

Many industries beyond Formula One are on the precipice as I write this. Another example includes the terrible financial shape of the NHL. Its financial problems are deep and systemic. And what is their answer? Taxpayer funding. Often threatening to leave cities without financial assistance. Ahem. Where might these firms relocate to with every major municipality in financial trouble?

Remember, were the Federal Reserve not backstopping the economy with trillions of dollars of taxpayer money, a phenomenon which cannot continue forever, entertainment firms and sports franchises would already be in bankruptcy reorganizing. First on the list of any reorganizations in the entertainment and leisure industry would be the adjustment of salaries and compensation commitments of people making bubble earnings.

The party is over. The unwinding begins. And that means some of the world's wealthiest people are likely to experience the same fate as many of the world's most underprivileged. That is, bankruptcy. A dynamic we have hammered on repeatedly. That is, many of the people who most benefited from current economic ideology would eventually succumb to it.

Senator Bernie Sanders Introduces Legislation To Break Up The Wall Street Mobster Monopoly

An unintended consequence of this legislation would be to break up of the Washington monopoly along with it. Let's explain this dynamic.

I have talked about this for nearly a year now but it remains unreported. Wall Street banks are likely not being broken up because they serve the state. They are a massive repository for new issuances of government debt. Wars, stimulus programs, funding massive foreign interventions and other policies which are related more to power and control need to be financed. With global trade collapsing and foreign entities unable to finance the U.S. deficit at its record levels, Washington needs to find domestic purchasers of its debt. The fact that Bernie mentions these mega banks are now substantially larger than before this crisis started creates an even larger repository for the Federal government to self-fund its own deficits without foreign purchasers. This is another dynamic also not clearly understood. The growing asset base of these banks also allows them to mint massive profits buy plowing enormous sums of money into a completely risk-free (conceptually) purchase of Treasuries. Get money at zero percent and invest it at 3.5% all day long. This dynamic allows these firms to continue to fund their Frankenstein financial market inventions as well.

Yet all of these dynamics and more are destroying the American economy. As we have said numerous times, it is Washington killing our economy. It is the President, the Congress, the Treasury, the Federal Reserve and anyone else who supports current policies. This surely is not malicious of intent, but is an unintended consequence of propping up these massive firms. In a world of finite capital, the U.S. government is crowding out the individual, the small business and even the large business for this country's resources. And because these firms are now effectively government-supported on every level, they too are crowding out capital which would otherwise support the operation of community banks and regional banks. What does that mean? We the People will continue to scavenge for capital and subsequently become poorer at the expense of the state. Bankruptcies will continue unabated. Unemployment will continue to rise. Small businesses will continue to fail. The economy will not recover.

Many people believe we are on the path of Japan and cite numerous meaningless comparatives including decades of low growth with low interest rates. That is absolutely incorrect. We are on the path to collapse without a change in economic policy. Japan's economy, unlike the U.S., was still a net producer of capital throughout their decades of comparable policies. And the global economy went without any substantial slowdown during their malaise thus providing a healthy outlet for their goods and services. So they could fund their government intervention. Today, comparatively, globalization is dead regardless of the rhetoric.

The U.S. has a reprieve of some length beyond what an initial crisis would have developed by allowing these mega banks to continue to grow in girth but a repeat of Japan is completely impossible in the U.S. without a massive economic transformation we have been stating for years must take place. It will take place whether elitists want it or not. It's only a matter of when and if it is adopted by necessity through collapse or through proactive policy. Only time will tell.

There are many solutions to our crisis . Solutions that mandate constructive government involvement. But current policy isn't one of them. Why would we expect it to be? As we have written Schumpeter told us ages ago that the only way to recover from economic crisis is to rid ourselves of the prior generation's foolish leadership and their faulty thinking which led to the collapse in the first place. And, indeed this collapse lies completely in the hands of elitists in government and business who have forsaken society's trust. They have forsaken We the People for morally bankrupt reasons. Were society enlightened to this fact, we would not consider any possible solutions involving a perpetuation of the status quo. But, in fact, all we are doing is perpetuating the status quo. Why? Because the status quo owns the microphone and the wealth taken from society in this great fraud. Wealth needed to control the microphone. Sound familiar?

A major change is headed Washington's way. What Schumpeter said is manifesting itself into today's political reality - Incumbents, regardless of party, are marked for removal as we saw in the elections last week. That's not a surprise on here. It is something we have been expecting for years as we have written of our self-correcting society. It's time for Washington to decide. Politicians are either part of the problem or part of the solution. It's time to stand to account and convince the voters of their merit as our public servants. Merit afforded by action. By true leadership. Not by rhetoric. Not as our overlords promising a new America while dictating the economically unpopular and morally bankrupt status quo. Or just as bad, accomplishing nothing.

Link here.