Alexis D'Tocqueville
Observer of America
Sunday, September 14, 2008
Houston's citizen's take care of themselves...
Mayor White's Amazement
In a press conference given this morning Houston's Mayor, Bill White, expressed amazement at the fact that people in some of Houston's neighborhoods had already come out of their homes to deal with the after-effects of hurricane Ike themselves.
Mayor White noted that in one neighborhood residents did not wait for city maintenance crews to come to their neighborhood to begin the clean-up process. Mayor White said that several neighbors had come out of their homes with chain saws, had cut up downed trees, gathered up scattered debris, and unblocked drainage culverts. They stacked the debris out of the way opening road access and as a result of unblocking the culverts the water levels in the neighborhood has already begun to drop.
Why is it that the Mayor would express amazement that these people would actually take matters into their own hands rather than to helplessly wait in their homes for their government rescuers to clear the roads and open the culverts? Could it be that the Mayor subscribes to the notion that only the government can take care of its otherwise helpless subjects? Such a personal subscription (people are dependent on government to take care of them), would account for the Mayor's amazement.
Though he seemed amazed that these residents would act for themselves, Mayor White seemed genuinely proud of these people. Though they seemed to be able to take care of themselves without government help Mayor White still thought that they needed a bit of government aid and reminded them that it might not be a good idea for them to cut up trees which had power lines entangled in them.
We saw just these sort of private citizen actions taken in Mississippi and Louisiana following the devastation of Katrina. Even as everyone was tossing scathing criticisms at the ineffectiveness of FEMA and local and state officials in coming to their aid, we saw private citizens, not public employees, making a difference in hard-hit communities. Not only were local residents taking matters into their own hands, but several private citizens from neighboring states came to help their fellows in time of need. Just as we see in Houston now, we saw private citizens then taking up chain saws and clearing neighborhoods of fallen trees and debris, which were blocking the roads.
It still seems that not all of the People are yet totally dependent on government in all areas of their lives; the People still retain the capacity to help themselves...to Mayor White's amazement.
Thursday, September 11, 2008
We the Servants...McCain the Statist!
We’ve heard a lot of talk from Obama about change in Washington and McCain has recently taken up that mantra, though he calls it reform.
As I watched the Presidential Candidate Forum on Public Service this evening, during which both McCain and Obama took turns lecturing the American People on their duty to serve their nation, (as I recall the government is the servant of the People, not the other way around–which just goes to show that our politicians think of themselves as our masters), I came to the inescapable conclusion that Joseph Farah is right. We ought not to vote for John McCain under any circumstance. I had already decided not to vote for him beforehand, but listening to John McCain speak at the forum definitely removed any lingering doubt.
Judy Woodruff asked McCain what he would have done on 9/11/2001 to keep the memory of that day, and the spirit and determination of the American People to serve and safeguard their nation, alive to this instant date. Apparently Sen. McCain has not only joined Sen. Obama in the “change” mantra, but he has adopted Obama’s call for a civilian national Praetorian Guard.
McCain said that he would have had the government create new organizations, such as a Neighborhood Watch organization, to patrol the nation and to guard nuclear facilities. Apparently Sen. McCain is unaware that such an organization already existed throughout the nation prior to 2001, and therefore needed no federal government creation . The organization, by the way, was coincidentally called Neighborhood Watch!
McCain went on to say that in those good old days of American unity he would have proposed legislation of service to country. Just what the form of that service would have been he did not say. One can only imagine. But the point is that he seems to think that the American People were so afraid post-9/11 and so united from that sense of fear that they were ripe to be “lead”(manipulated) into accepting a demand from the federal government in the form of legislation that they must serve the government.
McCain continued by explaining just what some of those organizations would be that he would have created, or rather have expanded, to counteract the terrorists and to keep America safe from future attack. He said he would have expanded AmeriCorps and the Peace Corps!
I am sure that we all would have slept so much better knowing that thousands more of our citizens were swelling the ranks of these organizations to secure us against further terrorist attack! But, when McCain went on with his next line his comment about expanding AmeriCorps and the Peace Corps as the front line of our national war on terrorism the thought in my mind of just how foolish this man sounded was immediately replaced with dreadful thoughts. The thoughts evoked when a statist speaks.
McCain said that we need to also expand the military, this in the context of national service!
When McCain was asked in turn about what he thought the solutions were to assuage the feelings of the American People that the nation is headed in the wrong direction and what he felt were the Citizens’ obligations to the state, beyond paying their taxes, McCain again offered the solution: military expansion accomplished by inspiring the American People to face the challenges we face as a nation. What are those challenges? McCain mentioned Afghanistan and Georgia, but we can presumably add Iran and Iraq to that list, as well. So, the principal kind of “service” that McCain wants to inspire the People to volunteer for is military service, which will expand the military and allow McCain to continue U.S. military adventurism and intervention throughout the world.
In the alternative, I suppose that McCain would be just as satisfied if the People served in Neighborhood Watch, AmeriCorps, or the Peace Corps instead of the military. He may well reason that if the volunteers in these organizations can defeat the terrorists at home by patrolling the block or standing guard in front of nuclear power facilities that they are just as fit to be deployed across the world to take out the likes of the Iranians or Russian military.
McCain then waxed nostalgic about just what the federal government was able to accomplish back in 2001 when the American People were sufficiently pliable. He lauded the fact that the federal government was able to bring about the “biggest reorganization of government”, and with it the greatest expansion of government power, made possible by the American Peoples’ unity at that time. McCain said that to bring about such change again the American People just need to be inspired again.
Just what was that “inspiration” McCain is talking about? I seem to remember that “inspiration” being fear, anger, and a sense of vulnerability. So, all that need happen for the People to once again be “inspired” to expand the military by serving (as fodder for U.S. aggression), thus enabling a President McCain to war against Afghanistan, Iraq, Iran, and Russia, is for the American People to be made to feel angry, fearful, and vulnerable once again. Not only will the People be willing to look the other way at expanded Executive power and the diminution of their civil liberties, but they will dutifully submit themselves as servants to the government!
McCain went on to crow about the needed reform he had already has, as the maverick he is, brought to Washington. What was that reform? McCain/Feingold campaign finance reform, which legislation just happened to be an overt assault on political freedom of speech, which assault serves to give the advantage to incumbent politicians who are standing for re-election.
McCain’s idea of reform in Washington, then, is one of an expanded military and massive government reorganization (expanded government power), and protection and insulation for incumbent politicians, made possible by “inspiring” the People again through feelings of fear, anger, and a sense of vulnerability, to serve their government (masters) by flocking into military service.
Given what I have heard from John McCain’s mouth tonight, I call upon my fellow citizens to volunteer for the most important public service that you could possibly perform in defense of this nation. That public service is in withholding your vote from both John McCain and Barack Obama. Neither one of them is deserving of our votes.
In fact, I call on you all to go one step more in your national service by running all incumbent politicians, Republican and Democrat alike, out of Washington by withholding your votes from them when they stand for re-election. That is the real change/reform we need!
We’ve heard a lot of talk from Obama about change in Washington and McCain has recently taken up that mantra, though he calls it reform.
As I watched the Presidential Candidate Forum on Public Service this evening, during which both McCain and Obama took turns lecturing the American People on their duty to serve their nation, (as I recall the government is the servant of the People, not the other way around–which just goes to show that our politicians think of themselves as our masters), I came to the inescapable conclusion that Joseph Farah is right. We ought not to vote for John McCain under any circumstance. I had already decided not to vote for him beforehand, but listening to John McCain speak at the forum definitely removed any lingering doubt.
Judy Woodruff asked McCain what he would have done on 9/11/2001 to keep the memory of that day, and the spirit and determination of the American People to serve and safeguard their nation, alive to this instant date. Apparently Sen. McCain has not only joined Sen. Obama in the “change” mantra, but he has adopted Obama’s call for a civilian national Praetorian Guard.
McCain said that he would have had the government create new organizations, such as a Neighborhood Watch organization, to patrol the nation and to guard nuclear facilities. Apparently Sen. McCain is unaware that such an organization already existed throughout the nation prior to 2001, and therefore needed no federal government creation . The organization, by the way, was coincidentally called Neighborhood Watch!
McCain went on to say that in those good old days of American unity he would have proposed legislation of service to country. Just what the form of that service would have been he did not say. One can only imagine. But the point is that he seems to think that the American People were so afraid post-9/11 and so united from that sense of fear that they were ripe to be “lead”(manipulated) into accepting a demand from the federal government in the form of legislation that they must serve the government.
McCain continued by explaining just what some of those organizations would be that he would have created, or rather have expanded, to counteract the terrorists and to keep America safe from future attack. He said he would have expanded AmeriCorps and the Peace Corps!
I am sure that we all would have slept so much better knowing that thousands more of our citizens were swelling the ranks of these organizations to secure us against further terrorist attack! But, when McCain went on with his next line his comment about expanding AmeriCorps and the Peace Corps as the front line of our national war on terrorism the thought in my mind of just how foolish this man sounded was immediately replaced with dreadful thoughts. The thoughts evoked when a statist speaks.
McCain said that we need to also expand the military, this in the context of national service!
When McCain was asked in turn about what he thought the solutions were to assuage the feelings of the American People that the nation is headed in the wrong direction and what he felt were the Citizens’ obligations to the state, beyond paying their taxes, McCain again offered the solution: military expansion accomplished by inspiring the American People to face the challenges we face as a nation. What are those challenges? McCain mentioned Afghanistan and Georgia, but we can presumably add Iran and Iraq to that list, as well. So, the principal kind of “service” that McCain wants to inspire the People to volunteer for is military service, which will expand the military and allow McCain to continue U.S. military adventurism and intervention throughout the world.
In the alternative, I suppose that McCain would be just as satisfied if the People served in Neighborhood Watch, AmeriCorps, or the Peace Corps instead of the military. He may well reason that if the volunteers in these organizations can defeat the terrorists at home by patrolling the block or standing guard in front of nuclear power facilities that they are just as fit to be deployed across the world to take out the likes of the Iranians or Russian military.
McCain then waxed nostalgic about just what the federal government was able to accomplish back in 2001 when the American People were sufficiently pliable. He lauded the fact that the federal government was able to bring about the “biggest reorganization of government”, and with it the greatest expansion of government power, made possible by the American Peoples’ unity at that time. McCain said that to bring about such change again the American People just need to be inspired again.
Just what was that “inspiration” McCain is talking about? I seem to remember that “inspiration” being fear, anger, and a sense of vulnerability. So, all that need happen for the People to once again be “inspired” to expand the military by serving (as fodder for U.S. aggression), thus enabling a President McCain to war against Afghanistan, Iraq, Iran, and Russia, is for the American People to be made to feel angry, fearful, and vulnerable once again. Not only will the People be willing to look the other way at expanded Executive power and the diminution of their civil liberties, but they will dutifully submit themselves as servants to the government!
McCain went on to crow about the needed reform he had already has, as the maverick he is, brought to Washington. What was that reform? McCain/Feingold campaign finance reform, which legislation just happened to be an overt assault on political freedom of speech, which assault serves to give the advantage to incumbent politicians who are standing for re-election.
McCain’s idea of reform in Washington, then, is one of an expanded military and massive government reorganization (expanded government power), and protection and insulation for incumbent politicians, made possible by “inspiring” the People again through feelings of fear, anger, and a sense of vulnerability, to serve their government (masters) by flocking into military service.
Given what I have heard from John McCain’s mouth tonight, I call upon my fellow citizens to volunteer for the most important public service that you could possibly perform in defense of this nation. That public service is in withholding your vote from both John McCain and Barack Obama. Neither one of them is deserving of our votes.
In fact, I call on you all to go one step more in your national service by running all incumbent politicians, Republican and Democrat alike, out of Washington by withholding your votes from them when they stand for re-election. That is the real change/reform we need!
Thursday, May 8, 2008
The Federal Reserve System - by a Poet!
By Dennis Siluk Ed.D.
To be honest, I don't think many people know what the Federal Reserve is. I worked for a bank many years ago for eleven years total, had to go to the Federal Reserve now and then, and even the folks working in the so called System, didn't know the workings of it, they just worked for it (I'm talking about the years between 1982 to 1993). I'm not all that smart about it either but I do know a few things, that I really do not like knowing about it. And to get off of my poetry for an evening, for I am a better poet than a economist, or article writer, I think so anyways, I thought I'd write a paragraph or two about it. Two may do.
Who owns the Federal Reserve? Can you buy stock in it? How did it come into existence? Is it really a reserve? Is it really a system? These are simple questions, nobody asks, perhaps the reason being, nobody really has the right answers, and where do you get them, not in Economics 101, or 701. I will answer them for you in my own way, and you can believe it or not. The Federal Reserve is owned basically by five families in America. In essence, the FRS is the central bank of or for, America, and since 1914, no one out side of the five families could buy stock in it. They have the monopoly on it. It doesn't sound fair, but that's the way it is.
A reserve bank they say it is? I don't think so. They print money, not reserve it, and they print what they want, and somehow try to keep inflation down, buy printing without discrimination.
China and Japan own so much of our money, should they dump it on the world, it would take a million dollars to buy a new car that now cost $26,000-inflation would sink America back into the dark ages. If you are asking why they buy it in the first place, it is because they want to do business with us. I doubt you will find this information in your economic books, so don't waste your time; it is behind the doors stuff. Again I say, we had a taste of the Federal Reserve System, in the 1920s with hyperinflation, guess who was the creators of that, you got it, the FRS.
This so called group I'm talking about has total control of the money, it almost sounds criminal, but the government has passed laws protecting these investors, whom nobody can subdue. It is clear to see, in future time, our paper currency, with our national debt, breaking the ankles of the American society as it is today. I'm surprised it has lasted this long.
Last but not least, the Federal Reserve System is not a system in the terms of what a system is considered being, that is, an organization by the government, although it is blessed by the government. It is a scheme that was put together in 1913, and activated in 1914, and became an organism of these five families, and has remained so ever since, and in their hands.
Actually, this would make for a good book, but I'm a poet, and this just would not fit into a poem, except perhaps "Black Sunday."
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See Dennis' web site: http://dennissiluk.tripod.com
Article Source: http://EzineArticles.com/?expert=Dennis_Siluk_Ed.D.
Dennis Siluk Ed.D. - EzineArticles Expert Author
To be honest, I don't think many people know what the Federal Reserve is. I worked for a bank many years ago for eleven years total, had to go to the Federal Reserve now and then, and even the folks working in the so called System, didn't know the workings of it, they just worked for it (I'm talking about the years between 1982 to 1993). I'm not all that smart about it either but I do know a few things, that I really do not like knowing about it. And to get off of my poetry for an evening, for I am a better poet than a economist, or article writer, I think so anyways, I thought I'd write a paragraph or two about it. Two may do.
Who owns the Federal Reserve? Can you buy stock in it? How did it come into existence? Is it really a reserve? Is it really a system? These are simple questions, nobody asks, perhaps the reason being, nobody really has the right answers, and where do you get them, not in Economics 101, or 701. I will answer them for you in my own way, and you can believe it or not. The Federal Reserve is owned basically by five families in America. In essence, the FRS is the central bank of or for, America, and since 1914, no one out side of the five families could buy stock in it. They have the monopoly on it. It doesn't sound fair, but that's the way it is.
A reserve bank they say it is? I don't think so. They print money, not reserve it, and they print what they want, and somehow try to keep inflation down, buy printing without discrimination.
China and Japan own so much of our money, should they dump it on the world, it would take a million dollars to buy a new car that now cost $26,000-inflation would sink America back into the dark ages. If you are asking why they buy it in the first place, it is because they want to do business with us. I doubt you will find this information in your economic books, so don't waste your time; it is behind the doors stuff. Again I say, we had a taste of the Federal Reserve System, in the 1920s with hyperinflation, guess who was the creators of that, you got it, the FRS.
This so called group I'm talking about has total control of the money, it almost sounds criminal, but the government has passed laws protecting these investors, whom nobody can subdue. It is clear to see, in future time, our paper currency, with our national debt, breaking the ankles of the American society as it is today. I'm surprised it has lasted this long.
Last but not least, the Federal Reserve System is not a system in the terms of what a system is considered being, that is, an organization by the government, although it is blessed by the government. It is a scheme that was put together in 1913, and activated in 1914, and became an organism of these five families, and has remained so ever since, and in their hands.
Actually, this would make for a good book, but I'm a poet, and this just would not fit into a poem, except perhaps "Black Sunday."
---------------------------------------------------------------------------------------------------------------------
See Dennis' web site: http://dennissiluk.tripod.com
Article Source: http://EzineArticles.com/?expert=Dennis_Siluk_Ed.D.
Dennis Siluk Ed.D. - EzineArticles Expert Author
Tuesday, May 6, 2008
Federalist, No. 7
Monday, May 5, 2008
Say What! Hillary and Economics---Free Gas or Gasbag?
By now, I am sure that Hillary Clinton's "scheme" to save us poor consumers at the pump from the avarice of the big, bad oil companies has been thoroughly sliced and diced on the political blogs. I won't go into a detailed debunking of Hillary's plan, other than to state the obvious: Hillary is full of it!
The basics of her "scheme" are that she proposes to suspend the federal tax on gasoline so that we consumers won't have to pay it at the pump and then have the big oil companies pay the tax themselves. That should fatten our wallets, give us a chance to fill up the tank, and to pay off the entire national debt at the same time, right? Wrong!
What Hillary fails to understand about economics (her judgment being clouded by the fog of politics), and the way businesses do business, is that a cost incurred by a business is usually passed along to consumers in the price they pay for the good or service that the business is providing! The federal gasoline tax is not a cost that Big Oil is incurring and therefore adding on to each gallon of gas because Big Oil is not currently paying the tax as a cost to its business! It is big, bad federal government which is adding that cost to the price of a gallon of gasoline, not big, bad oil companies!
So, what exactly will happen to the price of a gallon of gasoline at the pump if the payment of the tax is shifted off the consumer and onto Big Oil? The price will stay the same! That is because Big Oil will add the cost of the tax it is paying into the price it charges for the delivery of a gallon of gasoline to the wholesalers, who will in turn factor that cost into their retail price at the pump. And who will end up paying the cost of the tax reflected in the price? The consumer!
Tom Firey, the author of the article linked below, sums up the effect of Hillary's illogic nicely when he writes:
"Because she intends for the windfall profits tax to generate the same revenue as the gas tax, the windfall profits tax will have the same effect on gasoline supply, demand, and price as the current gas tax. The only difference is that the gas tax is transparent to consumers while the windfall profits tax is not. Voilà — the gas tax seems to disappear, but gas prices stay the same and the government still gets its money."
But, Alas! I mistake! For, not only will the price of a gallon of gas remain the same thanks be to the federal government for adding to its increase by imposing the federal gasoline tax; but through its inflationary policies, the federal government will assure us that the price of gasoline will continue to rise as the purchasing power of our devaluing currency continues to fall!
What Hillary is proposing is a shell game, smoke and mirrors! And in the end, as with all shell games, it is the sucker (consumer) and not the con-artist (politician) who gets taken!
Anyway, here is Mr. Firey's complete article on the subject, with a nice analysis of the factors influencing the price of gasoline. Please read it here at Cato Institute.
The basics of her "scheme" are that she proposes to suspend the federal tax on gasoline so that we consumers won't have to pay it at the pump and then have the big oil companies pay the tax themselves. That should fatten our wallets, give us a chance to fill up the tank, and to pay off the entire national debt at the same time, right? Wrong!
What Hillary fails to understand about economics (her judgment being clouded by the fog of politics), and the way businesses do business, is that a cost incurred by a business is usually passed along to consumers in the price they pay for the good or service that the business is providing! The federal gasoline tax is not a cost that Big Oil is incurring and therefore adding on to each gallon of gas because Big Oil is not currently paying the tax as a cost to its business! It is big, bad federal government which is adding that cost to the price of a gallon of gasoline, not big, bad oil companies!
So, what exactly will happen to the price of a gallon of gasoline at the pump if the payment of the tax is shifted off the consumer and onto Big Oil? The price will stay the same! That is because Big Oil will add the cost of the tax it is paying into the price it charges for the delivery of a gallon of gasoline to the wholesalers, who will in turn factor that cost into their retail price at the pump. And who will end up paying the cost of the tax reflected in the price? The consumer!
Tom Firey, the author of the article linked below, sums up the effect of Hillary's illogic nicely when he writes:
"Because she intends for the windfall profits tax to generate the same revenue as the gas tax, the windfall profits tax will have the same effect on gasoline supply, demand, and price as the current gas tax. The only difference is that the gas tax is transparent to consumers while the windfall profits tax is not. Voilà — the gas tax seems to disappear, but gas prices stay the same and the government still gets its money."
But, Alas! I mistake! For, not only will the price of a gallon of gas remain the same thanks be to the federal government for adding to its increase by imposing the federal gasoline tax; but through its inflationary policies, the federal government will assure us that the price of gasoline will continue to rise as the purchasing power of our devaluing currency continues to fall!
What Hillary is proposing is a shell game, smoke and mirrors! And in the end, as with all shell games, it is the sucker (consumer) and not the con-artist (politician) who gets taken!
Anyway, here is Mr. Firey's complete article on the subject, with a nice analysis of the factors influencing the price of gasoline. Please read it here at Cato Institute.
Sunday, May 4, 2008
Pulling a Tiger Out of the Hat
In a recent article, Gary North compares Federal Reserve Chairman, Ben Bernanke to a master illusionist, practicing sleight of hand. Mr. North writes :
"The illusionist relies on his ability to get the audience to look at one thing while he manipulates something else.
The stage illusionist doesn't harm anyone. Any illusionist who harmed people would be written out of the guild. That's why the Federal Reserve has never been able to gain membership, despite its consummate mastery at getting the audience to look somewhere else than where the FED is doing the manipulating."
The illusionist draws away his audience's attention by means of clever distraction. According to Mr. North, this is just what Chairman Bernanke and the Fed have been doing! They have been framing the current economic crisis in terms of liquidity, when the real issue is insolvency! Mr. North continues:
"The FED is not supplying the banking system with liquidity. It is instead providing public band-aids for banks facing insolvency or at least a contraction of their lending ability due to reduced balance sheets. The FED is trying to persuade decision-makers in an illiquid commercial banking system that the FED stands ready to bail out any toppling firm whose bankruptcy threatens the entire payments system with gridlock. This is what Greenspan a decade ago called cascading cross defaults."
This is the very point that Chris Klein was making with his article I posted here, and which can be found in more detail on his blog Wreckonomics.
Mr. North's article can be found in its entirety here.
This current crisis goes beyond the shores of the good 'ol U.S.A., as well. For an international flavor, I encourage you to check out this article. The level of state secrecy shows just how dangerous and fragile the current situation is. There are murmurings being sent out from the halls of power here, amplified by the lackey press, that all is well. The storm has been weathered and safe harbor is in sight. But, don't be fooled! It is just another illusionary sleight of hand!
P.S. As a point of reference when you read the figures in the article from England, where the number given is in pounds double that number to arrive at roughly the dollar equivalent (e.g., 50bn pounds is roughly equal to 100bn dollars, where bn=billion).
"The illusionist relies on his ability to get the audience to look at one thing while he manipulates something else.
The stage illusionist doesn't harm anyone. Any illusionist who harmed people would be written out of the guild. That's why the Federal Reserve has never been able to gain membership, despite its consummate mastery at getting the audience to look somewhere else than where the FED is doing the manipulating."
The illusionist draws away his audience's attention by means of clever distraction. According to Mr. North, this is just what Chairman Bernanke and the Fed have been doing! They have been framing the current economic crisis in terms of liquidity, when the real issue is insolvency! Mr. North continues:
"The FED is not supplying the banking system with liquidity. It is instead providing public band-aids for banks facing insolvency or at least a contraction of their lending ability due to reduced balance sheets. The FED is trying to persuade decision-makers in an illiquid commercial banking system that the FED stands ready to bail out any toppling firm whose bankruptcy threatens the entire payments system with gridlock. This is what Greenspan a decade ago called cascading cross defaults."
This is the very point that Chris Klein was making with his article I posted here, and which can be found in more detail on his blog Wreckonomics.
Mr. North's article can be found in its entirety here.
This current crisis goes beyond the shores of the good 'ol U.S.A., as well. For an international flavor, I encourage you to check out this article. The level of state secrecy shows just how dangerous and fragile the current situation is. There are murmurings being sent out from the halls of power here, amplified by the lackey press, that all is well. The storm has been weathered and safe harbor is in sight. But, don't be fooled! It is just another illusionary sleight of hand!
P.S. As a point of reference when you read the figures in the article from England, where the number given is in pounds double that number to arrive at roughly the dollar equivalent (e.g., 50bn pounds is roughly equal to 100bn dollars, where bn=billion).
Friday, May 2, 2008
Federalist, No.6
Sunday, April 27, 2008
Foreign Policy of Liberty
Mr. President What About Foreign Policy?
By Warren Cooley Platinum Quality Author
Our Foreign policy is antiquated and driven by economics and our dependence on energy from foreign soil. We are beginning today to reconcile our policies with the conditions as they exist in the world today. Huge centers of population, namely China and India are emerging as modern strong economies. Nearly half of the world’s population stands at the edge of rapid economic development. The pressure this will put on the earths natural resources can not be calculated with any measure of accuracy. However, we can already see that a foreign policy that seeks to dominate is no longer workable. Our foreign policy must be centered on cooperating, innovating, and trading for the resources required to sustain wealth and our standard of living. It is only by pulling the emerging economies up we can sustain our leadership in the world.
The tradition of these United States is as a beacon of hope, liberty and freedom for countries around the world. A foreign policy that seeks to allow this beacon to shine into the dark corners of the world can only do so by example. Our foreign policy should shift from being one concerned with exerting influence to one that influences by example. Clearly more freedom and liberty promotes the emergence of human potential. Our foreign policy should reflect our interests in the growth of freedom and liberty but never seek to impose these values on another nation. Our foreign policy must be consistently constrained to withdrawing support from nations, regions or groups that do not share our interest for the growth of human freedom and liberty. At the same time, we should seek always to keep open official pathways for dialogue and negotiation. It makes sense to withdraw from trade and exchange relationships but maintain diplomatic channels for discourse.
Where we have allowed our nation to fall into unhealthy relationships because of a dependence on foreign material resource or goods we should seek to immediately rebalance these relationships and rehabilitate ours selves from unhealthy dependence. This should be done not just to curb an unhealthy dependence but more to reclaim the freedom and liberty that we have given over to poor judgment. If for example, we choose to drastically cut our imports of oil from the Middle East or consumer goods from China. It is not because we do not want trade and relationships with these countries. It is because we want back the freedom and liberty that was ours before we became dependent on their goods and resources.
By demonstrating how valuable our freedom and liberty are to us. Other countries and people all over the world will be inspired to fight for their own freedom. Yes, there will be costs in this new approach to foreign policy but, could they possibly be greater then the costs we are now incurring. This path is sustainable our current path is not.
The Secretary of State has been directed to open conversations with every government that has fallen out of diplomatic favor. The Secretary of Commerce has been directed to review the entirety of our trade and economic relations. Immediately both of these departments will begin to adjust to a new chapter in foreign policy relations. We will be a country that talks with everyone about growing freedom and liberty and begins to withdraw from trade and economic relationships that do not serve the growth of our own freedom and liberty or the growth of freedom and liberty for others. We will be open to everyone but trade only with those we can trust.
About the Author: Warren Cooley is a teacher, writer, thinker and web entrepreneur. He is currently focused on clearing the cultural and social misunderstanding about the nature of love and offer a deeper more profoundly useful notion of the power of love. He invites you to visit http://www.loveaha.com. He is also beginning what he refers to as “open source research” aimed at solving the world’s energy problems by inventing a new fusion energy source and engine. Occasionally he also writes on politics and education. If you would like to contact him directly email: warcooley@comcast.net.
Article Source: http://EzineArticles.com/?expert=Warren_Cooley
By Warren Cooley Platinum Quality Author
Our Foreign policy is antiquated and driven by economics and our dependence on energy from foreign soil. We are beginning today to reconcile our policies with the conditions as they exist in the world today. Huge centers of population, namely China and India are emerging as modern strong economies. Nearly half of the world’s population stands at the edge of rapid economic development. The pressure this will put on the earths natural resources can not be calculated with any measure of accuracy. However, we can already see that a foreign policy that seeks to dominate is no longer workable. Our foreign policy must be centered on cooperating, innovating, and trading for the resources required to sustain wealth and our standard of living. It is only by pulling the emerging economies up we can sustain our leadership in the world.
The tradition of these United States is as a beacon of hope, liberty and freedom for countries around the world. A foreign policy that seeks to allow this beacon to shine into the dark corners of the world can only do so by example. Our foreign policy should shift from being one concerned with exerting influence to one that influences by example. Clearly more freedom and liberty promotes the emergence of human potential. Our foreign policy should reflect our interests in the growth of freedom and liberty but never seek to impose these values on another nation. Our foreign policy must be consistently constrained to withdrawing support from nations, regions or groups that do not share our interest for the growth of human freedom and liberty. At the same time, we should seek always to keep open official pathways for dialogue and negotiation. It makes sense to withdraw from trade and exchange relationships but maintain diplomatic channels for discourse.
Where we have allowed our nation to fall into unhealthy relationships because of a dependence on foreign material resource or goods we should seek to immediately rebalance these relationships and rehabilitate ours selves from unhealthy dependence. This should be done not just to curb an unhealthy dependence but more to reclaim the freedom and liberty that we have given over to poor judgment. If for example, we choose to drastically cut our imports of oil from the Middle East or consumer goods from China. It is not because we do not want trade and relationships with these countries. It is because we want back the freedom and liberty that was ours before we became dependent on their goods and resources.
By demonstrating how valuable our freedom and liberty are to us. Other countries and people all over the world will be inspired to fight for their own freedom. Yes, there will be costs in this new approach to foreign policy but, could they possibly be greater then the costs we are now incurring. This path is sustainable our current path is not.
The Secretary of State has been directed to open conversations with every government that has fallen out of diplomatic favor. The Secretary of Commerce has been directed to review the entirety of our trade and economic relations. Immediately both of these departments will begin to adjust to a new chapter in foreign policy relations. We will be a country that talks with everyone about growing freedom and liberty and begins to withdraw from trade and economic relationships that do not serve the growth of our own freedom and liberty or the growth of freedom and liberty for others. We will be open to everyone but trade only with those we can trust.
About the Author: Warren Cooley is a teacher, writer, thinker and web entrepreneur. He is currently focused on clearing the cultural and social misunderstanding about the nature of love and offer a deeper more profoundly useful notion of the power of love. He invites you to visit http://www.loveaha.com. He is also beginning what he refers to as “open source research” aimed at solving the world’s energy problems by inventing a new fusion energy source and engine. Occasionally he also writes on politics and education. If you would like to contact him directly email: warcooley@comcast.net.
Article Source: http://EzineArticles.com/?expert=Warren_Cooley
Saturday, April 26, 2008
On Liberty
One of the great works written about liberty, what liberty is, and how liberty is preserved was penned by Bastiat, whose "broken window" lesson we read about in the post on economics. The "broken window" scenario is what is also referred to in economics as "opportunity cost". Bastiat here in his book The Law educates us on liberty.
Walter Williams, famed economist at George Mason University, wrote in his foreward to The Law:
Many philosophers have made important contributions to the discourse on liberty, Bastiat among them. But Bastiat’s greatest contribution is that he took the discourse out of the ivory tower and made ideas on liberty so clear that even the unlettered can understand them and statists cannot obfuscate them. Clarity is crucial to persuading our fellowman of the moral superiority of personal liberty.
The Law , by Frederic Bastiat
Walter Williams, famed economist at George Mason University, wrote in his foreward to The Law:
Many philosophers have made important contributions to the discourse on liberty, Bastiat among them. But Bastiat’s greatest contribution is that he took the discourse out of the ivory tower and made ideas on liberty so clear that even the unlettered can understand them and statists cannot obfuscate them. Clarity is crucial to persuading our fellowman of the moral superiority of personal liberty.
The Law , by Frederic Bastiat
Federalist , No. 5
In Federalist ,No. 5 John Jay continues with his analysis of the benefits of a unified union and the dangers of a divided country and people.
The audio is here:
Federalist, No. 5
The audio is here:
Federalist, No. 5
Monday, April 21, 2008
On Economics
When I first began to consider politics and how politics in action is related to and affects liberty , I had never before considered the third piece of the politics-liberty puzzle: economics.
As I began to search the web for information about politics and liberty , I came across libertarianism , or classical liberalism. The more that I studied libertarianism , the ideas of voluntary exchange and maximum personal liberty , the more that it became clear to me that economics plays a central role in consideration of the other matters. They are all intertwined. For most of you this might not be a new revelation. But to me , at that time , it was.
Among the places that I landed in my searchings for subjects about politics and liberty was the Cato Institute. After reading a bit on that site , I enrolled in the Cato University; shortly thereafter , I received study materials. Among readings on liberty and libertarianism was included a book on economics. That book was Economics in One Lesson by Henry Hazlitt.
I have linked to it here at the Foundation for Economic Education website :
Economics in One Lesson
While it is available for purchase at F.E.E. , you can read the entire book at the website for free. I receive nothing from it if you should choose to purchase the book , as I am in no way affiliated with F.E.E. I have provided the link merely because I feel that it is important information for all to consider within the realm of politics , liberty , and economics. This is true of all other books that I will link to for your enjoyment at the F.E.E. site.
For those who would rather hear an audio-book reading of Economics in One Lesson it is presented in two parts.
You can listen here :
Part One
Part Two
As I began to search the web for information about politics and liberty , I came across libertarianism , or classical liberalism. The more that I studied libertarianism , the ideas of voluntary exchange and maximum personal liberty , the more that it became clear to me that economics plays a central role in consideration of the other matters. They are all intertwined. For most of you this might not be a new revelation. But to me , at that time , it was.
Among the places that I landed in my searchings for subjects about politics and liberty was the Cato Institute. After reading a bit on that site , I enrolled in the Cato University; shortly thereafter , I received study materials. Among readings on liberty and libertarianism was included a book on economics. That book was Economics in One Lesson by Henry Hazlitt.
I have linked to it here at the Foundation for Economic Education website :
Economics in One Lesson
While it is available for purchase at F.E.E. , you can read the entire book at the website for free. I receive nothing from it if you should choose to purchase the book , as I am in no way affiliated with F.E.E. I have provided the link merely because I feel that it is important information for all to consider within the realm of politics , liberty , and economics. This is true of all other books that I will link to for your enjoyment at the F.E.E. site.
For those who would rather hear an audio-book reading of Economics in One Lesson it is presented in two parts.
You can listen here :
Part One
Part Two
I have posted another Federalist : Federalist , No.4
I realize that I've been remiss while posting these important works. I haven't provided a subject-matter description of these numbers. Numbers 2 through 5 cover a very important subject ; that is , the dangers to the Union from foreign force and influences , and in this Number as is pointed out, against the American people , by the actions of their government , provoking the same. War-making and allowing foreign influences a place within the U.S. , or inviting aggression from other nations , have a profound and negative influence on the American people in all aspects of things relating to politics , liberty , and economics.
John Jay wrote in Federalist Number 4 :
"But the safety of the people of America against dangers from foreign force depends not only on their forbearing to give just causes of war to other nations, but also on their placing and continuing themselves in such a situation as not to invite hostility or insult; for it need not be observed that there are pretended as well as just causes of war....
There is great wisdom here. One mostly thinks of the U.S. going to war as a purely self-defense reaction ; a reaction to violence done against us. Here , Jay warns that not all attacks on us may arise from the natural aggressive natures of other peoples and nations. Rather , we may bring violence on ourselves.
The Law of Nations holds that each nation among the society of nations has certain rights it can claim for itself , just as there are rights among individuals within the society of his/her own nation. However , just as with individuals , if a nation will claim for itself a right it also has duties it then owes to other nations. A nation has the right to safety from aggression by other nations , so long as that nation itself remains a non-aggressor against her neighbor nations.
Nations have a duty to forebear using violence against other nations , with self-defense being an exception. If a nation will expect that no other has a right to attack her then she must give every other nation that same respect and refrain from violence and interference in the affairs of every other nation. Whatever permission one nation gives itself to do among other nations , every other nation may claim that same permission for itself to do also. Thus , if the U.S. interferes in the internal affairs of other nations or uses violence against a non-aggressor nation (as in the case of Yugoslavia a few years back)then every other nation may claim the same right of action against other nations...even against the U.S. This is the kind of "blow-back" that Ron Paul mentions.
Jay continues.....
"It is too true, however disgraceful it may be to human nature, that nations in general will make war whenever they have a prospect of getting anything by it; nay, absolute monarchs will often make war when their nations are to get nothing by it, but for the purposes and objects merely personal, such as thirst for military glory, revenge for personal affronts, ambition, or private compacts to aggrandize or support their particular families or partisans."
These forms of action are spoken of in the language of politics as "National interest." , or "National security." But, what is really meant by them is commercial interests ; interests in controlling other nations' resources. The real object behind such forays is cloaked in terms of nationalism , such that the people will not only not object to such action in behalf of private commercial interests , but will , out of a sense of either national pride (patriotism) or fear of the demonized nation against whom we must guard our "national interest" , actively and enthusiastically support or even encourage such use of violence.
I have included below links to the Federalist numbers in written form in case anyone would rather read them instead of listen to the audio book segments in my blog.
Federalist , No.1
Federalist , No.2
Federalist , No.3
I realize that I've been remiss while posting these important works. I haven't provided a subject-matter description of these numbers. Numbers 2 through 5 cover a very important subject ; that is , the dangers to the Union from foreign force and influences , and in this Number as is pointed out, against the American people , by the actions of their government , provoking the same. War-making and allowing foreign influences a place within the U.S. , or inviting aggression from other nations , have a profound and negative influence on the American people in all aspects of things relating to politics , liberty , and economics.
John Jay wrote in Federalist Number 4 :
"But the safety of the people of America against dangers from foreign force depends not only on their forbearing to give just causes of war to other nations, but also on their placing and continuing themselves in such a situation as not to invite hostility or insult; for it need not be observed that there are pretended as well as just causes of war....
There is great wisdom here. One mostly thinks of the U.S. going to war as a purely self-defense reaction ; a reaction to violence done against us. Here , Jay warns that not all attacks on us may arise from the natural aggressive natures of other peoples and nations. Rather , we may bring violence on ourselves.
The Law of Nations holds that each nation among the society of nations has certain rights it can claim for itself , just as there are rights among individuals within the society of his/her own nation. However , just as with individuals , if a nation will claim for itself a right it also has duties it then owes to other nations. A nation has the right to safety from aggression by other nations , so long as that nation itself remains a non-aggressor against her neighbor nations.
Nations have a duty to forebear using violence against other nations , with self-defense being an exception. If a nation will expect that no other has a right to attack her then she must give every other nation that same respect and refrain from violence and interference in the affairs of every other nation. Whatever permission one nation gives itself to do among other nations , every other nation may claim that same permission for itself to do also. Thus , if the U.S. interferes in the internal affairs of other nations or uses violence against a non-aggressor nation (as in the case of Yugoslavia a few years back)then every other nation may claim the same right of action against other nations...even against the U.S. This is the kind of "blow-back" that Ron Paul mentions.
Jay continues.....
"It is too true, however disgraceful it may be to human nature, that nations in general will make war whenever they have a prospect of getting anything by it; nay, absolute monarchs will often make war when their nations are to get nothing by it, but for the purposes and objects merely personal, such as thirst for military glory, revenge for personal affronts, ambition, or private compacts to aggrandize or support their particular families or partisans."
These forms of action are spoken of in the language of politics as "National interest." , or "National security." But, what is really meant by them is commercial interests ; interests in controlling other nations' resources. The real object behind such forays is cloaked in terms of nationalism , such that the people will not only not object to such action in behalf of private commercial interests , but will , out of a sense of either national pride (patriotism) or fear of the demonized nation against whom we must guard our "national interest" , actively and enthusiastically support or even encourage such use of violence.
I have included below links to the Federalist numbers in written form in case anyone would rather read them instead of listen to the audio book segments in my blog.
Federalist , No.1
Federalist , No.2
Federalist , No.3
Thursday, April 17, 2008
Show Me the Money ; Part II
In yesterday's post I wrote that people would be ill-advised to stuff their mattresses with cash in order to protect its value. Today , I provide a like to and article which shows the definite interconnectedness between politics , liberty , and economics.
As the article shows , the safest place to put your present money , given an out-of-control central bank and failing economy is in things of real value , like a home, or any other tangible good that will aid you in living when the time comes that your cash has been devalued to the point where it has more value as firewood than as a currency. When that time comes you may be very glad that you stuffed your mattress with cash ; not because you now have a ready supply of cash you can use to buy things with , but because you at least have filling for your mattress to make your bed more comfortable.
When it comes down to it , when your cash is worthless , when it takes a wheelbarrow full of dollars just to buy a slice of bread , when the wheelbarrow you use to carry the dollars in is more valuable than the sum total of all the dollars in it , you have to ask yourself ,"How will I survive? Where should I put my money now so that when that time comes I will not starve to death , or freeze to death in the streets when I am made homeless?" Well , how will you? And should you?
In my opinion , while cash has the value it does , you should be paying off your houses , paying off your credit cards , storing a supply of food and water , investing in a power generating system (solar and wind generated) , learning to grow and preserve your own food , have a wood burning stove , and the like. When the cash you earn , or have stored in your mattresses , falls in value such that you can't buy food , or pay your mortgage , or pay your electric bill , you will need to be able to live without cash. You will have to live without it. If you have a place to live , food to eat , water to drink , produce your own energy , grow your own food , etc. then the fact that the dollar is worthless and the most basic goods are priced in the trillions of dollars won't make a difference to your very survival.
Will you be able to live in luxury? Probably not. But , you will be able to live!
Is all this gloom-and-doom nothing more than an alarmist fantasy? The cogitations of a conspiracy theorist nutjob? Can it really happen? Well , my friends , it has already happened ; and , it happened to a people who didn't see it coming ; who didn't believe it was possible. But , it did come , and it was possible , and it was devastating. We are on the same road to devastation...believe it or not.
As the article shows , the safest place to put your present money , given an out-of-control central bank and failing economy is in things of real value , like a home, or any other tangible good that will aid you in living when the time comes that your cash has been devalued to the point where it has more value as firewood than as a currency. When that time comes you may be very glad that you stuffed your mattress with cash ; not because you now have a ready supply of cash you can use to buy things with , but because you at least have filling for your mattress to make your bed more comfortable.
When it comes down to it , when your cash is worthless , when it takes a wheelbarrow full of dollars just to buy a slice of bread , when the wheelbarrow you use to carry the dollars in is more valuable than the sum total of all the dollars in it , you have to ask yourself ,"How will I survive? Where should I put my money now so that when that time comes I will not starve to death , or freeze to death in the streets when I am made homeless?" Well , how will you? And should you?
In my opinion , while cash has the value it does , you should be paying off your houses , paying off your credit cards , storing a supply of food and water , investing in a power generating system (solar and wind generated) , learning to grow and preserve your own food , have a wood burning stove , and the like. When the cash you earn , or have stored in your mattresses , falls in value such that you can't buy food , or pay your mortgage , or pay your electric bill , you will need to be able to live without cash. You will have to live without it. If you have a place to live , food to eat , water to drink , produce your own energy , grow your own food , etc. then the fact that the dollar is worthless and the most basic goods are priced in the trillions of dollars won't make a difference to your very survival.
Will you be able to live in luxury? Probably not. But , you will be able to live!
Is all this gloom-and-doom nothing more than an alarmist fantasy? The cogitations of a conspiracy theorist nutjob? Can it really happen? Well , my friends , it has already happened ; and , it happened to a people who didn't see it coming ; who didn't believe it was possible. But , it did come , and it was possible , and it was devastating. We are on the same road to devastation...believe it or not.
Wednesday, April 16, 2008
An Illustrated History...Part I
Here is a video series I came across which addresses money creation and banking :
Show Me the Money! Ok , Where is it?
Here is an article I came across that I though might be of interest:
Stash The Cash
By Christopher Klein
The following is an excerpt from SafeHaven.com
Bold is my emphasis
Printing Money to Avoid Immediate Banking Collapse
"According to the Federal Reserve Board website, U.S. non-borrowed bank reserves have gone from $37B to $199M (nope, that's not a typo) in the last month. We have been discussing this with Sitka Pacific Capital's Mike 'Mish' Shedlock for the last two weeks. He concludes: "Banks in aggregate have now burnt through all of their capital and are forced to borrow reserves from the Fed in order to keep lending." Simply put, the U.S. banking system has no reserves. In addition, the FDIC has recently begun modernizing large-bank insurance rules. We hope this is a wake-up call to everyone as to the extent of the credit crisis. Bank account balances should be used only for transactions. Instead cash should be held in the form of U.S. Treasury Bills at a conservative brokerage or trust. Under the mattress is also perfectly acceptable (your parents or grandparents had to do it!). For investors, we advised last year to sell the banks. Banks will be soon forced to sell assets (yes, even 10 year Treasury Bonds) at deeply discounted prices to pay depositors."
These guys are actually recommending that you keep all your money in either CASH in your house, or by short term treasuries. Only use a bank account to pay your bills, i.e. checks or card transactions.
Also, pay attention to the first part...
"U.S. non-borrowed bank reserves have gone from $37B to $199M (nope, that's not a typo) in the last month."
This is an actual Federal Reserve statistic, and is quite alarming. What this means is that in the entire federal banking system, according to the Federal Reserve, banks ONLY HAVE 199 MILLION of "cash". Banks are required to keep a percentage of their assets as "reserves" which used to mean actual cash in the vault so that in the event of a run on the bank they have money to hand out to their depositors. The Fed regulates this percentage and it varies (slightly) day to day. If a bank does not have the required reserves, it must borrow them by either going to another bank (the overnite, or fed funds rate) or borrowing directly from the Fed. (the discount rate).
The fact that the entire banking system has now borrowed over 90 percent of it's reserve requirements from the Fed or other banks is absolutely Orwellian. It signifies more than a credit crunch. What it means is that the banking system is currently damn near out of money.
This is NOT a good sign. This is bad bad bad. I am seriously considering the mattress cash.
For this and other great commentary about the state of our economy, follow Chris Klein at Wreckonomics
---------------------------------------------------------------------------------------------------
Now, personally, I can't in good conscience advise people to either put their cash into U.S. Treasuries or stash it under their mattresses. The former course of action might be something to consider only from the standpoint that U.S. Treasuries are backed by "the full faith and credit of the United States"--for whatever that's worth. The mattress method "seriously" advocated may well be tongue-in-cheek ; I don't know. But , if it is a serious suggestion it is, in my opinion, the absolute worst thing someone can do.
In the world of economics, where money is concerned, people tend to act according to certain basic principles relating to the value of money(the medium of exchange). In the face of the declining value of money people will tend to want to use the money while it has a higher value ; they will want to use it before its value decreases below its present value.
As an example , a couple of weeks ago I had to fill up my car's gas tank. This was when the price of a barrel of oil was "sky-rocketing" and gold was over $1,000 an ounce. I thought to myself, "Should I fill up the tank or only fill it half-way to save myself some money , since gas prices had gone up a bit?" I decided to fill it up all the way. Why? Because I thought, "If I fill up only half-way at today's price and prices are higher the next time I go to put gas in the tank , even if I only fill up half-way again , the same amount of gas will cost me more money."
In the face of higher future prices , I decided to buy(spend) all the gas (good) I could now because I thought prices would go higher in the future and my money would buy less of the same good then. Had I decided to only fill up the tank half-way I would have , in effect , been stashing money(the money not spent in filling up the second half of the tank)under my mattress--assuming I did not spend the money saved on some other good. And this is the reason that , in the face of the declining value of a dollar , people are ill-advised to stuff their mattresses with cash!
According to the laws of supply and demand , when you have a high demand for a good and a small supply of the good the price of the good will increase ; when you have a low demand for a good that is in great supply then you will have a decrease in the price for buying the good. When demand for and supply of a good are equal then the price of the good will remain constant--this is called equilibrium. But , in the case where a good is in a state of price equilibrium can something other than the supply of, or the demand for, the good itself cause prices to rise? Yes! The supply of money (cash)...in our present situation, as the Federal Reserve prints more and more, the increasing supply of money.
As the supply of money goes up the value of each unit (dollar) of money goes down. As the value of each unit of money goes down it takes more units of money to buy a good. If I have one dollar now and the Federal Reserve prints and circulates enough additional dollars to decrease the value of the dollar I now hold in my hand by ten cents then the current value of the dollar I hold is now 90 cents. The supply of a certain good in equilibrium has not gone up ; the demand for that good has not gone up ; but , because my dollar is now worth 10% less than what it was before , it will take more money to buy the same good! The price of the good , in terms of money , will be greater! This is inflation. Inflation (higher prices for goods) happens because the value of money goes down.
You can't protect the value of your cash (its buying power) by hiding it in your mattress. Why? Because all the time that your cash in sitting there the Federal Reserve is printing and circulating more and more into the system--more importantly ,thanks to fractional reserve banking , banks are creating more and more money from thin air--devaluing the buying power of your cash. Let's say that you stash the cash for three years ; all the while the Federal Reserve is printing and printing cash , which devalues the dollar at 3% each year. At the end of the three years you dig out some cash from your mattress to buy some food. What once cost you $1 three years ago now costs you $1.09! To your astonishment , you find that you now have to pay 9% more for food than you did three years ago! This is inflation on a small scale!
In Part II of this post (coming tomorrow) take a look at a real world example of what a central bank , like the Federal Reserve , can do to the value of money in a very short period of time.
Stash The Cash
By Christopher Klein
The following is an excerpt from SafeHaven.com
Bold is my emphasis
Printing Money to Avoid Immediate Banking Collapse
"According to the Federal Reserve Board website, U.S. non-borrowed bank reserves have gone from $37B to $199M (nope, that's not a typo) in the last month. We have been discussing this with Sitka Pacific Capital's Mike 'Mish' Shedlock for the last two weeks. He concludes: "Banks in aggregate have now burnt through all of their capital and are forced to borrow reserves from the Fed in order to keep lending." Simply put, the U.S. banking system has no reserves. In addition, the FDIC has recently begun modernizing large-bank insurance rules. We hope this is a wake-up call to everyone as to the extent of the credit crisis. Bank account balances should be used only for transactions. Instead cash should be held in the form of U.S. Treasury Bills at a conservative brokerage or trust. Under the mattress is also perfectly acceptable (your parents or grandparents had to do it!). For investors, we advised last year to sell the banks. Banks will be soon forced to sell assets (yes, even 10 year Treasury Bonds) at deeply discounted prices to pay depositors."
These guys are actually recommending that you keep all your money in either CASH in your house, or by short term treasuries. Only use a bank account to pay your bills, i.e. checks or card transactions.
Also, pay attention to the first part...
"U.S. non-borrowed bank reserves have gone from $37B to $199M (nope, that's not a typo) in the last month."
This is an actual Federal Reserve statistic, and is quite alarming. What this means is that in the entire federal banking system, according to the Federal Reserve, banks ONLY HAVE 199 MILLION of "cash". Banks are required to keep a percentage of their assets as "reserves" which used to mean actual cash in the vault so that in the event of a run on the bank they have money to hand out to their depositors. The Fed regulates this percentage and it varies (slightly) day to day. If a bank does not have the required reserves, it must borrow them by either going to another bank (the overnite, or fed funds rate) or borrowing directly from the Fed. (the discount rate).
The fact that the entire banking system has now borrowed over 90 percent of it's reserve requirements from the Fed or other banks is absolutely Orwellian. It signifies more than a credit crunch. What it means is that the banking system is currently damn near out of money.
This is NOT a good sign. This is bad bad bad. I am seriously considering the mattress cash.
For this and other great commentary about the state of our economy, follow Chris Klein at Wreckonomics
---------------------------------------------------------------------------------------------------
Now, personally, I can't in good conscience advise people to either put their cash into U.S. Treasuries or stash it under their mattresses. The former course of action might be something to consider only from the standpoint that U.S. Treasuries are backed by "the full faith and credit of the United States"--for whatever that's worth. The mattress method "seriously" advocated may well be tongue-in-cheek ; I don't know. But , if it is a serious suggestion it is, in my opinion, the absolute worst thing someone can do.
In the world of economics, where money is concerned, people tend to act according to certain basic principles relating to the value of money(the medium of exchange). In the face of the declining value of money people will tend to want to use the money while it has a higher value ; they will want to use it before its value decreases below its present value.
As an example , a couple of weeks ago I had to fill up my car's gas tank. This was when the price of a barrel of oil was "sky-rocketing" and gold was over $1,000 an ounce. I thought to myself, "Should I fill up the tank or only fill it half-way to save myself some money , since gas prices had gone up a bit?" I decided to fill it up all the way. Why? Because I thought, "If I fill up only half-way at today's price and prices are higher the next time I go to put gas in the tank , even if I only fill up half-way again , the same amount of gas will cost me more money."
In the face of higher future prices , I decided to buy(spend) all the gas (good) I could now because I thought prices would go higher in the future and my money would buy less of the same good then. Had I decided to only fill up the tank half-way I would have , in effect , been stashing money(the money not spent in filling up the second half of the tank)under my mattress--assuming I did not spend the money saved on some other good. And this is the reason that , in the face of the declining value of a dollar , people are ill-advised to stuff their mattresses with cash!
According to the laws of supply and demand , when you have a high demand for a good and a small supply of the good the price of the good will increase ; when you have a low demand for a good that is in great supply then you will have a decrease in the price for buying the good. When demand for and supply of a good are equal then the price of the good will remain constant--this is called equilibrium. But , in the case where a good is in a state of price equilibrium can something other than the supply of, or the demand for, the good itself cause prices to rise? Yes! The supply of money (cash)...in our present situation, as the Federal Reserve prints more and more, the increasing supply of money.
As the supply of money goes up the value of each unit (dollar) of money goes down. As the value of each unit of money goes down it takes more units of money to buy a good. If I have one dollar now and the Federal Reserve prints and circulates enough additional dollars to decrease the value of the dollar I now hold in my hand by ten cents then the current value of the dollar I hold is now 90 cents. The supply of a certain good in equilibrium has not gone up ; the demand for that good has not gone up ; but , because my dollar is now worth 10% less than what it was before , it will take more money to buy the same good! The price of the good , in terms of money , will be greater! This is inflation. Inflation (higher prices for goods) happens because the value of money goes down.
You can't protect the value of your cash (its buying power) by hiding it in your mattress. Why? Because all the time that your cash in sitting there the Federal Reserve is printing and circulating more and more into the system--more importantly ,thanks to fractional reserve banking , banks are creating more and more money from thin air--devaluing the buying power of your cash. Let's say that you stash the cash for three years ; all the while the Federal Reserve is printing and printing cash , which devalues the dollar at 3% each year. At the end of the three years you dig out some cash from your mattress to buy some food. What once cost you $1 three years ago now costs you $1.09! To your astonishment , you find that you now have to pay 9% more for food than you did three years ago! This is inflation on a small scale!
In Part II of this post (coming tomorrow) take a look at a real world example of what a central bank , like the Federal Reserve , can do to the value of money in a very short period of time.
Sunday, April 13, 2008
War , What is it Good For?
The expansion of government power and control , that's what!
The ideals of liberty deal with many subjects ; but, one of the most important subjects in human relations is that of the use of violence against others. It is so because when this right is violated it can deprive each of us of the most basic right--life--which when trespassed renders all other rights useless. Stating the obvious , when you are dead neither politics , liberty , nor economics matter.
Without going into too much detail about the law , of course violence when used by one individual against another is justified , even when death results , when the person using the violence is doing so in defense of his own life , or in defense of another's life. It used to be the case , and is still absent government , that people could use violence against others to regain property stolen from them. This is called "private justice". The nature of some humans , being what it is , where people are left without government and everything is based on voluntary exchange , there are those who will take by force-rob. Absent government the "victim" of the robbery was left with two choices : 1. Forget about his stolen property , or 2.Use whatever force he needed to (private justice)in order to get his property back. While it certainly was a right , the use of private justice in society isn't necessarily a good thing. Not only does it put society at risk of constant private feuds , acts of revenge and retaliation , but the victim (whether he is weaker or stronger than the offender) has to put his life or health at risk in exercising private justice while trying to get his property back. That is where men (ok , and women) thought that it would be best for government to step in.
Jefferson wrote about government in the Declaration of Independence , writing "That to secure these rights,...(life , liberty and the pursuit of happiness)..." Governments are instituted among Men, deriving their just powers from the consent of the governed,..." Rather than expose themselves to the risks of exercising private justice , men instituted government to secure to themselves these rights , among other things , in property ; they gave over their rights to private justice by consenting to give that power to the government they instituted for that purpose. The government now exercised public justice , employed courts of law and justice to settle matters in dispute , and established its own institutions to employ force to carry out its judgments when a violator of another's rights would not yield. The government also necessarily was given the power to extend its use of force in our defense against other nations.
In giving government this power to employ force we not only gave away a right in ourselves of using violence in private justice , but we most certainly set ourselves up for the government to be able to use force in others ways , both against ourselves and other nations , that we surely did not intend. This is why the Founders tried to make it very clear that the government was to one of limited powers , that war must be declared , that the branches of government were to be divided , and that the government was put on notice in the ten amendments to the Constitution that the People's fundamental rights were to be respected. It wasn't enough!
As government is made up of human beings , many for whom power and control over their fellows is an aphrodisiac , the potential always exists for the fatal error to come to pass in giving over our rights to these individuals , who act as agents government. The danger is that individuals who might , absent government , be the very ones trespassing against the rights of others may get elected to government office and now have the force of the state at their beck and call to help them carry out their private ambitions. Rather than employing force in the defense of the governed , these individuals now employ force at the expense of the liberty and security of those who gave up their right to private justice in exchange for government protection.
What has been the result? The men and women--not some faceless creature called the "Government"--have employed force in ways that we did not intend , and that to our detriment. In his book Libertarianism : A Primer David Boaz tells us how government uses fear and violence to take from us our liberty , not just in the area of politics and economics , but control over our very lives.
Judge Andrew Napolitano has quite a bit to say about government's expansion of its power over us during times of "war" in the following 3 part video series. The series actually consists of 4 vids , but the first really isn't content specific rich so I just included the relevant parts. :
The ideals of liberty deal with many subjects ; but, one of the most important subjects in human relations is that of the use of violence against others. It is so because when this right is violated it can deprive each of us of the most basic right--life--which when trespassed renders all other rights useless. Stating the obvious , when you are dead neither politics , liberty , nor economics matter.
Without going into too much detail about the law , of course violence when used by one individual against another is justified , even when death results , when the person using the violence is doing so in defense of his own life , or in defense of another's life. It used to be the case , and is still absent government , that people could use violence against others to regain property stolen from them. This is called "private justice". The nature of some humans , being what it is , where people are left without government and everything is based on voluntary exchange , there are those who will take by force-rob. Absent government the "victim" of the robbery was left with two choices : 1. Forget about his stolen property , or 2.Use whatever force he needed to (private justice)in order to get his property back. While it certainly was a right , the use of private justice in society isn't necessarily a good thing. Not only does it put society at risk of constant private feuds , acts of revenge and retaliation , but the victim (whether he is weaker or stronger than the offender) has to put his life or health at risk in exercising private justice while trying to get his property back. That is where men (ok , and women) thought that it would be best for government to step in.
Jefferson wrote about government in the Declaration of Independence , writing "That to secure these rights,...(life , liberty and the pursuit of happiness)..." Governments are instituted among Men, deriving their just powers from the consent of the governed,..." Rather than expose themselves to the risks of exercising private justice , men instituted government to secure to themselves these rights , among other things , in property ; they gave over their rights to private justice by consenting to give that power to the government they instituted for that purpose. The government now exercised public justice , employed courts of law and justice to settle matters in dispute , and established its own institutions to employ force to carry out its judgments when a violator of another's rights would not yield. The government also necessarily was given the power to extend its use of force in our defense against other nations.
In giving government this power to employ force we not only gave away a right in ourselves of using violence in private justice , but we most certainly set ourselves up for the government to be able to use force in others ways , both against ourselves and other nations , that we surely did not intend. This is why the Founders tried to make it very clear that the government was to one of limited powers , that war must be declared , that the branches of government were to be divided , and that the government was put on notice in the ten amendments to the Constitution that the People's fundamental rights were to be respected. It wasn't enough!
As government is made up of human beings , many for whom power and control over their fellows is an aphrodisiac , the potential always exists for the fatal error to come to pass in giving over our rights to these individuals , who act as agents government. The danger is that individuals who might , absent government , be the very ones trespassing against the rights of others may get elected to government office and now have the force of the state at their beck and call to help them carry out their private ambitions. Rather than employing force in the defense of the governed , these individuals now employ force at the expense of the liberty and security of those who gave up their right to private justice in exchange for government protection.
What has been the result? The men and women--not some faceless creature called the "Government"--have employed force in ways that we did not intend , and that to our detriment. In his book Libertarianism : A Primer David Boaz tells us how government uses fear and violence to take from us our liberty , not just in the area of politics and economics , but control over our very lives.
Judge Andrew Napolitano has quite a bit to say about government's expansion of its power over us during times of "war" in the following 3 part video series. The series actually consists of 4 vids , but the first really isn't content specific rich so I just included the relevant parts. :
An Introduction to Ludwig von Mises
In the areas of liberty and economics there are two great , yet disparate , schools of economic thought : The Keynesians (proponents of the theories of John Maynard Keynes) and those of the Austrian School (followers of the theories of Carl Menger , and later Ludwig von Mises). In our present environment in the U.S. the Keynesians hold the upper hand , and it is , by and large , the theories of the Keynesian school we see in operation. The main theory of the Keynesians is that the government could inject itself into economic activities via policies and regulation such that it could stimulate demand , keep unemployment and deflation in check , and make things all-around hunky-dory. Government can do these things in just the way we see it , through the Federal Reserve (which is not a federal agency) and through governmental departments , being done today.
The Austrian School thought runs counter to the Keynesians in that it looks to individual human action (praxaeology , as Mises called it) in which it is entrepreneurship , among other things , absent government interference in the activities of exchange between individuals , which makes for a truly free and health economy. This is a rather incomplete and simplistic explanation of things , but it is a start.
I've included a video biography introducing Ludwig von Mises here :
The Austrian School thought runs counter to the Keynesians in that it looks to individual human action (praxaeology , as Mises called it) in which it is entrepreneurship , among other things , absent government interference in the activities of exchange between individuals , which makes for a truly free and health economy. This is a rather incomplete and simplistic explanation of things , but it is a start.
I've included a video biography introducing Ludwig von Mises here :
The Beginning
First of all , welcome to my blog!
This is a new adventure for me , as I have never tried blogging before. Though I am late to the game , I am excited about giving this a try and sharing my thoughts about politics , liberty , and economics here with all of you who share the same interests. Although these may seem disparate subjects , as you know, all of these are intertwined and interrelated.
A very brief bit about my own journey is seen in my profile " about me" segment. As time goes on , I will sparingly interject my own thoughts and opinions about the subject matter of my blog , but rather than trying to re-invent the wheel it is my intention to post here articles and subject matter already addressed by the giants in these respective areas. These men and women of throughout the ages have already expressed these ideas far more capably than I ever could. I think it is wisdom to let them do the teaching , while my object will be , for the most part , to merely present them to you here for your edification.
Here you will find free e-books , links , and video on various subjects related to politics , liberty , and economics. I will certainly be engaged in writing about my own impressions of these things , of current events , and in reply to your comments. I look forward to your comments and input here and hope that we can have some interesting , informative and lively discussions here.
Lastly , all are welcome here. The exchange of differing ideas is what makes life interesting ; though I am of a classical liberal mind-set , I am very much welcoming of my "liberal" friends of the "left", with the hope that I can teach you a thing or two to bring you around to the right way of thinking! Still , in the interest of being "fair and balanced" , among the links here you will find one to my sister's blog " They Get Letters". Julie is what I call "A flaming liberal" , but I still love her...and even agree with many of her views!
Warning: Julie can sometimes be very colorful with her language (viz. , she sometimes swears like a drunken sailor!).
With this said , let the beginning begin!
This is a new adventure for me , as I have never tried blogging before. Though I am late to the game , I am excited about giving this a try and sharing my thoughts about politics , liberty , and economics here with all of you who share the same interests. Although these may seem disparate subjects , as you know, all of these are intertwined and interrelated.
A very brief bit about my own journey is seen in my profile " about me" segment. As time goes on , I will sparingly interject my own thoughts and opinions about the subject matter of my blog , but rather than trying to re-invent the wheel it is my intention to post here articles and subject matter already addressed by the giants in these respective areas. These men and women of throughout the ages have already expressed these ideas far more capably than I ever could. I think it is wisdom to let them do the teaching , while my object will be , for the most part , to merely present them to you here for your edification.
Here you will find free e-books , links , and video on various subjects related to politics , liberty , and economics. I will certainly be engaged in writing about my own impressions of these things , of current events , and in reply to your comments. I look forward to your comments and input here and hope that we can have some interesting , informative and lively discussions here.
Lastly , all are welcome here. The exchange of differing ideas is what makes life interesting ; though I am of a classical liberal mind-set , I am very much welcoming of my "liberal" friends of the "left", with the hope that I can teach you a thing or two to bring you around to the right way of thinking! Still , in the interest of being "fair and balanced" , among the links here you will find one to my sister's blog " They Get Letters". Julie is what I call "A flaming liberal" , but I still love her...and even agree with many of her views!
Warning: Julie can sometimes be very colorful with her language (viz. , she sometimes swears like a drunken sailor!).
With this said , let the beginning begin!
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