Friday, January 28, 2011

The End Game Begins

Recent postings and comments here as well as on other sites appear to be assuming a somber note. Can it be that the citizenry is at last awakening to the precarious nature of Western culture in general and the American empire specifically? We are now beginning to hear even the "One" speak of the "unsustainability" of our present economic and financial direction. However, can he be taken seriously when in the next breath he proposes we "invest" additional (borrowed) treasure in a rail scheme which has already been proven bankrupt?

If one does not have his head buried in either the sand or his rectal cavity he should be beginning to consider individual options for dealing with the deteriorating situation. What continues to amaze this observer is the debate on how the now ongoing collapse can be reversed by "cutting expenditures" on this or that government "program" by some miniscule sum. By miniscule, we continue to insist on defining such "cuts" as mere billions of dollars (Federal Reserve banknotes) of increases in future growth.

The time is now past when such a discussion is relevant to the real world. The Empire has begun collapsing around us and academic debate over which interest group's sacred cow is to be slaughtered and whose is to be spared serves little objective purpose. We have been overtaken by events. An example would be the back and forth over reductions in the "defense" budget. It may or may not be advisable to maintain hundreds of thousands of military personnel and hardware thousands of miles from our shores. More importantly, how can such policies be pursued when the means for supporting them is borrowed from our likely competitors? As in the later part of the fourth century Roman empire, the legions will be retreating from the periphery whether or not it pleases the emperor.

If you look at what they pay, you will think them abundant in riches, but if you look at what they actually possess, you will find them poverty stricken. Who can judge an affair of this wretchedness? They bear the payment of the rich and endure the poverty of beggars...

It now behooves individual families to consider which tools will be useful in addressing the cascading of events. The only sure wager is that the world of 5-10(?) years hence will be substantially changed from what obtains today. For example, will that hoard of gold bullion coins and bags of junk silver serve to ameliorate the dearth of what are  now considered necessities? Will we be able to defend from predators consisting of starving mobs of our fellow citizens or a desperate and dying government the meager means of continuing a brutish existence? Only those of the remnant either blessed or cursed by experiencing these most dangerous of times will be equipped to record the events for the enlightenment of future generations. Make no mistake, just as a wounded beast is the most dangerous of creatures, a dying empire is a most murderous enemy of the lives, liberty and property of its subjects.

If there is a God may he have mercy on us all. Meanwhile, keep the powder dry and sell your liberty as dearly as possible.


cross posted at: Eternity Road

Tuesday, January 25, 2011

Historic Parallels

Tonight we will be treated or subjected (depending on your viewpoint) to the Kabuki theater performance known as the "State of the Union" address by the President of the United States. Rumor has it that POTUS will be pushing for increased "investment" in national infrastructure and "research" in order to "restore" competitiveness. It is further rumored that POTUS will acknowledge the negative impact of excessive regulation on the nation's economy and in addressing the situation will impose additional regulations. In other words: "the beatings will continue until morale improves".

The President will doubtless urge the Congress to increase the national debt ceiling by at least another trillion dollars in order to "buy time" to implement "deficit reduction". Have we heard this before? Since Congress first enacted a debt ceiling has it EVER failed to raise that ceiling in order to accommodate the increased spending investment? I thought not. Why not simply repeal the so called debt ceiling and continue borrowing until our creditors finally wise up and refuse to finance the spending addiction? It is only a matter of time until the inevitable day of reckoning arrives. The question answers itself. The current political class assumes the collapse can be postponed until they are safely retired.

Additionally, there is always the Federal Reserve which will; and is arguably now acting as the lender of last resort by buying government bonds with freshly created banknotes and electronic digits.  This practice is already resulting in the inflation that government hastens daily to deny, understanding that the booboisie will eventually realize that the 2% Fed inflation target (soon to be spiraling upward) is in fact a tax. The government profits from inflation when it prints additional banknotes by being the first to spend them before their inflationary impact works its evil on the rest of the serfs. This is an ancient practice dating from at least the later Roman Empire where taxes were required to be paid in unclipped gold coins but imperial expenditures were paid in clipped or debased coins at face value.

The government schools of recent decades when deigning to teach history at all, which is increasingly rare, offer up a sanitized version of past "civilizations". These versions generally designate the fall of the western Roman empire in Europe as A.D. 476 when a descent into the "dark ages" occurred. This factual distortion conveniently obscures the economic/cultural situation which obtained in fourth and fifth century Europe.
One of the great weaknesses of standard accounts of the Middle Ages is that they compare the poverty of the provinces with the wealth of the city of Rome in the early Empire. This is completely misleading. The comparison should be between the provinces in the first century with the provinces five centuries or more later. Here, the typical serf was better off under the manorial system of the so-called "dark ages" than the slave had been in Augustus' day. Farming was more efficient, due to crop rotation. Metallurgy was more advanced. Road building was not, but the roads had been more for military control than trade.

Economic historian Robert Latouche as far back as 1956 argued that, in comparison to the heartland of Western Europe in the early Roman Empire, economic conditions were better during the dark ages. Another economic historian, Rondo Cameron, two decades ago wrote that "medieval Europe experienced a flowering of technological creativity and economic dynamism that contrasts strongly with the routine of the ancient Mediterranean world.

During the rule of the later Roman emperors citizens were legally bound to their taxing districts and sons were forced to enter the trades and occupations of their fathers. We see the beginnings of such a system today in the US where income earned outside of the country by expatriate citizens is taxed as if it were earned within the US.

Another measure of what our government has wrought is comparing the value of our (infinite) currency today to the purchasing power of a finite commodity such as gold. During the reign of Augustus Caesar in the first century an ounce of gold bought a quality robe/toga or a suit of armor.  The services of a Roman scribe-messenger could be obtained for the better part of a month for an ounce of gold. In 1910 an ounce of gold equalled US $20.00 which was the price of a quality man's suit. In 2011 an equivalent man's suit is priced at $1,300.00 about equal to an ounce of gold or the wages of an urban messenger for the better part of a month.

This is the work of the Federal Reserve Bank whose enabling act of 1913 stated its purpose as "stabilizing" the value of our currency. How's that working out?

cross posted at: Eternity Road

Tuesday, January 18, 2011

End of a "National" Monopoly?

I hope it would not be overly presumptuous of this humble blogster to assume that you, dear readers (all three of you) are aware that there are several states in this once perfect union who are in dire financial straits due to having overspent their budgets by substantial sums. California, Illinois, New York and New Jersey come immediately to mind with the attendant handwringing on the part of their spendthrift politicians.

That sigh of relief by residents of more parsimonious states who have assured themselves that the inevitable economic pain will be confined to the populations of the bankrupt states are in for a rude awakening.

The actions of the central bank, The Federal Reserve, are not controlled by a Congress who, due to the political climate revealed by last November's mid term elections may decline to bail out the spendthrift states. If Mr Bernanke elects to purchase the soon to default state and municipal bonds of these entities (naturally at face value) those bonds will soon join the worthless "assets" lounging on this or that  taxpayer guaranteed "balance sheet".

As disastrous as the above described nightmare scenario is, imagine the following: California resorts to printing "legal tender" dollars at its printing presses in Sacramento. Preposterous you say? Compare such a national disintegrating event with what we just learn is happening in the European Union:

In news reports that have thus far not attracted much attention, the Irish Central Bank has been printing euros out of thin air to prop up its ailing banks. The whole of Europe will pay for this action, as the result will be increased euro-zone price inflation. We can only imagine the reactions of Germans if this continues – though apparently the Irish action is legal from the EU's standpoint so long as the ECB is "informed" in advance and approves. As is often the case, we doubted our reaction to the news, so we went trolling the ‘Net to see if anyone shared our instinctive reaction that this was overwhelmingly bad news for the euro. Here's one comment we found:
"Wait... have I just slipped into a parallel universe? Is this some sort of early April's fools joke? Doesn't this defeat the entire point of a single currency and the ECB? Were the rules changed on the quiet without anyone noticing?"
The nations (states) who responsibly "lived within their means" will be handed the bill for profligate states' irrational policies. This is the stuff of which revolutions are made. We are indeed living in "interesting" times.

Got food and ammo?

cross posted at: Eternity Road

Thursday, January 06, 2011

US Government Bureaucracy Smuggling Guns to Mexican Drug Cartels?

A thread running through much of the reporting of violence along and mostly south of the Mexican-US border is that most of the weaponry used by the Mexican drug cartels is supplied by private sources in the US and smuggled south.
"Federal authorities say more than 60,000 U.S. guns of all types have been recovered in Mexico in the past four years, helping fuel the violence that has contributed to 30,000 deaths. Mexican President Felipe Calderon came to Washington in May and urged Congress and President Obama to stop the flow of guns south."
The Washington Post article quoted above refers as you can see to, "Federal authorities" who are charged with gathering and collating statistics relating to firearms. Enter BATFE, the Bureau of Alcohol, Tobacco, Firearms and Explosives. After examining the statistics published by the "authorities" several US gun rights groups whom the Post refers to as "the gun lobby" found several problems and inconsistencies. Firstly, only an unknown portion of the weapons seized in Mexican crimes were sent to the US for identification and the "authorities" claimed that "80-90% of them could be traced to private sources in the US e.g. licensed gun dealers. When these statistics were challenged and it was pointed out that the cartel members, especially those involved in the Acapulco Police Massacre and similar crimes prefer fully automatic weapons such as AR 16s and AK 47s which are not available from non governmental US sources, the ATF simply discontinued publishing the statistics.

Recently and since the death of a US Border Patrol agent in a shootout  in Arizona, allegations have surfaced that the source of the weapon used in the agent's death was possibly the ATF field office in Phoenix and it's attempt to "pad statistics" by transferring weaponry into Mexico without consulting the Mexican government:
    •    ATF’s Phoenix office allowed the guns to go across the border.
    •    The ATF office in Mexico was denied permission to share this information with their Mexican counterparts.  Believing this was wrong, they went over the heads of the Phoenix office and requested permission directly from headquarters in DC.
    •    The higher-ups sided with the Phoenix decision to withhold the information from Mexican authorities.
If this is true, there are some federal bureaucrats that are in need of serious jail time.

It is common knowledge that the Mexican drug cartels pay their "employees" substantially more than the Mexican military and law enforcement. Thus the desertion rate of Mexican police and military trained personnel is extremely high and these deserters take with them the issued automatic weaponry which was originally supplied by US military and law enforcement agencies.

The efforts by lapdog mainstream media and federal bureaucracies to paint gun dealers in the US as complicit in the ongoing bloodbath in Mexico is one of a piece with the gun control lobby's effort to disarm law abiding US citizens. The apparent attempt by ATF bureaucrats to pad gun trafficking statistics in order to defend their fiefdom and pursue a citizen disarmament  agenda needs to be investigated by an independent agency. It is also time to end the failed "drug war" which like most prohibitionist projects only serves to increase the price of the prohibited product thus generating lucre for criminals.

Tuesday, January 04, 2011

Déjà vu all Over Again

One of the first orders of business for the 112th Congress which will convene this week will be a debate on increasing the national debt limit. As of today the national debt surpasses $14 trillion. The statutorily imposed limit of $14.294 trillion was signed into law on 1 June 2010 a mere 7 months ago by President Obama. The president appears anxious to sign a new and increased debt limit as soon as it is passed by Congress in order to avoid what one of his advisors characterizes as a catastrophe involving a government default on its obligations and an inability to borrow more money.

The debate is likely to become contentious as "Some Republicans in the new Congress have said they'll seek to block an increase in the Debt Ceiling unless a plan is in place to significantly reduce federal spending and unfunded government liabilities on entitlement programs such as Social Security and Medicare." Your humble blogster's bluff detector has just gone off. Regardless of the sturm und drang, the political game of chicken will end with a hefty increase in the debt ceiling and the can will continue to be kicked down the road to the point of collapse wherein there will be no fools left other than the printers at Mr.Bernanke's Fed willing to bid on U.S. Treasury bonds.

Nevertheless, plan on hearing political speeches such as the following in the halls of the Capitol: 
“The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the U.S. Government can't pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government's reckless fiscal policies. … Increasing America's debt weakens us domestically and internationally. Leadership means that ‘the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.”

The above are the words of Senator Barak Hussein Obama on 20 March 2006. Boys and girls; we are in DEEP doo doo.