Reading on a Saturday Morning yet again ..... we never seem to learn.
If you're in a good mood just go somewhere else.
This is some fairly seriously depressing shit right here.
All of the following excerpts link to the full article, most of the charts link up to stuff as well.
I have no confidence in paper money of any kind; or the promises of any and all governments and their employees. The relative safety of one kind of paper as against another is of no importance...What worries me most is the incredible prevalence of official lying, delusion, ignorance and dishonesty ... It's a whole gang of crooks in a system that encourages and rewards fraud ... It isn't just the fact that money is nothing but confidence. Edelweiss Journal
"Here in Europe, the Greek government is helping itself to its citizens’ bank accounts; the Italian government is working with banks to freeze customers out of their accounts without warning. Spanish police are embroiled in a bloody struggle against bazooka-wielding workers who are protesting austerity measures. EU leaders in Brussels have announced their intention to impose capital controls as part of a ‘rescue plan’. This is today’s reality. It can happen here, it probably will happen here. And frankly, it’s all unfolding almost exactly as it has so many times before throughout history:
1. A nation rises to greatness and becomes wealthy based on sound principles and the hard work of initial generations.
2. Eventually, being wealthy becomes the natural expectation… an entitlement, rather than a goal to work hard for and achieve.
3. A nation begins living beyond its means to maintain the high life without the hard work, leveraging its credibility to trade tomorrow’s production for today’s consumption.
4. Living beyond its means eventually becomes unsustainable. Government begins to slowly, then staggeringly, devalue its currency.
5. The market (i.e. people) finally wake up to the fraud being perpetrated.
6. Financial repression usually follows– high taxes which steal from the productive, negative real interest rates which steal from the savers, etc.
7. Capital flight comes next. People take their money and run.
8. Governments implement capital controls, border controls, price and wage controls, and anything else they can do to maintain the status quo. People find out who the police are really there to protect and serve.
9. Capitulation (default) is the endgame; the system resets itself and begins anew.
"This is nothing new. From the 3rd Dynasty of Ur (2000 BC) to Medieval Venice to the familiar stories of Rome and the Ottoman Empire, the world is full of monuments to the past greatness of failed civilizations. We’re seeing the same pattern unfolding now. And sure, anything’s possible. Maybe the skies open up and the unicorns come out to play and the whole world manages to fix itself without skipping a beat. But let’s live in reality: there are consequences when nations go bankrupt. And nearly every western nation on the planet is insolvent. That is a fact. Simon Black
Red is cities and counties, black is municiple utilities and other government entities.
America's transition into a welfare state continues, as May saw a new all time high number of American households, 22.3 million to be exact, enter technical poverty and collect foodstamps. At the individual level, 46.5 million Americans lived off foodstamps, a 222,157 increase in the month, or nearly three times the number of people who found jobs in June according to the BLS. Next month this too will be a record, as it is currently just 17,367 before the previous all time high set in December of 2011. The good news, and we use the term loosely, is that the average benefit per household rose from all time lows of $275.82 to $276.76. Surely, the bottom is in and just like housing, there is on blue skies ahead.
“If the bond ever starts falling in price, they unwind the carry trade…Then you get a message, ‘Do not pass go.’ Sell your bonds, unwind your overnight debt, your repo positions. And the system then begins to contract – exactly what happened in September and October of 2008. That was a minor trial run for the great unwind that is going to happen when the Treasury market is finally shattered with a lack of confidence because, on the margin, no one owns a Treasury bond: they just rent it on borrowed money. If the price starts falling, they’ll get out of that trade as fast as they got out of toxic CDOs ...
“The Fed has destroyed the money market. It has destroyed the capital markets...And you can’t have capitalism if the capital markets are dead, if the capital markets are simply a branch office – branch casino – of the central bank. That’s essentially what we have today...They are monetary central planners who are attempting to use the crude instrument of interest-rate pegging and yield-curve manipulation and essentially buying debt that no one else would buy, in order to keep this whole system afloat. It’s Ponzi economics...
“There are 25 million households in America who couldn’t move if they wanted to, because their mortgages are under water. They cannot generate a down payment and the 5% or 6% broker fee that you need to move. So we’ve got 25 million households immobilized, paralyzed, and worried every day about when they are going to lose property, because of what the Fed did. It’s a terrible indictment...It’s policy. If we don’t do something about the Fed, if we don’t drive the Bernankes and the Dudleys and the Yellens and the rest of these lunatic money-printers out of the Federal Reserve and get it under the control of people who have at least a modicum of sanity, we are just going to bury everybody deeper...
“As a result of that you have a doomsday machine. As I was saying when the great margin call comes and they start selling the Treasury bond, they’ll take everything else with it. Real estate is priced off Treasuries. Mortgaged-backed securities are priced off Treasuries. Corporates are priced off Treasuries. Junk bonds are priced off Treasuries. Everything. The stock market will go into a panic...
“The only thing I think you can conclude is preservation is the only thing you are about as an investor. Forget about yield. Forget about return. Just keep yourself liquid and preserve your capital, because you can’t predict the day when, as I say, the great margin call in the sky comes down.“ – David Stockman, Former Director OMB under Reagan
"The state is a thug. Basically, it relies upon two things to elicit cooperation from people in order to ‘convince' them to surrender their rights and wealth. The first is the myth of legitimacy; this is the notion that an electoral process or a hereditary line-of-succession or 'fill in the blank' establishes an elite group who consist of politicians and those with political pull. These elite individuals somehow have the ‘right' to tell other individuals what to say and what to do with their own body. They live by a double standard. Theft is wrong except if done by them in the form of taxation. Killing innocent people is wrong except if done by them in the war against terrorism.
Today the myth of legitimacy is being widely seen for what it is: a myth. Every day, fewer and fewer people believe in the legitimacy of the elites. And without that myth, their actions are being seen for what they are: a vicious double standard that excuses theft and murder. This means the state has to increasingly use the second method by which it elicits your cooperation: raw force or the threat thereof. And a sure sign that the elites have lost legitimacy and know it is the fact that they are becoming more violent toward their own citizenry by the hour...
My purpose is the business of living ... by privatizing your own life, you make the state increasingly irrelevant, which is what politicians fear most. They are desperate to be part of our lives, to teach our children, to regulate our work, to read our messages and hear our phone calls, to dictate our medical choices ... And the most effective personal response when the State knocks at your door may well be to not answer even by the act of raising your fist." - Wendy McElroy, Whiskey & Gunpowder,
"The false premise which guides their decisions is that we can all grow wealthy by borrowing and consuming, instead of by producing and saving. People have been sold this lie for more than a generation. It is embedded in social DNA. In the current western economic system, you are rewarded for going into debt with all sorts of tax deductions. Save money, on the other hand, and you are punished through taxation and inflation. The incentives are all wrong; [unless the diabolical purpose is to enslave the masses] it’s no wonder that people have over-borrowed and overspent given that the system is so blatantly slanted to promote such behavior.
"Housing is one of the most interesting examples of bad incentives: tax policy in many countries encourages people to take out debilitating mortgages, and governments end up with a moral imperative to ensure home prices continue rising. This strikes me as truly bizarre. You’d think people would want housing costs to stay low and affordable, not rise. Nobody cheers when the price of healthcare goes up, even though they could just as easily profit by investing in any number of insurance companies. I don’t click my heels when the price of food goes up in the grocery store, even though we’ve been paid handsome sums from the bountiful harvests of our farm in central Chile. And let’s not forget how much turmoil ensues when gasoline prices get too high. Why should housing be any different? For the vast majority of people, a house isn’t wealth. It’s an expense. And wishing for this expense to increase is both foolish and destructive. Yet most politicians and central banksters in the west are frantically fanning the flames of broken housing markets, desperately trying to re-inflate prices.
"Here in Portugal, for example, housing prices have fallen dramatically. Housing has become affordable. Cheap, even. This is a good thing. Yet the bureaucrats keep trying to figure out ways to ‘prop up the housing market’ and distort prices, often through policy that is very unfriendly to homeowners. In the United States, the Federal Reserve keeps ratcheting down long-term interest rates and scooping up mortgage bonds in an attempt to re-inflate home prices.
"With so many Nobel Prize-winning economists backing these kinds of policies, it’s clear that the people in charge haven’t even begun to acknowledge the flaws in their intellectual framework. And if you can’t even admit that you have a problem, then you are light years away from solving it." - Simon Black,