Austerity for thee, but not for me. or Greece, a reflection of our future.

Not Long after Barak Obama’s election Newsweek magazine emblazoned its cover with the open declaration “We’re All Socialists Now.” What they meant of course was that the election had put us firmly and irrevocably on the path to European Socialism in America and that the capitalist system as we had known it was dead and buried.


It seems however that intervening events have raised some question about that irrevocable course. The administration’s right from the start crawling in bed with the very forces that brought us to the brink of disaster in 2008, its unwillingness and/or inability to delineate never mind address the problems that created the disaster, this policy of embracing the status quo and extend and pretend had almost immediate repercussions on the political front. If the President doesn’t like this reversal of fortune or the Tea Party, maybe he should look in the mirror. Both action and inaction have consequences; it’s a beast of his own making.

Any questions about European Socialism aside I have to agree with Newsweek on one thing, capitalism as we once knew it is dead. It has been replaced with a system of crony capitalism, the government and corporate partnership, a neo-fascism or more succinctly; a kleptocracy. This is the Rosemary’s Baby born of decades of deregulation and the revolving door between the Treasury Department and the banks, particularly the Federal Reserve Bank and the Wall Street investment banks like Goldman Sachs, J.P. Morgan, HSBC and others. We now live in a system where the insiders prosper greatly and divide their pocket change between the politicians they buy through campaign contributions and the growing legions of government employees who reap salaries and benefits far beyond anything the working and taxpaying public could ever hope to earn in the private sector.

The inevitable result of what the United States has become in the macrocosm, we can see being played out in microcosm in Greece. (And soon Spain and the rest of the PIIGS.) These 1/10 of 1%ers have leached off the wealth of the nation through insider corruption, embezzlement and outright fraud. They have done so with virtual impunity as it’s their fellow kleptocrats who hold the civil and financial reins of authority.

They have taken their profits from the creation of massive piles of debt based money knowing full well that the as long as they maintained control the loans would never have be paid off. With each passing year the lender of last resort, the Federal Reserve, and the spender of last resort, the Federal government must create more debt and interest payments in excess of what was created in the previous year or deflation sets in. So make no mistake, whether it’s called QE3 or some euphemism for it, more money will be printed at an ever accelerating pace. On one end the profit statements of the FEDs primary dealers will continue to grow, the annual bonuses will be paid, and on the other end real unemployment will rise, wages will stagnate, real estate values, and home sales will continue to fall. The middle class, the self-reliant and privately employed worker, the small businesses of this world are being wiped out, and by design, to be replaced with the welfare recipient, the unionized government employee and a new Walmart on every block.

If you want to know what will happen in Congress as the day of reckoning draws closer on a debt ceiling vote, cast your eyes to Greece. Just as our banksters and politicians are desperate to maintain the illusion of American capitalism and reserve currency status, the Europeans are desperate to maintain the façade of the Euro and European unity around it. The Parliament in Athens has passed a new “austerity plan” in exchange for a new infusion of Euros. Nobody really thinks that this plan will actually be put in place or that any of the fiscal target will be met. The government will delay and put every obstacle in place to prevent privatization. Meanwhile the same government and financial elites will skim off a fat share of the proffered cash, nothing will change and there will be talk of bailout round 3 (or is it 4, I’ve lost count) before winter sets in.

It should be no surprise then that the populations are showing up in the streets. Between 30% and 40% of workers hold government jobs, at the national, provincial or local level. For decades they have selfishly bought into the false promise of ever expanding wages and benefits paid at the public’s expense. They have been played for suckers and now, to paraphrase Margret Thatcher, socialism has run out of other people’s money. Well at least other Greek’s money. The game now is to keep playing with other European’s and American’s money.

Take a look at this picture. Just last week this fat pig, I’m sorry there is no more fitting term, Greece’s Deputy Prime Minister issued a warning that if the austerity plan was not passed there would be tanks in the streets. It sounds like he is channeling Hank Paulson’s desperate pleading for the TARP package.



                               
 
I could think of no better caption than “Austerity for thee, but not for me.”


These elites, these politicians and bankers are but 1/10 of 1% of the population, if that. They are busily engaged in selling us the fraud that the other 99.9% of us must sacrifice ourselves for their survival. Whether we buy it, and if we do, for how long, remains to be seen. As I write this the Finance Ministry building in downtown Athens is ablaze. Do we really want Syntagma Square in Athens to be coming to a town near us? If we don’t send the clear message to our politicians in the next elections that the game has to stop, the banks have to be broken up and the corrupt must be tried, convicted and jailed (can you hear me Ben Bernanke, and Lloyd Blankfein, and tax cheat Tim?) then our last chance for a peaceful resolution may well be gone and the beginnings of George Orwell’s “jackboot stomping on a human face forever” in his novel “1984” may well be upon us. Finding courage is difficult, failing to find it may be disastrous.

A Government in Search of its Moment.

The reaction across the blogosphere to the establishment of this new “White House Rural Council” has been almost universally negative. In first reaction it would be easy to recall President Reagan’s warning about the nine most frightening words; “I’m from the government, and I’m here to help.” The range of adjectives that could and have been applied to this initiative range from “presumptuous” and “arrogant” on the low end and ratchet up on the scale of paranoia to “insidious” and “pernicious” on the high end.

It’s pretty hard not to see the opening salvo in the creation of yet another vast, mindless bureaucratic boondoggle as frightening in and of itself. After all one needn’t look to hard to see all the great benefits that liberal democracy and government assistance have provided to the upper mid-west. Detroit comes to mind as a most shining example.

The question that first comes to mind is just who is it that hatched this hair brained scheme in the first place? And why would anyone think that peaceful if struggling rural communities (full of “bitter clingers”) would want anything to do with the systems and methods that turned such once great places as Detroit into festering slums of poverty, violence, corruption and decay?

Is this the liberal mindset simply gone delusional? Or perhaps an administration seeing itself on the road to political ruin and grasping at creating yet one more dependent class that can be psychologically bound to government assistance? Or is there perhaps something else going on here? While the public hand is being played with this nonsense is the other hand setting us up for something even more dangerous behind the scenes?

Well, for me at least, it’s a bit hard not to become a little paranoid by what I see potentially going on here, so let me lay a few things out point by point.

On the first level there are no doubt a great many naïve liberals out there who can be sold on the notion that this is nothing more than a necessary “outreach” program to the rural “poor” in desperate need of government help. What better way to employ these vast legions of new college graduates with their worthless sociology degrees than to disperse them among the ignorant masses to spread the word of the great beneficent federal government?

On the level just below that are the equally naïve political operatives who will see and this as a opportunity to use a new bureaucracy to try and convince the “rural bumpkins” that without President Obama and his party bringing these new benefits to them they would be either lost, forgotten or somehow suffering in even worse conditions. “So just pull that straight Democrat Party lever the next time you step into the voting booth why don’t you?”

Below these two layers of camouflage we will find the real danger however. Once this little army of well meaning operatives is dispersed they, like good bureaucrats everywhere, will start generating reports about what is going on in their individual locations. Where are they being well received, where are they meeting resistance and to what degree? Once some community or communities have been identified as particularly resistant to and even resentful of yet more government interference in their lives comes the time to send in the “agent provocateur” who in the name of enforcing some new useless, meaningless and unwanted bureaucratic regulation will commit some egregious act intended to create a violent reaction. Be it a demonstration turned violent, the firebombing of some local office or better yet, from their perspective the death of some “innocent and well intentioned” federal employee. They will then have what they have truly been after; the “hard evidence of domestic terrorism” coming from the conservative “flyover country.” They will have their Horst Wessel, their martyr for the cause, (http://en.wikipedia.org/wiki/Horst_Wessel) their “burning of the Reichstag” moment. I can here it now; “Civil order must be maintained, these acts of lawlessness must not be tolerated.”

Hummmm now just what will they do with all those battle hardened troops that are being brought back from Afghanistan and Iraq? Why would they deploy them to the southern border to stem a real invasion when they can be dispatched back to their local National Guard units and then called out to suppress this “new threat?”

Yeah, yeah I know I’m just ranting like a paranoid loon here. Do I really think this bunch of stumble bums could actually pull such a stunt off? Frankly, no. That does not mean however that such machinations are beyond the mindset of the Fabian socialist, crypto-fascist, very real paranoids, inhabiting the halls of the present administration. This is after all the man who said we need a domestic security force, just as powerful and just as well funded as the military. We just had the President of the Postal Workers Union suggest that the letter carriers be made part of the Homeland Security Department. What better way to create a vast network of government spies than the recruit the very people who visit your doorstep six days a week?

The creation of this “White House Rural Council” may be just the first step. One can only hope that by shining enough disinfecting light on this disease infested cockroach of bureaucracy we can at least send it scurrying back under its rock if not kill it outright.

That said, I think that the deterioration of the domestic and indeed global economy will politically overwhelm this administration long before any such effective network could be put in place. The danger then becomes violent crowds in the streets tired of being out of work, or having the safety net of social wefare pulled out from under them or just plain sick and tired of ineffective government telling them how to run their lives or that all the chaos is their fault. That will bring us back to the very same very real threat of violent government suppression of an angry populace. It’s working out so well in Greece and the Middle East, why not here?

Never mind, just relax, bread and circuses, “So you think you can dance” is on tonight. What more could we need or ask for.

And Now For Something Completely Different.

Nine moths ago my wife and I suffered the loss of our 10-year-old Chocolate Lab, Scooter, after a long fight with cancer. He passed away in my arms after lifting his head one last time to look at me as if to say, “I’m sorry I have to go now.” He then collapsed and died. I was devastated and we both went through a long and painful period of mourning.

We recently decided that the time had come to fill the holes in our hearts and lives that his passing had left. In Scooter’s memory we wanted something Chocolate in color and in consideration of my wife’s allergies we decided on a “designer” breed, the Labradoodle.

Not wanting to become involved with or lend support to a “puppy mill” we did our research and found a home breeder who works as a dog groomer and owns a female Chocolate Lab and who’s employer owns a full size Chocolate Poodle.

We made an appointment to go see the puppies and instantly fell in love. So much so that we ended up bringing two brothers home. Jake and Elwood now have a new home and will no doubt soon become the most spoiled dogs in the neighborhood!

Jake

Elwood

Greece is the Word, the Final Act or Beware of Europeans Baring the Gift of Default.

To say that the markets and the rating agencies were not impressed with Wednesday’s chaos in Athens would be an understatement. The DJIA closed down 178.8 points, resuming its six week slide after Tuesday’s brief uptick. The down grading of Greek debt to CCC was quickly followed up with warning that major French banks were overexposed of Greek bonds and were likely to be downgraded as well and Barclays Bank finally admitting that it had “serious problems” in its European operations.


It had been anticipated that Wednesday’s scheduled vote in the Greek parliament was going to be difficult at beast but as events unfolded by the end of the day it could only be described as a disaster of Promethean proportions. With the ruling PASOK party having fallen apart like a cheap suit it looks like Greece is now faced with the reality of a nonfunctioning government.

The above chart shows how that it is the US taxpayer that is the key player (perhaps biggest victim would be a better term) in the unraveling farce known as the Euro Zone. It could not be clearer that that the $600 Billion in QE2 US funny money has been transferred entirely into European banks. It’s not just the European banks that have had their accounts padded so as to absorb the oncoming shock wave. From the chart it’s pretty clear that US banks have been holding back reserves as well to cover their own exposure to the European debt contagion. All of this money, every single dime, has been provided by the US Federal Reserve and represents nothing more than the debt obligation of the US taxpayer for generations to come.

So now the curtain on the final act is about to be raised, and it’s all according to plan. Germany gave us a peek under the edge on Thursday morning with their suggestion that any implementation of “restructuring” of Greek debt be put off until September, knowing full well that Greece will run out of money long before September gets here. Default is thus assured. Before anyone speculates that Germany is just trying to buy some time perhaps in order to come up with an alternative solution is naïve at best or stupid or a liar at worst.

With a zero probability of an orderly debt restructuring in Greece why would there or could there be any expectation that Portugal, Ireland and Spain will continue on with their own struggles down the same path of destruction? Why would they think that they could finish in a different place than where Greece is now? Why would they wish to inflict the same chaos, uncertainty and turmoil on their populations that the Greek government has done? The simply answer is they won’t. Any why should they? With the monies in place the PIIGS all get to go into default and return to their own currencies, the insurance companies that issued the Credit Default Swaps go belly up (AIG round 2), the banks absorb the shock and remain solvent (at least that’s what they will tell you), and the US taxpayer gets stuck with the bill.

It’s almost like World War Two played out again in some sick, twisted alternative universe. Europe engages in decades of foolish behavior, petty sanctimony and self-indulgence, ignoring the corruption in their midst. Then when the consequences of an implosive self-destruction become inevitable and unstoppable the US rushes in to rescue them from themselves all at the expense of unborn generations of US taxpayers. Think of it as like we put the Marshall plan in place before the destruction came. Only this time Germany ends up as the nominal strongman of Europe, yet having to keep a wary eye on a reemerging Russia, on whom it remains dependent for energy supplies. The US then gets left as the odd man out having absorbed once again the costs of European self-indulgence, but this time also having been stripped of the productive capacity that might allow the burden to be paid off.

So what then happens when the American people recognize the mess they have allowed the so-called experts, politicians and bankers to get us into? Will we think, oh let’s just declare default ourselves and pass it off to the Chinese? Will we again listen to some fool politician who will tell us that all of those Treasury bonds held on the FED’s balance sheet is just money we owe to ourselves?

We better think again. We have been played for fools. We just got put on the hook to bail out the very banks that own the Federal Reserve and they will now be stronger than ever. Their answer will be same question the Greeks have been staring down; sell you national assets and sell your sovereignty back to the very elites whose bacon you just pulled out of the fire. You didn’t think that they were really going to let themselves get stuck with the bill for their own corruption now did you? That’s what the naïve bumpkins, otherwise known as the US taxpayers are for. You’re not really going to take up arms against your European masters again are you? OR ARE YOU?

                                             

Greece is the Word Part Three Rev. 1 or Go long on Popcorn as this is going to get very interesting.

Update: June 15th 2011


First a correction to yesterday’s post. The story reported by a small Greek television station about a tunnel leading from the Parliament building to a nearby port has been exposed as a hoax. There does exist however a tunnel to a local hotel that is only some 250 yards away.

There are at least two other potential elements to this ongoing story that remain unspoken. The first is the Greek Army, which has so far remained in their barracks. There should be little doubt that the government is trying to keep one on the demonstrations outside and another eye on the Army, which already has an established record of playing the coup de tat card when things get out of hand. If they do it will be interesting to watch to see if they become the ultimate enforcer for the bankers or the defenders of Greek sovereignty against both the bankers and the communists. The second is will a default in Greece spread to Portugal, Ireland and Spain and bring down the Euro in short order with the UD dollar shortly to follow? Oh never mind, Irish Finance Minister Noonan stated today that his government may not (read will not) redeem Anglo-Irish Bank senior bonds at par and that the institution is in such bad shape it should no longer be even considered a bank! My my but isn’t the IMF having a wonderful day?!? In military terms it looks like a pincer movement with the Germans caught in the middle once again. At this rate they may withdraw from the Euro zone even before the Greeks!

If anyone happens to drive past the Eccles Building this evening look for the midnight oil being burned as helicopter Ben and the boys will be watching those films of “Baghdad Bob” for some quick lessons on how to spin the disaster. It worked so well for Saddam and company didn’t it? Look for some sort of bogus pronouncement that the $1.20 jump in the ratio price of the dollar and the $4.30 drop in the price of oil is “evidence” of a strong dollar and the market's confidence in it. I don’t know whether to puke or laugh as the reality is that it’s simply the result of panic out of the Euro and the Pound Sterling. Any statement will read more like the FED grasping at straws than honest analysis.

Trying to follow and make sense of todays staccato of events was akin to trying to take stop-action photographs of a bullet train with an old tintype camera.

The failure of the Parliament to vote today on the bailout may prove to be a moot point as it looks like the financial contagion risk is already spreading, in spite of all the efforts of the bankers and politicians to keep it in check. Funny isn’t it how reality has a way of overwhelming “the best laid plans”? The European financial agencies and ratings groups had already started to react preemptively before dawn even broke over the Aegean. S&P had already downgraded the four largest Greek banks to CCC from B. (This is below junk bond status.) Meanwhile Moody’s warned that it may downgrade at least three French banks due to their exposure to Greek debt. Additionally Barclays Bank in London has announced today that it has “serious problems” in its European unit. There was no mention if they were related to the Greek situation but there can be little doubt that it is. Small wonder then that as markets opened Greek three year bonds were priced at 40.5 cents on Dollar and the yields hit 28.6%.  The Greek stock exchange opened down 3.5%. I can just see the investors flocking to gobble this stuff up! Yeah right. I’d bet that the bid to cover ratio is one very ugly number.

It has to be remembered that the chaos in Athens is something that in many ways the Greeks have brought upon themselves by having elected the same crooked political families for generations simply because they promised them a never ending stream of government largess. Now that the lie has been revealed, they public wants to lay all the blame on the politicians and ignore their own responsibilities in having electing them in the first place. As always the small independent businessman and his employees will be the ones caught in the middle.

None the less today’s chaos has all of Europe focused on Athens. As the crowds grew this morning in Syntagma Square outside the Parliament building the riot police broke out the tear gas early, but so far only against overt trouble makers on the fringes of the demonstration. The Prime Minister’s convoy came under a bombardment of eggs, oranges and water bottles.

Yesterday the PM announced that he will be conducting a Cabinet “shake up.” Speculation was that the Finance Minister, a “former” Goldman Sacks employee, who has been a focus of the demonstrator’s anger, may be the first to go. If there was any doubt that such a cosmetic move will not placate the crowds it was soon dissolved by the government coming apart at the seams. With the other political parties refusing to negotiate with the ruling PASOK party PM Papandreou offered to step down in a last ditch attempt to form a new government. That failing, he later reneged on the offer and said he will stay on, from a new government and seek a vote of confidence. With this much chaos, the chances of a vote on, never mind passage of the so-called “intermediate package” are less than zero. Can you spell power vacuum or worst-case scenario? As the sun went down over the Adriatic the crowds grew larger. At the time of this posting the crowd seems to be remaining calm if not basking it something of a victory over the government. The air temperature may be cooling but it remains to be seen if the gathering gets heated up by the ongoing speech making. All this will of course be accompanied by about 30 seconds of coverage on your nightly news broadcast.

If it’s not on FOX or NBC it simply didn’t happen. So folks just belly up to the useless distraction bar. What is it “American Idol” or “So You Think You Can Dance” that’s on tonight?

Greece is the Word, Part Three: Sacrificing the Dollar to Save the Euro or the Greek Revolution Will be Televised.

The most prominent speculation on the monetary front (if one listens to the talking heads) is whether or not the FED will institute a QE3 program once QE2 comes to a close at the end of June. A more pertinent speculation might be will Helicopter Ben and the boys at the FED still have jobs in the not too distant future. The Feds long standing policy of not revealing just exactly what they are doing in the cloistered halls of the Eccles building was brought to an end by a court ruling on FOIA requests seeking disclosure to find out just exactly who got that $700 Billion in TARP funding. There was little surprise and no small amount of anger when it was revealed that a large part of it went to US subsidiaries of European banks.

Having been exposed as taking better care of their European banking masters than the US citizens (which is their charge) one would think that the FED would take it as a lesson learned and refrain from the practice in the future. Apparently the arrogance of the elite knows no bounds however. It seems while they have been feeding the public and the politicians the lie that this latest round of money printing was needed to prop up the DJIA and “stimulate” economic growth here at home by providing cash to domestic banks to fund loans to business and individuals, the reality is that it has been nothing more than another rescue program for the European banks.

Since the inception of QE2 in November of last year the FED has printed in excess of $600 Billion in new magic money. If the reader will take the time to examine this chart it will tell you all you need to know.

The blue area represents the cash reserves of small domestic banks in billions of dollars. The grey area is the same for large domestic banks. The purple area is for foreign banks (those with US operations that can be used to transfer US dollars from here to their European operations.)

It doesn’t take a genius to see that since November the reserves of domestic banks have remained largely flat and that those of the European banks have gone vertical. And by how much? Oh just that $600 Billion or so that Bennie boy has printed.

So what’s going on here? Once again it doesn’t take a genius. On Wednesday the Greek parliament is scheduled to vote on the latest austerity package and the next round of bailout money for their bankrupt economy. (Read kicking the can down the road to default one more time.) Problem is some of the members of the ruling PASOK party are announcing they will be leaving the party in protest of the plan. If their numbers begin to grow passage of the proposal may become problematic. With the Parliament building surrounded by ever increasing crowds every day the psychology of fear and concerns for the personal security of the members would seem to be taking root. Small wonder then that there have been reports that the long abandoned escape tunnel under the Parliament building is being cleared out by foreign workers in case the situation tips over the edge.

Neither should we be surprised then that the ECB (European Central Bank) recently announced that it would be able to withstand a Greek default. Thanks Bennie, the US taxpayer and yet unborn generations just got to save the Banksters again!  Any wonder then why Obama meets at the White House with his Wall Street donors?

Got gibbets? Just how much longer the taxpayers are going to stand for this ongoing theft and fraud remains to be seen. Probably until it’s too late, if it isn’t already.

Unless of Course, we Lose………..

In order to understand the status of the conflict between Jihadist Islam and the West in general, one must first define the term enemy and how the juxtaposition as enemies comes about. At the present stage of the conflict there can be little doubt that it was these elements of Islam that declared the West to be their enemy, and had been engaged it committing act of war long before all but a very few bothered to take their actions seriously. Historically the argument could be made that the conflict goes back for nearly a millennium, having it roots in Moorish conquest and subsequent expulsion from Spain and Portugal and the conflicts with the Ottoman Turks in the Balkans.

The attitude of many practitioners of Islam is that once Islam conquers an area or nation its inhabitants have no further right to reassert themselves and reclaim their lands. Their only choices being to convert, pay the tax for not converting or die. That this is a complete anathema to Judeo-Christian Western civilization is an argument that should not even need to be made.

It is the Jihadists who have defined the alternatives as either our destruction or theirs. When a group or nation has declared itself to be your enemy, wages war against you, kills your soldiers and civilians and neither shows or expresses any inclination to negotiate except as a means to gain a position of political or military advantage from which to wage further war, WHAT CHOICE TO YOU HAVE BUT TO WAGE WAR AGAINST THEM AND KILL THEM AS EXPEDIENTLY AS POSSIBLE?

It is they who have declared us to be their enemy and waged war against the west. The time for turning the other cheek has long since passed but sadly our politicians lack the courage to wage total war as was done in WWII. As ugly as they are, wars are not won by negotiating from a weak or defensive position. Wars are won by killing the enemy and destroying their ability and will to continue the fight, leading to either their total destruction or their coming to the negotiating table from a weak and defensive position.

That is a lesson the history has taught a thousand times, but the moral relativists just won’t or don’t want to see it applied to this conflict.

No reasoned Westerner would define all Moslems as bad. But I must reiterate it is the Jihadist ‘s interpretation of Islam that has declared war against us and defined our status as non-Moslem as justification. I have heard no declarations of a need or desire to kill Moslems in the name of Christ, yet the opposite is the battle cry of the Jihadists. Neither the US nor any Western nation has declared that the desired end of conducting war against Jihadist Islam or the dismantling of Saddam Hussein’s tyranny in Iraq was their conversion to Christianity. Again the same cannot be said of the Jihadists.

To the Jihadists the absence of status as a Moslem or failure to adhere to their interpretation of Islam is the definition of the loss of innocence. But for the moral relativists the problem is one of “lack of understanding.” If there was such a thing as a Neville Chamberlain award they would win it hands down.

Putting forth the Crusades as an argument or justification is disingenuous at best. No one could rationally argue that Christianity as practiced today is the same as it was practiced in the 1100’s. The same cannot be said for Islam. Christianity went through a reformation and has evolved in its interpretation and practice. The inquisition is an historical fact but it is not an ongoing practice. Again the same cannot be said of Islam.

The supposition and expounding on only parts of the story of Christianity is what is dangerous. Twisting half-truths as the whole story is far more dangerous than lies cut from whole cloth. The spread of Christianity’s through most of the Mediterranean and Roman world came about because Emperor Constantine came to realize that it had grown to become a force he could no longer reckon with. Stories of his “miraculous” conversion not withstanding it became more a matter of “if you can’t beat ‘em join ‘em.”

If Christianity then became a means through which he could exert control of the Empire so be it. He was a Roman Emperor after all. Rome had a long history of tolerance for the religions of conquered nations. It was only when the corruption of the likes of Nero, Caligula and Claudius wrought havoc upon the Roman economy that the Christians became the targets of convienience persecution and the scapegoats for the consequences of Imperial excess. Yet it continued to grow, leading to Constantine’s momentous decision.

Neither the excess’s nor shortcomings, successes or failures of the Bush administration are relevant to the issue. The Jihadists were at war with us before he came to office and will still be at war with us when Obama is gone, unless and until we address it as an issue of total war rather than one of “proportional response” or criminal acts, or as long as there are those in power who view the world through rose colored glasses or through a lens of political correctness or moral relativism.

To do so is to venture into the realm of the absurd. As stated one of the root causes of the aggression is because we are not Moslems. We should no more waste time and effort trying to ‘understand’ them than one should try to reason with a rapist. When faced with kill or be killed, you kill or you get killed. Even if one could reason with them or ‘understand’ their motive do you honestly think that it would change their tactics or murderous intent? To me that answer seems a pretty clear and unambiguous no.

So then getting back to the Jihadists, it’s not a matter of invasion or conquest, it’s a matter of destroying their will to fight. Look at the air campaign in the 1st gulf war. The Iraqi army's will to fight was destroyed before the first tank crossed the border.

My personal ideas or suggestions not withstanding are strategic not tactical. Just as in WWII if we knew the Germans or Japanese were using a particular town or city as a marshalling area or production center we bombed the crap out of it and civilian casualties were not of paramount concern. The object was to destroy the enemy’s ability and will to fight. We didn’t fight the war with one hand tied behind our back. When Truman made the decision to drop the a-bomb on Japan it was not out of some blood lust it was a calculated decision as the quickest way to end the war with the fewest further casualties on both sides.

To those who would choose not to accept the cogency of such an arguments, or would so easily dismiss it as vague or just plain wrong, that is of course their right and I might argue obligation. But with such rejection comes another obligation, one to propose your own course of action. The difference between the Germans of the WWII era and the Jihadist of today is that Germans at least had a rational fear of death and a semblance of what would become of their posterity. The Jihadists do not possess either of these. Hence there repeated call that they “love death” more than we “love life”. It is not possible to reason with the irrational. How else can we conclude otherwise than that if they are so in love with death that they will not stop until we give it to them?

The murdering rapist is in YOUR house, what are you going to do? As I asked at the very beginning: WHAT OTHER CHOICE DO WE HAVE? If you can’t or won’t answer that question with a viable solution that has a reasonable expectation of success, then what place do you really have in the argument, other than as a victim?

For further background see my previous post “The Psychological Disconnect of the Petro Dollar.”

Greece is the Word, Part Two.

I’d like to think that for those of us who have spent the better part of the last few years trying to prepare ourselves and our families for the ongoing and now accelerating financial disaster, the parade of daily events have now moved beyond being harbingers of troubles to come and have taken on more of an air of farcical comedy. If watching the DJIA tumble yesterday in the closing minutes with each bit of flapping drivel that came out of Fed Chairman Ben Bernanke’s mouth wasn’t entertaining enough, this morning’s CNBC piece titled “Obama Presses Europe, Pledges Help for Greek Crisis” nearly had me exhaling coffee through my nose in fits of laughter. Sometimes laughter is the only way to cope with tragedy.

It’s not that making obvious corollaries has ever been the strong suit of the gods at CNBC but this is ridiculous. After being basically flat most of the day, rumors started spread about the contents of Bernanke’s non-event speech around 2:30 and the numbers started to decline. As soon as he opened his mouth and started spewing his MOPE at 3:45 they went over the edge and fell another 55 points, down 108 points off the day’s high. What was he selling? This inflation is just a “temporary” event caused by a few issues with some commodities. Never you mind those churning noises coming from the basement of the printing presses at the FED working 24/7. Nothing to see here, move along, move along.

Then we get the absurdity of President Obama “pledging” help for any second (or is it third or fourth, I forget) round bailout of Greece. The CNBC article’s statement that Chancellor Merkel is “under political pressure at home to avoid being the financial savior for other struggling European countries” has got to be the understatement of the month. Merkel’s party has been getting its walking papers handed to them in local elections. The German people are simple fed up with financing the foolishness on the Euro periphery and Merkel knows that if she doesn’t get adequate cover from Obama for flushing more money down the Aegean toilet she’ll be looking for another job soon. She may well be done for either way.

I would suspect however that the President’s “pledge” isn’t much more than lip service. Facing his own electoral demise, if he’s not aware that the American populace is no more in the mood for bailing out failed foreign states than the Germans are, then he lacks even what little grasp of reality even I would credit him with. As more and more 99 weekers fall off the back of the unemployment compensation bus and even larger numbers pour into the front any political posturing that “Obama saved Greece” will inspire anger and resentment not admiration.

Just as with our own fiscal condition (anywhere from $60 Trillion to $100 Trillion in unfunded liabilities depending on who you talk to and what you do or do not include in the calculation) there exists no viable or functional methodology that will avert the inevitability of a default of some form. Year over year productivity in the Greek economy has contracted by 11%! Taken alone industrial production is down by an even larger number. Given such a reality just how is even more austerity in government spending (laying off workers and putting them on the dole) and increasing taxes going to facilitate an even larger debt obligation even if some agreement to provide Greece with more money could be reached?

Can meet foot, see you down the road, has reached the end of its usefulness. Posturing, printing and vain management of perception is coming up against hard political realities, and politicians will always, always, always put the preservation of their positions of power over and above any other consideration. They know it won’t work, they know it’s all just a game of extend and pretend, they just don’t want the voters to know it. At least not until we get past the next election cycle, and then they will be telling us one more time to trust them to “fix” the problems they created. I think we’re in for a long hot summer in every possible way. By the time October gets here we may be faced with an entirely different and worse if that’s possible, political and economic landscape than we have today.

Will the Democratic Process Remain Relevant?

Over the weekend the size of the crowds protesting in Athens against any new bailout package and its attendant austerity programs swelled to new highs in terms of size. This weekend elections in Portugal saw the current Socialist government go down to an overwhelming defeat. Here in the US the reaction was a barely stifled yawn. I know, I know they replaced the Socialists with the Social Democrats, I’m attempted to yawn myself. In reality the change in government might make a few voters feel better or give them the illusion that they might actually bring about change through the ballot box, but as one voter commented, coming out of the polling station, that’s not the reality they face; "I think the election won't bring anything new because it's the IMF in charge of the country now ... Any party that gets to the government will just have to follow IMF rules,"

Well at least one individual is thinking straight. The question then becomes how long will the electorates of Greece, Portugal and the rest of the PIIGS, and eventually here in the US, stand by and allow their national and individual sovereignty to be surrendered to a bunch of unelected bureaucrats and bankers? At what point will they recognize that the bankers and their wholly owned politicians have deliberately manipulated them into this position? When will they realize that their rights to self-determination take precedents over the yearend bonuses of the bankers? I would guess not soon enough to forestall either the growing chaos spreading across the Atlantic or the bankers and politicians trying to implement their globalist “New World Order” that will leave all power and decision making in their hands and delegating our most sacred traditions to irrelevancy. Oh we will still have our elections, but if we are not careful the options we will be given there will differences without distinction.

As far as they are concerned the debt must be serviced at all cost. All else must be sacrificed on its sacred alter, be it liberty, democracy or constitutional government itself. All must suffer, except for the banks and their power and control. We may not recognize it but it’s already happening. As the economy of mainstreet suffers, unemployment climbs and actual production shrinks, Wall Street and only Wall Street prospers. In 2008 our government handed out $125 Billion in taxpayer funds to maintain the illusion of the solvency of the big banks. In 2009 these same banks passed out $135 Billion in bonuses to top executives.

The great Keynesian experiment is about to come to an end. What will come out of it will either be a renewal of the individual spirit and the destruction of the feudal lords of the banking elite, or the utter destruction of the individual and his rights and the emergence of a global fascism on a monumental scale. In the end, at least here in the US it’s going to come down to a question of whether or not the military decides if it loyalties lie with corrupt government or with the people whose liberties they have sworn to protect. Will they become the jackboots of repression or protectors of the people from whose ranks they come? That is the risk and the imponderable that the powers that be face, and they will do everything they can to portray any and all who dare stand against them as, racists, radical, reactionaries or whatever brush they can tar them with to try and bend that ultimate power of military authority to its will. They know full well that without it or if it turns against them they stand no chance to prevail.

We can only hope. Will Lincoln’s words from the Gettysburg address still ring true? Or will “Government of the people, by the people and for the people” be cruelly morphed into government of the banks, by the banks and for the banks? We can only hope.

Greece is the Word! (With all due respect to the recently departed Jeff Conaway.)

Well folks it would appear that the Greek situation will be coming to a head very soon. Sooner than expected by some and not soon enough for others.

In some ways it’s hard to figure out whom to feel sorry for in this Promethean tragedy. On the one hand you have the Greek citizens and unions who have repeatedly elected the same corrupt politicians based on the foolish promises of ever expanding social welfare programs and public employment with unrealistic compensation and benefits packages.

In order to finance this fool’s errand the government has nationalized larger and larger segments of the private economy, borrowing the money to do so. As those now government held industries became less and less efficient and less and less profitable (as always happens under nationalizations) the government was then forced to borrow even more money to subsidize them in order to keep up the charade of prosperity.

On the other hand you have the bankers and the sovereign wealth funds of the other European states that were of course more than glad to help them out. After all the Greeks weren’t the only ones playing this game of circular self-deception. The Italians would lend to the Greeks and the Greeks would lend to the Spanish and the Spanish would lend to the Irish and round and round it would go. All of them being good European Social Democrats, they were of course obliged to help each other out.

But it was only a matter of time, at some point on the circle the piles of debt would grow so deep and heavy that that corner of the system would have to lose inertia and come dragging to a halt and begin to pull the other players down with it. Quite simply what has happened is that the accumulated interest and principle due on existing debt has out grown the capacity to take on more debt, and it just so happens that it’s Greece that is only the first to reach this point in the end game.

This brings us to where we are today. Someone has to pay. The banks say there have to be “structural reforms,” i.e. austerity, lay off state workers, reduce benefits, raise taxes, privatize state owned industry in order to make the payments on the existing debt in exchange for lending the government even more money. The government, that is to say the politicians, who are owned by the banks that finance their campaigns, by agreeing to these terms, bring themselves to odds with the citizens and particularly the unions who equally feel that they own the politicians through their votes and union’s political contributions.

The threat from the banks being that if Greece does not comply, then it would imperil the stability of all the debts of the other PIIGS that are behind the Greeks by only a matter of degrees. This in turn would destabilize the financial systems of Germany and France that played their own part in this little game of Russian roulette.

The unions and the radical socialists are already making their play with the very real threat of social chaos and the now almost daily mass demonstrations and violence. (There was very little mention in the news here of the fact that they had occupied the Greek Financial Ministry building on Friday.)

So we have what appears to be the irresistible force meeting the unmovable object. Which is which I will leave for the readers to decide for themselves. Is a compromise possible wherein the banks and bondholders take a haircut and loose billions not only in Greece, but also across the entire spectrum of European debt and risk seeing the entire Euro experiment come to an end? Do the citizens, led by the unions and the radicals get the revolution they want, overthrow the government they elected, declare default, withdraw from the Euro and pay the debt with a wildly inflated Drachma, and similarly bring down the Euro system? Or are bribes paid and the Greek military step in with its well-established tradition of performing a coup d’etat to become the banks enforcers? Whatever the outcome you can pretty much guarantee that the independent Greek business owner and those citizens that work for them are the ones that will be caught in the middle and suffer the most. They are the ones for whom we should have the greatest sympathy. Seems like that’s how it always works out.

In any case, its going to be a long hot summer in the Aegean and the waves of unrest may well spread all across the northern shores of the Mediterranean Sea. (Any confluence with the chaos in the Middle East and North Africa is just to dizzying to contemplate at this point, but will need to be addressed at some point whether we want to or not.)

So while the readers watch this splendid little farce come to its violent conclusion they might be well served by asking themselves just how different is all this from our own situation? With state after state facing growing deficits and increasingly under funded pension obligations, are our politicians and bankers and unions all that different than the European’s? Or is this the “European model” that so many of them aspire too?

More Half Truths from Mr. Glenn Beck

Firstly, as I have said before, I am all in favor of the defense of Israel from those neo-Nazi forces around it that seek it destruction. What I am opposed to is the distortion of historical truth to further that agenda. Mr. Glenn Beck has once again proven himself guilty on this account.

On last night’s show Mr. Glenn Beck has engaged in a bit of historical distortion in one of his narrations. He seems most adept at this practice of only telling part of a story and distorting other parts of it in order to craft his narrative. He and his audience would be better served by the whole story not just snippets crafted to allegedly fit “time restraints” or more likely, his personal agenda.

In this case he portrayed King Antiochus Epiphanes as a Syrian, which he was not. He was in fact a Greek; more specifically a Seleucid Greek, who had an ongoing conflict with the Ptolemaic Greeks of Egypt over the control of Judea. Neither did he mention the context that the greatest conflict the Jews of the time faced was not about which of these Greek power centers would control Judea, but rather a struggle amongst themselves as to how much Hellenistic (Greek) culture would, could or should be intertwined with their own. It was out of this conflict that the anti-Hellenizers, the Hasideans grew.

While the Jews felt it was enough that they marched in his armies and paid taxes and tribute to the Seleucid king, Antiochus Epiphanes felt that only by thoroughly Hellenizing all of the peoples of his kingdom could he create the unity necessary to take on the Ptolemaists. Only problem was when he marched into Egypt he ran smack into the Roman Legions now occupying it. During the conflict the Jews heard a rumor that Antiochus Epiphanes had been killed and immediately set to removing all the Greek statuary from there Temples and Holy sites.

Except Antiochus Epiphanes was in fact not dead. Retreating from Egypt, angry and humiliated, and entering Judea to see what had been done in his absence, it was then in a pique of anger and humiliation that he instituted his policies of inviting pagans to move into Jerusalem and banned the practice of circumcision.

Neither did Mr. Beck mention that it was out of the ensuing 25 years of war that the Hasideans were renewed and finally defeated those elements within Jewish society that were in favor of Hellenization, but also the rise of the Maccabees, literally the “hammer” that repeatedly smashed Antiochus Epiphanes’s armies and eventually secured not just peace with the Seleucid Kingdom, but the full independence of Judea from the Greeks.

So then I can only conclude that Mr. Beck cannot or will not see that the use of truncated and distorted narratives of an otherwise true story are a disservice to his audience but opens up the pathways of criticism for himself and any of his audience who might repeat his distortion as fact. But then I guess credibility is not the issue, stirring the pot is the issue. Mr. Beck has so often stated that “the truth has no agenda” one has to wonder why he leaves so much of it out of his stories.

For anyone looking for a clear (and secular) narrative of Jewish history I would refer them to “Jews, God and History” by Max I. Dimont.

A Growing Sense of Ill Ease.

Upon returning from the long holiday weekend I was confronted with a couple of stories that I found most disconcerting and not at all coincidental. The first was an email reporting that Lockheed Martin had shut down all secured external access to email and other systems due to a cyber attack that had succeeded in making off with SecurID related data and possibly the means to generate one time codes that would allow entry into its systems. The warning also stated that the hack “strongly pointed to state-sponsored hackers.” If this were not disturbing enough I then came across a story in this morning’s Wall Street Journal titled “Cyber Combat: Act of War.” The first sentence sent chills down my spine. “The Pentagon has concluded that computer sabotage coming from another country can constitute an act of war, a finding that for the first time opens the door for the U.S. to respond using traditional military force.” The full story can be found here: http://online.wsj.com/article/SB10001424052702304563104576355623135782718.html?mod=WSJ_hp_LEFTTopStories

Couple this with the fact that we have a President in office who seems to think he can conduct undeclared war against whomever he feels whenever he wants and dismisses as “unnecessary” any obligations under existing legislation to obtain required authorization from Congress before extending US military action beyond 60 days and we have a recipe for both a Constitutional crisis and military crisis that could spin out of control with but one unexpected incident.

Now let’s throw into the mix a statement by the Israeli Minister of Strategic Affairs, Moshe Yallon; “We would strongly hope that the entire civilized world will come to realize what threat this regime is posing and take joint action to avert a nuclear threat posed by Iran, even if it would be necessary to conduct a pre-emptive strike.”

It’s not that I don’t think that Iran does not represent an existential threat to Israel and Western Civilization in general. After all we are dealing with religious fanatics and not rational pragmatists as we had in the Soviet Union during the Cold War. That in and of itself is cause for grave concern, but I fear that either the President and his advisors (Zbigniew Brzezinski, is back and his advise worked out oh well for Jimmy Carter) are functioning like that group of blind men standing around an elephant and only able to see and describe what is within their immediate grasp, or this is all a deliberate manipulation of information and public opinion to drag us into an even wider war as the supposed solution the growing and ever threatening financial crisis. After all the American people have a long history of throwing out politicians and parties in the midst of economic crisis, war not so much. What better excuse to seize to the $10 Trillion in private IRA’s and 401K’s than a “national security crisis?” See my previous post.
http://theeveningchronicle.blogspot.com/2011/05/tyranny-at-treasury-department-or-how-i.html

So then say your prayers, for many it may be the only recourse we have left.

Obama and the Middle East or Doubling Down with Br’er Rabbit.

Seems it was not that long ago that I warned that our involvement in “liberating” Libya was going to become a tar-baby for Obama’s foreign policy. Weren’t we told it would be a “matter of days not weeks” before the situation was resolved? Well here we are 60 days in and the President’s authority under the War Powers Act is set to expire and by law he must go before Congress to get further authorization to extend our military involvement. I’m sorry Mr. President you just issuing a statement that our involvement is now “open ended” doesn’t cut it with the law or the American People.

So just what is the President’s plan here? It might have been a plausible story at the start that the Libyan people overwhelmingly wanted to get rid of Kaddafi and his clan. That Kaddafi and his supporters are having a fair amount of success in holding the rebels at bay in spite of the application of US and NATO air power raises some serious questions of judgment about getting involved in the first place.

Does this administration honestly think that making speeches placating the Palestinians and calling for more uncounted billions of dollars in aid be sent to the Arab world is going to make up for bombing the snot out of civilians in Tripoli? Obama likes to present himself as an anti-colonialist but this sure looks like the early 20th century's Teddy Roosevelt “carrot and stick”, American neo-colonialism to me.

I can’t help but conclude that Obama is in so far over his head that all he has left is shooting from the lip, throwing stuff against the wall and hoping something will stick. It’s a pretty bad specter of a man and a nation that somewhere in the back of his mind he may have resigned himself to being a one term President and is more concerned with creating some sort of “Well I tried” legacy than with actually solving any real problems.

So with one fist firmly imbedded in the tar of Libya he swipes with the other at Assad in Syria and then jumps in with both feet into the Palestinian question. With all the chaos going on in the Middle East I don’t think any rational person could tell you what that part of the world will look like in six months from now never mind a year or two. So then trying to create a new policy initiative built not just on shifting sands but in the middle of a blinding sandstorm, is either the epitome of narcissist arrogance or burgeoning ignorance or more likely the combination of the two. Or maybe he’s getting so much smoke blown up his backside by his so-called advisors that he’s blinded by the excess coming out his ears and can’t see he’s being played for a fool and the fall guy for an even more conflagrational war.

Growing Weary of the 9-11 Truthers.

It seems like about once a month or so we get another article somewhere either raising questions if not making nefarious accusations about the fate of Building 7 at the World Trade Center. The latest being that it was deliberately brought down so that it could be done in a controlled manner so as to minimize any collateral damage of it coming down on its own.

Whether it’s this scenario or any of the others, there are a couple of questions that I never see addressed. One: If it was a controlled demolition, how was it done so quickly? There exist many video productions of controlled demolitions. They all, without exception, document how it is a well thought out, planned and fully engineered process involving specific physical modifications to the structure that can take weeks if not months to put into place before the sirens go off and the button is pushed. Two: Even if one were to dismiss question #1 and contend that it was “rush job” executed to some pre- arranged plan, how can it be explained that during those events of that terrible day, as literally dozens if not hundreds of cameras both of the news media and private citizens, were focused on ground zero, no one has come forth with any video of these alleged demolition crews either going into or out of the building. Police, fire and rescue crews were everywhere, yet none have come forward to document any such “suspicious activity.”

I do know that that the center of building 7 contained a large open area with large, long span beams supporting the structure above it. These beams, as manufactured and installed may well have been more than adequate to do the intended job and I’m sure calculated to factors of safety to withstand shock loads. Much of the strength of these kinds of beam structures comes from both the particular alloy used and from how they are heat treated to lock in particular grain structures in order to maximize and balance yield and tensile strengths. When these kinds of specially conditioned steels are subsequently subjected to prolonged exposure to heat, as with an uncontrolled fire, grain structures change, molecules revert from the stronger face centered structure to the weaker body centered structure, and their thermally engineered strength goes away. Already subjected to huge loads, coming out of design intent, that their new metallurgical condition can no longer sustain, they bend and collapse. Having been located centrally in the structure everything then fell into this now unsupported void, looking very much like a “controlled” event.

Just my two cents worth, but I think it’s kind of an “Occam’s razor” kind of deal.

Tyranny at the Treasury Department or How I Learned to Love the Debt Bomb.

It would be my guess that both the two headed beast of Repulicrats in Congress and Tiny Tim the tax cheat at Treasury are breathing a collective sigh of relief at the moment. They just rolled out the opening precedent for the largest theft in history and the public’s response so far has been; “the Govonator did what?” Between Arnold’s peccadilloes and those of IMF chief Strauss-Kahn they could have not asked for a better cover for or distraction from this grand little scheme.

Maybe someone should check Geithner’s phone and email logs to see how long it took Helicopter Ben at the FED and his good buddy Blankfein at Goldman Sachs to call in their congratulations. I’d bet the first line was something like: “Debt ceiling? We don’t need no stinking debt ceiling!”

Getting pushed up against the legislative limits, rather than actually cutting off some of the bureaucrats budgets Treasury announces that it will start “borrowing against” the pension funds of Federal employees. They further assured us saying that there was no reason to worry because the Treasury was “legally” required to pay back those funds as soon as they became available under any new increase in the debt ceiling. The justification for this little sleight of hand was that that the pension funds are held in government controlled accounts. In reality the Treasury Department is simply converting whatever equities that are held by those funds into Treasury bonds. The banks collect huge fees for conducting the transactions, they kick back the pocket change to the politicians in campaign contributions, everybody keeps their mouth shut, and the powers that be laugh at the rest of us while making their deposits in off shore accounts.

So how much is in those accounts? What 2 – 3 trillion or so? Well that should be enough to keep up the spending charade for the next year or so while the public is kept distracted by the so-called “battle” over the budget and any debt ceiling legislation. Anyone who thinks this is anything but the first round in an even bigger scam to come is either stupid or already works for a politician or investment bank. With those monies now fully under their control, the Eye of Sauron will next fall upon that fat and inviting $10 trillion or so sitting in private IRA and 401k accounts. Well stealing from government employees is one thing right but how could they justify stealing private funds you say? Herein lays the all powerful and ubiquitous “commerce clause.” I can hear it already, “Well you see the government has done you the favor by allowing you to save all that money without letting Shylock, I mean the government, taking its ‘fair share’ through taxation. So at least, what 30% - 40%, is actually the government’s money and not yours.” It will kind of be like the Germans marching into the Sudetenland, they got their foot in the door, took what they said they were entitled too and after a short breather gobbled up the rest of Czechoslovakia.

Hey it worked for Greece didn’t it? It’s working in Spain right? The NY Times and the Washington Post aren’t running any front page stories on renewed riots in Greece or street protests in Madrid so they're either not happening or they're just not that important, right?

It’ hard to believe that Congress or the Obama Administration are serious about actually cutting the profligate spending. They both know that if they do, that number will come straight off the top of the GDP. But then maybe that’s part of the plan. The GDP falls, the market panics, the FED has it’s excuse for QE3, the FED loans even more money to Wall Street at 0%, they then buy up collapsing equities at bargain basement prices, the market goes back up and voila, problem solved! Better yet another couple of trillion dollars previously held by private individuals and pension funds are now in the hands of the Blankfein and friends and those now liquid funds are now ripe for the picking and conversion into Treasury Bonds!

So instead of complaining all you ingrates need to be thankful for the wizardry of the banks that have saved the economy once again! Hey those T-Bills are going to make wonderful wallpaper for you luxury one room retirement condo. That is if you don’t use them all for the toilet paper you won’t be able to afford first!

Gold & Silver, Good vs. Evil, and the Triumph of Insanity Principle

Anyone who knows me and/or has read what I have written previously knows that:
1. I am a lifelong student of history.
2. I am a strong advocate of buying gold and silver in these times of economic unraveling.

In a previous piece I raised and discussed my serious differences with one Glenn Beck and questioned who and what was motivating or influencing him in regards to monetary and economic policy. (Surprise, surprise he never answered my very direct inquiry). That said, there are some points on which he and I are in agreement; there does exist good and evil in this world. Whether one wants to call them demonstrations of the existence of God and the devil are a matter of personal decision if not individual struggle of conscience. But for the sake of this piece let’s just call them good and evil. I can’t and won’t elucidate on all the manifestations of good or evil but I do know that one of the manifestations of evil seems to be of a recurring theme.

The arc of history is a long and complex one, but I do know this about it; anyone who tells you that they have the definitive interpretation of it is either a paid shill for some political operation or blindly possessed of an egotistical arrogance out of all proportion to their actual understanding. This writer is no exception to this characterization.

As the child of a WWII vet and growing up in the ‘50s and ‘60s I was exposed to my share of the narrative of that war. Whether it was “Victory at Sea” early on or “The World at War” later on or all the myriad war movies in between, the Second World War was almost as much a part of my experience as it was of those who actually went through it. All the details of strategy and tactics, the results and implication of individual battles aside, I think the overarching lesson of WWII is in the uniqueness of its extremes. I can only speak for myself, but perhaps more than any other images of those that came out of the war, the systemic and systematic extermination of people and peoples made the greatest and most horrifying and formative impression. While the Japanese may have conducted the “Rape of Nanking” and indeed the rape of all they conquered out of a manifest cruelty or simply as mindless sport, it pales in comparison to the mechanized efficiency of the Nazi’s concentration camps.

Unfortunately today there are far too many who would try to simplify these events, if not to dismiss or excuse them, but to categorize them as just another example of “man’s inhumanity to man.” By doing so, they also dismiss their historical continuities and seek to separate, even if only unconsciously, from the continued existence of the very same manifest evil.

Even Hitler knew that although much of the German population may have been more than comfortable with their own prejudice and the de facto discrimination against any and all outside the new definitions of the “ideal German”, there would still be those who would be repulsed by an overt and stated policy of systematic genocide and extermination. Yet today we see not just a single nation, but groups of nations and alleged political and religious movements that have transitioned beyond even that poorly exercised moral restraint and into an open and stated policy of hatred, genocide and extermination. A policy that repulsed the entire civilized word not seventy years ago is manifest anew and far too many either turn a blind eye or find justification or excuses for it.

One would be hard pressed to find a credible historical narrative that would separate the rise of fascism, particularly Nazism and the economic despair and chaos of the Weimar hyper-inflation and the subsequent global depression. I’m not saying that there is a direct corollary between the event of the ‘20s and ’30s and today, but I do think that the onset of inflationary increases in the price of food and energy are playing a part in the growing turmoil in the Middle East and it is being used to manipulate the baser instincts in furtherance of the same corrupt and evil agenda.

It would also be a mistake to view its overt racism as the only pernicious danger of fascism that is on the rise. That even some of those who do recognize the corollary between the Nazis and the jihadists ignore its other dangers leaves us all to be sucked into its vortex. The merging of government and business in the creation and implementation of policy is the textbook definition of fascist governmental structure and yet we ignore it. President Eisenhower warned us about the emergence of the “military-industrial complex” back in the ‘50s and yet we ignore it.

How easy it is then if one pays much, or perhaps too much, attention to what is happening around us on a daily basis to become entangled in the minutia of the details of the moment, of the short term view or get caught up in the cause du jure and as a result, either lose or corrupt our long range perspective.

So what then does all this have to do with gold and silver as mentioned in the title of this piece? As I mentioned above I am, and remain an advocate of buying gold and silver in these perilous times. I do so not as a means of making a quick buck but rather as a means of protecting yourself and your family against the uncertainty of the times and the very real and exigent problems of inflation. I do so in recognition that the merging of government and business has produced a market system that nothing more than a rigged game, rigged for the benefit of bankers and business and politicians and to the detriment of the rest of society. A rigged game that has become known as “ponzinomics.” It’s a game that even many prominent politicians and businessmen recognize, but refuse to address because the consequences of it coming undone are too terrible to contemplate. So they go on accepting the lies, damned lies and statistics that come out of government bureaus and tell themselves it can just keep going on as is, if we can only just raise the debt ceiling now and worry about cutting spending later, as if to think that either/or, or some combination of the two will actually fix the problem or delay the consequences at least through the next election cycle or until after the next annual report comes out.

I am not alone in my advocacy of acquiring precious metals or railing against the corruption of the revolving door between banks, business and government. It doesn’t take an extensive search on the internet to come up with dozens if not hundreds of sites that share at least some of this perspective. What bothers me however is that some of the more notable figures in this field have become possessed of a dichotomous if not schizophrenic view when these two subjects intersect. They are all the ready to condemn the “evil empire” of Wall Street for manipulating markets with impunity and the apparent acquiescence of our so-called regulatory institutions, and corrupt and dangerous taxation and monetary policy. Yet at the same time they portray and would have their readers believe, that the chaos in the Middle East and the ongoing “Palestinian question” is all the result of some massive “Zionist conspiracy” to control US foreign policy and the region itself. What bothers me even more is that they come off as so self-righteous and condescending in stating their position as if to issue an unquestionable dismissal to any who might disagree. In this they seem to echo the arrogance and method of the political left in some of it most extreme forms. The climate alarmists for one come to mind. I can almost see it as playing the “race card” in reverse, if that makes any sense to the reader.

Is Israel perfect; is its foreign policy beyond reproach? Of course not, no nation is and no policy is. One of the consistent currents of history, up until the era on the UN anyway, has been that nations that institute wars of aggression against their neighbors and lose, subsequently also lose territory. At their ends treaties are signed, territories are annexed, borders are redrawn and populations migrate, often forcibly, to conform to the new conditions. Apparently when Muslim states wage war against Israel and lose this paradigm no longer applies. The Palestinians remain in refugee camps because their Arab brethren keep them there and refuse to allow them to integrate into their societies, not because of anything Israel is doing. They are a means to a political end, and nothing more.

In the ‘30s the world failed, no refused, to take Hitler at his word when he laid out his plans in “Mein Kamph.” The result was the most costly and destructive war the world has ever seen. Today the world refuses to take the Muslim fanatics at their word when they call for the same thing as Hitler. Isn’t the “Insanity Principle” doing the same thing over and over again and expecting a different result?

The Psychological Disconnect of the Petro-Dollar

Whether you are among those that consider the jihadists to be “terrorists,” or are among those who consider US foreign policy to be “terrorism” in its own right, or at the least is the source or cause of terrorism, has become quite irrelevant at this point of the conflict. Once one enters into the quasi-mystic world of moral and cultural relativism, all connections to logic, reason and historical precedent get left behind. This is how and when this particular form of political correctness becomes an obstacle to understand and addressing the clash of cultures between the West and Islam.

If one were to listen to much of the Arab and Islamic world and it defenders in the West, the source of the West’s “crime” against Islam has been our mere presence in the region, infidel boots desecrating the “sacred ground” of Islam. Since the dawn of time stronger nations have been influencing and manipulating if not conquering weaker ones as an instrument of foreign policy for their own benefit. How then is Western colonialism any different than the Moor’s occupation of Spain or the Ottoman Turk’s conquest of Greece and the Balkans? It’s not that there is anything inherently wrong with the concept of taking pride in a national or cultural identity. The problems arise when the element of religious fervor spills over into becoming a moral justification for an irrational blood lust exercised in the name of the supremacy one concept of “god” over another.

Such is of course the greatest of human weaknesses and failings over the centuries and indeed the hardest to overcome. “My god is better than your god.” “Worship my god, my way or be put to the sword or burned at the stake … etc… etc.” For much of the Arab world and particularly among the extremists elements, it is not just the presence of the “infidel” on their sacred soil, be it for whatever reason, that creates the offence, but that a modern world of advanced technology, mass and instantaneous communication, Western culture, be it in whatever form, automobiles, music, movies, television and now the internet have infiltrated and corrupted the desired static “purity” of their would be medieval 8th century societies.

Irrespective of whatever may be the foreign policy machinations of our governments, I’d think that most Westerners would be more than glad to limit our dealings with that part of the world to simply buying their oil at whatever price and wash our hands of most all the rest of it. Sadly the world of economic interaction does not work that way. The accumulation of all those petro-dollars does the recipients little good if they can’t in turn further exchange them for some other more tangible goods or services. Therein lays the rub, the source of the conflict. How can the Arab street aspire to maintain some ethereal and static 8th century cultural “purity” and at the same time desire all those technological innovations that are the epitome of, the very manifestation of the Western capitalist and cultural system? Under what paradigm can they benefit from interaction with and indeed absorption of these elements of Western culture and at the same time hope to remain apart and uninfluenced by it? Is there not some failure of logic, some rational disconnect in blogging on some jihadist web site that calls for the death of the great Satan and the imposition of Sharia law on the West and at the same time using the fruits and benefits of Western technology in complaining about the corruption of Islamic culture by influences of this same Western technology?

We are left then to assume that the desired interpretation of Arab and/or Islamic cultural “purity” would be one where children are seen but not heard, where women are neither seen nor heard, and the delusion that the intellectual liberation that comes from the exposure to a myriad of sources of information and influences from outside a previously closed society, is a genie that can and should be forced back into the bottle via the instruments of violent religious fervor, and failing that, at the point of a gun.

The fact remains that in spite of their adherence to tribalism, narrow moralistic interpretations and tolerating elitist, corrupt leadership structures, those Arab states floating in petro-dollars enjoy some of the highest standards of living in the world. At the same time these so-called sovereign states remain xenophobic in the extreme. They import the vast majority of their labor force to both, build, maintain and operate the means of exploiting their oil resources and to build the fabulous modern architectural infrastructures they now enjoy. They then keep their hired help largely confined to enclaves, kept separate from Arab society in general.

All this new found wealth has led to a considerable percentage of the native populations to have transitioned from the camel to the Corvette, from the goat herd to the art collection, and from living in tents into living in luxury high rise condos, and thus becoming, if not the idle rich, at least the idle well to do. Doing so absent any history of their fathers and their father’s fathers working hard, saving and sacrificing to provide for their progeny’s future and to build the society and the benefits they now enjoy. Deprived of the Western model of a generational economic, social and cultural evolution they find themselves, quite understandably in a state of culture shock, weather they want to admit it or not. How else then does one interpret Islamic families immigrating to the West to create a better life for their families and then turning around and slaughtering their wives and daughters for the cultural crimes of becoming “too Westernized,” or refusing to enter into an arranged marriage, or dating a non-Muslim, absent this contention of culture shock or a psychological disconnect in reason or logic?

In the West the transformation and growth of the middle class into widespread economic affluence took place over generations and decades if not centuries, driven by advances in technology and the governmental systems that grew out of the enlightenment. The accompanying changes and normalizations in social mores and attitudes about class and religious differentiations were slower to develop, take root and gain general social acceptance, often only after a great deal of social turmoil and conflict. A shorter-term example would be the contentious evolution of the American civil right struggle. A longer-term example would be the protracted and violent conflict brought about by the Protestant Reformation. The point being, that changes in social attitudes do eventually catch up with the economic changes that drove them, but it takes time and generations.

In the oil states of the Arab world, when measured against the Western example, this economic transformation has been revolutionary rather than evolutionary and has taken place in a virtual blink of the eye. There has been no generational time frame to allow for any gradual changes in the social attitudes to catch up to the implications of this economic revolution. This retardation of changes in social attitudes catching up to the economic changes has been exacerbated both by the absence of any underlying long-standing traditions of individual liberty and self-reliance as found in the West and the continuance of adhering to tribalism and narrowly constructed moralisms as defense mechanisms against the social implications of an irreversible economic revolution. It is emotional discomfort of this embedded culture shock and psychological disconnect from reason and logic that has become the fertile ground of Islamic nihilism and its demagogic practitioners. And we have been reaping the whirlwind of their corruption for the last 30 years.

Now throw in the added pressure of rapid inflation in food prices and you not only ignite the fires of even more social unrest, you further accentuate the contradiction with one of the most basic and universal of human desires, one that knows no borders or states; the desire to lead a better life than your parents, to provide a better existence for your children and grandchildren than you had yourself. Clearly the Arab and Islamic world has a lot of catching up to do. The questions becomes not ones of if it will be tumultuous and violent but ones of how much of that tumult and violence is the West responsible for, how much of it will spill over into the rest of the world and how deeply will the West get drawn into it while acting in its own self-defense.

The Strange Case of Gold, Oil and Mummar Kaddafi.

What with the world’s attention diverted with demise of Osama Bin Laden and dubious controversies over whether or not to release any photographic evidence of his brain matter, the story of the ongoing violence in Libya has been moved to page 12 so to speak. That is until just the other night when Kaddafi’s forces managed to blow up the last remaining oil facilities in rebel hands at the port city if Misrata. Going up in the smoke of the fires was not only the rebels last hopes of holding the city but any potential of funding there little revolution with oil and any financial viability to the curiously and hastily created new Central Bank of Libya.

I’d say that it’s a pretty safe bet that Kaddafi is a low life tin pot dictator not much different than any other low life tin pot dictator found all across the Arab world. This raises the questions of why Libya and why now? As the wave of violence spread across the Middle East Kaddafi was hardly the only or the first to turn his guns on his subjects. In particular, as in Syria, where using unarmed protesters for target practice is now a daily ritual.

So is there something going on under the surface with Libya that is perhaps not being discussed but is also perhaps a driving force behind the “humanitarian mission” that NATO has undertaken? Well let’s look at a few elements, some not necessarily making the front page in the New York Times.

1. Shortly after the so-called rebels took control of the city of Benghazi it was announced that it would become the home for a new Central Bank of Libya and would seek association with both the (International Monetary Fund (IMF) and the Bank for International Settlements (BIS).

2. This new “Bank” would also become the financial clearing house for new oil export agreements between the new rebel “government” and other Arab states that would provide the logistical support to get the oil out of Libya, i.e. tankers and refinery capacity.

3. Libya’s existing Central Bank is wholly owned by the State and is not affiliated with either the IMF or the BIS. (Not to mention that it also owns about 12% of the major Italian banks.)

4. Just a few months before this “revolution” spread to Libya, Kaddafi (through the state owned bank) announced that they were seeking to create a “Gold Dinar” to be used by Arab and African States as the medium of exchange for oil transactions within the region.

5. Any such transaction would be outside the reach of the IMF and BIS and would not necessarily be based on any translation of the spot price value based in U.S. Dollars, and whatever the agreed to transaction price was, based in Gold Dinars.

With any such transactions now taking place directly between the buys and sellers and cutting out the western spot market and banking interests and eliminating whatever their cut of the action is for the currency trades certainly casts an additional if not different light on the above questions of “Why Libya and why now.”

I’ll be waiting for Osama Ben Bernanke to be asked about this at his next propaganda press conference. But I won’t be holding my breath.

The Death of Osama and the Lack of Political Will

The announcement that US Special Forces had found and killed Osama Bin Laden has brought out a variety of reactions to the event and reactions to the reactions. After watching them the old concept of the “theater of the absurd” comes to mind.

While the release of pent up frustration in celebratory reaction by much of the public is understandable, its condemnation as somehow crude or gosh is just as predictable. We we’re told that we should be “better than that,” that we should not celebrate the death of another human being. That it brought us “down to the level” of the Arabs who celebrated in the streets on 9-11.

Well at this point, for me at least, the revulsion factor kicks in. I would ask just who do these sanctimonious jerks think they are? But then I remember that they are most likely the products public education and the victims of some faceless pseudo-Marxist college professor, and are therefore completely lacking in any real exposure to military history. How else can one explain how their pontifications are so out of context with any historical precedent? I guess then that by their standards we had no right to celebrate the end of World War II or when von Ribbentrop or Tojo danced at the end of a rope after their convictions for war crimes. I doubt that the vast majority of them could tell you who von Clausewitz or Sun Tsu were without making a quick check with Wikipedia first. As such I am forced to dismiss their opinions as not worth consideration never mind even being bothered listening to them. This is what happens when people become more concerned with political correctness, moral relativism and “sensitivity.” The very notion that we should be “civil” in how we conduct war is ludicrous on its face. As someone who has traveled through the Arab and Islamic world I can state without hesitation that the only thing they respect is strength, and that they have nothing but contempt for weakness and accommodation.

So what then will become of American foreign policy in the wake of Bin Laden oh so celebrated demise? Given the combination of the particular ideological bent of the current administration and the continued and growing economic problems on the home front I would suspect that the lure of isolationism will become far more appealing. The population in general has grown weary of a seemingly endless war, so I would fully expect this administration to use this as an excuse to declare “mission accomplished” in the Afghanistan Theater and begin pulling out the vast majority of our troops. This would then become fodder for the re-election campaign slogans that Obama “got us out of the war” in Afghanistan. This of course would then begin the pressure to do the same in Iraq. Throwing in the need to cut our expenditures as an added measure may well make such a move politically irresistible. I’m not saying that I would be opposed to such a move if it included the caveat that it include a warning to both the Taliban and Iran that any further terror attacks against Western interests or an aggressive move into Iraq would be met with a swift and decisive move to stop it, up to and including the nuclear option. If he were to couple any such withdrawal with an announcement of renewed support for Israel and that a percentage of our troops in the area were going to be re-deployed there as a tripwire against renewed Arab state aggression against it I might change my mind. Sadly I don’t think such decisive and bold actions are within the realm of this President’s thought or even consideration.

Wars are won by seeking out and exploiting your enemies’ weaknesses. For the Islamists we face their greatest weakness is in their religion itself. Although there are those within the military and intelligence establishment that recognize this, our government lacks both the spine and the political will to exploit it.

So What's Another Trillion or two?

As the debate on the debt ceiling begins to move closer to its inexorable place on the front burner we are beginning to see what some of the real numbers are, and we can expect the hyperbolic rhetoric to ratchet up a few more notches. It would be hard to imagine anyone being able to top former Bush Treasury Paul O’Neill who recently stated "The people who are threatening not to pass the debt ceiling are our version of al-Qaeda terrorists. Really. They're really putting our whole society at risk by threatening to round up 50 percent of the members of the Congress, who are loony, who would put our credit at risk."

Never the less expect the issue to create some sharp divides, both in Congress and amongst the public. Needless to say the politicians will play football with this for as long as they can and milk it for whatever perceived partisan advantage they think they can get. Facing reality and making hard choices are not their forte, never has been and don’t expect it to be anytime soon. As someone once said “Governments always do the right thing, but not until all other options have been exhausted.” Pretty much sounds like the game plan we can expect.

Already things are starting move into the realm of what can only be called bizarro world. With only some $30 Billion remaining below the legally prescribed maximum, (.002% of the total $14.3 Trillion allowed) the Treasury announced today that it plans to issue $72 Billion in 3, 10 and 30 year bonds next week. This of course would place the Treasury department technically in violation of the law. But who’s going to stop Little Timmy Geithner and his band of merry pranksters? The President? The Congress? Don’t hold your breath. Congress and the DOJ can’t even be bothered to enforce the new regulations they passed in the Dodd-Frank so-called financial reform law. I’d like someone to ask the CFTC about those required position limits that were supposed to be in place by January 15 but are still “under consideration." Couldn’t possible have anything to do with the CFTC Chairman being a “former” Goldman Sachs employee now could it? But I digress.

I would expect that this “technical” violation will become the Administration’s lever to try and force the increase through. “We can’t have this situation go on. We can’t prosecute the Secretary of Treasury for willful violation of the law now can we?” Yeah right like that will ever happen.

So now we get to the revelation of what the Treasury really wants. Hold onto your hats, or more precisely your wallets. The Treasury says it needs an additional $2 Trillion debt capacity through the end of 2012! I’d ask if they are kidding but I know that they are perfectly serious. Never mind that this number is well over 100% of US GDP or represents a 14% increase in total debt. The problem that is not being spoken of, is not that the Congress is going to keep spending like there is no tomorrow, that’s to be expected, we’re talking Congress here, it’s that of the already $14.3 Trillion in outstanding debt, 28% of it is due to come due in this same period.

So here we sit already $14.3 Trillion in the hole and Timmy and company want to dig the hole $2 Trillion deeper. Of that already existing $14.3 Trillion, $4 Trillion either has to be paid off, rolled over, or sold to new holders. Paid off? Not a snowballs chance in hell. Rolled over? That percentage already held by the FED, maybe, as to the rest, not a snowballs chance in an equatorial jungle. Sold to new holders? Therein lays the POMO game's perennial out. Think Japan is going to be buying any more US debt, never mind rolling over what they already have? I doubt it, they’re already selling anything not welded down to finance their rebuilding process. China? Well they might by some but it will be far outweighed but what they are already selling and what they will continue to sell. India? Same story as China. The Europeans? Silly rabbit. PIIGS is all you need to know there.

Who does that leave then? It doesn’t take a genius to guess the FED and ultimately the US taxpayer and their children and grandchildren. So you can pretty much bet that the Wall Street banks will continue to prosper and pass out those fat bonus checks while our GDP begins to contract, real unemployment grows and the rest of the world casts an increasingly jaundiced eye on our ability, never mind willingness to address or fiscal problems.

What could possible go wrong? Never mind. I forgot is it "Survivor" or "Dancing With The Stars" that’s on tonight? Bin Laden is still dead isn’t he? Can we bring him back and kill him again?