Archive for the 'monetary policy' Category

02
Nov
08

Liberty’s Best Week Ever!

NO, I am not talking about the impending undemocratic, non-election about to be perpetrated on us a couple of days hence between Wall Street Candidate A and Wall Street candidate A’ This one has been decided already – ordinary Americans have lost, and the banksters have won.

I am, rather, calling attention to the surprising upside to the continuing global financial collapse. The completely deserted checkout lanes today at my local wholesale club underscored the rapid retreat of consumer spending that’s occurring now. What is occurring now in the public intellectual mind is both thoroughly awful, and blindingly brilliant.

Awful, due to the present and future suffering of millions, nay, billions of people around the world, but brilliant, because the fact is that the economic predictive power of Austrian-School economics has been thoroughly vindicated, no matter what stupid, nonsensical things the Keynesians and Friedmanites say. We were right, we told them all what was coming, and they failed to listen. More Important, we have the correct answers.

And, better late than never, even some mainstream journalists, conservative Republicans, and left progressives are trying to re-orient their thinking in the midst of an unprecedented global financial calamity, where suddenly “Liberal” nor “Conservative” (as we have been brainwashed to call Socialist and Fascist policy ‘solutions’) ideas seem to have no discernible relevance at all.

This week two astounding interviews took place, between serious people of the left, and two of the current stars of the Austro-Libertarian movement.

On Thursday, the charming, brainy lefty journalist Rachel Maddow of MSNBC interviewed Ron Paul, focusing on his eerie (not to us of course) prescience on the economic meltdown, and on the significance of his recent campaign, and what it portends for the future of Republican Party as well as the electoral system.

On Friday, Lew Rockwell, founder and president of the Ludwig von Mises Institute interviewed Naomi Wolf on his podcast. This is a MUST LISTEN interview with the principled, thoughtful left-wing journalist. Ms Wolf, author of several books, including “The Beauty Myth”, and more notably “The End of America”, was last heard of in libertarian circles promoting, along with Ron Paul the American Freedom Agenda, calling for an end to America’s belligerent foreign policy and its depredations on domestic liberty.

Listen to her questioning Lew about definitions of libertarianism, and her response to his answers – I half held my breath throughout the unedited 50-minute conversation, waiting perhaps to hear Lew say something to make Ms Wolf ‘fall out of the ether’ as they say in the car business.

He doesn’t, and she didn’t. It is an extended dialog on the principled embrace of universal liberty, in honest, non-agendized terms that will speak to the heart of every thinking, compassionate person on the left, right, or middle. This shows how there is not, and never has been, such a thing as Democrat liberty, or Republican liberty, only Liberty For All.

Do yourself and your loved ones (particularly intelligent, leftish and rightish ones) a favor and get them to listen to this podcast to give them an understanding why you are a principled, onsistent advocate of liberty.

Then go to www.campaignforliberty.com , and get involved.

UPDATE: If you are still, for some unfathomable reason a McCain supporter, PLEASE watch this video of Dr. Paul taking apart McCain’s dumbass foreign policy prescriptions in the St. Petersburg debate;

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24
Sep
08

Hank Paulson’s Taxpayer Takedown Strategy

(CLIP: Leroy Smith Shows How To Set Up An Opponent For A Takedown.)

My local Ron Paul Meetup (yes, it’s still around) has been loosely organizing a letter-writing and phone campaign against the absolutely unconscionable, immoral, illegal, undemocratic bank-bailout bill  that Treasury Secretary Hank Paulson (R, Goldman-Sachs) dragged up the steps of the Capitol the other day.

One writer suggested this emphasis, I thought it good enough to use, initially;

“I am writing to strongly discourage you from supporting the Treasury Secretary Paulson’s “bank bailout” proposal. This bill will ensure the indentured servitude of Americans for generations to come as it will become increasingly certain that the US will never be able to service is debt obligations. Why should I as an honest and responsible citizen be required to bailout the willfully negligent behavior of executives in the financial industry?

Moreover, I find Section 8 of the proposal particularly disturbing:

Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

This bill in effect makes Secretary Paulson a “Financial Dictator” subject to no Congressional oversight and no judicial oversight. He is immune from any future prosecution with respect to his appropriations of bailout funds.”

Later I remembered what my old wrestling coach taught me about executing a takedown, that the most effective setup is often one where you use your opponent’s own reaction to help you execute the move, so I wrote this;

This bill must be defeated, not modified.

This is a classic setup, a case of action – reaction – action.

If you wrestled in high school or college, you will, upon reflection realize that the Paulson proposal is in part a ‘set-up’ for a financial takedown.

They tie us up with the banking implosion.

Push us (and our representatives) with this unbelievably egregious proposal.

We (and our congresscritters) push back (“we want mortgage forgiveness, salary caps, blah, blah, blah”).

Paulson and Bush then drop down and “Fireman’s Carry” our asses up into the rafters, and down onto the mat – 4 points, and a pin to win.

We never ever see it coming.

Hank’s real goal is to ensure that the bad debt is bailed out at ‘face value‘, instead of at a steep market discount. This will cost further trillions of dollars (money that we do not have) and prevent market prices of the underlying assets from correcting for years, if ever. The bankers will escape completely unscathed, while the taxpayer watches his money rot.

This is why the proposal must not be modified, but defeated utterly.

If the banking system, and our fiat economy, is ready to collapse, then we must Let It Fall.

21
Sep
08

What I Saw At The Great Inflation

I’m on a mailing list for Guided By Voices, a 4-years-defunct band. What keeps it going, I think, are the people who make up the Postal Blowfish community – largely thoughtful, earnest folks.

I’m feeding an off-off-topic discussion (I didn’t start it, honest) about the current financial calamity, and the discussion turned to government-backed and subsidized mortgages;

David;

> But to scuttle the whole system would also keep people from buying houses
> who can repay the loans.  Put the crooks in jail, but leave the
> baby in the bathtub.

Dennis;

Yes, our first house loan was through fannie may. They put us through the credit check wringer and we had to take out mortgage insurance. We paid our way out of that and were able to refinance at a better rate and get the mortgage ins. dropped. These programs can work but people got too greedy and home buyers were fucked in those hot markets like vegas and arizona. A good friend of mine is sitting on a mortgage that is prob twice what the house will auction for in vegas.

My rejoinder;

One thought on this;

My parents, in 1964, purchased a house. A little run-down, not in the best neighborhood, but good enough. They paid $7000 for it. My dad was a pattern maker in a machine shop, my mom was, well, my mom (NOTE: No disrespect was intended to my mom, after raising 5 of us full-time she has gone on to two degrees and two entirely separate careers.)

My uncle financed the purchase, I think for 5 years at 5% simple interest. It was a duplex, and the upstairs rent paid back the mortgage in that time. I remember the day in first grade when my mom said I was getting my own room, after the renters had vacated (it was the same day I came down with the mumps, silver linings and all that.)

Fast forward 35 years to 1999. We have all moved out, except for my brother. My parents have moved, a couple of steps up the nice-neighborhood ladder (the old neighborhood, now home to numerous subsidized renters, has moved a couple steps down), and my brother, an industrial mechanic, buys the house from them at a heavily-discounted $84,000 or so, 12 times what they paid for it. Even with a healthy discount from market (this was before the boom), he had to get an FHA loan to make the deal.

What happened? There is simply no way that house in real terms was worth 12x what it sold for in 1964. The ‘magic’ of inflation, plus demand artificially stimulated by government-backed and / or subsidized mortgages, helped put a very modest home outside of the budget of a working person without help. It benefitted my parents very modestly. For the first time in 30 years, they had a mortgage. Their new crib consumed much more than the cash from the old home.

I’m not saying I have all the answers. But government interference in any market carries costs. Are they too high?

vini

15
Sep
08

If We Could See The Crisis Coming, Why Couldn’t Anybody Else?

We thought that the collapse of Lehman Brothers and Merrill Lynch over the weekend, the two latest “victims” in the financial calamity unfolding in our newspapers and on our TV screens, was an excellent opportunity for us to point out how right we were about the mortgage mess even before it started;

Every Homeowner…(6/9/2004);

…especially those who are mortgaged to the hilt, should read this article;

An excerpt;

Signs of a “”new era”” in housing are everywhere. Housing construction is taking place at record rates. New records for real estate prices are being set across the country, especially on the east and west coasts…As one loan officer explained to me: “”It’s almost too good to be true.””In fact, it is too good to be true. What the prophets of the new housing paradigm don’t discuss is that real estate markets have experienced similar cycles in the past and that periods described as new paradigms are often followed by periods of distress in real estate markets, including foreclosure sales, bankruptcy and bank failures.

OOOH, This Is BAD (7/2/2004);

From today’s WSJ;

The Johnsons thought they had it all figured out. After changing jobs, Paul had planned to rollover the $36,000 balance from his former employer’s 401(k) plan into an IRA. But a desire to live closer to their parents and worries that mortgage rates would head higher spurred them to cash out the 401(k) account last year and use some of the money to buy a home…”We’re making more money, but a lot of that is going into improvements on the home.””The couple also still owes state and federal taxes on the retirement-account withdrawal, and they haven’t started to rebuild their nest egg.

No real-estate bubble you say?;

A President’s Job Is Never Done (8/24/2004);

I just spotted this on the Mises Institute blog. James Bovard (always a must-read) wrote in Barron’s about George Bush’s initiative to close the gap between rich and poor. I can’t even start to comment on it. Here are some clips:

* A White House Fact Sheet issued June 17, 2002, declared that Bush’s agenda “”will help tear down the barriers to homeownership that stand in the way of our nation’s African-American, Hispanic and other minority families. … The single biggest barrier to homeownership is accumulating funds for a down payment.””

* Federal Housing Commissioner John Weicher said in January 2004 that “”the White House doesn’t think those who can afford the monthly payment but have been unable to save for a down payment should be deprived from owning a home,”” National Mortgage News reported.

* While zero-downpayment mortgages have long been considered profoundly unsafe (especially for borrowers with dubious credit history), Weicher confidently asserted: “”We do not anticipate any costs to taxpayers.””

Although Barron’s is a pay site, the full text of the article is on the blog if you scroll down a little. I just have one question that Bovard leave’s unanswered: Did we indeed elect Al Gore in 2000?

Some Eagles Fans Have Really, Really Lost Their Minds (2/3/2005);

…and could lose their houses.

From “”The Rude Awakening””, published by Bill Bonner and Addison Wiggin, authors of Financial Reckoning Day comes the following;

“”Mr. Dave Brekher, president and co-owner of North American Federal Mortgage Co. in blue-collar Northeast Philadelphia, realizes that enthusiasm is not the same as good credit.

His company has been asked to lend money to local football fans wishing to mortgage their houses so they can afford to go to the Super Bowl. “”No,”” he said.

“”If someone is that desperate, there’s always repercussions,”” he explained.

I Hope the Voters Remember This When He’s Up for Reelection (2/4/2005);

This is from the Philadelphia Daily News:

Kevin P. O’Donoghue, 36, of Glen Mills, sank $4,000 into a Super Bowl package that includes round-trip airfare, a four-night hotel stay, and one ticket.

He said that he told his wife after the Eagles defeated the Atlanta Falcons for the NFC championship: “”I don’t care if we have to mortgage our house, I’m going.””

He applied for a home-equity line of credit that required him to put up his home as collateral. He’s getting the money in a few days.

“”Sometimes the cards are maxed out, and you got to do what you got to do,”” he said.

For those of you who don’t know him, O’Donoghue is the township supervisor where I live so he wields fiduciary responsibility over my money. I will surely not forget this next time it comes time to elect a township supervisor. .

We Hate To Say We Told You So… (10/17/2005);

…but the “”crack-up boom”” is about to bite us all in the ass. Just this week;

When you get right down to it, people vote their pocketbooks.

And they are all about to be given a HARD kick.

Taking Advantage Of FHA, Buyers, Beazer Destroys Lives, Neighborhoods (3/28/2007);

When we last left this sorry tale, builder Beazer Homes had sold crappy 2-bedroom starter houses to low-income buyers in Charlotte, NC, an average of 20% of whom, it turns out, have since had those homes foreclosed.

Now the FBI, and the US Attorney in Charlotte are involved, and Beazer’s stock price is tanking, down 17% from an already low point.

As great as it is to see such a corporate pig get skewered, Beazer was only doing what the Bush Administration was urging them to do, which is to sell houses to people who have no realistic way to ever pay for them.

(link from Breitbart.com)

The Fed’s Fatal Overreach (4/1/2008);

Just when you think you have seen it all, a proposal has arisen from the Bush White House to empower the Federal Reserve to take over the entire US financial system.

Now right about now, anyone like us who has followed the Fed-inflated real-estate bubble, followed by the collapse of the housing marketthe Fed origins of the mortgage crisis, and the Fed-caused recession can be forgiven for making a gurgling noise as their head explodes from the unbelievable hubris, the BALLS behind such a move.

The prescient words of the great Ron Paul chill the spine at this moment;

We had missed the 5:30 Ferry, but the good people at Shepler’s quickly boarded us on another boat and made a special run to take us and Ron Paul over to the Island..

… I asked him how much longer he thought those guys in Washington could keep going before everything started to collapse, and he said “”Not much longer, things are starting to fall apart and this time they will not be able to stop it.””

To singlehandedly destroy an economy, quickly steal away from the scene, then return with a flourish annoncing that salvation is at hand is exactly what compulsive arsonists do.

And the people should rise up and put them in exactly the same place as arsonists – in prison, every last one of them.

06
Sep
08

Is Ron Paul Going Third-Party?

Ron Paul Holds Up The Two Fingers I'm Keeping Crossed

I'm Keeping Mine Crossed

On the Campaign For Liberty website, a tantalizing blog entry giving hope that, despite my previous post, it may NOT be quite over, after all;

Ron Paul to Make Major Announcement Next Week

Friends,

Dr. Paul just authorized me to send this press release to the national wire. Stay tuned!


FOR IMMEDIATE RELEASE                                                      CONTACT: Jesse Benton
September 5, 2008

ALEXANDRIA, VIRGINIA – On the heels of his historic three-day rally in Minneapolis that drew over 12,000 attendees, Congressman Ron Paul will make a major announcement next week in Washington at the National Press Club.

More details will be announced Monday.

Also, Eric Garris reports on the Lew Rockwell Blog that the Montana Constitution Party has removed Chuck Baldwin’s name from the state presidential ballot, and replaced it with Ron Paul and Michael Peroutka.

The next 60 days could be very, VERY interesting.

06
Jul
08

Please Tell Me The World’s "Leaders" Are Not Really This Stupid

On the upcoming G8 summit in Japan:

foodpricessmallprod_affiliate91

German Chancellor Angela Merkel said the G8 leaders would agree on steps to fight the soaring price of food and to guarantee supplies.

The steps will provide short-term relief to the crisis and a long-term strategy to increase world agricultural production.

Rising food prices have pushed 100 million people below the poverty line, the World Bank estimates, and have sparked street riots around the world.

I know it’s too early to celebrate International Talk Like a Pirate Day but, “Arrr, shiver me timbers!” No one is even talking about how price supports for dumb initiatives such as biofuels are causing market distortions, raising food costs and dropping the world’s poorest people into starvation. I will go out on a limb here, though, and predict that the only “solution” they can up with is a more uniform scheme of economic fascism instead of simply disbanding the G8 which does nothing other than to guarantee that the world’s most economically influential countries inflate their money supplies at approximately the same rate.

27
Jun
08

Thanks, Alan and Ben

I have been looking forward to my photo workshop in Venice, Italy for some time now. The trip is all-inclusive and was paid for several months ago (or so I thought) so all I had to do was not go crazy waiting until October. Then I get this email from the organizer of the trip (chart not included):

I have booked all that is necessary for each of us and …. a few little surprises to ensure an even greater time together in Bella Venezia!!!

I have one little bad news…. the USD$$$   has plummeted by 14.3% against the EURO since lat year !!   We ADVERTISED  hotel rates in USD $ , but will be paying the hotel in EURO.

The deficit is quite significant when booking 20 or so rooms per week, so I am afraid we need to charge you an extra USD$300 for the WEEK for the accommodation component of the costs.

Sweet. The trip isn’t for another few months so I wonder how many more emails like this I’ll get before I actually take off?  The $300 kinda makes me mad but it got me thinking about how aware everyone else in the world is of our monetary policy and how numb Americans are toward anything but reality teevee shows. The Euro is inflating like crazy (in terms of gold) but Da Fed is making Brussels look like a bunch of monks.