Tuesday, May 26, 2009
Sunday, April 12, 2009
Thursday, March 26, 2009
The root of the financial crisis
Our money is debt created when we and corporations borrow. It represents our labor promised for things not yet done. It has to be continually expanded to cover the interest that is not created with the original principal. There is constantly more demand for money than is present during the normal cycle reducing the risk of hyperinflation while at the same time insuring inflation is contantly greater than the savings rate.
No consistent savings is possible in such a system for the average citizen. He/she is constantly going to be on the short side of the stick as money is expanded faster than his savings. Bubbles such as housing or equities will give him the illlusion of savings for awhile. So he is herded from one side of the corrall to another. If he decides to be responsible and ignore the bubble du jour he will again be denied his fair share. During a deflationary period the central bank will aggressivley devalue the debt load in society and ramp up the speed of the inflationary money cycle so that he is again running at breakneck speed on an incline to stay where he is. If he falters or someone in his family gets sick or injured he is thrown off and has to beg the government for scraps and trickle down from the high and mighty.
The difference with commodity based money is that the borrowing is done from labor done in the past. It winds up in the hands of the average person for his labor and he can make a decision on the risks he will take. It must be taxed fairly or he will not give it up. Our system is borrowing collectively from the future. In borrowing from the future the average person has no say where the mighty will place his future labor. The unseen inflation tax takes it out of his hands even though he does not spend it. He has no 5th ammendment right regrding how he made his money. If he does not file his taxes he is thrown in jail. So under threat of duress he has to file which goes against centuries of common law regarding forced confessions. It is also taken out in payroll taxes before he gets to look at it. This is the invisable chain that makes him the the debt slave of the government/banking industry.
His future labor may be used in unnecessary wars or complex financial instruments or to get even more benefits on both sides of the the political financial sytem. Which system would be more bio-diverse and increase the liklihood of stabilty. Read our history. It is constantly a war of centralization for the benefits of a few and against the expansion of freedom and stabilty for the many. The loss of freedom is always disguised in the tyranny of good intentions.
No consistent savings is possible in such a system for the average citizen. He/she is constantly going to be on the short side of the stick as money is expanded faster than his savings. Bubbles such as housing or equities will give him the illlusion of savings for awhile. So he is herded from one side of the corrall to another. If he decides to be responsible and ignore the bubble du jour he will again be denied his fair share. During a deflationary period the central bank will aggressivley devalue the debt load in society and ramp up the speed of the inflationary money cycle so that he is again running at breakneck speed on an incline to stay where he is. If he falters or someone in his family gets sick or injured he is thrown off and has to beg the government for scraps and trickle down from the high and mighty.
The difference with commodity based money is that the borrowing is done from labor done in the past. It winds up in the hands of the average person for his labor and he can make a decision on the risks he will take. It must be taxed fairly or he will not give it up. Our system is borrowing collectively from the future. In borrowing from the future the average person has no say where the mighty will place his future labor. The unseen inflation tax takes it out of his hands even though he does not spend it. He has no 5th ammendment right regrding how he made his money. If he does not file his taxes he is thrown in jail. So under threat of duress he has to file which goes against centuries of common law regarding forced confessions. It is also taken out in payroll taxes before he gets to look at it. This is the invisable chain that makes him the the debt slave of the government/banking industry.
His future labor may be used in unnecessary wars or complex financial instruments or to get even more benefits on both sides of the the political financial sytem. Which system would be more bio-diverse and increase the liklihood of stabilty. Read our history. It is constantly a war of centralization for the benefits of a few and against the expansion of freedom and stabilty for the many. The loss of freedom is always disguised in the tyranny of good intentions.
Wednesday, March 25, 2009
Wednesday, March 18, 2009
Full Faith and Credit
The WWII generation had this phrase, "...backed by the full faith and credit of the US Treasury..."
It may very well take the Chinese to force the US Treasury into bankruptcy since our voters didn't elect representatives with the will-power to take appropriate action.
When the US was the most productive nation in the world, and by productive we mean actual goods for domestic consumption and export, with the ability to tax the "products' manufactured and sold from its jurisdiction the US Treasury had some clout.
Now the US Treasury is taxing such things as commissions, interest and what I would refer to as "financial transactions" that generate a paper profit and a "financial interest" without actually producing something that is consumable that will be traded for something that is consumable.
It would only be expected that China as a lender would want to re-position itself from a T-Bill "note holder" to a "securitized" creditor with a first lien on a real asset that can contribute to the production of consumables.
What the Chinese have or will realize is that the US Treasury has been plundered and that the "...full faith and credit..." is just not there. So the Chinese government is just looking for ways to protect what was invested primarily by their aging workforce/pensioners. With the pension function having been primarily performed by AIG, which is now 80% owned by the US Treasury, the US Treasury/Congress would now seem to be holding the bag for protecting the Chinese pension system.
It may very well take the Chinese to force the US Treasury into bankruptcy since our voters didn't elect representatives with the will-power to take appropriate action.
Sunday, March 15, 2009
Conservative talk radio on the wane in California
http://www.latimes.com/news/local/la-me-talkradio15-2009mar15,0,39114.story
But you have to laugh, when it is the LA Times-losing subscribers-daily-in bankruptcy that publishes this story, and when they fail to mention the bankrupt liberal Air America, which in Ann Arbor has been taken off a local station which has converted to a "business" news format. I'll tune in and let you know.
But you have to laugh, when it is the LA Times-losing subscribers-daily-in bankruptcy that publishes this story, and when they fail to mention the bankrupt liberal Air America, which in Ann Arbor has been taken off a local station which has converted to a "business" news format. I'll tune in and let you know.
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