Tuesday, January 31, 2012

Whoa Baby, NY Fed President Owned $1.4 Million Treasury Securities that Would Protect Him Against Inflation

File this under: Watch what they do not what they say.

William Dudley, the New York Fed president who famously pooh, poohed the possibility of significant price inflation, actually owned Treasury securities that protect investors against price inflation.

In March of last year, Dudley played down the threat of price inflation to an audience  enraged about increasing food prices, by telling the audience that not all prices were going up, and that they should look at the prices of iPads. Reuters, at the time, explained how that went down:
In Queens, New York, on Friday, New York Fed President William Dudley did just that. He got an earful.

After being bombarded with questions about food inflation, Dudley attempted to reassure his audience by putting rising commodity prices into a broader economic context -- but that only made matters worse.

"When was the last time, sir, that you went grocery shopping?" one audience member asked.

Dudley tried to explain how the Fed sees things: Yes, food and energy prices may be rising, but at the same time, other prices are declining.

He then stretched for a real world example. The only problem was he chose the Apple's latest tablet computer that hit stores on Friday, which may be more popular at the New York Fed's headquarters near Wall Street than it is on the gritty streets of Queens. 
"Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful," he said."You have to look at the prices of all things."

This prompted guffaws and widespread murmuring from the audience, with one audience member calling the comment "tone deaf."
"I can't eat an iPad," another said.
In a Fed branch bank data dump late today, the Federal Reserve released the financial holdings of the presidents of its 12 regional banks. The disclosures covered 2008 to 2010. The disclosure came after a Freedom of Information request from Bloomberg News.

Guess what, Mr. Chill on inflation, Dudley held in his portfolio? $1.45 million in Treasury inflation-protected securities (aka TIPS). These as the Treasury points out:
...provide protection against inflation. The principal of a TIPS increases with inflation and decreases with deflation, as measured by the Consumer Price Index
There is no other reason to hold these unless you expect strong price inflation.

When Dudley joined the Fed, he did not sell the TIPS, instead he went through the trouble of getting a waiver from the Fed to own them. As part of his waiver he has agreed to hold the securities until their maturity, according to the New York Fed.

It was not immediately clear if the securities have matured, or if he still holds them, since the NY Fed has only released data through 2010.

Henry David Thoreau Survival Insights that You Can Use Now in the Erratic, Government Interventionist Economy

By Wayne M. Thomas

Many people remember the book Walden as the story of a hermit living in a hut who survived on twigs and berries in the Concord, Massachusetts woods. Its author, Henry David Thoreau, was no hermit, but a survivalist and philosopher who personified the best of American values of self-reliance, simplicity, love of the land, individualism and defense of personal liberty against governmental overreaching.

He lived simply on Walden Pond from 1845-1847 without a GPS, iPod, iPhone, laptop or wi-fi.. Long before we developed a dependence on electronic devices, Thoreau defined some first principles for personal autonomy and survival. We find them in Walden, his gift of essential life strategies that we ought to re-learn before stuffing our G.O.O.D. bags and thinking that we have prepared ourselves to meet the Black Swans ahead. He would warn us today that we must not bet our lives on electronic survival devices because others control them and can jam them by the flick of a switch.

Thoreau's EDC bag

This article lifts up seven of Thoreau's survival principles that we can rely upon; that each of us can own at no cost, and which no government or terrorist can destruct. Think of these principles as the fabric of an indestructible carry bag large enough to stuff with all our plans and tools for personal survival.

Many surprises await us in the 2000s. This we know, but none of us knows the timing. Thus, we create short-term and long-term survival strategies. Thoreau's principles are an overarching everyday strategy, holding that a life worth living depends upon remaining free and independent, living as autonomous men and women alert and able to confront, ignore, or go around obstacles in our way. The best survival strategy is to be always ready, but live well always.

The individual versus the world

"Simplify, simplify," Thoreau repeated, and be certain that you have the essentials for life--food, shelter, fuel and clothing--under your control. Thoreau's sojourn in Walden woods lasted two years, two months and two days in the cabin he built himself. It was no coincidence that his move-in date was the fourth of July. Thoreau explained, "I went to the woods because I wished to live deliberately, to front only the essential facts of life, and see if I could not learn what it had to teach, and not, when I came to die, discover that I had not lived."

Writing four hours a day on the shore of Walden Pond, he pondered how an individual could maintain his autonomy against a mighty government, powerful business interests and a growing trend to materialism. Just as in 1845, our politicians continue to grab power by making thousands of promises. What they deliver is trillion dollar debts and more promises. It is said that each of us now owns $2 million of government debt. (Have you budgeted for that?) In a cozy relationship with politicians, business spends billions coaxing us to buy things we do not need, that rarely perform as advertised and that often drag us under a pile of debt. Thoreau saw a way for an individual to get around these growing influences, and he spelled it out in Walden.

What's essential; what's not

To emphasize his points, he often wrote in extremes. For example, Thoreau defined anything non-essential to life as a "luxury." While he succumbed to a few luxuries himself, Thoreau spent within his means by deciding his own balance of essentials and luxuries and then earned just enough to sustain it. He called this living "deliberately", and it was the centerpiece of his life strategy. If he lived deliberately, he would not get into debt and therefore, not become enslaved by work to pay it off. Debt is more than dollars and cents because it represents the amount of life we must trade in work to pay it off. Time is money, and Thoreau became rich by acquiring it.

Thoreau enjoyed the work he did, but tried to work as little as possible. He believed that society had it all wrong about the role of work in life and said so in his Harvard graduation speech. People sat up in their seats as he declared that they had things backwards and that they should work just one day a week and have the other six to do what was important to them. This was no utopian dream. It is how he actually lived. Incidentally, I verified this with the Institute at Walden Woods.

Personal responsibility to do what's right

Thoreau believed that each of us has an intuitive sense of morality, what is right and wrong. He held that we have a personal responsibility to uphold higher moral laws when they come into conflict with manufactured laws. Consequently, he had a personal theory of "nullification" of government law when it conflicted with moral law. He maintained that no government has any "pure right over my person or property but what I concede to it.” Thus he was philosophically consistent that as a good neighbor, he would train with the Concord militia because he chose to. However, he chose not to pay a tax to a government waging an unjust war in Mexico, and that cost him a night in jail.

Thoreau's arrest inspired his world-famous essay Civil Disobedience where he proclaimed, "I heartily accept the motto, — 'That government is best which governs least'; and I should like to see it acted up to more rapidly and systematically." Many people mistakenly limit Thoreau's thinking to passive resistance. He railed against the government's hanging of John Brown who raided the arsenal at Harper's Ferry to arm slaves. Violence is not the preferred way to protest government policies, but as a last resort, Thoreau agreed with President Thomas Jefferson who wrote, "The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants."


Today few of us could replicate Thoreau's life in a 10 x 15 foot cabin a mile from his closest neighbor. What we can do whether we live in New York City, Los Angeles, or in between is to think of Walden as a state of mind.

Walden's principles and maxims are as relevant in 2012 as in 1853. In fact, times were remarkably similar to our world today. Global competition was common. Better quality German pencils nearly drove the Thoreau family pencil business under. The Panic of 1837 was as severe as our financial downturn today. A real estate bubble burst due to sub-prime lending, and real estate prices plummeted. Families lost jobs, spending power, and risked their savings as half the banks in America folded within weeks. The federal government, whose policies touched off the contagion, was growing in power and would continue piling on public debt. Even then, the U.S. government depended upon foreign countries to finance its operations.

Read the rest here.

Atlanta Fed Pres Clueless about the Developing China Financial Collapse

According to his disclosure statement, the president of the Atlanta Fed, Dennis Lockhart,  owns shares in the Morgan Stanley China Fund.

He is already underwater in the position and the real downside hasn't even started yet.

In other words, these guys can't spot the developing downside of a central bank manipulated business cycle, even if it is headed directly at their wallet.

PayPal Co-Founders Fund Ron Paul Super PAC

Co-founders of online  payment service PayPal, now owned by eBay Inc, donated to a Super PAC funding group supporting Ron Paul, the group Endorse Liberty announced today.

PayPal co-founders Peter Thiel and Luke Nosek and Scott Banister, an early adviser and board member, put their support behind the Endorse Liberty Super PAC, alongside Internet advertising veteran Stephen Oskoui and entrepreneur Jeffrey Harmon, who founded Endorse Liberty in November.

"Too often in this country we learn things the hard way ... With its unsustainable deficits, government spending is heading down the same path. Men and women who want freedom and growth should take action. A good place to start is voting for Ron Paul," Thiel said in a statement.

Thiel, worth $1.5 billion, is ranked  833 on the Forbes billionaires list last year.

(thanks 2 Marco Chavez)

California To Run Out Of Cash In One Month, Controller Warns

California will run out of cash by early March if the state does not take swift action to find $3.3 billion through payment delays and borrowing, according to a letter state Controller John Chiang sent to state lawmakers today, reports the Sacramento Bee.

Lawmakers previously believed the state had enough cash to last through the fiscal year that ends in June.

Chiang said additional cash management solutions are needed because state tax revenues are $2.6 billion less than what Gov. Jerry Brown and state lawmakers assumed in their optimistic budget last year. Meanwhile, Chiang said, the state is spending $2.6 billion more than state leaders planned on.

Bottom line: Who needs a Greek financial crisis to worry about, when you have California? They'll patch California together.

We are probably still at least a year or more away from a major state or city fiscal crisis, but they are coming. (Illinois will probably be first.)

This is not the time to own municipal bonds.

No Down Days of 1% or More in the S&P During January

The last one percenter plus was December 28.

Translation: Bernanke's money printing is indeed propping up the stock market.


The Most Popular Course at Harvard is Taught by...

...a Keynesian apologist for the state, Greg Mankiw.

He has attacked Ron Paul's portfolio.

He has called for more money printing by the Federal Reserve and the European Central Bank.

He spends much time defending Ben Bernanke, probably more so than any other economist.

It goes on and on, the man loves the state.

Econometricians Exposed Big Time

Ed Yardeni tells is like it is about the snake oil mathematicians:
I’m not a big fan of leading economic indexes (LEIs). They can be quite misleading. They are constructed by well-intentioned economists with the intention of providing an early warning that a recession is coming in a few months or assurance that the economy is likely to expand in coming months. These man-made indexes combine a bunch of indicators that purportedly lead the business cycle. When they fail to do so, the men and women who made these indexes recall them, retool them, and send them back out for all of us to marvel at how well these new improved versions would have worked in the past. I can accurately predict that when they fail in the future, they will be recalled and redesigned yet again.

This just happened to the US LEI. The Conference Board has made the first major overhaul of the components of the LEI since it assumed responsibility of the index in 1996. It replaced real money supply with its proprietary leading credit index, and the ISM supplier delivery index with the new orders index. In place of the Thomson Reuters/University of Michigan consumer expectations measure, it will now use an equally weighted average of its own consumer expectations index and the current measure. Also, the nondefense capital goods gauge was tweaked to exclude commercial aircraft.

The impact of these changes has been shocking, and really questions the credibility of constructing LEIs. The old LEI rose to a new record high in November, exceeding the previous cyclical peak (where it hovered during 2006 and 2007) by 12.7%. The new LEI edged back up in December to its previous high for the year during July, but that’s 13.1% below the previous cyclical peak!
What about the ECRI Weekly LEI? It tended to track both the old and the new monthly LEIs prior to 2009. Since then, they’ve all diverged though the weekly index is now more in sync with the new one than the old one. Still, the weekly LEI has been very volatile and gave a misleading warning of a recession during both 2010 and 2011 (so far)

Gingrich Goes After George Soros

Newt will say anything to get elected. He just put George Soros and New York City into play:

"When we win tomorrow," he said in Florida, "we'll send a signal to George Soros, Goldman Sachs, to the entire New York and Washington establishment: Money can't beat people power."

Don't take this to mean that Gingrich is against big money influence. It just that Gingrich's money comes from Vegas.

Understanding Tax Reform Madness

I don't think it was his intention, but NYT columnist Bruce Bartlett has put together a few points on why tax "reform" is a joke and he destroys the myth that Ronald Reagan was a tax cutter.

On Reagan, he writes:
In his 1984 State of the Union address, President Ronald Reagan asked the Treasury Department to study tax reform and send him a report on options. The task fell largely to Eugene Steuerle, then a Treasury economist and now a senior fellow at the Urban Institute in Washington.

The Treasury approached the project with an open mind....The report was not a call for tearing up the tax code and starting over from scratch. It was about taking the tax system as it was, fixing glaring problems and proposing improvements that were doable, rather than pie-in-the-sky reforms with no chance of enactment.

Two key constraints guided the Reagan tax reform effort. First was a hard revenue-neutrality requirement. Because our political leaders actually cared about the budget deficit in those days, a tax cut was not viable; any proposals that reduced revenue had to be offset by provisions that raised revenue. The final package was devised to neither raise nor lower aggregate revenues.
In short, Reagan was not about tax cuts, he was about rearranging taxes. He taxed, your shoes, say, instead of your socks.

Murray Rothbard had it right about Reagan all along, when he wrote in 1987:
One of the few areas where Reaganomists claim success without embarrassment is taxation. Didn't the Reagan administration, after all, slash income taxes in 1981, and provide both tax cuts and "fairness" in its highly touted tax reform law of 1986? Hasn't Ronald Reagan, in the teeth of opposition, heroically held the line against all tax increases?

The answer, unfortunately, is no. In the first place, the famous "tax cut" of 1981 did not cut taxes at all. It's true that tax rates for higher-income brackets were cut; but for the average person, taxes rose, rather than declined. 
The highly ballyhooed Tax "Reform" Act of 1986 was supposed to be economically healthy as well as "fair"; supposedly "revenue neutral," it was to bring us (a) simplicity, helping the public while making the lives of tax accountants and lawyers miserable; and (b) income tax cuts, especially in the higher income brackets and in everyone's marginal tax rates (that is, income tax rates on additional money you may earn); and offset only by plugging those infamous loopholes. The reality, of course, was very different, In the first place, the administration has succeeded in making the tax laws so complicated that even the IRS admittedly doesn't understand it, and tax accountants and lawyers will be kept puzzled and happy for years to come.
Rothbard nailed it. Check out how mad this tax "reform" actually was  and how it often led to unexpected (by the interventionist tax designers) all kinds of distortions in the economy. Here's Bartlett:
...the 1984 effort necessarily needed to be bipartisan from the beginning, and it was. The chairman of the House Ways and Means Committee, Dan Rostenkowski of Illinois, accepted the need for tax reform and was instrumental in moving the ball forward.

For several months after the Treasury study was published, the White House reviewed its options. In May 1985, it sent a detailed tax reform proposal to Capitol Hill. It incorporated some valid criticisms of the Treasury effort and deleted some of the more politically controversial ideas. This proposal formed the basis of the Tax Reform Act of 1986.

One lesson of that effort is that it is very, very easy for tax reform to lose its focus absent a detailed outline at the start of the process. Vague principles are insufficient to guide legislation, because it’s too easy to ignore and jettison the unpopular revenue-raising side of the coin — the actual reforms — and just do a bill loaded with special-interest provisions enacted at the behest of tax lobbyists.

Also, given the long road to tax reform from the Ways and Means Committee to the House floor, to the Senate Finance Committee, to the Senate floor, to a conference committee and final passage, many opportunities abound for squeaky wheels to demand their pound of grease.

It is essential that there be some baseline against which to measure progress and experts following it closely enough to know when some seemingly innocuous amendment will interact badly with some other provision to create a perverse result.

Even with the Treasury keeping a close eye on the progress of the Tax Reform Act of 1986, mistakes were made. A glaring one was the provision eliminating the deduction for interest paid on credit cards and other consumer loans. The idea was to curb borrowing for consumption while raising revenue to pay for revenue-losing provisions of the legislation.

However, ending the deduction for consumer interest neither reduced consumer borrowing nor raised revenue, because mortgage interest remained deductible. Banks simply created home-equity loans to finance consumer borrowing and the interest remained tax deductible. By and large, such loans simply replaced those that the Tax Reform Act tried to curb.

Arguably, the result was worse than doing nothing. Excessive credit card debt can be renegotiated or discharged through bankruptcy. But when people start using their homes as credit cards, the results can be more severe. Any downturn in home equity, especially a prolonged one such as we have seen since 2007, risks the loss of people’s homes when home equity loans cannot be paid.
So what lesson does Bartlett suggest has been learned from the Reagan mess? That the reform is a joke, that taxes don't come down, that distortions occur? Nope.

Bartlett writes:
President Obama should have taken a page from Reagan’s book and asked the Treasury to do another comprehensive study of the tax system...It would have been better to approach tax reform in a comprehensive manner, as the Reagan administration did in 1984.
And there you have the mind set of a DC insider. Never real reform. Never real tax cuts. Just jiggle the system and make it look like you are doing something serious and important. Amazing.

Monday, January 30, 2012

BlackRock: Munis Face Threat of 'Super Downgrade'

Peter Hayes, head of municipals at BlackRock Inc., told advisers at the 2012 Investment Management Consultants Association in New York that he expects super downgrades to accelerate throughout the year, according to Investment News Daily.

“We're expecting a radical change in the methodology of the ratings agencies because of Dodd-Frank,” he said. One of the aspects of the Dodd-Frank Act requires ratings agencies to review their methodology for credit ratings annually.

The spreads between higher-rated municipal bonds and less-than-investment-grade ones are “dramatic,” so a severe downgrade could have a big impact on pricing, Hayes said.

Investors in municipal bonds also will have to consider the effect of likely tax policy changes, which should become clearer in the second half of the year.

As I pointed out in October:

 Obama "jobs" bill contains a retroactive tax on municipal bonds. 
The proposed jobs bill would cap municipal bond tax exemptions, which are currently 100 percent tax-free at the federal level. Americans in the top tax bracket would pay 7 percent on any income that would have otherwise been tax-exempt, including municipal bonds. If the Bush tax cuts expire at the end of 2012, the maximum tax on municipal earnings would be even higher: 11.6 percent  
Additionally, the proposal would affect previously purchased tax-exempt bonds — creating a retroactive tax increase.
It's not clear if the retroactive tax on muni-bonds will gain traction, but it might.

You really have to be a little loopy to own munis right now. There's the eventual climb in interest rates that will push the bonds down. There are the revenue problems facing some states and municipalities, which threaten the eventual payment of some bonds. There's the potential retroactive tax.  And, in addition, the likelihood of "super downgrades".

Snoop Dogg Endorses Ron Paul

“Because I said so,” writes Snoop on his Facebook page.

Fed Members Laughed As Housing Bubble Grew

The blog, The Daily Stag Hunt, has calculated the number of times “laughter” was recorded by the Fed’s stenographer during the FOMC meetings. In 2001, the FOMC averaged 16.5 moments of guffaws per meeting. In 2006, there were, on average, 44 outbreaks of laughter, reports CNBC.

CNBC continues:
In what may be the strangest market indicator ever, a blogger found that the amount of laughter recorded in the official transcripts of Federal Reserve Open Market Committee meetings from 2000 to 2006 correlates almost perfectly with the rise in housing prices taking place at the time.

A particular series of side-splitting meetings by the central bank in 2006 marked the very top of the housing bubble.
Most telling, the Fed’s January 2006 meeting when then NY Fed president and also then-FOMC Vice Chairman Tim Geithner said to the departing Greenspan during his last FOMC meeting:
I’d like the record to show that I think you’re pretty terrific, too. [Laughter] And thinking in terms of probabilities, I think the risk that we decide in the future that you’re even better than we think is higher than the alternative.[Laughter] With that, the economy looks pretty good to us, perhaps a bit better than it did at the last meeting. With the near-term monetary policy path that’s now priced into the markets, we think the economy is likely to grow slightly above trend in ’06 and close to trend in ’07.

Robert Reich Trashes Newt Gingrich

Reich says that even if Gingrich has a 10% chance of beating President Obama, if Gingrich gets the nomination, it's too much of a risk for Democrats to want a Gingrich nomination. He sees Gingrich as that much of a nutjob. Reich writes:

...no responsible Democrat should be pleased at the prospect that Gingrich could get the GOP nomination. The future of America is too important to accept even a small risk of a Gingrich presidency...

“Weird” is the word I hear most from Republicans who have worked with him. Scott Klug, a former Republican House member from Wisconsin, who hasn’t endorsed anyone yet, says “Newt has ten ideas a day – two of them are good, six are weird and two are very weird.”

Newt’s latest idea, for example – to colonize the moon – is typically whacky.

The Republican establishment also points to polls showing Gingrich’s supporters to be enthusiastic but his detractors even more fired up. In the latest ABC News/ Washington Post poll, 29 percent view Gingrich favorably while 51 percent have an unfavorable view of him...

Independents, who will be key to the general election, are especially alarmed by Gingrich.

As they should be. It’s not just Newt’s weirdness. It’s also the stunning hypocrisy. His personal life makes a mockery of his moralistic bromides. He condemns Washington insiders but had a forty-year Washington career that ended with ethic violations. He fulminates against finance yet drew fat checks from Freddie Mac. He poses as a populist but has had a $500,000 revolving charge at Tiffany’s.

And it’s the flagrant irresponsibility of many of his propositions – for example, that presidents are not bound by Supreme Court rulings, that the liberal Ninth Circuit court of appeals should be abolished....that the First Amendment guarantees freedom “of” religion but not “from” religion...

Yet Democratic pundits, political advisers, officials and former officials are salivating over the possibility of a Gingrich candidacy. They agree with key Republicans that Newt would dramatically increase the odds of Obama’s reelection and would also improve the chances of Democrats taking control over the House and retaining control over the Senate.

I warn you. It’s not worth the risk.

Even if the odds that Gingrich as GOP presidential candidate would win the general election are 10 percent, that’s too much of a risk to the nation. No responsible American should accept a 10 percent risk of a President Gingrich.

I’d take a 49 percent odds of a Mitt Romney win – who in my view would make a terrible president – over a 10 percent possibility that Newt Gingrich would become the next president – who would be an unmitigated disaster for America and the world.

Ten Terms that Could Get You in Trouble with the DHS, If You Tweet Them

Below, I reported on the Brit who was not allowed into the U.S. because he tweeted the British slang for "party", which is "destroy", as in I am going to destroy America.

Below is a report from the UK's Mail Online on 10 terms the DHS is monitoring:

The Department of Homeland Security was recently criticised over false accounts it set up on Twitter.

These are then used to scan networks for 'sensitive' words and then for tracking the people who use them.

Online privacy group, the Electronic Privacy Information Centre requested information on the DHS's scans, which it says the agency announced in February last year.

The group claims that a request under the Freedom of Information Act to access the documentation has gone unanswered.
The words deemed as being sensitive by the DHS include:

Illegal immigrant
Human to animal

Lew Rockwell Smacks Down the WEF, the WSF and Angela Merkel

All in under 9 minutes. Awesome stuff.

And it's right here.

A Very George Soros Agenda for the Occupy Movement

Adbusters the outfit that launched the Occupy Wall Street movement is calling for a month long occupation of Chicago in May, which will coincide with G8 and NATO summits in the Windy City:
Hey you redeemers, rebels and radicals out there,

Against the backdrop of a global uprising that is simmering in dozens of countries and thousands of cities and towns, the G8 and NATO will hold a rare simultaneous summit in Chicago this May. The world’s military and political elites, heads of state, 7,500 officials from 80 nations, and more than 2,500 journalists will be there.

And so will we.

On May 1, 50,000 people from all over the world will flock to Chicago, set up tents, kitchens, peaceful barricades and #OCCUPYCHICAGO for a month. With a bit of luck, we’ll pull off the biggest multinational occupation of a summit meeting the world has ever seen.

And this time around we’re not going to put up with the kind of police repression that happened during the Democratic National Convention protests in Chicago, 1968 … nor will we abide by any phony restrictions the City of Chicago may want to impose on our first amendment rights. We’ll go there with our heads held high and assemble for a month-long people’s summit … we’ll march and chant and sing and shout and exercise our right to tell our elected representatives what we want … the constitution will be our guide.

And when the G8 and NATO meet behind closed doors on May 19, we’ll be ready with our demands

What are their demands?

Get a load of this:

A Robin Hood Tax, aka, the Soros tax. This is what I wrote in October:
In his 2005 book, George Soros on Globalization, Soros writes not only in favor of the tax, but discuses how to "mobilize public opinion" for such a tax:

The globalization of financial markets has given capital an unfair advantage over other sources of taxation, a tax on financial transactions would redress the balance...the tax ought to be extended to all markets, not just currency markets... Collection has to be worldwide, including tax havens. How could it be enforced? The collecting country must be given a portion of the proceeds...To mobilize public opinion of increased international assistance, the proposal must not only show how the money will be raised but how it will be spent.

Adbusters, thus, is putting out the call to promote a plan that Soros wants so bad, that in his book, he discusses paying off foreign governments, and mobilizing public opinion, to get the tax implemented
Got that? A bunch of tent living, barely surviving protesters are being advised to put at the top of their agenda a proposal that a manipulating billionaire wants to see desperately implemented and that will immensely benefit him.

What's next on the agenda for the Occupy movement, as presented by the curious Adbusters?
a ban on high frequency ‘flash’ trading
I am not going to embarrass myself and go out to Freedom Plaza or McPherson Square to talk to the occupiers (before they are removed by police) and ask them if they even know what flash trading is.

Naturally, the removal of flash trading does create another edge for Soros in his trading.

Adbusters contends that these proposals come up at general assemblies:
...whatever we decide in our general assemblies and in our global internet brainstorm – we the people will set the agenda for the next few years and demand our leaders carry it out.
Puhleeze, the Soros tax and the banning of flash trading coming up at an assembly of muddied sheep? Yeah right. There's a big shadow over this occupation and it's the shadow of a man who isn't living in a tent.

DHS Detains and Sends Back Brit for Using UK Slang

Well the DHS has finally caught someone who wants to "destroy" America, a Brit, where the word destroy is slang for party.

Two British tourists were barred from entering America after joking on Twitter that they were going to 'destroy America' and 'dig up Marilyn Monroe',reports UK's Mail Online.

Leigh Van Bryan, 26, was handcuffed and kept under armed guard in a cell with Mexican drug dealers for 12 hours after landing in Los Angeles with pal Emily Bunting, says MO.

The Department of Homeland Security flagged him as a potential threat when he posted an excited tweet to his pals about his forthcoming trip to Hollywood which read: 'Free this week, for quick gossip/prep before I go and destroy America'.

After making their way through passport control at Los Angeles International Airport (LAX) last Monday afternoon the pair were detained by armed guards.

Despite telling officials the term 'destroy' was British slang for 'party', they were held on suspicion of planning to 'commit crimes' and had their passports confiscated.

More from MO:
Federal agents even searched his suitcase looking for spades and shovels, claiming Emily was planning to act as Leigh's 'look out' while he raided Marilyn's tomb.

Bar manager Leigh, from Coventry, and Emily, 24, from Birmingham, were then quizzed for five hours at LAX before they were handcuffed and put into a van with illegal immigrants and locked up overnight.

They spent 12 hours in separate holding cells before being driven back to the airport where they were put on a plane home via Paris.

Leigh, an Irish national, and Emily arrived at Birmingham Airport last Wednesday afternoon.

Emily said: 'The officials told us we were not allowed in to the country because of Leigh's tweet. They wanted to know what we were going to do.

'They asked why we wanted to destroy America and we tried to explain it meant to get trashed and party.

'I almost burst out laughing when they asked me if I was going to be Leigh's lookout while he dug up Marilyn Monroe.

'I couldn't believe it because it was a quote from the comedy Family Guy which is an American show.

Greek Financial Crisis Resulting in More Abandoned Children

Greece is coming apart at the seems. The Guardian had this report in late December:
As Greece prepares to endure a fifth consecutive year of recession, as the crisis extends its reach, as cuts take their toll, as poverty deepens and unemployment climbs, evidence is mounting that society is tearing at the seams.

Like the middle class, society's great connector, families are beginning to unravel under the weight of a crisis that, with no end in sight, is as much human as it is financial...

From cases of newborn babies wrapped in swaddling and dumped on the doorsteps of clinics, to children being offloaded on charities and put in foster care, the nation's struggle to pay off its debts is assuming dramatic proportions, even if officials insist that the belt-tightening and structural reforms will eventually change the EU's most uncompetitive economy for the better.

Propelled by poverty, 500 families had recently asked to place children in homes run by the charity SOS Children's Villages, according to the Greek daily Kathimerini. One toddler was left at the nursery she attended with a note that read: "I will not return to get Anna. I don't have any money, I can't bring her up. Sorry. Her mother."
Many other eurozone countries are not far behind. From all indications Portugal is next on the bankster hit list. But eventually all of the eurozone may be swallowed up in misery. The youth of Spain are already leaving their country.

The cause is, of course, socialist and other interventionist schemes that suck the wealth and drive from the productive to hand the wealth over (for votes) to those with their hands out. Eventually, it leads to this. The only wealthy left are elitists who know how to game the system and keep their wealth and know how to cause the government to take measures that will increase their wealth with everyone else just struggling to survive.

We are early stage strugglers in the United States, but the struggle is going to intensify here.


Is This The Real Reason Why MegaUpload Was Shut Down?

Was fear by the U.S. corporate movie and music industry of major new legitimate competition from Megaupload the real reason behind the raid and takedown of Mega? Was this a case of U.S. Department of Justice muscle acting on behalf of the elitist sectors of Hollywood? David Thier writes at Forbes:
The internet is up in arms over the federal crackdown of file-sharing website Megaupload, from irate blog posts to coordinated digital attacks on secure government servers. The move appeared to be a sort of governmental muscle flexing in the wake of the successful internet protest of SOPA and PIPA. But was there another reason? In the weeks before the crackdown, Megaupload was planning on launching a new music sharing website called Megabox that looked like it had the potential to completely transform music distribution, and even find a way to pay musicians in the process. 
From TorrentFreak, via Digital Music News: 
“UMG [Universal Music Group] knows that we are going to compete with them via our own music venture called Megabox.com, a site that will soon allow artists to sell their creations directly to consumers while allowing artists to keep 90 percent of earnings,” said MegaUpload founder Kim dotcom.“We have a solution called the Megakey that will allow artists to earn income from users who download music for free,” Dotcom said. “Yes that’s right, we will pay artists even for free downloads.  The Megakey business model has been tested with over a million users and it works.” 
This smacks a little of conspiracy theory, but there may be some truth to the timing. MegaUpload no doubt looked like a good target for FBI attention even before this new development,  considering it was prime hacker territory and its founder was living like a Colombian drug lord in New Zealand. But the timing seems a little serendipitous, especially since MegaUpload had even begun to acquire legitimate partners in the form of 7digital, Gracenote, Roviand Amazon.

Sunday, January 29, 2012

U.S. Park Police Tase Occupy D.C. Protester

Here's WTOP reporting the police version:
An Occupy D.C. protester was tased Sunday afternoon at McPherson Square, as Park Police were handing out fliers about the upcoming Monday deadline on overnight camping.

Park Police Sergeant David Schlosser tells WTOP the man got angry about the fliers and confronted officers about the ban.

Schlosser says officers used a taser on the man when he wouldn't comply with police orders.

Police arrested him and took him to the hospital, after he informed them about a previous medical condition.

The man was taken to George Washington Hospital where he refused treatment and was charged with disturbing the peace.

Starting noon Monday, Park Police will enforce a ban on overnight camping in McPherson Square and Freedom Plaza.

The Good Life of Murray N. Rothbard

In 1996 at the Mises Institute Supporters Summit in San Francisco, California, JoAnn "Joey" Rothbard spoke about her late husband, Murray.

Note: I never met Mrs. Rothbard and today is the first time I heard this clip, but it's clear why Murray married her. She was as sharp as a tack and shared Murray's wonderful gift of wit and humor. 

Ron Paul: Newt's Tea Party Claims a Little Strange

Ron Paul said on CNN’s State of the Union:
The tea party is not a tea party. I mean, it’s all over the place - everybody’s claiming they’re the tea party.Somebody like Newt Gingrich who’s been in politics all these years and is an insider is claiming that he’s leading the tea party movement  - that to me is a little strange.

The Boston Brahmins

Lew Rockwell has posted this great clip of two Boston Brahmins in conversation.

From Wikipedia here's a little history about the Brahmins:
Boston Brahmins are wealthy Yankee families characterized by a highly discreet and inconspicuous life style. Based in and around Boston, they form an integral part of the historic core of the East Coast establishment. They are associated with the distinctive Boston Brahmin accent, and with Harvard University.

The term Brahmin refers to the highest caste in the caste system in India. In the United States it has been applied to the old, upper crust New England families of British Protestant origin that were extremely influential in the development and leadership of arts, culture, science, politics, trade, and academia. The term was certainly applied partly in jest to characterize the often erudite and pretentious nature of the New England gentry to outsiders. The nature of the Brahmins is summarized in the doggerel "Boston Toast" by Harvard alumnus John Collins Bossidy.

"And this is good old Boston,
The home of the bean and the cod,
Where the Lowells talk only to Cabots,
And the Cabots talk only to God."

Boston's "Brahmin elite" developed a semi-aristocratic value system by the 1840s. Cultivated, urbane, and dignified, a Boston Brahmin was the very essence of enlightened aristocracy. The ideal Brahmin was not only wealthy, but displayed suitable personal virtues and character traits. The term was coined in 1861 by Oliver Wendell Holmes, Sr.The Brahmin was expected to cultivate the arts, support charities such as hospitals and colleges, and assume the role of community leader. Although the ideal called on him to transcend commonplace business values, in practice many found the thrill of economic success quite attractive. The Brahmins warned each other against "avarice" and insisted upon "personal responsibility". Scandal and divorce were unacceptable. The total system was buttressed by the strong extended family ties present in Boston society. Young men attended the same prep schools and colleges,[5] and heirs married heiresses. Family not only served as an economic asset, but also as a means of moral restraint. Most belong to the Unitarian or Episcopal churches, although some were Congregationalists or Methodists. Politically they were successively Federalists, Whigs, and Republicans. They were marked by their manners and distinctive elocution, the Boston Brahmin accent, version of the New England accent.

Do you have a Brahmin surname? According to Wikipedia, there seems to be only 24:

2.1 Adams
2.2 Amory
2.3 Bacon
2.4 Cabot
2.5 Chaffee/Chafee
2.6 Choate
2.7 Codman
2.8 Coffin
2.9 Coolidge
2.10 Cooper
2.11 Cushing
2.12 Crowninshield
2.13 Dana
2.14 Delano
2.15 Dudley
2.16 Dwight
2.17 Eliot
2.18 Emerson
2.19 Endicott
2.20 Forbes
2.21 Gardner
2.22 Holmes
2.23 Jackson
2.24 Lawrence
2.25 Lodge
2.26 Lowell
2.27 Minot
2.28 Norcross
2.29 Otis
2.30 Parkman
2.31 Peabody
2.32 Perkins
2.33 Phillips
2.34 Putnam
2.35 Quincy
2.36 Rice
2.37 Saltonstall
2.38 Sears
2.39 Tarbox
2.40 Thorndike
2.41 Tudor
2.42 Weld
2.43 Wigglesworth
2.44 Winthrop

The White Balloon Protest in Russia against Putin Heats Up

Just like CIA adviser Gene Sharp wrote. Every uprising needs a color. The agent provocateurs embedded in Russia have chosen white, and in a new touch, white balloons.

A car decorated of white balloons seen on the Moscow's Garden Ring road during a protest in Moscow, Russia, Sunday, Jan. 29, 2012. Hundreds of cars flying white ribbons or white balloons are driving around Moscow's Garden Ring in a show of support for a protest movement against Russian Prime Minister Vladimir Putin. - A car decorated of white balloons seen on the Moscow's Garden Ring road during a protest in Moscow, Russia, Sunday, Jan. 29, 2012. Hundreds of cars flying white ribbons or white balloons are driving around Moscow's Garden Ring in a show of support for a protest movement against Russian Prime Minister Vladimir Putin. | Mikhail Metzel/AP

The latest report via the Toronto Globe and Mail  is that thousands of cars flying white ribbons are circling central Moscow.

How the Elitists of Washington D.C. Live

WaPo has the slideshow, here.

Occupy D.C. to be Cleared Monday; Occupy Mayhem Across the Country

There are two occupation camps in D.C., one at Freedom Plaza and one at  McPherson Square, National Park Service police plastered copies of a notice at both stating that camping equipment was not allowed and that sleeping in the parks would  not be tolerated and that those who do so will be subject to arrest.

The notice said the non-sleeping and no camping equipment regulations will start to be enforced on Monday. Things could get interesting.

I spoke to one occupier at McPherson Square and he told me he had no plans to leave his tent and that the police would have to come in and get him.

McPherson Square Occupation

Another protester at McPherson Square told WaPo:
Many of us will be likely to defend the park with the passion anyone would show defending their home.We are fighting for the betterment of D.C., America and the world, and we intend to continue using our First Amendment rights to do so.
At Freedom Plaza, an occupier told me that no one slept at the occupation and that the tents were there for symbolic reasons only and that on occasion some occupiers went into the tents for "8 to 12 hour meditations".

Meanwhile, in Oakland over 300 Occupy protesters were arrested after an attempt was made to Occupy a vacant Oakland convention center. USA Today has the story:

 About 300 people were arrested Saturday during a chaotic day of Occupy protests that saw demonstrators break into City Hall and burn an American flag, as police earlier fired tear gas and bean bags to disperse hundreds of people after some threw rocks and bottles and tore down fencing outside a nearby convention center. 
Dozens of police officers remained on guard outside City Hall around midnight following the most turbulent day of protests since November, when Oakland police forcefully dismantled an Occupy encampment. An exasperated Mayor Jean Quan, who faced heavy criticism for the police action last fall, called on the Occupy movement to "stop using Oakland as its playground." 
"People in the community and people in the Occupy movement have to stop making excuses for this behavior," Quan said. 
Protesters clashed with police throughout the day, at times throwing rocks, bottles and other objects at officers. And police responded by deploying smoke, tear gas and bean bag rounds, City Administrator Deanna Santanta said. 
"These demonstrators stated their intention was to provoke officers and engage in illegal activity and that's exactly what has occurred today," Santana said. 
Interim Police Chief Howard Jordan said about 300 arrests were made.

Here's video of tear gas and flashbangs being used against protesters in Oakland:

In NYC, Occupiers appear to be going upscale. NyPo reports:
...more than 100 protesters flocked to a more upscale locale last night when they ransacked an unoccupied condo building in Williamsburg by throwing a massive party.

After about half an hour, cops broke up the 10 p.m. bash at 205 N. Eighth St. It wasn’t immediately clear how many were arrested, but officers suffered minor injuries.

The building has 10 units for sale for as much as $625,000.

The hipsters left empty cans of Schlitz beer behind and spray-painted graffiti, such as “Be the Crisis,” on the walls.

The Parties of Davos

When attendees at the World Economic Forum in Davos aren't discussing "what's wrong with capitalism", they are partying at events hosted by the firms that create the finest in consumer goods, by tools of the evil elitists (see, KPMG,Accenture,PwC,Deloitte---all who have teams of economic hit men),  And, naturally, what's an elitist gathering without a reception hosted by the elitist daughter, Chelsea Clinton.

Capitalist hater Henry Blodget was there to snap pics.

Saturday, January 28, 2012

Topless Ukrainian Protesters Land in Davos

Remember the topless Ukrainian protesters who ended up protesting in Russia?

Well, they have made it to Davos, Switzerland, where they are protesting at the World Economic Forum.

Topless Ukrainian protesters demonstrate at the entrance ... Anja Niedringhaus / AP

A topless Ukrainian protester is arrested by Swiss police... Anja Niedringhaus / AP

Here's video:

I'm not exactly sure what these gals are for or against, but I think in the interest of advancing praxeology  Bob Murphy and I should head over to the Ukraine and find out.

Russell Means Endorses Ron Paul


Ron Paul and Black America

I am pissed, really pissed. There is another outrageous hit piece on Ron Paul. This one comes from the Washington Post and continues the attack on Dr. Paul for comments that appeared in newsletters published under his name some 20 plus years ago. The implication being that Ron Paul is a racist. Here's what needs to be understood fully, everyone, that is, everyone, agrees that Dr. Paul did not write one word in those articles.

Here's what you need to know about this attack. It has been aggressively pushed by the Koch brothers-funded Reason magazine, a supposedly libertarian organization.  Got that? An attack on Ron Paul by libertarians. The mainstream media has simply broadcast further what was handed to them on a silver platter.

Also curious is the fact that the original reporting on the newsletters was from James Kirchick, who writes that he found many of the newsletters at the University of Kansas. Hmm, University of Kansas? Just a few miles from Wichita, headquarters of Koch Industries.

Interesting that a Yale boy, who travels in elitist circles, ends up in a library just miles from the billionaires' bunker to find the Ron Paul newsletters.

Check this guy out, does he look like the type that generally hangs in Witchita. From wikipedia:
James Kirchick (pronounced /ˈkɜrtʃɨk/; born 1983) is a reporter, foreign correspondent and columnist. Kirchick attended Yale University and wrote for its student newspaper, the Yale Daily News.[1] He is a fellow with the Foundation for Defense of Democracies in Washington;[2] prior to this he was writer-at-large for Radio Free Europe/Radio Liberty.[3] 
For over three years, Kirchick worked at The New Republic, covering domestic politics, intelligence, and American foreign policy.[4][5]While he remains a contributing editor for TNR, Kirchick’s reportage has appeared in The Weekly Standard,[4] The American Interest, The Virginia Quarterly Review, The Columbia Journalism Review, Prospect, Commentary and World Affairs Journal. He writes frequently for newspapers including The Washington Post, The Wall Street Journal,[6] The Los Angeles Times,[7] and Ha’aretz.
Kirchick has worked as a reporter for The New York Sun, the New York Daily News, and The Hill, and has been a columnist for the New York Daily News and the Washington Examiner.

Kirchick is a regular book critic and reviews frequently for Azure,[8] Commentary, the Claremont Review of Books, Policy Review, and World Affairs, among others. A leading voice on gay politics, he is a contributing writer to the Advocate, the United States' largest gay publication,[9] and a recipient of the National Lesbian and Gay Journalists Association Excellence in Student Journalism Award and the Journalist of the Year Award.[10][11]
But, just to nail in the fact that this is coming from Koch circles, co-founder and president of of Koch-funded Cato Institute, Ed Crane, now volunteers to WaPo that Ron Paul told him his best subscriber response had come when he used the mailing list of Spotlight, which Crane characterized as racist and anti-Semitic. Puhleez.

I am somewhat familiar with mail list rentals of that period and Spotlight was a hot list to rent for almost any investment type newsletter, including those that took no social or political positions at all. In fact, I doubt most newsletter writers who rented the list through rental agents even knew what Spotlight was, other than that it was a "hot" list. I knew it was a hot list, but I had no idea, back then, what it was. Ed Crane is the one who just recently, in his comments, made it clear to me. Crane was clearly reading the letter to know, not me. But, I am wondering if the Cato Institute or Reason magazine would be willing to release the names of all the lists they have rented so that we could put the same magnifying test on them. As a matter of fact, let's see what mailing lists WaPo uses.

But aside from this attack on Congressman Paul from so-called libertarians, lets look at what a Ron Paul presidency would mean for Black America.

First and foremost, Ron Paul would end the insane war on drugs. Dr. Paul has pointed out that more blacks are in jail on drug charges than any other group. He would release them.

Second, he would close down the Department of Education which has resulted in some of the worst education for black youth possible. Education needs to be in the private sector.

It is the growth of government involvement in individuals lives that has created the miserable state that many blacks find themselves in. I have known enough sistas to see what it is like for most brothers in the hood. If they aren't way on the right side of the bell curve in terms of being persistent and self-starters, there isn't much for them to do, especially with minimum wage laws preventing them from entry level positions. It shouldn't be surprising that many of them become gangstas.

So while WaPo, Reason and Ed Crane yank out a few quotes not written by Ron Paul and obsess over them every chance they get, the bastards don't for a minute write about what Black America would be like under a Ron Paul presidency.

It would mean for blacks a new freedom for those who have been suffocated and (literally) caged by big government.

Any black person, who has a brother, sister, father, mother or cousin, caged in Federal prison because of drug charges , Ron Paul is your only hope to get your loved one home now. You should vote for Ron Paul.

Any black person, trying to make ends meet, who has small children, Ron Paul is your only hope, among the candidates, that  private sector education might develop that would provide hope for  a cheap and good quality education. You should vote for Ron Paul.

Any gangsta, who would like to get a decent job, Ron Paul is your only hope that minimum wage laws might be eliminated so that some businessman will give you a break and hire you at a low wage in an entry level position. Rather than your slinging dope and risking getting shot or jail time. You should vote for Ron Paul.

There would be big changes for blacks under Ron Paul and the changes would mean more freedom, more opportunity and less of big brother keeping the thumb on the black community.

What must be asked is "Why aren't Reason magazine, Cato, Ed Crane and WaPo highlighting the changes that would come about for Black America during a  Ron Paul presidency?"

It's a damn injustice to all blacks when Reason, Cato, Ed Crane and WaPo fail to present the truth about a Ron Paul presidency and what it would mean for the black community. Ron Paul is the best thing that could happen to Black America, and these evil bastards know it.


Gary Chartier writes:
Per your piece of this morning: it also strikes me that, since the military recruits disproportionate numbers of poor Americans, and since black Americans are particularly likely to be in that group, a Paul presidency, which would lead to a dramatic reduction in the involvement of US military personnel in violent conflict, would thus also lead to a reduction in war-related deaths for black Americans.

Germany Wants Greece to Give Up Budget Control

The bankster power grab is getting aggressive and obvious.

Reuters reports:
Germany is pushing for Greece to relinquish control over its budget policy to European institutions as part of discussions over a second rescue package...The Financial Times said it had obtained a copy of the proposal showing Germany wants a new euro zone "budget commissioner" to have the power to veto budget decisions taken by the Greek government if they are not in line with targets set by international lenders.

Did Marc Rich Have Henry Kissinger on His Payroll, While Rich was a Fugitive?

There's something of a confirmation of this.

It has just been brought to my attention that billionaire, commodities trader Marc Rich quotes me on his web site, when I wrote in a 2009 about his then-soon to be published book. This is the quote:
Marc Rich is one of the most remarkable men of finance. I know a number of traders that worked for Rich. All the stories they tell me about Rich point to one thing, Rich has one of the most creative, aggressive and shrewd minds in finance, with a governments be damned attitude. He's one of a kind. People tell me that he kept Henry Kissinger on his payroll, even while he was living in Switzerland as a fugitive. I can't really believe he is going to tell all, but if he tells 10% about his operations, it is going to be one fascinating book.


More London Police Raids on the Ruupert Murdoch Empire

The British police have just raided a Murdoch office in East London. Keep in mind, Murdoch's troubles were first instigated by NYT and UK's The Guardian.

CNN is reporting that  four arrests have been made in connection with allegations of inappropriate payments to police, London's Metropolitan Police Service said Saturday, with a police officer among those detained.

"The home addresses of those arrested are currently being searched and officers are also carrying out a number of searches at the offices of News International in Wapping, East London," the police statement said.

News International's Wapping plant in London, pictured last year.

Friday, January 27, 2012

HOT: Pentagon to Send Floating Base to Mideast for Use by Commandos

The U.S. government is definitely looking for trouble.

WaPo reports that the Pentagon is rushing to send a large floating base for commando teams to the Middle East.

In response to requests from the U.S. Central Command, which oversees military operations in the Middle East, the Navy is converting an aging warship it had planned to decommission into a makeshift staging base for the commandos. Unofficially dubbed a "mothership," the floating base could accommodate smaller high-speed boats and helicopters commonly used by Navy SEALs, procurement documents show. WaPo said.

Details of the project became public this week when the Military Sealift Command posted a bid request to retrofit the USS Ponce, an amphibious transport docking ship, on a rush-order basis.

USS Ponce

WaPo says Navy officials acknowledged that they were moving with unusual haste to complete the conversion and send the mothership to the region by early summer.

"Capitalism is Making Humanity Obsolete"

I continue to be absolutely amazed at how far the World Economic Forum discussion about "capitalism" advances.

The BBC has aired an interview with Marxist historian Eric Hobsbawm, who in the tradition of the other discussants, fails to make a clear distinction between capitalism and government intervention on behalf of insider operators. Adbusters features the interview with the subtitle, "Capitalism is making humanity obsolete". And indeed, in this interview, Hobsbawm comes pretty close to declaring that, since he states that "capitalism" is creating a situation where there will be no jobs.

If there are no jobs, its because minimum wage laws are extremely high, or otherwise we are all in some never, never land with all our wants fulfilled. But Hobsbawm's world seems to somehow be one where machines somehow takeover all tasks and so the "capitalist" have no use for most of humanity. Allowing just for a moment Hobsbawm's absurdity, he does not address the question that perhaps maybe, if the fat capitalists are completely satisfied, that there would be plenty of opportunity for up and coming entrepreneurs to feed, clothe and house the starving masses, and thus also employ them.

Why Iran Won't Back Down and When Might War Between the U.S. and Iran Occur?

by Michael S. Rozeff

Which state, the U.S. or Iran, more likely wants a war with the other? It's the side that thinks it benefits from such a war. That side is the U.S. If this war begins, it will be entirely because the U.S. wants it and has decided that the time is right to instigate it or elicit actions from Iran that provide excuses for instigating it. Any U.S.-Iran war will be entirely the doing of the U.S.

Here's how we know this. Iran has nothing to gain because it will lose such a war, its power being so much less than the U.S. This is why Iran has tolerated, so far and to a remarkable degree, the intrusions of U.S. subversions and covert activities in Iran, the assassinations of scientists, the computer disruptions, the embargos, the sanctions, the U.S. warships, the U.S. threats, and the U.S. troops being placed nearby. By contrast, the U.S., in the view of the neoconservatives who are running foreign policy, stands to gain quite a lot, namely, undisputed hegemony over the Middle East, control of a country perched on central Asia, control of oil, support for Israel, and a rise in global dominance more generally. Therefore, when and if such a war starts, no matter by what incidents it is triggered, we can be 100% certain that the U.S. has caused and precipitated this war because it, not Iran, is the state that foresees the benefits of such a war.

There are costs, however, and these are restraining the U.S. from instigating this war at this time. These include war costs of several kinds, since Iran is not a pushover. Iran, if pushed into a war by the U.S., can respond in nearby regions, such as Iraq, Lebanon, Syria, Saudia Arabia, and the Persian Gulf. It can conceivably draw Russia into the war, or perhaps Pakistan. The U.S. will win a war with Iran, but it does not expect an easy win. If it did, it would already have started the war. The war on Libya was a recent warm-up exercise that shows what air power can do in this day and age, but Iran's forces are more formidable.

We can expect that military advisors to the U.S. will tend to be against war with Iran because of these costs, but that under enough pressure they will yield. Another cost is that oil will rise in price steeply, and this will derail economic activity in Europe, the U.S., and elsewhere. Economic advisors to the U.S. will tend to be against war with Iran for this reason, but they too will yield under enough pressure because, like the military leaders, their positions are secure and others will bear the responsibility of starting such a war.

The U.S. will attempt to restrain Israel from causing a war on its own until the U.S. leadership thinks that these costs have become bearable and/or that the U.S. is in a position to beat Iran rather quickly and not have to endure a long war.

Since Iran does not want war with the U.S. and since its forces are what are deterring the U.S., Iran has a powerful incentive to build up its military forces in ways that deter the U.S. and make an easy victory unlikely. This is why Iran issues threats of its own, so that the U.S. will think twice and continue to hold off from attacking Iran, which Washington is ready to do as soon as it thinks the costs of doing so are bearable. This is why Iran continues to develop its missile capabilities. This is also why it makes sense for Iran to take the necessary preparatory steps toward developing a nuclear warhead that can be carried on a missile. No doubt it understands how to manufacture a nuclear bomb and has come a long way in understanding how to ignite explosives simultaneously so as to create the nuclear explosion within. The U.S., in a very real way, is causing Iran to pursue this nuclear development course if only to prevent a U.S. attack and to preserve its own power as a state. And certainly the sanctions imposed by the West for many years now and the concurrent threat of U.S. attack are causing Iran to bolster its military forces so as to deter the U.S.

Read the rest here.

March Madness: Bernanke versus Rothbard, Salerno and Thornton

The Federal Reserve Board has just announced that Fed Chairman Ben Bernanke will deliver a series of lectures aimed at college students.

Beginning on March 20, he will lead four classes on "The Federal Reserve and its Role in Today's Economy" as part of a course offered to undergraduates at the George Washington University School of Business. The class will feature a variety of speakers who will discuss central banking. Chairman Bernanke's lectures are scheduled for March 20, 22, 27 and 29 and will begin at 12:45 pm EDT.

Online viewing will be available to the public at www.ustream.tv/channel/federalreserve . After the lectures, the Board will post transcripts and video recordings at www.federalreserve.gov.

To ensure that students of the Fed receive all perspectives, I will be posting videos here on opposing views, on the same days as Bernanke lectures. Bernanke's lectures are at 12:45 PM and I will post videos here six hours later at 6:45 PM and I will moderate and open the comment section to discussion. Hopefully, we can get a great debate going.

Here's what I will be posting opposite Bernanke.

On March 20: The Founding of The Federal Reserve by Murray Rothbard

On March 22: From Hoover to Roosevelt: The Federal Reserve and the Financial Elites by Murray Rothbard (Narrated by Matthew Mezinskis)

On March 27: The Federal Reserve as a Confidence Game: What They Were Saying in 2007 by Mark Thornton

On March 29: Economists and the Myths of Central Banking by Joseph T. Salerno

And we will go into overtime on March 30 with:

The Immoral Federal Reserve by Lew Rockwell

and the final shot by Murray Rothbard: What is the proper role of the Federal Reserve?

HOT: Facebook to File IPO Papers Next Week


They wouldn't be doing this now if Bennie wasn't printing a lot of money.

 According to WSJ, Facebook Inc. could file papers for an initial public offering as early as next week and is close to picking Morgan Stanley as the lead underwriter for its IPO, said people familiar with the matter.

First Sicily, then Rome; The Revolt in Italy Intensifies

by Alexander Jousse

This past week has been a very turbulent time for Italy. And it wasn't just the grounding of the Concordia cruise ship by a playboy captain; but the grounding of the country by Euro-technocrat usurper Darth Monti, trying to impress his Keynesian buddies with his latest attempts to ‘Save Italy’!

This week saw the launch of a popular uprising in Sicily, by a group known as the ‘Movimento dei Forconi’ or ‘Pitchfork Movement’. This is not an uprising of self absorbed youth who want more government handouts; but of producers who are being pushed into poverty by government taxes and regulation. The organizers are middle aged and older; this is significant, as most power and wealth is held by this generation and they have now drawn a line in the sand.

On the 16th of January these protesters began "Operazione Vespri Siciliani", a blockade of the Island of Sicily. Within two days the transportation of all goods was stopped. Over the next week, nothing entered or exited Sicily. This was no mean feat given that Sicily is not a small Island; it has a population of over five million people and a surface area of 25,711 km2.

These are some of their demands:
  • The arrest of all corrupt politicians.
  • To reduce the number of parliamentarians.
  • To remove the provincial bureaucracy, as most of these politicians have been there for over forty years.
  • To drastically cut the salaries and privileges of parliamentarians and senators.
  • To restrict politicians two only two terms in office
Not one of Darth Monti’s “austerity” measures has touched the political caste; in fact in classic Italian style, the press has dug up some very dirty scandals concerning two of his fellow tax-feeders.

The trigger for these events was the vampire state sinking it’s fangs deeper into the already hampered Italian economy; a vicious tax was added to petrol, diesel and other energy sources in December.

Though agriculture contributes only 2.5% of GDP, in the southern regions of Basilicata, Calabria, and Molise, agriculture accounts for just over 20 percent of local employment. Many goods are transported by road, and as the cost of transport went through the roof within the time frame of just a few weeks, it destroyed the farmer's tight margins. Why work when the state steals most of your profits?

To further understand the rage, despair and humiliation it is necessary to know some Sicilian history. 

Read the rest here.

When Ron Paul Talks

It's about freedom, liberty and bringing the troops home.

NYT has a graphic out on selected words used by President Obama in his State of the Union addresses, and by Republican presidential candidates in their debates, television interviews and major speeches since May.

Of note, Ron Paul talks more about budgets and deficits than the other candidates, even though he gets less speaking time!

He is clearly not an interventionist in the economy looking to bestow special privilege to specific industries as he talks the least about oil, coal and energy--and manufacturing.

He mentions war and troops the most. This is, of course, because of his belief that they should be brought home. He mentions government the most because he sees government for the threat it is to our freedoms.

He blows away everyone else when it comes to mentioning freedom and liberty. And the other wrap themselves in patriotism by using the words America and American, but not Ron Paul.

tax, taxation
energy, oil,
gas or coal
Mr. Gingrich often mentions Ronald Reagan.
Mr. Paul criticizes “war propaganda” and says
America cannot afford a war with Iran.
Mr. Romney speaks about
repealing the health care law.
Mr. Obama discusses
his health care overhaul.
Mr. Santorum proposes a zero
percent tax rate on manufacturers.
Mr. Gingrich frequently mentions the U.S. unemployment rate.
Mr. Romney defends his
record at Bain, saying
he helped create jobs.
Several interviews about
the federal debt ceiling.
freedom, liberty
Islam, Muslim
war, troops
health care,
Medicare or
Used 5 times per 1,000 words
deficit or debt
God, faith,
religion, church