Extremes in Unsound Money and Finance Will (Eventually) Lead to Catastrophe

We live in a time of utter and complete corruption of government, media, central banks and our political parties. They are corrupted and held hostage by moneyed elites who are manipulating money and government for their ends-- not yours.

Where we are today is due to utter failure of government and central banks, corruption of all elements of government and moral and intellectual decay of our population. We have a massive and expensive surveillance state, weaponized police and government departments, massive financial deficits and debt with nothing to show for it, bloated money supplies, a hollowed-out economy stripped of entire industries and well-paying jobs, corrupted and lying media outlets spreading nothing but political propaganda and persecution of Conservatives.

Everything in Washington is broken and failed. Nothing is fixed. Much of Washington is plotting to illegally and unconstitutionally overthrow the Trump administration and has been from day one. Despite all the spending, our infrastructure and military has decayed. Our government is interfering with and manipulating many foreign countries -- yet half of our nation is obsessed with a largely non-existent influence of Russia in ours. These people which include the previous administration have been risking war with a country that has 10,000 nuclear bombs. For what??

It's all become this way because we are told nothing but lies by politicians, corporate chieftains, and other elites that everything is fine even though it's obvious that everything is broken. Only Trump was able to say the obvious truth much to the delight of one-half of the nation who were tired of lies.

Our inner cities, mostly black and ruined by government failures and the resulting moral decay, are like burned-out hulks of a previously high-level civilization as if we're replaying some dystopian movie like Robocop or Planet of the Apes complete with murder, crime, gangs and massive decay. Our status quo is completely and utterly unsustainable.

We also live in a time of  nothing but massively unsound finance and banking thanks to the failures of our Central Bank and the corrupted government. Even our current concept of money is completely corrupted. It's as if no one alive even knows or remembers what sound money or sound finance is. Maybe that's why there are somewhat regular society-wide and world-wide crises happen about every 80 years as described in The Fourth Turning by Howe and Strauss. Eighty years is the length of a long human lifetime. After 80 years, there is no one alive who can remember the cause of the last crisis. Think about it. Our current crisis started with the crash of 2009 which is exactly 80 years from the last one in 1929.  Our current crisis is causing economic upheavals that is also causing social distress and unrest.

Since we're 10 years into a 20 year long crisis phase it also means that, in the next 10 years, we're facing total war and crisis that will threaten the survival of our nation and maybe even mankind itself. From The Fourth Turning:

..the next Fourth Turning ends in apocalypse – or glory. The nation could be ruined, its democracy destroyed, and millions of people scattered or killed. Or America could enter a new golden age, triumphantly applying shared values to improve the human condition. The rhythms of history do not reveal the outcome of the coming Crisis; all they suggest is the timing and dimension

Fourth Turnings end in total war, crisis and destruction. Interestingly, from Howe and Strauss' research, a grey champion often arrives to lead the nation through the crisis period. Surely, that grey champion is Donald J. Trump.

The last Fourth Turning ended with 65 million persons dead in World War II. How many will die in the next 10 years? Our current crisis might even end with a war against or succession from our own government. Our current government deserves to be vanquished so that we can start again. This is the only way to bring the country back to its founding principles and the restoration of the U.S. Constitution. It will require that you and I act with honesty, integrity, and honor during the coming struggle (war). Almost certainly there will financial calamity, hardship, system-wide failures and we will have to once again restore our country, sound finance, sound money and sound banking again from the ashes our proximate financial calamity.  After all, our status quo is completely and utterly unsustainable.

What Sound Finance Looks Like

Not long ago, banks used to be a place where savers put their savings and the banks, in turn, lent out this money out to borrowers. That saved money was a surplus from the saver's hard work and productivity.

For many periods of history, gold was money and money was gold, so growth in the money supply was limited by the quantity of gold mined or ~2% per year. Nations historically turned to gold as money because no government can be trusted. That's more true than ever. With the exceptions of wartime, money used to be generally limited even when it wasn't backed by gold --- it was limited by responsible and high-integrity bankers (and no central bank prior to 1913). As a result, the nation's labor productivity led to long periods of falling consumer prices and rising international exchange rates---giving consumers more spending power and prosperity (the opposite of today). Deflation was often the norm and that was a good thing for consumers and the country.

So, the nation's and world's money supply growth was limited for significant periods of history. This meant that the growth of debt was similarly limited to money saved. And there weren't trade and budget deficits--it just couldn't happen in a sound money regime. With sound money and sound banking, if a government spent too much and issued bonds (which takes scarce money out of the economy), it would cause interest rates to rise to attract more savings to re-establish equilibrium and crowd-out the private sector and immediately contract the nation's money supply (there was no "accommodation" of such pressures by central "money printing" to avoid the consequences of excess government spending ---like what is happening now all over the world).  Too much government spending used to cause adverse real world consequences, so we had built-in budgetary discipline---thanks to sound money.

If a nation imported too much, then that nation would find their gold reserves (money) leaving their country and slowing their economy and imports to correct the trade imbalance. This controlled international trade and financial balances.

Oh, the beauty of a sound money regime. It limited spending -- meaning it required financial and government spending discipline. It limited debt levels, it controlled and balanced international finances and trade. It's TOO good because governments often did away with it when the going got tough --usually when they needed to spend money to fight wars. Therefore sound money, if strictly maintained, even has the effect of preventing wars!

Where We Are Now

All of that is history.

In 1970, US debt was $275 Billion. It took 188 years to achieve that.  This past week alone, the government sold $258 billion!  In the past 6 months alone, US debt has exploded by $1 Trillion. And this is during "good times."

In 1971, Nixon ended the Post WWII Bretton Woods arrangement which ended any semblance of (gold-backed) sound money. As an immediate result, our national debt and inflation began to skyrocket. Central bank activism and "experimentation" increased as they tried to tame the increasingly unstable business cycle---that THEY caused!

The big banks have once again become highly risky hedge funds using your money to gamble with highly leveraged positions in risky derivatives (again) thanks to the repeal of Glass-Steagall. They act with impunity since they have the government's backing when they fail again. Just 10 years ago, the world had a financial near-death experience as derivatives failed, banks failed and markets failed. The world economy come to a halt as finance failed. And here we are again thanks to lobbying money and corrupted politicians. Remember, if finance fails then everything else fails and millions, even billions, of people may die as supply chains collapse, commerce halts, shortages develop, grocery store shelves empty and people begin starving. Longer term, infrastructure fails including even electricity and utilities. I know it's unthinkable, but that's how bad it could get.

Paul Craig Roberts: Results of the Mueller Investigation: NOTHING!

From Paul Craig Roberts:

Robert Mueller discredited himself and his orchestrated Russiagate investigation last week (Friday, February 16, 2018) with his charges that 13 Russians and 3 Russian companies plotted to use social media to influence the 2016 election. Their intent, Mueller says, was to “sow discord in the US political system.”

What pathetic results to come from a 9 month investigation!

Note that the hyped Russian hacking of Hillary’s emails that we have heard about every day is nowhere to be found in Mueller’s charges. In its place there is “use of social media to sow discord.” I mean, really! Even if the charge were correct, considering the massive discord present in the last presidential election, with the Democrats calling Trump voters racist, sexist, homophobic white trash deplorables, how much discord could a measly 13 Russians add via social media?

Note also that the Trump/Putin conspiracy is also not present in Mueller’s charges. Mueller’s charges say that the Russians’ plan to sow discord began in 2014, before there was any notion that Trump would run for president in 2017. The link of the plot to Putin is reduced to the allegation that the plot was financed by a St. Petersburg restaurateur whose connection to Putin is that his business once catered official dinners between Russian officials and foreign dignitaries.

Finally, note that Mueller’s release of his charges in the face of dead news weekend means that Mueller knows that he has nothing to justify the massive propaganda onslaught against Trump for conspiring with Putin with which the presstitutes have regaled us. If the charges amounted to anything, they would have been released on Monday morning, and the presstitutes would have been handed by the FBI and CIA the news stories to file with their papers.

How did the 13 Russians go about sowing discord? Are you ready for this?

They held political rallies posing as Americans and they paid one person (unidentified) to build a cage aboard a flatbed pickup truck and another person to wear a costume portraying Hillary in prison clothes.

How much money was lavished on this plot.

A monthly budget of $1.2 million, a sum far too small to be seen in the $2.65 billion spent by Hillary and Trump and the $6.8 billion spent by all candidates for federal elective offices in the last election.

Mueller claims to have emails from some of the 13 Russians. If the emails are authentic, they sound like a few kids pretending to friends that they are doing big things. One of the emails brags that the FBI got after them so they got busy covering up their tracks.

House Speaker Paul Ryan has fallen for Mueller’s ruse.

Remember what William Binney, the person who designed the NSA spy program, said: If any such Russiagate plot existed, NSA would have the evidence. No investigation would be necessary.

One can conclude that Mueller and Rosenstein are fighting for their lives now that it is known that their spy requests for FISA court approval were based on deception. Mueller has produced this silly indictment of individuals who are not the Russian government in the hope that it will keep the attention off the FBI’s deception of the FISA court.

As a special prosecutor Mueller has demonstrated the same lack of integrity that he demonstrated as FBI director.

Ready for a 50% Loss of Your Wealth?

On January 26 2018, the US reported that 4th quarter real GDP grew at a 2.6% rate -- a rate that was disappointing relative to expectations. It was disappointing because there was a real surge of post-disaster spending after the two hurricanes and massive wildfires during the fourth quarter. In fact, some people were asking "is that all we get??"

It was even worse than that. The savings rate fell from 3.3% to 2.6%. If it had stayed the same, real "personal consumption expenditures" would have been just 0.8% (annualized) instead of 3.8% and GDP would have been 0.6% instead of 2.6%.  So, after all the disaster spending we "only" got 2.6% GDP growth.  The underlying economic growth rate is actually closer to 0.6% since that disaster spending was a "one off."

The savings rates of America plunged due to an unprecedented surge in credit card expenditures during the last quarter of 2017. It's really quite stunning (and unsustainable):

An Unsustainable Surge of Credit Card Expenditures--Unlikely to be Repeated in Coming Quarters

But the US consumer has been in distress for a long time. For the bottom 90%, wages are not keeping up with rising healthcare costs, rising rents, food and other rising costs.  To "make ends meet," they have been using debt to sustain their standard of living. It just keeps getting worse and worse:

Graph from Real Investment Advice

Another view of the rising debt and the financial gap that consumers have been facing and using debt to fill it:

Graph from Lance Roberts at Real Investment Advice

US consumers are already in record debt and they went on a spending spree at the end of 2017. They had to -- they aren't making ends meet in their personal finances and haven't been doing so for a long time.  US consumers are tapped-out.  The US real personal savings rate dropped to an extremely low 2.6%.  US consumers are 70% of the total economy.  See below:

That 2.6% personal savings rate is about as low as it goes. Note that rate was also reached in 2008, just before the great financial crisis in 2008 (savings rate was 2.3% then).  An extremely low savings rate that signals a recession.  

So, I'm warning you now that, despite all the narratives in the lying media and from lying economists, we're not in a "boom" or an "overheating" economy. The truth is that we're much closer to recession than boom. And because of all the corporate, personal and government debts that have built-up since the last recession, the next recession will be bad or worse.  In fact, you can expect a 50% loss (or more) of your net worth!

Each time the US savings rate drops to current levels, it signals an economic top and subsequent recession. The past two recessions have been accompanied by large losses of net worth.  The 2009 recession saw about a 30% decline in household net worth (includes stocks, bonds, real estate, etc).  It's likely to happen once again, but worse. As of today , household wealth as a percent disposible income is over 700%. Just extrapolating trends, a trip back to 450% to 500% or a 36% decline in household worth or more can be expected.

The Last Time That the Savings Rate Reached Current Levels, Household Wealth declined by 30%. We're Facing the Same or Worse Prospects in February 2018
Graph from Econimica blog

YOU HAVE BEEN WARNED.  

FBI Was Warned About Florida Shooter and Failed

We probably don't need any more gun laws.  What we need is an FBI that functions -- which is probably too much to ask since they are so obsessed with the Russia witch-hunt hysteria. 

In the same way, we didn't need the massively expensive army of Homeland Security agents and black SUVs that showed-up in Boston to chase the Tsarnaev brothers after the Boston bombing. At the end of the day, it was a local person's tip to the local police that caught those fuckers. 

Once again, in regard to the FBI, CIA, NSA and countless other agencies of the Federal Government:  BURN THEM DOWN!

Back to the Florida Shooter story. The FBI was warned and they failed. Guaranteed you will not hear this story from MSM as they have a Leftist and gun control agenda.  From Buzzfeed:

Last fall, a Mississippi bail bondsman and frequent YouTube vlogger noticed an alarming comment left on one of his videos. "I'm going to be a professional school shooter," said a user named Nikolas Cruz.

The YouTuber, 36-year-old Ben Bennight, alerted the FBI, emailing a screenshot of the comment and calling the bureau's Mississippi field office. He also flagged the comment to YouTube, which removed it from the video.

Agents with the bureau's Mississippi field office got back to him "immediately," Bennight said, and conducted an in-person interview the following day, on Sept. 25.
"They came to my office the next morning and asked me if I knew anything about the person," Bennight told BuzzFeed News. "I didn't. They took a copy of the screenshot and that was the last I heard from them." 

Why Trump Is Correct, Most Places Are Shitholes; America Is Special

"What I Learned in the Peace Corps in Africa"  From American Thinker:

Three weeks after college, I flew to Senegal, West Africa, to run a community center in a rural town. Life was placid, with no danger, except to your health. That danger was considerable, because it was, in the words of the Peace Corps doctor, "a fecalized environment."

In plain English: s--- is everywhere. People defecate on the open ground, and the feces is blown with the dust – onto you, your clothes, your food, the water. He warned us the first day of training: do not even touch water. Human feces carries parasites that bore through your skin and cause organ failure.

Never in my wildest dreams would I have imagined that a few decades later, liberals would be pushing the lie that Western civilization is no better than a third-world country. Or would teach two generations of our kids that loving your own culture and wanting to preserve it are racism.

Last time I was in Paris, I saw a beautiful African woman in a grand boubou have her child defecate on the sidewalk next to Notre Dame Cathedral. The French police officer, ten steps from her, turned his head not to see.

I have seen. I am not turning my head and pretending unpleasant things are not true.

Senegal was not a hellhole. Very poor people can lead happy, meaningful lives in their own cultures' terms. But they are not our terms. The excrement is the least of it. Our basic ideas of human relations, right and wrong, are incompatible.

As a twenty-one-year-old starting out in the Peace Corps, I loved Senegal. In fact, I was euphoric. I quickly made friends and had an adopted family. I relished the feeling of the brotherhood of man. People were open, willing to share their lives and, after they knew you, their innermost thoughts.

The longer I lived there, the more I understood: it became blindingly obvious that the Senegalese are not the same as us. The truths we hold to be self-evident are not evident to the Senegalese. How could they be? Their reality is totally different. You can't understand anything in Senegal using American terms.

Take something as basic as family. Family was a few hundred people, extending out to second and third cousins. All the men in one generation were called "father." Senegalese are Muslim, with up to four wives. Girls had their clitorises cut off at puberty. (I witnessed this, at what I thought was going to be a nice coming-of-age ceremony, like a bat mitzvah or confirmation.) Sex, I was told, did not include kissing. Love and friendship in marriage were Western ideas. Fidelity was not a thing. Married women would have sex for a few cents to have cash for the market.

What I did witness every day was that women were worked half to death. Wives raised the food and fed their own children, did the heavy labor of walking miles to gather wood for the fire, drew water from the well or public faucet, pounded grain with heavy hand-held pestles, lived in their own huts, and had conjugal visits from their husbands on a rotating basis with their co-wives. Their husbands lazed in the shade of the trees.

Yet family was crucial to people there in a way Americans cannot comprehend.

The Ten Commandments were not disobeyed – they were unknown. The value system was the exact opposite. You were supposed to steal everything you can to give to your own relatives. There are some Westernized Africans who try to rebel against the system. They fail.

We hear a lot about the kleptocratic elites of Africa. The kleptocracy extends through the whole society. My town had a medical clinic donated by international agencies. The medicine was stolen by the medical workers and sold to the local store. If you were sick and didn't have money, drop dead. That was normal.

So here in the States, when we discovered that my 98-year-old father's Muslim health aide from Nigeria had stolen his clothes and wasn't bathing him, I wasn't surprised. It was familiar.

In Senegal, corruption ruled, from top to bottom. Go to the post office, and the clerk would name an outrageous price for a stamp. After paying the bribe, you still didn't know it if it would be mailed or thrown out. That was normal.

One of my most vivid memories was from the clinic. One day, as the wait grew hotter in the 110-degree heat, an old woman two feet from the medical aides – who were chatting in the shade of a mango tree instead of working – collapsed to the ground. They turned their heads so as not to see her and kept talking. She lay there in the dirt. Callousness to the sick was normal.

Americans think it is a universal human instinct to do unto others as you would have them do unto you. It's not. It seems natural to us because we live in a Bible-based Judeo-Christian culture.

We think the Protestant work ethic is universal. It's not. My town was full of young men doing nothing. They were waiting for a government job. There was no private enterprise. Private business was not illegal, just impossible, given the nightmare of a third-world bureaucratic kleptocracy. It is also incompatible with Senegalese insistence on taking care of relatives.

All the little stores in Senegal were owned by Mauritanians. If a Senegalese wanted to run a little store, he'd go to another country. The reason? Your friends and relatives would ask you for stuff for free, and you would have to say yes. End of your business. You are not allowed to be a selfish individual and say no to relatives. The result: Everyone has nothing.

The more I worked there and visited government officials doing absolutely nothing, the more I realized that no one in Senegal had the idea that a job means work. A job is something given to you by a relative. It provides the place where you steal everything to give back to your family.

I couldn't wait to get home. So why would I want to bring Africa here? Non-Westerners do not magically become American by arriving on our shores with a visa.

For the rest of my life, I enjoyed the greatest gift of the Peace Corps: I love and treasure America more than ever. I take seriously my responsibility to defend our culture and our country and pass on the American heritage to the next generation.

African problems are made worse by our aid efforts. Senegal is full of smart, capable people. They will eventually solve their own country's problems. They will do it on their terms, not ours. The solution is not to bring Africans here.

We are lectured by Democrats that we must privilege third-world immigration by the hundred million with chain migration. They tell us we must end America as a white, Western, Judeo-Christian, capitalist nation – to prove we are not racist. I don't need to prove a thing. Leftists want open borders because they resent whites, resent Western achievements, and hate America. They want to destroy America as we know it.

As President Trump asked, why would we do that?

We have the right to choose what kind of country to live in. I was happy to donate a year of my life as a young woman to help the poor Senegalese. I am not willing to donate my country.