Oldtent Archives 2007 - 2008

and a speedy recovery…

Just talked to Dr. Casstillo today. He has his infectious disease nurses using it at Southern Hospital and the childeren are responding like mad. I asked how much was left..he handed me ONE bottle. I said whooo wait a minute..how come Chirman Taylor was not told and some used down the road at Pommona????????? The Chairman knows now,,…but we should be written up by the Minister of Health for this ..not just for glory ..but because it WORKS
Sinbad..He is using your microscope too…a lot. I have to watch this outfit down here like a gang on the corner of 47th street.
Love ya all.
I will try to get digging results from Erin Resources before they are common knowledge..on how much per ton they are retrieving in the mountians.

indeflation…. by golly .. lol

Indianflation ?

www.investmenttools.com/thefed/federal_reserve_monetary_base.htm

in spite of home prices falling yADDA YADDA .and prices either going up or down .

with ( eratta) deflation the economic world will collapse..stop the monetary expansion.. not going to happen for a time ..

inflation is world wide .. not in two states or five .. all countrys have the spiket open .. china, russia, india , EU,

…..Is that your stuff ?

Who cares if she can read charts….she can see more clearly the man she loves….

17% will have cosmetic surgery by 2015… .. it will become 15.5% lol

……I have come to the conclusion..that this flation we are living right now …is not your Mother’s Flation…its not Weimar…its not 1929…..its not 1979……..its 2009…..and its bigger and badder than those Flations

Weimer…INFLATION

1929….DEFLATION

1979……STAGFLATION

2009…….?

Lets have a contest…..best name for what we are about to receive is ?

……Conflagulation……. is my choice…(Confused Flagulative Indeflation) …

….what else ?…lets get our collective heads on this ….maybe we can be the first to coin a phrase….that lives on in Infamy….

…I mean look at the guy who first coined the Phrase..Stagflation……Genius !

Gary North’s REALITY CHECK

Gold’s price:
www.GaryNorth.com/snip/300.htm

The Federal debt:
www.GaryNorth.com/snip/544.htm

To subscribe to this letter:
www.snipurl.com/subscribenow

Issue 765                                     June 24, 2008

OLD KEYNESIAN DOGS, OLD FISCAL TRICKS

As a dog returneth to his vomit, so a fool
returneth to his folly (Proverbs 26:11).

We are about to be thrown back into the tender mercies
of Keynesian economists.  In the current setting, this will
push the economy lower rather than higher.

The main Keynesian solutions to a faltering economy
are federal budget deficits and monetary inflation.  This
two-part program assumes unemployment at 25% and annual
deflation at 10%: the Great Depression in America.

Problem: it’s not 1936 any more.

Two recent articles reminded me that the
intelligentsia of the United States is like the Louis
XVIII, the king of France in the post-Napoleonic
restoration: he had forgotten nothing and had learned
nothing.

What the intelligentsia learned from the popularizers
of Keynesian economics after 1936 they have not forgotten.
They have learned nothing new.

KEYNESIAN ECONOMICS

The heart of John Maynard Keynes’ analysis in 1936 was
the idea of a permanent free market equilibrium with high
unemployment.  For some reason, which he never explained
coherently, sellers refuse to lower their prices when faced
with buyers who refuse to buy at yesterday’s pre-Depression
prices.  This is especially true of workers who refuse to
cut their wage demands.

Keynesianism is based on two fundamental ideas: (1)
sellers do not learn that something is better than nothing,
and therefore will not lower their selling prices; (2)
economists do not learn that government spending that is
financed by debt is accomplished in one of only ways: (a)
money lent by savers, which could have been lent to
businesses or consumers; (b) money lent by a central bank,
which lowers the purchasing power of the currency unit.
This is a philosophy of something for nothing.

We are told by economists that there are no free
lunches.  But, except for Austrian economists, all
economists really do believe in something for nothing.
They debate with each other about which “something” can be
obtained for nothing — “nothing” always being a piece of
legislation.

Non-Austrian economists believe that a gun, when held
by a salaried government official and pointed at a citizen
to extract his wealth can sometimes produce economic
growth, whereas a gun held by an thief and pointed at a
citizen to extract his wealth always produces economic
loss.  The first produces something for nothing, whereas
the second produces nothing for something.  What is the
difference?  This: the person holding the gun.

KEYNES AND THE NEW DEAL

Early in Franklin Roosevelt’s first term, Keynes met
with Roosevelt.  We know the date: May 28, 1934.
Roosevelt’s Secretary of Labor, Frances Perkins, noted in
her published recollections that Keynes came out of the
meeting and commented on the President’s lack of economic
literacy.  Later, when speaking with Roosevelt, she noted
that he said he thought Keynes must be a mathematician,
rather than a political economist.

Both men had the other pegged exactly.  Roosevelt knew
no economics, and Keynes had earned a bachelor’s degree in
math.  He had no degree in economics.  He got his job at
Cambridge University in 1909 because his father, a
Cambridge economist, put up half the money to hire his son.

Because the meeting was in 1934, and because Keynes
had not yet come up with Keynesianism — he was still
working on it — I do not think the meeting was important
for the future of the American economy.  Keynes justified
in theory in 1936 what every Western government had been
doing for several years: printing money, raising taxes,
running deficits, and regulating the economy.

The New Deal did not end the Great Depression in the
United States.  World War II did.  The war allowed
governments to increase deficit spending, inflate
tremendously, impose price controls, draft young men and
put them to work killing each other (which reduced the
labor pool), and hire women to work in munitions factories
at below-market wages, using patriotism to persuade them to
enter the labor force.  Patriotism was used as a way to
persuade men and women to work at what would have been
below-market wages in 1938.  Then inflation and rationing
reduced real wages even more.

Economics teaches this: “When the price falls, more is
demanded.”  This is true of the price of labor.  Keynes
knew this in 1936, and wrote specifically that the reduced
real wage rates produced by monetary inflation would fool
workers into going back to work.  But it took worldwide
deception — wartime wages — to achieve this on a scale
sufficient to end unemployment.

None of this is taught in any textbook — not in
economics, not in history.  To teach it would alert
students to the economics of war, which centralizes the
power of the State.  This is the thesis of economist Robert
Higgs in “Crisis and Leviathan.”  This book’s thesis and
data never get into college textbooks.

With this as background, let me summarize the first of
two documents.

TIME MARCHES ON!

In the May 15 issue of “Time Magazine,” there is an
article by Justin Fox.  I had never heard of Mr. Fox.  His
biography on “Time”’s site says he has a B.A. in
international relations.  He therefore writes for the
business section.  He has recently published a book, “The
Myth of the Rational Market.”  You get the general idea.

“Time” was started in 1923 by Henry Luce (Skull &
Bones, Council on Foreign Relations).  It has long been a
popular outlet for the American Establishment.  In fact,
“Time” is the news magazine written by the American Establishment
in order to shape the thinking of the voters on the Big Picture.

Mr. Fox’s enemy is what he perceives as Reaganism.

Economic eras don’t last forever, though, and
there are signs that the current slowdown is a
harbinger of something bigger: an end to
America’s 25-year love affair with tax cuts and
deregulation. A lot of the cracks that have
emerged during that time, because of global
economic shifts or our own neglect, have become
impossible to ignore — stagnant incomes, a
federal budget gone way out of balance, soaring
energy prices, a once-in-a-lifetime housing crash
and growing financial risks in retirement and
from health care.

He says there has been growing inequality of wealth.
He offers no statistics to indicate that inequality has
increased from the income distribution of 1940, let alone
1900.  Those who identify inequality as a significant
economic or moral liability that calls for radical policy
changes by government never do offer such statistics.
There is a reason for this.  The ratio of wealth by income
class has barely changed, in the United States or in
Western Europe, in a hundred years.

The evidence for a significant increase in American
inequality since 1980 is based on tax evidence.  But this
evidence does not consider money in tax-deferred retirement
funds.  So, it is questionable.

GaryNorth.com/snip/580.htm

In any case, the critics offer no evidence that their
reforms will eliminate inequality.  It does no good to
provide a cure until a problem is diagnosed.  Why is income
more unequal today — if it is — than it was in 1980?
Second, was 1980 significantly different from 1940 or 1900?
Where is the evidence?  Next, where is the explanation?
Only after we have both should we — meaning policy-makers
– begin suggesting solutions.

So what should be done about income disparity? In
an April Gallup poll, 68% of respondents said
wealth “should be more evenly distributed” in the
U.S. — the highest percentage saying so since
Gallup started asking the question in 1984. A
smaller majority, 51%, agreed that “heavy taxes
on the rich” were needed.

Surprise!  Surprise!  Voters with less wealth want to
the government to stick a gun in the belly of anyone with
more wealth, telling him to fork it over.  Of course,
voters do not want the government to send people with guns
to stick in their bellies, on behalf of people even poorer,
who are far more numerous.

The politics of envy is the politics of this
commandment:  “Thou shalt not steal, except by majority
vote.”  It is the politics of two wolves and a sheep voting
on what to have for dinner.  It is alive and well all over
the world.

The author then launches an unsubstantiated attack on
Reagan’s cuts of the top brackets: from 70% to 28%.  No
mention is made of Kennedy’s cuts from 91% to 70%.  The
economy boomed in both cases.

Then there is the energy crisis.  What is needed?  Not
more production.  We need more taxes and more subsidies by
federal government.

What makes doing the right thing on energy
difficult is that it would almost inevitably
involve raising costs now, with higher taxes on
oil, increased subsidies for other energy sources
or higher energy-efficiency standards for
vehicles and homes — or all three. Economists
tend to prefer the first of these approaches
because taxes on gas, oil or fossil fuels in
general tamp demand and allow the market –
rather than members of Congress — to sift out
the best alternatives.

Here is the good news, he says: the candidates’ stand
on global warming.

Interesting, though, to fight global warming,
Clinton, McCain and Obama are all in favor of a
carbon-cap-and-trade regimen, which would raise
the price of fossil fuels just as surely as a
direct tax would. Almost in spite of ourselves,
we may end up with a semi-rational long-term
energy policy. It won’t make gas cheaper anytime
soon — or perhaps ever — but in the long run,
it could strengthen the country’s economic
prospects.

Next, how should government solve the housing crisis?
Simple: repeal the tax deduction for mortgage interest
payments.  That will do it!  Yes, sir, there is nothing
like a huge tax on everyone’s after-tax income to stimulate
robust growth in the housing market.  (Too bad it won’t
happen — voters being used to the deduction.)

Several countries have dropped the mortgage-
interest deduction in recent years, with no
noticeably adverse effects, but there’s no
indication that any of our presidential
candidates are contemplating such a move.

Then there is universal health care.  No problem here,
either!

But there’s real hope on this front. It is
possible to conceive of a system that brings the
47 million uninsured into the fold, improves
medical outcomes and costs less than what we’ve
got now. It’s possible to conceive of because
many other wealthy countries already have such
systems. Figuring out exactly how to make
universal health care work in the U.S. is a
matter better left to its own lengthy magazine
article. But if you’re looking for big economic
change from the next Administration, this is the
form it’s most likely to take.

www.garynorth.com/snip/588.htm

This article appeared in the premier Establishment
outlet for the American intelligentsia.

My conclusion: get ready for a big dose of the
politics of envy.

KUCINICH’S ECONOMIST SPEAKS OUT

There are not many American politicians further to the
Left economically than Dennis Kucinich.  In a recent
interview, his economic advisor, Michael Hudson, provided a
detailed and accurate assessment of the problems facing the
Federal Reserve System.  Then he offered solutions.

You will not like the solutions.

The interviewer knew what questions to ask.  The
questions centered around the solvency of America’s largest
banks.  The FED is letting them swap bad debt for Treasury
debt.  Half of the FED’s reserves have been swapped for
this supposedly AAA-rated paper since last December.  This
cannot go on much longer.

Problem: this program merely buys time.  How will the
banks unload this bad paper on suckers?  The supply of
suckers has dried up.

The Fed’s idea was merely to buy enough time for
the banks to sell their junk mortgages to the
proverbial “greater fool.” But foreign investors
no longer are playing this role, nor are domestic
U.S. pension funds. So the most likely result
will be for the Fed simply to roll over its loans
– as if the problem can be cured by yet more
time.

The problem is bad real estate loans.  There is
nothing the Treasury can do to solve this problem.  The
game is over.

The financial sector has been living in the short
run for quite a while now, and I suspect that a
lot of money managers are planning to get out or
be fired now that the game is over. And it really
is over. The Treasury’s attempt to reflate the
real estate market has not worked, and it can’t
work. Mortgage arrears, defaults and foreclosures
are rising, and much property has become
unsaleable except at distress prices that leave
homeowners with negative equity.

Hence, the title of the article: “The Game Is Over.
There Won’t Be a Rebound.”

The dollar is likely to fall.  The problem begins with
the international trade system.

When Europe and Asia receive excess dollars,
these are turned over to their central banks,
which have little alternative but to recycle
these back to the United States by buying U.S.
Treasury bonds. Foreign governments — and their
taxpayers — are thus financing the domestic U.S.
federal budget deficit, which itself stems
largely from the war in Iraq that most foreign
voters oppose.

This is exactly the problem.  The United States has
pressured oil-exporting nations in the Middle East to
demand payment in dollars and then cycle these dollars back
through American multinational banks.

For over 30 years they have been pressured to
recycle their oil earnings into the U.S. stock
market and loans to U.S. financial institutions.
They have taken large losses on these investments
(such as last year’s money to bail out Citibank),
and are trying to recoup them via the oil market.

Conclusion: “. . . unless they are willing to make a
structural break and change the world monetary system
radically, they will remain powerless to avoid giving the
United States a free ride — including a free ride for its
military spending and war in the Near East.”

But the fact is, a refusal by central banks to buy T-
bills is exactly such a structural break in the world
monetary system.  He thinks this is now happening.  So do
I.  So, I see no way to remain optimistic about the future
value of the dollar.

Regional banks will go under, he says.  The FED and
the government will oversee mergers.

False reporting also will help financial
institutions avoid the appearance of insolvency.
They will seek more and more government
guarantees, ostensibly to help middle-class
depositors but actually favoring the big
speculators who are their major clients.

I add: this is already taking place.  That is what the
FED’s swaps of Treasury debt for private mortgage-backed
assets is all about.

Then what should Obama do?  Tax and spend.

As president, he will have to do what FDR did,
and challenge the financial oligarchy with new
government regulatory agencies staffed with real
regulators, not deregulators as under the
Bush-Clinton-Bush regime. . . .

Most of all, he will have to make the tax system
back progressive again if the domestic market is
to recover. He should remove the tax-
deductibility of interest payments, and do what
the original 1913 income tax did: tax capital
gains at normal income rates rather than
subsidizing speculation. . . .

Wait a minute!  This is what Mr. Fox recommends in his
article in “Time.”

What about Social Security and Medicare?  Simple:
exempt family that makes under $60,000 a year and tax all
income for everyone else — no cut-off at $105,000.

There is no deduction from gross income for donations
under Social Security.  This is just what the centralizers
need!  This will be Europe’s tax system.

He says this will take power away from the American
oligarchy.  “Unless he does this, what used to be a
democracy will be turned into an oligarchy.”

Yet “Time” ran a cover story on just this sort of tax
reform.  And time has been the popular news magazine for
the oligarchy since its creation in 1923.

CONCLUSION

We are heading into a great reversal.  We are going to
see rising taxes and a falling stock market.  Housing is
unlikely to rebound next year.

The economic goal today is to keep what you have in
the face of a revived welfare state.  The days of wine and
roses are going to be rolled back next year and beyond.

So, today I found that usagold.com has the afternoon London ” FIXed ” gold price history (www.usagold.com/reference/prices/history.html)  ..

So, … I had the ” idea ” … copy the dates & prices and run some FFT’s

So, … I copied the info for 1973, ( www.usagold.com/reference/prices/1973.html ) and ” pasted ” that to an ” OpenOffice ” spreadsheet ( www.openoffice.org/ )

ReFormatted the Dates from ” mm/dd/yy  ” to style ” Tue 17/ Apr 73 ” only to find that www.usagold.com/reference/prices/1973.html contains the ” date - price ” item = “  04/01/73 - $90.00 ” …

BUTT .. 1 April 1973 was a Sunday …. according to both www.calendarhome.com/date.shtml and the ” Spreadsheet ”

Hmmmmmmm .. London FIX Sunday ..

..

http://cryptogon.com/

Thank-you for your input into the ‘flation’ debate.

” I hope I’m just a paranoid, conspiracy nut case.”

I’m with Dusty I hope you are also but I’m not betting against it. All gold and most silver that I possess is in high quality numismatic coins and a great proportion are pre 1933.