Free Country vs. Police State. The clash between these two philosophies was all over the headlines during the Cold War era of the past century. It was a war of ideology - the idea of a society that harnesses the creativity and freedom of thought versus a society that marginalizes and stifles it. Contrary to popular belief, the ideology battle, which defined the Cold War, was finally settled by economic means. Through oil price speculation, aggressive military spending and the space race the Soviet Union was pushed to the brink of a collapse. The consequences of internal corruption pushed it over the edge. That is how the Western World won the battle.
Nevertheless, it appears no lessons were learned by our people and now the same plagues which doomed the Soviet Union are manifesting themselves right here in the United States. First of which is an overbearing central government, which usurps the freedoms and rights of the people - the very same rights which our forefathers deemed inalienable. Second, the gigantic ever-growing military spending, most of which is obsolete, that devastates government budget and consistently runs our country's debt further into the red. Lastly, the widespread corruption within the government that allows the elite minority to raid the coffers of the taxpayers - money which pays to facilitate further corruption through lobbies.
A large portion of the public has no idea what a police state really means, except for the sensationalist remnants of the national propaganda machine that was designed to vilify the Soviet Union and everything it was associated with. Short of the History Channel documentaries about countries behind the "Iron Curtain" during the Cold War, the public at large regards a police state as something that was tied closely to Communism - something that couldn't possibly occur here in the United States. Well I have a surprise for you - it is happening right now as I write this post.
It all started with the Patriot Act, shortly after the 9/11 attacks in 2001. The Patriot Act is the first step toward taking personal privacy out of the equation. This legislation was masked as the means to combat terrorism by opening up all data available on the internet to be used by Intelligence and Law Enforcement authorities. However, the end result is that this act allowed the government to spy on any person in the United States without a valid court order. The Patriot Act is unconstitutional, as it infringes upon the Fourth Amendment, which protects the public from unreasonable search and seizure.
Fast forward to 2011, and we now are faced with SOPA (Stop Online Piracy Act). This legislation practically allows the government to silence internet content that is deemed inappropriate. What can our government deem inappropriate - criticism, dissent, exposure of corrupt practices and anything it wishes to file under such description. Therefore, SOPA is unconstitutional, because it infringes upon the First Amendment to our Constitution, which guarantees the Freedom of Speech.
Also in 2011, moving into 2012, we have the NDAA (National Defense Authorization Act), The verbiage of this legislation reads like the charter of a dictatorial state. If enacted, it will essentially allow our government to imprison any individual it deems to be harmful to the United States for an indefinite amount of time, without affording them the luxury of due process. Furthermore, the act is not limited to foreign nationals - it covers United States citizens as well. As such, it is in the direct violation of the Fifth and Fourteenth Amendments that guarantee no citizen shall be denied liberty without due process.
So if you put all three of these pieces of legislation together, you will come up with a horrifying realization - we have a government that can spy on us, silence us, and throw us into prison without affording us due process. The people who represent us in Congress and in the White House have pushed for this... This is exactly what KGB was designed to do in the Soviet Union - to spy, silence and incarcerate indefinitely. Remember that the abbreviation of KGB stood for (Committee for Government Safety). This, my fellow readers, is the true definition of a Police State.
To be continued... (In my next post, I will cover the aspect of Military Spending)
Tuesday, January 10, 2012
Saturday, December 17, 2011
Doing the Right Thing
A guest speaker at my company's holiday party decided to quote one of my favorite characters in history - Winston Churchill. The quote: "You can always count on Americans to do the right thing - after they’ve tried everything else." While that quote was a not-so-subtle jab at the United States for their late entry into World War II, it applies universally, to humanity in general. The generic form of this quote is a motivational speech moniker: "Change will not occur, until the pain of not changing surpasses the pain of change itself".
As we get older, human beings tend to take fewer and fewer chances turning into conservative beings. As professional adults we have already established ourselves and want to preserve our current standing, often overlooking potential improvements to our lives that require significant change. In this stretch, we have forgotten what it was like to choose where to go to college, what to study, where to take your first professional job and where to live. As adolescents and young adults we make these choices without much to lose, because we are just starting out in life. Further down the line, we acquire a steady level of income, a circle of friends, a comfortable place to live, and a level of familiarity with our daily routine that makes us want to preserve the Status Quo.
Personal tendencies ultimately trickle down into professional behavior as well. Therefore, the fearless leaders of monetary policy at the Federal Reserve are not immune to doing what is the easiest, rather than doing the right thing. When the financial crisis hit our national economy in late 2008, the government and Federal Reserve had important decisions to make. Specifically, whether or not they would allow free market's natural selection kill the banks and corporations who were borrowing irresponsibly and leveraging their assets foolishly. On one hand, the officials could have elected to allow these institutions to fail - showing that there are consequences for being foolish and irresponsible, while plunging the economy into an immediate crash that would have been quite severe in the short term. On the other hand, the officials could save these institutions by using taxpayer money to create bailouts, and borrow money to provide means of further financing - the proverbial "kicking the can down the road" for future generations to deal with.
At first he government allowed Lehman Brothers, a financial institution with too many toxic mortgage-backed securities, file for bankruptcy and fail. The same fate awaited Bear Sterns. The stock market's initial reaction was positive, because everyone saw that the government will not protect failing businesses and believed that financial institutions will be held accountable for their transgressions. But in the long run, that was not the case. The government turned around and chose to provide large sums, many of which were undisclosed to the general public until very recently, to Citigroup, Bank of America, Goldman Sachs and countless others. The government chose to save their financial pillars of the status quo at taxpayers' expense.
The treasonous criminal nature of that act may not be evident to the naked eye at first. However, as you look closer you see how the government told the average Americans to pull down their pants and bend over so that they can service our accounts. We were all intentionally mislead to believe in 2008 that the initial bank bailout was in the amount of 700 billion dollars. At the end of November of 2011, we discovered that the initial amount was actually 7 trillion dollars. Just so that the average reader understands - the Federal Reserve intentionally mislead the American public, which is responsible for the bill of all government bailouts, that the amount of money being borrowed was 1/10th of the actual amount. When, in reality, the actual amount of $7,000,000,000,000 was slightly less than 1/2 of the entire Gross Domestic Product of the United States. If you, as an individual, take 10 times more money from your employer than you are supposed to, you will be in hand-cuffs facing prison time.
But there's more to this fraud against the American people. Imagine you have a mortgage with Bank of America which you have signed at the peak of the housing bubble in 2006. Bank of America has claimed profits from that transaction and truly appreciates your business. Usually, on a 30 year fixed rate conventional mortgage, the finance charge over the life of the loan will be a little over 105% of your home's face value at 5.25% interest rate.
Now, with that profit on the books Bank of America packages your projected profit value into an investment called a mortgage-backed security. This security amounts to nothing more than an IOU in the amount of projected profits from your loan's lifetime payments. It turns out that this projected profit security was packaged with some not-so-certain (sub-prime loans) projected profit securities, and now the bank is in trouble, because the investors can't get rid of these securities fast enough, even at discounted prices. As a result, Bank of America receives a bailout from the government, which taxpayers must pay. So, in addition to paying 105% of your home's value to Bank of America in finance charges, you are now shelling out your tax dollars to help the bank survive the consequences of acting irresponsibly with the 105% you paid initially.
But wait, there's more! As a result of the $7,000,000,000,000 bank bailout, the government must borrow and print more money. As I've discussed previously in 'Real Money' post, when the government prints money without real asset value to back that money, they are in effect devaluing (diluting the value of) existing money in circulation. So over the past three years, the Federal Reserve has more than tripled the amount of money in circulation without any real asset value to back that money (just the faith of the US Government). Therefore, doing the math, your $1.00 in 2008 is mathematically worth $0.33 today. The only reason why you didn't feel that is because deflationary forces kept the purchasing power at the same level over the same time span. In the short-term, there are more deflationary forces in play (European Crisis, Asian Crisis, etc.). So the dollar may get stronger, before the actual inflationary crash occurs. But when the inflation catches up to the reality of dollar devaluation, it will be lightning fast and severe.
To summarize, you have paid the Bank of America 105% of the face value of your home in finance charges, the tax dollars to save for its irresponsibility with the money you paid. And to thank you for all of this, the government has stolen two thirds of your lifetime savings and all the money you earn through devaluation of the dollar. The Banks made money, the Government made money, while the people were left bent over with their pants down... waiting for the banks and the government to double-team them.
The Federal Reserve has recently said that they will "Do the Right Thing" by not printing any more money - they are currently rejecting any notion of a Quantitative Easing 3 program. Which means, for the time being the amount of dollars in existence will remain unchanged (if you trust Bernanke). However, it remains to be seen whether or not the Federal Reserve and our government will stick to this position.
As I've alluded to in the beginning of this post, change will not occur until the pain of not changing becomes too great. For those who are in power and have nobody to hold them accountable for their actions, the pain cannot be too great until it is inflicted by the people whom they are meant to serve. Our forefathers understood this concept and created means to hold each other accountable. However, the government has corrupted these means over centuries to a point where an average American is ignorant, if not altogether indifferent, to the actions of people who are supposed to represent their best interests.
So I ask you, my fellow Americans, are you willing to wait until the pain of not changing becomes too great?
As we get older, human beings tend to take fewer and fewer chances turning into conservative beings. As professional adults we have already established ourselves and want to preserve our current standing, often overlooking potential improvements to our lives that require significant change. In this stretch, we have forgotten what it was like to choose where to go to college, what to study, where to take your first professional job and where to live. As adolescents and young adults we make these choices without much to lose, because we are just starting out in life. Further down the line, we acquire a steady level of income, a circle of friends, a comfortable place to live, and a level of familiarity with our daily routine that makes us want to preserve the Status Quo.
Personal tendencies ultimately trickle down into professional behavior as well. Therefore, the fearless leaders of monetary policy at the Federal Reserve are not immune to doing what is the easiest, rather than doing the right thing. When the financial crisis hit our national economy in late 2008, the government and Federal Reserve had important decisions to make. Specifically, whether or not they would allow free market's natural selection kill the banks and corporations who were borrowing irresponsibly and leveraging their assets foolishly. On one hand, the officials could have elected to allow these institutions to fail - showing that there are consequences for being foolish and irresponsible, while plunging the economy into an immediate crash that would have been quite severe in the short term. On the other hand, the officials could save these institutions by using taxpayer money to create bailouts, and borrow money to provide means of further financing - the proverbial "kicking the can down the road" for future generations to deal with.
At first he government allowed Lehman Brothers, a financial institution with too many toxic mortgage-backed securities, file for bankruptcy and fail. The same fate awaited Bear Sterns. The stock market's initial reaction was positive, because everyone saw that the government will not protect failing businesses and believed that financial institutions will be held accountable for their transgressions. But in the long run, that was not the case. The government turned around and chose to provide large sums, many of which were undisclosed to the general public until very recently, to Citigroup, Bank of America, Goldman Sachs and countless others. The government chose to save their financial pillars of the status quo at taxpayers' expense.
The treasonous criminal nature of that act may not be evident to the naked eye at first. However, as you look closer you see how the government told the average Americans to pull down their pants and bend over so that they can service our accounts. We were all intentionally mislead to believe in 2008 that the initial bank bailout was in the amount of 700 billion dollars. At the end of November of 2011, we discovered that the initial amount was actually 7 trillion dollars. Just so that the average reader understands - the Federal Reserve intentionally mislead the American public, which is responsible for the bill of all government bailouts, that the amount of money being borrowed was 1/10th of the actual amount. When, in reality, the actual amount of $7,000,000,000,000 was slightly less than 1/2 of the entire Gross Domestic Product of the United States. If you, as an individual, take 10 times more money from your employer than you are supposed to, you will be in hand-cuffs facing prison time.
But there's more to this fraud against the American people. Imagine you have a mortgage with Bank of America which you have signed at the peak of the housing bubble in 2006. Bank of America has claimed profits from that transaction and truly appreciates your business. Usually, on a 30 year fixed rate conventional mortgage, the finance charge over the life of the loan will be a little over 105% of your home's face value at 5.25% interest rate.
Now, with that profit on the books Bank of America packages your projected profit value into an investment called a mortgage-backed security. This security amounts to nothing more than an IOU in the amount of projected profits from your loan's lifetime payments. It turns out that this projected profit security was packaged with some not-so-certain (sub-prime loans) projected profit securities, and now the bank is in trouble, because the investors can't get rid of these securities fast enough, even at discounted prices. As a result, Bank of America receives a bailout from the government, which taxpayers must pay. So, in addition to paying 105% of your home's value to Bank of America in finance charges, you are now shelling out your tax dollars to help the bank survive the consequences of acting irresponsibly with the 105% you paid initially.
But wait, there's more! As a result of the $7,000,000,000,000 bank bailout, the government must borrow and print more money. As I've discussed previously in 'Real Money' post, when the government prints money without real asset value to back that money, they are in effect devaluing (diluting the value of) existing money in circulation. So over the past three years, the Federal Reserve has more than tripled the amount of money in circulation without any real asset value to back that money (just the faith of the US Government). Therefore, doing the math, your $1.00 in 2008 is mathematically worth $0.33 today. The only reason why you didn't feel that is because deflationary forces kept the purchasing power at the same level over the same time span. In the short-term, there are more deflationary forces in play (European Crisis, Asian Crisis, etc.). So the dollar may get stronger, before the actual inflationary crash occurs. But when the inflation catches up to the reality of dollar devaluation, it will be lightning fast and severe.
To summarize, you have paid the Bank of America 105% of the face value of your home in finance charges, the tax dollars to save for its irresponsibility with the money you paid. And to thank you for all of this, the government has stolen two thirds of your lifetime savings and all the money you earn through devaluation of the dollar. The Banks made money, the Government made money, while the people were left bent over with their pants down... waiting for the banks and the government to double-team them.
The Federal Reserve has recently said that they will "Do the Right Thing" by not printing any more money - they are currently rejecting any notion of a Quantitative Easing 3 program. Which means, for the time being the amount of dollars in existence will remain unchanged (if you trust Bernanke). However, it remains to be seen whether or not the Federal Reserve and our government will stick to this position.
As I've alluded to in the beginning of this post, change will not occur until the pain of not changing becomes too great. For those who are in power and have nobody to hold them accountable for their actions, the pain cannot be too great until it is inflicted by the people whom they are meant to serve. Our forefathers understood this concept and created means to hold each other accountable. However, the government has corrupted these means over centuries to a point where an average American is ignorant, if not altogether indifferent, to the actions of people who are supposed to represent their best interests.
So I ask you, my fellow Americans, are you willing to wait until the pain of not changing becomes too great?
Tuesday, December 13, 2011
Accountability
My former co-worker, as well as a good friend of mine, and I were discussing the various causes of present day financial crisis. Naturally, the Real Estate Bubble of 2006 came up along with the subsequent crash of 2008. After a long spirited exchange of supposed scapegoats like oil speculation and Ponzi scheming financial firms, I went on to talk about government intervention and policy failure.
My argument centered on the deregulation of the banking industry and the loosening of the lending standards. The repeal of the Glass-Steagall Act in 1999 opened the door for Banks to become giant conglomerates that could perform savings, loan, insurance, investment, as well as other types of business under one roof. The Glass-Steagall Act was passed originally in 1933 in order to stem the abusive corporate tactics that led to the market crash of 1929 and the subsequent Great Depression. This act prohibited banking institutions from engaging in other businesses - in essence, they could no longer take on unacceptable risk with people's savings. This was one of the first steps taken by the United States to get out of the Great Depression.
The loosening lending standards began to escalate in the past decade due, in part, to the demand of the Democratic party that everyone in America deserves a chance to own a home. The other part was the realized profitability by the newly "unchained" banking institutions. So when the banking institutions saw the Democrats' demands, their eyes lit up with dollar signs. They helped the Democrats' lobby for the Federally sponsored mortgage programs, and the rest is history. Soon, the massive lending led to soaring profits which led to even looser standards and more profits. By 2006, the peak of loosening lending standards led to the sub-prime mortgage era - where people with atrocious credit rating could get a mortgage at a substantially inflated interest rate. Everyone was raking in the money and nobody was paying attention that the money earned can never be realistically realized...
Let me explain that - you wouldn't lend money to a broke man without a job, because you would never see that money again. However, with banking institutions now having government protection and willing insurance branches to protect in the event of default, the banks lost all sense of responsible lending.
My good friend argued in turn: "You can't blame the banks and politicians. Surely the people who took the loans they knew they could never repay deserve the blame."
My response to that was: "You have people who are responsible and irresponsible. The bottom line is the people in charge must put measures in place that decrease, if not eliminate, these kinds of noncollectable loans. When the savings of ordinary people and the health of economy is at stake, you have to have responsible and accountable people take the right action at the top."
My friend replied: "I refuse to blame the banks for the fools who borrowed irresponsibly and contributed to the financial crisis. The blame is in the borrower."
My response: "The borrower does have a certain degree of responsibility to themselves. However looking at the bigger picture - if you're in charge, do you really want the health of the nation resting in the hands of the people you consider to be irresponsible fools?"
There is a Russian phrase that roughly translates to - "the fish rots from the head down". In this context, it means that the irresponsibility present in the society of a nation is a direct reflection of the leadership of that nation. On the other hand in a well run society, the leadership are more intelligent having the integrity and accountability to the people. The leadership must be responsible to the rest of the people, who may not be as intelligent, but are willing to work and contribute to society as a whole.
Accountability by the leadership ensures accountability by the rest of our society, with appropriate indisputable retribution in the event anyone fails to conform in this regard. The society is only as corrupt and irresponsible as the government and the government is nothing more than the representation of the people's ambitions.
So the question is - are you ambitious enough to force a change of who represents us as a nation?
My argument centered on the deregulation of the banking industry and the loosening of the lending standards. The repeal of the Glass-Steagall Act in 1999 opened the door for Banks to become giant conglomerates that could perform savings, loan, insurance, investment, as well as other types of business under one roof. The Glass-Steagall Act was passed originally in 1933 in order to stem the abusive corporate tactics that led to the market crash of 1929 and the subsequent Great Depression. This act prohibited banking institutions from engaging in other businesses - in essence, they could no longer take on unacceptable risk with people's savings. This was one of the first steps taken by the United States to get out of the Great Depression.
The loosening lending standards began to escalate in the past decade due, in part, to the demand of the Democratic party that everyone in America deserves a chance to own a home. The other part was the realized profitability by the newly "unchained" banking institutions. So when the banking institutions saw the Democrats' demands, their eyes lit up with dollar signs. They helped the Democrats' lobby for the Federally sponsored mortgage programs, and the rest is history. Soon, the massive lending led to soaring profits which led to even looser standards and more profits. By 2006, the peak of loosening lending standards led to the sub-prime mortgage era - where people with atrocious credit rating could get a mortgage at a substantially inflated interest rate. Everyone was raking in the money and nobody was paying attention that the money earned can never be realistically realized...
Let me explain that - you wouldn't lend money to a broke man without a job, because you would never see that money again. However, with banking institutions now having government protection and willing insurance branches to protect in the event of default, the banks lost all sense of responsible lending.
My good friend argued in turn: "You can't blame the banks and politicians. Surely the people who took the loans they knew they could never repay deserve the blame."
My response to that was: "You have people who are responsible and irresponsible. The bottom line is the people in charge must put measures in place that decrease, if not eliminate, these kinds of noncollectable loans. When the savings of ordinary people and the health of economy is at stake, you have to have responsible and accountable people take the right action at the top."
My friend replied: "I refuse to blame the banks for the fools who borrowed irresponsibly and contributed to the financial crisis. The blame is in the borrower."
My response: "The borrower does have a certain degree of responsibility to themselves. However looking at the bigger picture - if you're in charge, do you really want the health of the nation resting in the hands of the people you consider to be irresponsible fools?"
There is a Russian phrase that roughly translates to - "the fish rots from the head down". In this context, it means that the irresponsibility present in the society of a nation is a direct reflection of the leadership of that nation. On the other hand in a well run society, the leadership are more intelligent having the integrity and accountability to the people. The leadership must be responsible to the rest of the people, who may not be as intelligent, but are willing to work and contribute to society as a whole.
Accountability by the leadership ensures accountability by the rest of our society, with appropriate indisputable retribution in the event anyone fails to conform in this regard. The society is only as corrupt and irresponsible as the government and the government is nothing more than the representation of the people's ambitions.
So the question is - are you ambitious enough to force a change of who represents us as a nation?
Friday, December 9, 2011
Gold Unleashed!
I have received a lot of email regarding my November 27th post on Real Money. Specifically, the correspondence was divided into two camps. One was arguing that the price of gold is strongly inflated due to the falling value of the United States Dollar. The other was vehemently professing that the soaring demand from countries like China and India played a major factor.
Both factions are correct, to an extent. The nature of gold, as stated previously, is that it has intrinsic value that no treasury in the world can devalue. As such, it is highly desirable at the moment by countries and individuals who don't value paper currency on the same level.
With the treasury printing presses in the US and Europe set ready to greatly devalue the dollar and the euro, the one asset governments cannot devalue is thrust into limelight. Relative of these currencies, gold will retain its value.
However without buying or selling of the gold itself, its price would remain the same regardless of where the dollar goes. It is the actual volume of gold purchases that drives up the price (demand).
So to answer my readers - you are both right. The falling value of the dollar is providing the motivation for countries and individuals holding the dollar to convert it into another asset that is more stable - gold. These purchases drive the demand and, subsequently, the price up.
The recent Federal Reserve intention to provide more liquidity only means that our government is ready to do more of the same. They will continue printing tonnes of money, hoping to devalue their debt and your savings. This should provide sufficient and significant additiinal motivation for countries and individuals holding dollars to convert them to gold.
Caveat: The worsening situation in Europe may provide a temporary flight toward the US Dollar as a perceived safety asset. During this time you may see some institutions and individuals sell gold for dollars. As a result, the price of gold and precious metals may fall to an extent. However, in my mind the safety in the US Dollar is a false perception and this boom will not last long. Therefore, I will use this period of Dollar's strength (and precious metals' fall in price) to purchase gold and silver.
There are many ways in which you may own gold. Bullion, coins, stocks, ETFs - it is up to you. Just remember that there are no guarantees in life and weigh risk/reward carefully.
Monday, December 5, 2011
Apathy, Polyarchy, and Squeezing the Middle
Isn't it great living in the United States of America? I certainly think so, because otherwise I wouldn't be able to write my column here every week. But make no mistake about it - we are losing the very foundation of what makes America great with each passing day. The worst part about this phenomenon is that we, as citizens, should be held accountable.
We may very well soon lose the freedom of expression, given the way that mayor Michael Bloomberg acted against the protesters and the media covering them. We have lost all our rights to privacy, given the way the Legislative Branch of our country has taken away our ability to sound off without that conversation being screened for keywords the government deems inappropriate. And now we are losing the foundation of unjust imprisonment without cause, the Habeas Corpus, which our wonderful government believes should be suspended. If this proposition goes through, anyone may be imprisoned and held without just cause. Yes, we are one step away from becoming a police state - the United Socialist Republics of America. Given all of rights that are taken away from us, we are headed towards a society that ultimately will be transformed into a dictatorship.
So how did the government obtain the ability to rule with an iron fist? The answer is voter apathy. More specifically, the answer is a gradual degradation of personal freedom, elected official limitations and the significance of your vote - facilitated by voter apathy. All of this happened, while the voting public at large remained blissfully ignorant. Ever since the forefathers of our country drew up the Constitution, every elected official has been trying to "game the system" and circumvent the underlying principles by claiming they were bringing forth an "improvement". As a result, we now have elected incompetent career politicians, who can take a "secret vote" in Congress so that their constituents can't even hold them accountable for the miscarriage of justice!
The majority of Americans simply believe that their vote counts for nothing. This fact has become a very destructive factor in the process of electing public officials. Let's look at the reasons why - electoral colleges and the two party system.
Electoral colleges disregard the popular vote, where my one vote in New Jersey is equal to someone's vote in Wyoming. Instead, Electoral colleges weigh the complete popular vote of a state with an assigned nominal value that is given to that state's winning party. This "homogenized" nominal value is why majority of individuals don't even bother showing up to vote. For example - I live in a very Democrat-dominated state and chances are most national elections will have New Jersey's nominal votes go to a Democratic candidate. As a result, many non-Democrats never bother showing up voting due to the belief that their vote will not be enough to overtake the Democratic majority. On the other side, many Democrats also don't show up to vote, because they believe there are enough Democrats to make the majority a winner every time without their vote.
The two party system stigmatizes and squeezes the middle class, making the largest segment of the United States' population feel ambivalent towards voting. If it were up to me, there would be no political parties whatsoever. A political party is a drug for the ignorant - a way to vote for a broad ideology that provides no real solutions, just feel-good monikers and slogans which get their party candidates elected instead. Let's take a look at the facts - we currently have a two-party system, where the vast majority of elected officials are either Democrats (who appeal to the lower class, the have-nots) and the Republicans (who appeal to the wealthy and the corporate). Both parties are raping the United States of America through entitlements. The Democrats are trying to take tax dollars and spend it on education, unemployment, tax breaks and free healthcare for the lower classes. The Republicans are trying to provide tax preferential treatment to corporations and upper class, spending wildly on defense, repeal anti-trust laws, and sell out American jobs overseas. Both Democrats and Republicans demolish the national budget. But who pays for these entitlements (corporate and individual)? Why it's the middle class, of course! The wealthy and Corporate hardly ever pay the taxes they actually must according to the tax code, while the lower class can't pay what it doesn't have. That leaves the middle class to foot the bill for politicians' irresponsible, and mostly irrelevant, promises. This results in the weakening of the middle class and, ultimately, the economy which depends upon it.
Had the voting America actually gotten together and lobbied the government for the abolition of the Electoral colleges and political parties, we may actually have candidates worth voting for, instead of some talking figure that must abide by the party ideology.
The United States of America is a Polyarchy state. Since we are very young, we are taught that America is the land of Democracy. That is simply false, because in a true Democracy every vote is counted equally, regardless of which part of the country it comes from. Furthermore, in a true Democracy there are no elected officials, as the people decide by a popular vote on every issue. In a Polyarchy, you have the elite few making decisions for the public. Therefore, United States of America is a Polyarchy state, where the power is being withdrawn from the people with each passing day.
Benjamin Franklin was once asked: "...shall we have a Monarchy or a Republic?"
To which he replied: "A Republic, if you can keep it."
...and we haven't been very good about keeping it.
We may very well soon lose the freedom of expression, given the way that mayor Michael Bloomberg acted against the protesters and the media covering them. We have lost all our rights to privacy, given the way the Legislative Branch of our country has taken away our ability to sound off without that conversation being screened for keywords the government deems inappropriate. And now we are losing the foundation of unjust imprisonment without cause, the Habeas Corpus, which our wonderful government believes should be suspended. If this proposition goes through, anyone may be imprisoned and held without just cause. Yes, we are one step away from becoming a police state - the United Socialist Republics of America. Given all of rights that are taken away from us, we are headed towards a society that ultimately will be transformed into a dictatorship.
So how did the government obtain the ability to rule with an iron fist? The answer is voter apathy. More specifically, the answer is a gradual degradation of personal freedom, elected official limitations and the significance of your vote - facilitated by voter apathy. All of this happened, while the voting public at large remained blissfully ignorant. Ever since the forefathers of our country drew up the Constitution, every elected official has been trying to "game the system" and circumvent the underlying principles by claiming they were bringing forth an "improvement". As a result, we now have elected incompetent career politicians, who can take a "secret vote" in Congress so that their constituents can't even hold them accountable for the miscarriage of justice!
The majority of Americans simply believe that their vote counts for nothing. This fact has become a very destructive factor in the process of electing public officials. Let's look at the reasons why - electoral colleges and the two party system.
Electoral colleges disregard the popular vote, where my one vote in New Jersey is equal to someone's vote in Wyoming. Instead, Electoral colleges weigh the complete popular vote of a state with an assigned nominal value that is given to that state's winning party. This "homogenized" nominal value is why majority of individuals don't even bother showing up to vote. For example - I live in a very Democrat-dominated state and chances are most national elections will have New Jersey's nominal votes go to a Democratic candidate. As a result, many non-Democrats never bother showing up voting due to the belief that their vote will not be enough to overtake the Democratic majority. On the other side, many Democrats also don't show up to vote, because they believe there are enough Democrats to make the majority a winner every time without their vote.
The two party system stigmatizes and squeezes the middle class, making the largest segment of the United States' population feel ambivalent towards voting. If it were up to me, there would be no political parties whatsoever. A political party is a drug for the ignorant - a way to vote for a broad ideology that provides no real solutions, just feel-good monikers and slogans which get their party candidates elected instead. Let's take a look at the facts - we currently have a two-party system, where the vast majority of elected officials are either Democrats (who appeal to the lower class, the have-nots) and the Republicans (who appeal to the wealthy and the corporate). Both parties are raping the United States of America through entitlements. The Democrats are trying to take tax dollars and spend it on education, unemployment, tax breaks and free healthcare for the lower classes. The Republicans are trying to provide tax preferential treatment to corporations and upper class, spending wildly on defense, repeal anti-trust laws, and sell out American jobs overseas. Both Democrats and Republicans demolish the national budget. But who pays for these entitlements (corporate and individual)? Why it's the middle class, of course! The wealthy and Corporate hardly ever pay the taxes they actually must according to the tax code, while the lower class can't pay what it doesn't have. That leaves the middle class to foot the bill for politicians' irresponsible, and mostly irrelevant, promises. This results in the weakening of the middle class and, ultimately, the economy which depends upon it.
Had the voting America actually gotten together and lobbied the government for the abolition of the Electoral colleges and political parties, we may actually have candidates worth voting for, instead of some talking figure that must abide by the party ideology.
The United States of America is a Polyarchy state. Since we are very young, we are taught that America is the land of Democracy. That is simply false, because in a true Democracy every vote is counted equally, regardless of which part of the country it comes from. Furthermore, in a true Democracy there are no elected officials, as the people decide by a popular vote on every issue. In a Polyarchy, you have the elite few making decisions for the public. Therefore, United States of America is a Polyarchy state, where the power is being withdrawn from the people with each passing day.
Benjamin Franklin was once asked: "...shall we have a Monarchy or a Republic?"
To which he replied: "A Republic, if you can keep it."
...and we haven't been very good about keeping it.
Sunday, November 27, 2011
"Real Money"
One thing that people often can't seem to accurately grasp, due to years and years of indoctrination, is the concept of what real money means. Nowhere is this lack of grasp more evident than the United States of America. The reasons for this syndrome is years, decades and over a century of dollar dominance.
The truth, which people seem to forget is that every dollar in your pocket is a government-issued currency, backed by the faith of that government. If the government can no longer substantiate the value of the dollar, the paper currency you carry in your pocket, and in all of your accounts, is just that - paper. Not even worth the paper it is printed on.
If the government cuts on its revenue collection, it will have less money in the budget. Government currently spends wildly on elected officials and provides a slew of entitlements (corporate and individual); which forces the Treasury and the Federal Reserve to engage in printing money to cover these expenses. Sounds great, doesn't it? Until you realize that every time money printing occurs, they amount of paper money you have is being devalued.
Over the course of the past three years, since 2008, the United States Treasury has tripled (3x) the amount of United States dollars in existence. As a result, every dollar in your pocket should now (2011) be worth one third (33%) of what it did in 2008. So how come the prices in most cases didn't increase threefold?
The reason being is that our economy has actually contracted over the course of the past three years. We haven't experienced real economic growth in over three years. We have actually suffered deflation during this period in time. The Federal Reserve officially engaged in Quantitative Easing (printing money) in order to "kick-start" the economy, when in fact the chairman of the Federal Reserve was attempting to prevent a natural, albeit painful, free market correction - deflation.
In a period of deflation, prices and salaries fall resulting in the increase of the dollar's value. Therefore as the Federal Reserve was helping the Treasury print money, the prices and salaries didn't skyrocket threefold, because the economy was suffering a period of deflation.
People who understand this gradual devaluation of the dollar have already rushed to purchase hard assets, whose value isn't dependent on the faith of the United States government. We are talking about foreign property, precious metals (gold, silver), and other things whose value is stable and not dependent on the dollar.
Gold, Silver are "Real Money", because unlike the dollar, their value does not depend upon the United States government, nor any other authority. These precious metals carry value in themselves. In a way the value of Gold and Silver do not change - their pricing in terms of US Dollar changes due to the change of the value of the dollar.
The skyrocketing price of Gold and Silver is a reflection on people's (and governments') speculation on the lack of value of the US Dollar. More individuals are acquiring gold as a safety net against inflation. But it's not just individuals who are acquiring Gold and Silver. China, and the entire Asian region, is buying gold in bulk. Chinese, who own the vast majority of US debt, have a reason to be concerned about the plummeting value of the dollar.
Therefore, they're trading in dollars into "Real Money". What's right for you? Only you can make that decision.
The truth, which people seem to forget is that every dollar in your pocket is a government-issued currency, backed by the faith of that government. If the government can no longer substantiate the value of the dollar, the paper currency you carry in your pocket, and in all of your accounts, is just that - paper. Not even worth the paper it is printed on.
If the government cuts on its revenue collection, it will have less money in the budget. Government currently spends wildly on elected officials and provides a slew of entitlements (corporate and individual); which forces the Treasury and the Federal Reserve to engage in printing money to cover these expenses. Sounds great, doesn't it? Until you realize that every time money printing occurs, they amount of paper money you have is being devalued.
Over the course of the past three years, since 2008, the United States Treasury has tripled (3x) the amount of United States dollars in existence. As a result, every dollar in your pocket should now (2011) be worth one third (33%) of what it did in 2008. So how come the prices in most cases didn't increase threefold?
The reason being is that our economy has actually contracted over the course of the past three years. We haven't experienced real economic growth in over three years. We have actually suffered deflation during this period in time. The Federal Reserve officially engaged in Quantitative Easing (printing money) in order to "kick-start" the economy, when in fact the chairman of the Federal Reserve was attempting to prevent a natural, albeit painful, free market correction - deflation.
In a period of deflation, prices and salaries fall resulting in the increase of the dollar's value. Therefore as the Federal Reserve was helping the Treasury print money, the prices and salaries didn't skyrocket threefold, because the economy was suffering a period of deflation.
People who understand this gradual devaluation of the dollar have already rushed to purchase hard assets, whose value isn't dependent on the faith of the United States government. We are talking about foreign property, precious metals (gold, silver), and other things whose value is stable and not dependent on the dollar.
Gold, Silver are "Real Money", because unlike the dollar, their value does not depend upon the United States government, nor any other authority. These precious metals carry value in themselves. In a way the value of Gold and Silver do not change - their pricing in terms of US Dollar changes due to the change of the value of the dollar.
The skyrocketing price of Gold and Silver is a reflection on people's (and governments') speculation on the lack of value of the US Dollar. More individuals are acquiring gold as a safety net against inflation. But it's not just individuals who are acquiring Gold and Silver. China, and the entire Asian region, is buying gold in bulk. Chinese, who own the vast majority of US debt, have a reason to be concerned about the plummeting value of the dollar.
Therefore, they're trading in dollars into "Real Money". What's right for you? Only you can make that decision.
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