The Fed's Conundrum

In the US we have a slowing economy, however prices are rising for commodities like food and energy, and this just doesn’t make any sense. It doesn’t make sense having low interest rates while mortgage debt defaults are hitting all-time highs. Rising equity prices don’t make sense with all of this going on, as well as the US Dollar hitting new all-time lows. And contrary to what the financial media proclaims, the liquidity the world is awash in, is not the result of high productivity and wealth accumulation. So are the answers to these economic conundrums a result of the new global economy?

Back when the US Dollar was much higher, the US was able to import goods cheaply since we paid fewer dollars than today, so part of the reason we’re paying higher prices is a direct result of a dollar that’s lower in value. But the main reason for rising prices is global competition for commodities. Developing countries like China are growing as much as 15% a year, and demand raises prices. However in answer to these demands we’re not seeing a corresponding increase in business investment to create the additional supply needed to meet rising demand. And the reason is because both asset prices and debt levels are too high to justify the low return on investment relative to risk. This ‘stagflation’ is the direct result of interest rates which have been set at too low levels to bring down asset prices and increase returns that business and investors demand for taking on risk. So we see US energy companies preferring to buy back stock in their companies rather than increase business investment since it appears their return for gambling in the stock market has returned a higher reward than building their business to meet the increasing global demand for energy.

Across the economy, we see a simple and consistent theme. Capacity is full, costs are rising, asset prices are high, government, corporate and consumer debt is at staggering heights, and perceived returns on new projects is low. Is it possible the US Fed is the cause of this global mess? After-all, they were the jackals who kept rates suppressed at 1% back in 2003 and 2004. And that's what caused the housing ‘boom’ turned bust that resulted in debt defaults, which ignited the current global credit crisis responsible for massive foreclosures on a global basis. So why have they returned to their old tricks of lowering rates again below the real rate of inflation?

The truth is the US Fed is backed into a corner, they need to continue lowering interest rates in order to cover-up the real estate and financial Ponzi scheme they created to remedy the 2k Nasdaq crash they created. Sure, free markets would cause real estate prices to collapse and a recession to bring down consumer spending. That would cause supply and demand to fall into line. But, that would also reveal the incompetence of the Fed and the major banks, which would simply be unacceptable, so free markets must be subverted. Look for liquidity and some fancy academic justifications in the face of oil over $100. The Fed and market watchers may wonder at the theoretical cause of stagflation, but it’s real obvious who the culprits are here.

So the next time you hear a US Fed official wondering about economic conundrums, the only ones to blame are the master manipulators themselves. There would be no irrational booms and busts were it not for the direct actions of this entity. We are in a crisis so deep now with over $300 trillion in derivatives at risk, the downside of this story may finally reveal the destructive capacity of the Federal Reserve system, but not without the dearest consequences in the history of our society. And I suppose that’s what it will take to finally rid ourselves of these economic Demons of Disaster.

Below is a fantastic video explaining how our monetary system works and the US Fed's part in what amounts to the most hideous financial scam ever perpetrated.

Money, Banking and the Federal Reserve..

Global Warming - Science vs Crap

The following is adapted from a lecture delivered on the Hillsdale College campus on June 30, 2007, during a seminar entitled “Economics and the Environment,” sponsored by the Charles R and Kathleen K Hoogland Center for Teacher Excellence.

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IN THE PAST few years there has been increasing concern about global climate change on the part of the media, politicians, and the public. It has been stimulated by the idea that human activities may influence global climate adversely and that therefore corrective action is required on the part of governments. Recent evidence suggests that this concern is misplaced. Human activities are not influencing the global climate in a perceptible way. Climate will continue to change, as it always has in the past, warming and cooling on different time scales and for different reasons, regardless of human action. I would also argue that should it occur, a modest warming would be on the whole beneficial.

This is not to say that we don’t face a serious problem. But the problem is political. Because of the mistaken idea that governments can and must do something about climate, pressures are building that have the potential of distorting energy policies in a way that will severely damage national economies, decrease standards of living, and increase poverty. This misdirection of resources will adversely affect human health and welfare in industrialized nations, and even more in developing nations. Thus it could well lead to increased social tensions within nations and conflict between them.

If not for this economic and political damage, one might consider the present concern about climate change nothing more than just another environmentalist fad, like the Alar apple scare or the global cooling fears of the 1970s. Given that so much is at stake, however, it is essential that people better understand the issue.

Man-Made Warming?

The most fundamental question is scientific: Is the observed warming of the past 30 years due to natural causes or are human activities a main or even a contributing factor?

At first glance, it is quite plausible that humans could be responsible for warming the climate. After all, the burning of fossil fuels to generate energy releases large quantities of carbon dioxide into the atmosphere. The CO2 level has been increasing steadily since the beginning of the industrial revolution and is now 35 percent higher than it was 200 years ago. Also, we know from direct measurements that CO2 is a “greenhouse gas” which strongly absorbs infrared (heat) radiation. So the idea that burning fossil fuels causes an enhanced “greenhouse effect” needs to be taken seriously.

But in seeking to understand recent warming, we also have to consider the natural factors that have regularly warmed the climate prior to the industrial revolution and, indeed, prior to any human presence on the earth. After all, the geological record shows a persistent 1,500-year cycle of warming and cooling extending back at least one million years.

In identifying the burning of fossil fuels as the chief cause of warming today, many politicians and environmental activists simply appeal to a so called “scientific consensus.” There are two things wrong with this. First, there is no such consensus: An increasing number of climate scientists are raising serious questions about the political rush to judgment on this issue. For example, the widely touted “consensus” of 2,500 scientists on the United Nations Intergovernmental Panel on Climate Change (IPCC) is an illusion: Most of the panelists have no scientific qualifications, and many of the others object to some part of the IPCC’s report. The Associated Press reported recently that only 52 climate scientists contributed to the report’s “Summary for Policymakers.”

Likewise, only about a dozen members of the governing board voted on the “consensus statement” on climate change by the American Meteorological Society (AMS). Rank and file AMS scientists never had a say, which is why so many of them are now openly rebelling. Estimates of skepticism within the AMS regarding man-made global warming are well over 50 percent.

The second reason not to rely on a “scientific consensus” in these matters is that this is not how science works. After all, scientific advances customarily come from a minority of scientists who challenge the majority view or even just a single person (think of Galileo or Einstein). Science proceeds by the scientific method and draws conclusions based on evidence, not on a show of hands.

But aren’t glaciers melting? Isn’t sea ice shrinking? Yes, but that’s not proof for human caused warming. Any kind of warming, whether natural or human caused, will melt ice. To assert that melting glaciers prove human causation is just bad logic.

What about the fact that carbon dioxide levels are increasing at the same time temperatures are rising? That’s an interesting correlation; but as every scientist knows, correlation is not causation. During much of the last century the climate was cooling while CO2 levels were rising. And we should note that the climate has not warmed in the past eight years, even though greenhouse gas levels have increased rapidly.

What about the fact—as cited by, among others, those who produced the IPCC report—that every major greenhouse computer model (there are two dozen or so) shows a large temperature increase due to human burning of fossil fuels? Fortunately, there is a scientific way of testing these models to see whether current warming is due to a man-made greenhouse effect. It involves comparing the actual or observed pattern of warming with the warming pattern predicted by or calculated from the models. Essentially, we try to see if the “finger-prints” match, “fingerprints” meaning the rates of warming at different latitudes and altitudes.

For instance, theoretically, greenhouse warming in the tropics should register at increasingly high rates as one moves from the surface of the earth up into the atmosphere, peaking at about six miles above the earth’s surface. At that point, the level should be greater than at the surface by about a factor of three and quite pronounced, according to all the computer models. In reality, however, there is no increase at all. In fact, the data from balloon borne radiosondes show the very opposite: a slight decrease in warming over the equator.

The fact that the observed and predicted patterns of warming don’t match indicates that the man-made greenhouse contribution to current temperature change is insignificant. This fact emerges from data and graphs collected in the Climate Change Science Program Report 1.1, published by the federal government in April 2006. It is remarkable and puzzling that few have noticed this disparity between observed and predicted patterns of warming and drawn the obvious scientific conclusion.

What explains why greenhouse computer models predict temperature trends that are so much larger than those observed? The answer lies in the proper evaluation of feedback within the models. Remember that in addition to carbon dioxide, the real atmosphere contains water vapor, the most powerful greenhouse gas. Every one of the climate models calculates a significant positive feedback from water vapor - ie: a feedback that amplifies the warming effect of the CO2 increase by an average factor of two or three. But it is quite possible that the water vapor feedback is negative rather than positive and thereby reduces the effect of increased CO2.

There are several ways this might occur. For example, when increased CO2 produces a warming of the ocean, a higher rate of evaporation might lead to more humidity and cloudiness (provided the atmosphere contains a sufficient number of cloud condensation nuclei). These low clouds reflect incoming solar radiation back into space and thereby cool the earth. Climate researchers have discovered other possible feedbacks and are busy evaluating which ones enhance and which diminish the effect of increasing CO2.

Natural Causes of Warming

A quite different question, but scientifically interesting, has to do with the natural factors influencing climate. This is a big topic about which much has been written. Natural factors include continental drift and mountain-building, changes in the Earth’s orbit, volcanic eruptions, and solar variability. Different factors operate on different time scales. But on a time scale important for human experience, a scale of decades let’s say, solar variability may be the most important.

Solar influence can manifest itself in different ways: fluctuations of solar irradiance (total energy), which has been measured in satellites and related to the sunspot cycle; variability of the ultraviolet portion of the solar spectrum, which in turn affects the amount of ozone in the stratosphere; and variations in the solar wind that modulate the intensity of cosmic rays (which, upon impact into the earth’s atmosphere, produce cloud condensation nuclei, affecting cloudiness and thus climate).

Scientists have been able to trace the impact of the sun on past climate using proxy data (since thermometers are relatively modern). A conventional proxy for temperature is the ratio of the heavy isotope of oxygen, Oxygen-18, to the most common form, Oxygen-16.

A paper published in Nature in 2001 describes the Oxygen-18 data (reflecting temperature) from a stalagmite in a cave in Oman, covering a period of over 3,000 years. It also shows corresponding Carbon-14 data, which are directly related to the intensity of cosmic rays striking the earth’s atmosphere. One sees there a remarkably detailed correlation, almost on a year by year basis. While such research cannot establish the detailed mechanism of climate change, the causal connection is quite clear: Since the stalagmite temperature cannot affect the sun, it is the sun that affects climate.

Policy Consequences

If this line of reasoning is correct, human-caused increases in the CO2 level are quite insignificant to climate change. Natural causes of climate change, for their part, cannot be controlled by man. They are unstoppable. Several policy consequences would follow from this simple fact:

1. Regulation of CO2 emissions is pointless and even counterproductive, in that no matter what kind of mitigation scheme is used, such regulation is hugely expensive.

2. The development of non-fossil fuel energy sources, like ethanol and hydrogen, might be counterproductive, given that they have to be manufactured, often with the investment of great amounts of ordinary energy. Nor do they offer much reduction in oil imports.

3. Wind power and solar power become less attractive, being uneconomic and requiring huge subsidies.

4. Substituting natural gas for coal in electricity generation makes less sense for the same reasons.

None of this is intended to argue against energy conservation. On the contrary, conserving energy reduces waste, saves money, and lowers energy prices irrespective of what one may believe about global warming.

Science vs Hysteria

You will note that this has been a rational discussion. We asked the important question of whether there is appreciable man-made warming today. We presented evidence that indicates there is not, thereby suggesting that attempts by governments to control greenhouse gas emissions are pointless and unwise. Nevertheless, we have state governors calling for CO2 emissions limits on cars; we have city mayors calling for mandatory CO2 controls; we have the Supreme Court declaring CO2 a pollutant that may have to be regulated; we have every industrialized nation (with the exception of the US and Australia) signed on to the Kyoto Protocol; and we have ongoing international demands for even more stringent controls when Kyoto expires in 2012. What’s going on here?

To begin, perhaps even some of the advocates of these anti-warming policies are not so serious about them, as seen in a feature of the Kyoto Protocol called the Clean Development Mechanism, which allows a CO2 emitter—ie, an energy user to support a fanciful CO2 reduction scheme in developing nations in exchange for the right to keep on emitting CO2 unabated. “Emission trading” among those countries that have ratified Kyoto allows for the sale of certificates of unused emission quotas. In many cases, the initial quota was simply given away by governments to power companies and other entities, which in turn collect a windfall fee from consumers. All of this has become a huge financial racket that could someday make the UN’s “Oil for Food” scandal in Iraq seem minor by comparison. Even more fraudulent, these schemes do not reduce total CO2 emissions, not even in theory.

It is also worth noting that tens of thousands of interested persons benefit directly from the global warming scare at the expense of the ordinary consumer. Environmental organizations globally, such as Greenpeace, the Sierra Club, and the Environmental Defense Fund, have raked in billions of dollars. Multi-billion dollar government subsidies for useless mitigation schemes are large and growing. Emission trading programs will soon reach the $100 billion a year level, with large fees paid to brokers and those who operate the scams. In other words, many people have discovered they can benefit from climate scares and have formed an entrenched interest. Of course, there are also many sincere believers in an impending global warming catastrophe, spurred on in their fears by the growing number of one-sided books, movies, and media coverage.

The irony is that a slightly warmer climate with more carbon dioxide is in many ways beneficial rather than damaging. Economic studies have demonstrated that a modest warming and higher CO2 levels will increase GNP and raise standards of living, primarily by improving agriculture and forestry. It’s a well known fact that CO2 is plant food and essential to the growth of crops and trees, and ultimately to the well being of animals and humans.

You wouldn’t know it from Al Gore’s An Inconvenient Truth, but there are many upsides to global warming. Northern homes could save on heating fuel. Canadian farmers could harvest bumper crops. Greenland may become awash in cod and oil riches. Shippers could count on an Arctic shortcut between the Atlantic and Pacific. Forests may expand. Mongolia could become an economic superpower. This is all speculative, even a little facetious. But still, might there be a silver lining for the frigid regions of Canada and Russia? “It’s not that there won’t be bad things happening in those countries,” economics professor Robert O Mendelsohn of the Yale School of Forestry & Environmental Studies says. “But the idea is that they will get such large gains, especially in agriculture, that they will be bigger than the losses.” Mendelsohn has looked at how gross domestic product around the world would be affected under different warming scenarios through 2100. Canada and Russia tend to come out as clear gainers, as does much of northern Europe and Mongolia, largely because of projected increases in agricultural production.

To repeat a point made at the beginning: Climate has been changing cyclically for at least a million years and has shown huge variations over geological time. Humans have adapted well, and will continue to do so.

Conclusion

The nations of the world face many difficult problems. Many have societal problems like poverty, disease, lack of sanitation, and shortage of clean water. There are grave security problems arising from global terrorism and the proliferation of nuclear weapons. Any of these problems are vastly more important than the imaginary problem of man-made global warming. It is a great shame that so many of our resources are being diverted from real problems to this non-problem. Perhaps in ten or 20 years this will become apparent to everyone, particularly if the climate should stop warming (as it has for eight years now) or even begin to cool.

We can only trust that reason will prevail in the face of an onslaught of propaganda like Al Gore’s movie and despite the incessant misinformation generated by the media. Today, the imposed costs are still modest, and mostly hidden in taxes and in charges for electricity and motor fuels. If the scaremongers have their way, these costs will become enormous. When will sound science and good sense finally prevail in the face of all this irrational and scientifically baseless climate fears?

Iacocca's Message to America

Every so often, and lately its been rare, I'll read something with so much truth, I just swell up inside with hope for the future of this country. The fact there are still people like Mr Iacocca who aren't afraid to speak out and let us have it straight and to the point, is a rare find today. His message is important to all Americans...

Where Have All the Leaders Gone?
By Lee Iacocca

Had Enough? Am I the only guy in this country who's fed up with what's happening? Where the hell is our outrage? We should be screaming bloody murder. We've got a gang of clueless bozos steering our ship of state right over a cliff, we've got corporate gangsters stealing us blind, and we can't even clean up after a hurricane much less build a hybrid car. But instead of getting mad, everyone sits around and nods their heads when the politicians say, "Stay the course." Stay the course? You've got to be kidding. This is America, not the damned Titanic. I'll give you a sound bite: Throw the bums out! You might think I'm getting senile, that I've gone off my rocker, and maybe I have. But someone has to speak up. I hardly recognize this country anymore. The President of the United States is given a free pass to ignore the Constitution, tap our phones, and lead us to war on a pack of lies.Congress responds to record deficits by passing a huge tax cut for the wealthy (thanks, but I don't need it). The most famous business leaders are not the innovators but the guys in handcuffs. While we're fiddling in Iraq, the Middle East is burning and nobody seems to know what to do. And the press is waving pom-poms instead of asking hard questions. That's not the promise of America my parents and yours traveled across the ocean for.

I've had enough. How about you? I'll go a step further. You can't call yourself a patriot if you're not outraged. This is a fight I'm ready and willing to have. My friends tell me to calm down. They say, "Lee, you're eighty-two years old. Leave the rage to the young people." I'd love to, as soon as I can pry them away from their iPods for five seconds and get them to pay attention. I'm going to speak up because it's my patriotic duty. I think people will listen to me. They say I have a reputation as a straight shooter. So I'll tell you how I see it, and it's not pretty, but at least it's real. I'm hoping to strike a nerve in those young folks who say they don't vote because they don't trust politicians to represent their interests. Hey, America, wake up. These guys work for us. Who Are These Guys, Anyway? Why are we in this mess? How did we end up with this crowd in Washington? Well, we voted for them, or at least some of us did. But I'll tell you what we didn't do. We didn't agree to suspend the Constitution. We didn't agree to stop asking questions or demanding answers. Some of us are sick and tired of people who call free speech treason. Where I come from that's a dictatorship, not a democracy. And don't tell me it's all the fault of right-wing Republicans or liberal Democrats. That's an intellectually lazy argument, and it's part of the reason we're in this stew. We're not just a nation of factions. We're a people. We share common principles and ideals. And we rise and fall together.

Where are the voices of leaders who can inspire us to action and make us stand taller? What happened to the strong and resolute party of Lincoln? What happened to the courageous, populist party of FDR and Truman? There was a time in this country when the voices of great leaders lifted us up and made us want to do better. Where have all the leaders gone?

The Test of a Leader

I've never been Commander in Chief, but I've been a CEO. I understand a few things about leadership at the top. I've figured out nine points, not ten (I don't want people accusing me of thinking I'm Moses). I call them the "Nine Cs of Leadership." They're not fancy or complicated. Just clear, obvious qualities that every true leader should have. We should look at how the current administration stacks up. Like it or not, this crew is going to be around until January 2009. Maybe we can learn something before we go to the polls in 2008. Then let's be sure we use the leadership test to screen the candidates who say they want to run the country. It's up to us to choose wisely.

A leader has to show CURIOSITY. He has to listen to people outside of the "Yes, sir" crowd in his inner circle. He has to read voraciously, because the world is a big, complicated place. George W. Bush brags about never reading a newspaper. "I just scan the headlines," he says. Am I hearing this right? He's the President of the United States and he never reads a newspaper? Thomas Jefferson once said, "Were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate for a moment to prefer the latter." Bush disagrees. As long as he gets his daily hour in the gym, with Fox News piped through the sound system, he's ready to go.

If a leader never steps outside his comfort zone to hear different ideas, he grows stale. If he doesn't put his beliefs to the test, how does he know he's right? The inability to listen is a form of arrogance. It means either you think you already know it all, or you just don't care. Before the 2006 election, George Bush made a big point of saying he didn't listen to the polls. Yeah, that's what they all say when the polls stink. But maybe he should have listened, because 70 percent of the people were saying he was on the wrong track. It took a "thumping" on election day to wake him up, but even then you got the feeling he wasn't listening so much as he was calculating how to do a better job of convincing everyone he was right.

A leader has to be CREATIVE, go out on a limb, be willing to try something different. You know, think outside the box. George Bush prides himself on never changing, even as the world around him is spinning out of control. God forbid someone should accuse him of flip-flopping. There's a disturbingly messianic fervor to his certainty. Senator Joe Biden recalled a conversation he had with Bush a few months after our troops marched into Baghdad. Joe was in the Oval Office outlining his concerns to the President, the explosive mix of Shiite and Sunni, the disbanded Iraqi army, the problems securing the oil fields. "The President was serene," Joe recalled. "He told me he was sure that we were on the right course and that all would be well. 'Mr. President,' I finally said, 'how can you be so sure when you don't yet know all the facts?'" Bush then reached over and put a steadying hand on Joe's shoulder. "My instincts," he said. "My instincts." Joe was flabbergasted. He told Bush,"Mr. President, your instincts aren't good enough." Joe Biden sure didn't think the matter was settled. And, as we all know now, it wasn't. Leadership is all about managing change, whether you're leading a company or leading a country. Things change, and you get creative. You adapt. Maybe Bush was absent the day they covered that at Harvard Business School.

A leader has to COMMUNICATE. I'm not talking about running off at the mouth or spouting sound bites. I'm talking about facing reality and telling the truth. Nobody in the current administration seems to know how to talk straight anymore. Instead, they spend most of their time trying to convince us that things are not really as bad as they seem. I don't know if it's denial or dishonesty, but it can start to drive you crazy after a while. Communication has to start with telling the truth, even when it's painful. The war in Iraq has been, among other things, a grand failure of communication. Bush is like the boy who didn't cry wolf when the wolf was at the door. After years of being told that all is well, even as the casualties and chaos mount, we've stopped listening to him.

A leader has to be a person of CHARACTER. That means knowing the difference between right and wrong and having the guts to do the right thing. Abraham Lincoln once said, "If you want to test a man's character, give him power." George Bush has a lot of power. What does it say about his character? Bush has shown a willingness to take bold action on the world stage because he has the power, but he shows little regard for the grievous consequences. He has sent our troops (not to mention hundreds of thousands of innocent Iraqi citizens) to their deaths. For what? To build our oil reserves? To avenge his daddy because Saddam Hussein once tried to have him killed? To show his daddy he's tougher? The motivations behind the war in Iraq are questionable, and the execution of the war has been a disaster. A man of character does not ask a single soldier to die for a failed policy.

A leader must have COURAGE. I'm talking about balls. (That even goes for female leaders.) Swagger isn't courage. Tough talk isn't courage. George Bush comes from a blue-blooded Connecticut family, but he likes to talk like a cowboy. You know, My gun is bigger than your gun. Courage in the twenty-first century doesn't mean posturing and bravado. Courage is a commitment to sit down at the negotiating table and talk.

If you're a politician, courage means taking a position even when you know it will cost you votes. Bush can't even make a public appearance unless the audience has been handpicked and sanitized. He did a series of so-called town hall meetings last year, in auditoriums packed with his most devoted fans. The questions were all softballs.

To be a leader you've got to have CONVICTION, a fire in your belly. You've got to have passion. You've got to really want to get something done. How do you measure fire in the belly? Bush has set the all-time record for number of vacation days taken by a U.S. President, four hundred and counting. He'd rather clear brush on his ranch than immerse himself in the business of governing. He even told an interviewer that the high point of his presidency so far was catching a seven-and-a-half-pound perch in his hand-stocked lake. It's no better on Capitol Hill. Congress was in session only ninety-seven days in 2006. That's eleven days less than the record set in 1948, when President Harry Truman coined the term do-nothing Congress. Most people would expect to be fired if they worked so little and had nothing to show for it. But Congress managed to find the time to vote itself a raise. Now, that's not leadership.

A leader should have CHARISMA. I'm not talking about being flashy. Charisma is the quality that makes people want to follow you. It's the ability to inspire. People follow a leader because they trust him. That's my definition of charisma. Maybe George Bush is a great guy to hang out with at a barbecue or a ball game. But put him at a global summit where the future of our planet is at stake, and he doesn't look very presidential. Those frat-boy pranks and the kidding around he enjoys so much don't go over that well with world leaders. Just ask German Chancellor Angela Merkel, who received an unwelcome shoulder massage from our President at a G-8 Summit. When he came up behind her and started squeezing, I thought she was going to go right through the roof.

A leader has to be COMPETENT. That seems obvious, doesn't it? You've got to know what you're doing. More important than that, you've got to surround yourself with people who know what they're doing. Bush brags about being our first MBA President. Does that make him competent? Well, let's see. Thanks to our first MBA President, we've got the largest deficit in history, Social Security is on life support, and we've run up a half-a-trillion-dollar price tag (so far) in Iraq. And that's just for starters. A leader has to be a problem solver, and the biggest problems we face as a nation seem to be on the back burner.

You can't be a leader if you don't have COMMON SENSE. I call this Charlie Beacham's rule. When I was a young guy just starting out in the car business, one of my first jobs was as Ford's zone manager in Wilkes-Barre, Pennsylvania. My boss was a guy named Charlie Beacham, who was the East Coast regional manager. Charlie was a big Southerner, with a warm drawl, a huge smile, and a core of steel. Charlie used to tell me, "Remember, Lee, the only thing you've got going for you as a human being is your ability to reason and your common sense. If you don't know a dip of horseshit from a dip of vanilla ice cream, you'll never make it." George Bush doesn't have common sense. He just has a lot of sound bites. You know, Mr "they'll welcome us as liberators no child left behind heck of a job Brownie mission accomplished" Bush. Former President Bill Clinton once said, "I grew up in an alcoholic home. I spent half my childhood trying to get into the reality-based world, and I like it here." I think our current President should visit the real world once in a while.

The Biggest C is CRISIS. Leaders are made, not born. Leadership is forged in times of crisis. It's easy to sit there with your feet up on the desk and talk theory. Or send someone else's kids off to war when you've never seen a battlefield yourself. It's another thing to lead when your world comes tumbling down. On September 11, 2001, we needed a strong leader more than any other time in our history. We needed a steady hand to guide us out of the ashes. Where was George Bush? He was reading a story about a pet goat to kids in Florida when he heard about the attacks. He kept sitting there for twenty minutes with a baffled look on his face. It's all on tape. You can see it for yourself. Then, instead of taking the quickest route back to Washington and immediately going on the air to reassure the panicked people of this country, he decided it wasn't safe to return to the White House. He basically went into hiding for the day, and he told Vice President Dick Cheney to stay put in his bunker. We were all frozen in front of our TVs, scared out of our wits, waiting for our leaders to tell us that we were going to be okay, and there was nobody home. It took Bush a couple of days to get his bearings and devise the right photo op at Ground Zero. That was George Bush's moment of truth, and he was paralyzed. And what did he do when he'd regained his composure? He led us down the road to Iraq, a road his own father had considered disastrous when he was President. But Bush didn't listen to Daddy. He listened to a higher father. He prides himself on being faith based, not reality based. If that doesn't scare the crap out of you, I don't know what will.

A Hell of a Mess

So here's where we stand. We're immersed in a bloody war with no plan for winning and no plan for leaving. We're running the biggest deficit in the history of the country. We're losing the manufacturing edge to Asia, while our once-great companies are getting slaughtered by health care costs. Gas prices are skyrocketing, and nobody in power has a coherent energy policy. Our schools are in trouble. Our borders are like sieves. The middle class is being squeezed every which way. These are times that cry out for leadership.

But when you look around, you've got to ask: "Where have all the leaders gone?" Where are the curious, creative communicators? Where are the people of character, courage, conviction, competence, and common sense? I may be a sucker for alliteration, but I think you get the point.

Name me a leader who has a better idea for homeland security than making us take off our shoes in airports and throw away our shampoo? We've spent billions of dollars building a huge new bureaucracy, and all we know how to do is react to things that have already happened. Name me one leader who emerged from the crisis of Hurricane Katrina. Congress has yet to spend a single day evaluating the response to the hurricane, or demanding accountability for the decisions that were made in the crucial hours after the storm. Everyone's hunkering down, fingers crossed, hoping it doesn't happen again. Now, that's just crazy. Storms happen. Deal with it. Make a plan. Figure out what you're going to do the next time.

Name me an industry leader who is thinking creatively about how we can restore our competitive edge in manufacturing. Who would have believed that there could ever be a time when "the Big Three" referred to Japanese car companies? How did this happen, and more important, what are we going to do about it? Name me a government leader who can articulate a plan for paying down the debt, or solving the energy crisis, or managing the health care problem. The silence is deafening. But these are the crises that are eating away at our country and milking the middle class dry.

I have news for the gang in Congress. We didn't elect you to sit on your asses and do nothing and remain silent while our democracy is being hijacked and our greatness is being replaced with mediocrity. What is everybody so afraid of? That some bobblehead on Fox News will call them a name? Give me a break. Why don't you guys show some spine for a change? Had Enough? Hey, I'm not trying to be the voice of gloom and doom here. I'm trying to light a fire. I'm speaking out because I have hope. I believe in America. In my lifetime I've had the privilege of living through some of America's greatest moments. I've also experienced some of our worst crises, the Great Depression, World War II, the Korean War, the Kennedy assassination, the Vietnam War, the 1970s oil crisis, and the struggles of recent years culminating with 9/11. If I've learned one thing, it's this: You don't get anywhere by standing on the sidelines waiting for somebody else to take action. Whether it's building a better car or building a better future for our children, we all have a role to play. That's the challenge I'm raising in this book. It's a call to action for people who, like me, believe in America. It's not too late, but it's getting pretty close. So let's shake off the horseshit and go to work. Let's tell 'em all we've had enough.

Lido Anthony "Lee" Iacocca (born October 15, 1924) is an American industrialist most commonly known for his revival of the Chrysler brand in the 1980s when he was the CEO. Among the most widely recognized businessmen in the world, he was a passionate advocate of U.S. business exports during the 1980s.

Carlin-Politically Incorrect

Who Really Owns America?


George Carlin on Religion


Mr Carlin doesn't mince words, he just tells it like it is. More than a comedian, he strips away the veneer of our politically correct institutions exposing them for what they are, in the simplest of terms.

I hope you enjoy the videos!

George Carlin's Upcoming Concerts...

America's Wake Up Call

via videosift.com

"This in the United States of America..."
Can Boston Legal's Alan Shore Save America From Itself?

Episode 19: Alan Shore's (played by James Spader) Closing Argument..

Alan Shore: When the weapons of mass destruction thing turned out to be not true, I expected the American people to rise up. Ha! They didn't.


Then, when the Abu Ghraib torture thing surfaced and it was revealed that our government participated in rendition, a practice where we kidnap people and turn them over to regimes who specialize in torture, I was sure then the American people would be heard from. We stood mute.


Then came the news that we jailed thousands of so-called terrorists suspects, locked them up without the right to a trial or even the right to confront their accusers. Certainly, we would never stand for that. We did.


And now, it's been discovered the executive branch has been conducting massive, illegal, domestic surveillance on its own citizens. You and me. And I at least consoled myself that finally, finally the American people will have had enough. Evidentially, we haven't.


In fact, if the people of this country have spoken, the message is we're okay with it all. Torture, warrant-less search and seizure, illegal wire-tappings, prison without a fair trial - or any trial, war on false pretenses. We, as a citizenry, are apparently not offended.


There are no demonstrations on college campuses. In fact, there's no clear indication that young people seem to notice.


Well, Melissa Hughes noticed. Now, you might think, instead of withholding her taxes, she could have protested the old fashioned way. Made a placard and demonstrated at a Presidential or Vice-Presidential appearance, but we've lost the right to that as well. The Secret Service can now declare free speech zones to contain, control and, in effect, criminalize protest.


Stop for a second and try to fathom that.


At a presidential rally, parade or appearance, if you have on a supportive t-shirt, you can be there. If you are wearing or carrying something in protest, you can be removed.


This, in the United States of America. This in the United States of America. Is Melissa Hughes the only one embarrassed?


*Alan sits down abruptly in the witness chair next to the judge*


Judge Robert Sanders: Mr. Shore. That's a chair for witnesses only.


Really long speeches make me so tired sometimes.


Judge Sanders: Please get out of the chair.


Alan: Actually, I'm sick and tired.


Judge Sanders: Get out of the chair!


Alan: And what I'm most sick and tired of is how every time somebody disagrees with how the government is running things, he or she is labeled un-American.


U.S. Attorney Jonathan Shapiro: Evidently, it's speech time.


Alan: And speech in this country is free, you hack! Free for me, free for you. Free for Melissa Hughes to stand up to her government and say "Stick it"!


U.S. Attorney Jonathan Shapiro: Objection!


Alan: I object to government abusing its power to squash the constitutional freedoms of its citizenry. And, God forbid, anybody challenge it. They're smeared as being a heretic. Melissa Hughes is an American. Melissa Hughes is an American. Melissa Hughes is an American!


Judge Sanders: Mr. Shore. Unless you have anything new and fresh to say, please sit down. You've breached the decorum of my courtroom with all this hooting.


Alan: Last night, I went to bed with a book. Not as much fun as a 29 year old, but the book contained a speech by Adlai Stevenson. The year was 1952. He said, "The tragedy of our day is the climate of fear in which we live and fear breeds repression. Too often, sinister threats to the Bill of Rights, to freedom of the mind are concealed under the patriotic cloak of anti-Communism."


Today, it's the cloak of anti-terrorism. Stevenson also remarked, "It's far easier to fight for principles than to live up to them."


I know we are all afraid, but the Bill of Rights - we have to live up to that. We simply must. That's all Melissa Hughes was trying to say. She was speaking for you. I would ask you now to go back to that room and speak for her.

A Brave New World

My topic today is a review of a new book by Daniel Estulin, "The True Story of the Bilderberg Group", Paperback Ed-Sept, 2007. Estulin dispels all the conspiracy theories currently surrounding 'The Elitists', replacing the many myths with a documentary based on his fifteen year investigation into the workings of this global Shadow Government.

Daniel Estulin is a Madrid-based journalist and an investigative reporter who took on the daunting and dangerous task of researching the Bildeberg Group, and who offers his findings in The True Story Of The Bilderberg Group, recently published by Trine Day. Equally intriguing as his harrowing tales of being followed and nearly killed on a couple of occasions while working on the book, is the manner in which Estulin connects the dots between the Bilderberg Group, world events, notable politicians and corporate tycoons and the two other secretive monsters of the ruling elite, the Council on Foreign Relations (CFR) and the Trilateral Commission (TC). The project was motivated by Estulin's curiosity about how it is that the mainstream media has never covered in depth the meetings of the Bilderberg Group whose combined wealth exceeds the combined wealth of all US citizens.

What Estulin's book makes clear is that the group, along with the CFR and TC, has become a shadow government whose top priority is to erase the sovereignty of all nation-states and supplant them with global corporate control of their economies under the surveillance of "an electronic global police state." (xv)

The author emphasizes that not all members of the group are "bad" people, and he implies that membership is structured somewhat like concentric circles in a target scheme with an inner core and various levels of relationship between that core and the outer circles of membership. Almost every famous player in politics and finance in the world is a member of one of the three organizations mentioned above, and their political affiliations range from liberal to conservative, for example, George W Bush, George Soros, Gerald Ford, George McGovern, and Jimmy Carter. Of this private club, Estulin says:

This parallel world remains unseen in the daily struggles of most of humanity, but, believe me, it is there: a cesspool of duplicity and lies and double-speak and innuendo and blackmail and bribery. It is a surreal world of double and triple agents, of changing loyalties, of professional psychotic assassins, brainwashed black ops agents, soldiers of fortune and mercenaries, whose primary sources of income are the dirtiest and most despicable government-run subversive missions-the kind that can never be exposed.(15)

This world, according to Estulin, is so perverse and evil that "it has left an indelible mark on my soul". (16) How not? Because the Bilderberg Group and its two other triplets, the CFR and the TC have set about to loot the entire planet. Their members run the central banks of the world and are poised to control discount rates, money-supply, interest rates, gold prices, and which countries receive or do not receive loans. Membership is by invitation only, many of the earliest members being handpicked, not from right-wing groups but from among none other than the Fabian Socialists who ultimately supported global government.

Another chilling quote Estulin includes is from William Shannon:

The Bilderbergers are searching for the age of post-nationalism: when we won't have countries, but rather regions of the Earth surrounded by Universal values. That is to say, a global economy; one World government (selected rather than elected) and a universal religion. To assure themselves of reaching these objectives, the Bilderbergers focus on a 'greater technical approach' and less awareness on behalf of the general public.

THE BILDERBERG BAPTISM OF BILL CLINTON

In 1991 Bill Clinton attended the Bilderberg Conference in Baden-Baden where Estulin asserts that he was "anointed" to the US presidency, and shortly thereafter he took an unexpected, unannounced trip to Moscow. It appears, says Estulin, that he was sent there to get his KGB student-era, anti-Vietnam war files "buried" before he announced his candidacy for president which happened some two-and-a-half months later. Today, Clinton is a member of all three groups: Bilderberg, CFR, and TC. Hillary Clinton is a member of the Bilderberg Group.

Estulin points out that "almost all of the presidential candidates for both parties have belonged to at least one of these organizations, many of the US congressmen and senators, most major policy-making positions, especially in the field of foreign relations, much of the press, most of the leadership of the CIA, FBI, IRS, and many of the remaining governmental organizations in Washington. CFR members occupy nearly all White House cabinet positions."(80) When one considers that most prominent members of mainstream media are also members of what Edith Kermit Roosevelt, granddaughter of Theodore Roosevelt called "this legitimate Mafia", how can we assert that Americans obtain their news from independent sources?

For example, The News Hour with Jim Leher is the cornerstone of PBS's programming. Leher is a CFR member, and when one examines the funding of the news hour by: Archer Daniels Midland (ADM) whose chairman Dwayne Andreas was a member of the Trilateral Commission; Pepsico, whose CEO Indra Krishnamurthy Nooyi is a Bilderberger and TC Executive Committee member; and Smith Barney which is interlocked with Citigroup, a global financial services company that is a member of the Bilderberg Group, the CFR, and the TC, what kind of "news" should one expect from Leher's News Hour? Consider also that many of the journalists on the News Hour: Paul Gigot, David Gergen, William Kristol, and William Safire are members of one or more of the three groups. (153)

Likewise, when we consider the membership in one or more of these groups of almost every American president since the inception of these organizations, we can no longer pretend that any Democratic or Republican presidential candidate offers the American people an alternative to ruling elite global hegemony.

In fact, Estulin's research reveals that "the Council on Foreign Relations creates and delivers psycho-political operations by manipulating people's reality through a 'tactic of deception', placing Council members on both sides of an issue. The deception is complete when the public is led to believe that its own best interests are being served while the CFR policy is being carried out."(117)

And what happens if the "anointed ones" become too autonomous? One chapter in the book, "The Watergate Con-Game", answers that question. In it Estulin suggests that Richard Nixon was set up by the Council on Foreign Relations of which he was a member because of his insubordination and unwillingness to submit to the shadow government. Presumably, Nixon's demise was carefully crafted to demonstrate to subsequent Chief Executives the price they would pay for disregarding the agenda of those who anointed them.

THAT WAS THEN, THIS IS NOW

In the book's final pages, Estulin's research waxes increasingly relevant to the present moment in history. He asks: "Why would David Rockefeller and other US Trilateralists, Bilderbergers and the CFR members want to dismantle the industrial might of the United States?" (184). He then launches into a summary of the economic history of the twentieth century and makes one of the most powerful statements of the entire book: "What we have witnessed from this 'cabal' is the gradual collapsing of the U.S. economy that began in the 1980s." (187)

In case you haven't noticed, this "gradual collapse of the US economy" is no longer gradual, and what Estulin is asserting confirms a great deal of the assertions made by Catherine Austin Fitts that the current housing bubble explosion/credit crunch/mortgage meltdown has its roots in the 1980s. James Howard Kunstler has also written recently in his blog entitled “Shock and Awe” that the great American yard sale has begun. In other words, as an engineered economic meltdown drives hundreds of thousands and eventually millions of businesses and individuals into bankruptcy, key players in the Big Three ruling elite organizations can buy up the train wreck left behind for pennies on the dollar-a brilliant fast-track strategy for owning the world.

In the final months of 2007 we are witnessing the stupendous success of the Big Three's strategy for planetary economic hegemony as the cacophony of their carefully engineered global economic cataclysm reverberates across America and around the world. It was never about buyers who didn't read the fine print when taking out liar loans. It was always about silver-tongued, ruling elite politicians and central bankers, anointed by the shadow government, who ultimately and skillfully stole and continue to steal governments from people and replace them with transnational corporations.

No one could have said it better than David Rockefeller, founder of the Trilateral Commission, a Bilderberg member and board member of the Council On Foreign Relations in his Memoirs:

Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as 'internationalists' and of conspiring with others around the world to build a more integrated global political and economic structure-one world, if you will. If that's the charge, I stand guilty, and I am proud of it.

If you're ready to dispel the myths and would like to know who really runs the world and the lengths to which they will go to establish a Brave New World, I urge you to read this well-documented investigation into “The True Story of the Bilderberg Group”.

Peak Oil or Peak Wealth?

Let's Discuss Peak Oil. I've been around long enough, that after a while the crap keeps rhyming. Take the oil shortage panic of the mid-1970's.. didn't that end up being a hoax? Then there was the panic over depletion of the Ozone Layer, remember that one? I guess it must have sowed itself back up. Now we're being alerted that Global Warming is being caused by the burning of fossil fuels on the planet, and a plethora of Doomsday scenarios have burst onto the media realm. This panic sort of rhymes with the early 1970's concern over Acid Rain, which was instigated by a book by Rachael Carlson.

While I believe the concept of Peak Oil is real and will someday arrive, there's no evidence that it has. What is evident is that fully 5% of world oil production is intentionally being kept off the market by t6 the kleptocracy not sharing with gulf locals. And what about the Falklands, whose huge reserves have yet to be tapped? What Big Oil (and the US government) wants is complete control of the amount of oil being put on the market at any time. Control of the "shortages" and the surpluses, so that the financial sharks can make money in the market both ways.

Remember, the last oil shortage occurred during the Vietnam war. And it is pure BS that Big Oil was not in favor of invading Iraq.

Then there's the news nobody hears about, like the 100 miles off the US eastern and Gulf coasts that show 64 times more clean natural gas (methane hydrates) than the entire current-day proven planetary gas reserves!

Folks, it's nothing more than a RIGGED game.

According to the Center for Responsive Politics, Oil and Gas companies gave Republicans 79% of their $61.5M in campaign contributions - and nobody but Big Oil's Bush was running that last time - SURPRISE, SURPRISE!

Peak Oil is very much a function of social justice. There will be no freedom allowed in producer nations.

Peak Oil is also just another scam to squeeze the middle class. If it were a real crisis, there would be national mobilization for efficiency programs and subsidies. But the ruling elite don't want national mobilization about anything; they want a dumb, divided, easily controlled, populace - which is what they strive to create. So with the Peak Oil excuse, the middle class gets squeezed still further about something they feel is a law of nature and they have no control of, the poor stay poor, and the rich thrive.

Peak Oil is one of a number of myth/scams to move along the process of Peak Wealth Redistribution, made easier by fear.

What Peak Oil does in the US, as proven by experience in Germany, is create a Green Party/environmental movement of educated, well-off, middle class in hysterical opposition to the dumb, dirty, underclass and how they live, and in opposition to all social justice/income equality movements.

Peak Oil is very much a function of social justice. There will now be no freedom allowed in consumer nations.

I have seen this here where I live, where well-off, upper-middle class people are hysterically proposing draconian rules which will result in the complete social control of society, especially the poor and underclass. They refuse to look at the oil consumption curve, which continues to show that oil is consumed in inordinate amounts by the ultra-wealthy, and that conservation can best be accomplished by taxing the rich, rather than penalizing the poor.

The poor of the world are not using up all the world's oil, the rich are. The real problem is income distribution. There is simply no such thing as an environmentally conscious rich person. The wealthy consume more resources than the poor. Solve the problem of the rich who are destroying the world in every way possible, and you solve the problems of a sustainable life.

So, rather than worry about Peak Oil, I think we need to worry about the problems caused by Peak Wealth.

The Root of All Evils

In my last commentary "Pondering the Meaning of Money", I attempted to define money in its simplest terms - what it is, how its created, and how it affects our purchasing power in a credit-based economy. Today I would like to expand upon the social ramifications inherent in our monetary system.

The implications of globally expanding debt and inflation on international trade and governments has historically always lead to impoverishment, war, and the ultimate concentration of power and control in the hands of a few whom I will call The Elitists, those who belong to the oldest of money. These are the families who truly rule the world, surrounded always by a veil of secrecy.

Let's examine how our monetary system works and review its inevitable outcome to be better informed of ways we can reverse the direction we're headed, since the current structure is hell bent on sowing the seeds of its own destruction..

Stage 1 - Ever Increasing Indebtedness

We know that when lenders make loans, money gets created, and this amount is equal to the value of goods and services sought, but short of the funds needed to pay back the loan at interest. This means that someone else will have to borrow funds enabling enough circulating money in the economy to pay interest on the loan. This interest represents the investor's profit as a result of lending his wealth. Thus when the loan is repaid, both principal and interest is taken out of circulation. If all debtors in the economy wished to repay their loans, there would not be enough money because the system requires ever increasing indebtedness to keep money circulating in the economy. In other words, without increasing indebtedness, all economic activity ceases. If that ever occurred it would expose the folly and negate the current concentration of money and power to the few.

Stage 2 - Inflation

As more and more debtors are created, more money is created which increases the cost of goods and services because prices are heightened by the amount of new debt money created, enabling the payment of interest on older debt. In other words, with more and more debtors in the system we have created more and more money with which to buy goods and services. This happens due to the time delay of debt service repayment. The total amount of debt is to be repaid in the future, as such there is excess liquidity sloshing throughout the economy in the interim, only to be soaked up by higher current prices.

How does the level of interest rates affect inflation? We know that the US Fed will lower short-term rates to spur economic 'growth', but how exactly does it work? When old debt is being repaid at higher rates and new debt is issued at lower rates, excess money creation to cover interest is reduced both by the repayment of debt, and the decreased need for new debt to pay interest at lower rates. Theoretically, this should reduce economic activity due to the contraction in the monetary base. However, just the opposite happens because lower rates cause that many more people to borrow, leading to massive increases in money, leading to an increase in inflation. So now we not only have massive increases in indebtedness, but massive increases in inflation further reducing our ability to buy adequate levels of needed goods and services, and find ourselves borrowing further to compensate until our finances become totally out of control.

Stage 3 - Effects on Global Trade

Enter Cheap Foreign Labor - Ahaa! a Solution to this inflation mess emerges with the importation of cheap goods from developing countries, and we are suddenly bombarded with a multitude of new multi-national trade agreements. This offers a temporary fix to indebted consumers, but what happens to their employers who are no longer able to compete against cheap labor? Yup, you guessed it.. thanks to our government's free trade alliances, we have managed to dig ourselves even deeper into the quagmire with lowered wages and fewer benefits. And now US industries now have to compete for even less of the pie from under-paid and over-indebted consumers.

And to add insult to injury, all the while these export-driven economies end up collecting our money free of debt - Talk about an imbalance!

Stage 4 - Government Debt to the Rescue

Governments go into debt much the same as we all do by issuing notes to a lender at interest. But government debt is called Treasury Bonds. These bonds are nothing more than a government IOU to the Fed, to be paid from public funds sometime in the future, while servicing the bonds with interest during the interim. The funds to pay government interest and principal historically has been provided by government revenues via public tax collection.

But governments can also create money by taking on more debt enabling them to service their bonds when public taxes are insufficient. And the more governments borrow, the further down the hole we all go.

So what do we have here at this stage? An indebted consumer, indebted US corporations having to compete with higher prices and lower wages, and a government indebted to those same developing countries who are getting rich importing stuff to us debt-free because they're now the ones creating the wealth. What a bargain!

Furthermore, these export-driven economies cause massive increases in the price of raw materials used in production and other basic commodities. Things like oil, metals, building materials, even food prices rise as these thriving populations cause increasing demand - and they go up for everyone.

This brings us to the next logical stage..

Stage 5 - War

Suddenly global governments are competing for vital resources. Our US government goes into even more debt by going to war to fight for what they cannot compete for in purchasing power. This ever increasing debt then eventually brings on the inevitable..

Stage 6 - Bankruptcy

The economic implications of more and more government debt are similar to increasing amounts of private debt in that it leads to impoverishment, but the impoverishment of a debtor nation has worse social implications. Our national corporations begin selling off to foreign countries their only means of wealth production, likewise governments sell off federal and state owned assets for needed funds. The end result is then selling the cows just to be able to buy the milk!

Once this stage is reached, the Federal government performs its silent declaration of bankruptcy. They are forced to devalue the currency, enabling them to be able to repay foreign creditors with vastly depreciated funds. But how can our government keep face with such disgrace? Basically, they don't. Since over time, our country will sink from its former position of global super-power much the same way Britain did towards the end of WW2.

Conclusion

We can now see how close the US is to collapse and End-Game. How low will the US Dollar have to sink into oblivion before we get the needed fresh start afforded by bankruptcy? I suppose we'll see.

In any event, it should be obvious by now that the path we find ourselves on is caused by the faulty logic inherent within a debt-based monetary system - and that the payment of interest will always create a shortage of money leading to increasing levels of debt - a predicament which leads to massive impoverishment and failure. The system simply does not work.

A possible solution to this outcome would be our cessation of the Federal Reserve and all other private banks who loan at interest. If there is a need for money, it should be our government who creates it (as mandated by our Constitution). The government would then spend into the economy on public projects and services, while creating jobs and stimulating economic growth. This would then enable us all to finally trade on par for wealth earned, rather than incurring debt at interest. This would also finally put an end to the ruling Elitists whose agenda is self-serving at best.

Link to the Elitists (Root of our Evils)

Pondering the Meaning of $$

Sometimes my mind rambles and comes to some frightening insights - Like when I question the real meaning of money. How can a simple concept like money be so abstract that we are constantly mislead as to its true nature? Well here I attempt to not only define money, but attempt also to show it's meaning within the context of our capitalist economy - and this is where it gets exposed, and scary..

For instance, with all the money the Fed has supposedly created over time, in reality I never ever even use cash. I use pieces of plastic in the real world, in cyber-space, everywhere. And if I do, there are lots of other people doing it, more and more of the time. The obvious conclusion therefore, is that money isn't really created by the Fed's printing press at all, unless they are now engaged in the manufacturing of plastic, that is.

So, does this mean plastic has now replaced currency as money? That would be a logical conclusion, however incorrect based on an ill-defined concept of what money really is. Let me explain further..

Money is more than a medium of exchange (like gold, dollars, euros, pesos or plastic). If I say that money represents the ability to trade one's wealth for goods and services, it would be closer to the truth, however still in error since wealth can be substituted for another's wealth rather than my own. In order to trade wealth when I have none, I have to borrow another's wealth. This creates a debt to those who have the wealth I need to borrow. Likewise I've promised these persons an increase of their wealth for the luxury of using their's when I have none. So I promise them a loan with interest payable at some time in the future.

So now money has become a credit-based system of exchange. However unlike the trading of wealth for goods and services on a par value, I have debased the value of my own future wealth by creating interest. Likewise I have created a means of enriching the existing wealthy who lend their wealth to me at interest. They no longer toil, but I must work just to pay for goods and services which have already been consumed.

Ah-Ha! So I have debased the value of my wealth by paying back a debt which includes the value of the goods and services I traded, PLUS the interest on the debt. So the truth in the transaction is the Fed didn't create any of this "money", I just did.. Because I am paying back in value more than I received in trade, the lender now has more chips to lend to the next debt slave, right?

Which brings me to my final "insight".. A credit-based monetary system not only creates "money" by creating interest on top of principal, it debases the "money" to the person who is indebted. And if all my neighbors are doing the same, the overall supply of "money" is eventually debased for everyone.

But Wait - Doesn't this rhyme with the definition of INFLATION???

So what is the use of money (in any form) in a credit-based economy, if not a means to create an unsustainable level of inflation (ie: debt)? If inflation represents the combined debtors' promise to pay interest on future earnings (wealth), and hence "money" is being created, this increase in the "money supply" creates monetary inflation, which is by definition a debasement of the monetary unit. Also since we can only service so much debt, limited by our income, it is finite and must at some point either be reduced or defaulted on which contracts the monetary base.

Therefore once the maximum amount of debtors in an economy have maxed out their ability to service debt, the system must go into reverse. And if the up-cycle to inflation is spending and increasing debt, then the down-side represents contractionary spending in order to service the payment on an unsustainable debt-load.

So debt is clearly a key force in credit-based monetary systems. One could argue then that money in a capitalist society is the equivalent of debt, since for every monetary unit I create with a credit card incurs a compounding of interest on prior unpaid debts, I create an additional burden called interest, which is paid from future wealth. The more I spend, the more I dig myself into a hole until I hit concrete with no way out other than to reverse direction. This inflation (debt production or creation of money) goes into reverse, or debt reduction, which begins the contraction of the monetary base known as a deflationary cycle.

Therefore money in our credit-based economy is constantly in flux. We go through inflationary up-cycles only to be subjected to deflationary down-cycles. Inflationary booms must always crash into deflationary depressions just as sure as night follows day. This is also how the rich get richer all the while the middle classes vaporize into the throes of debt enslaved poverty...

So there you have it -- Money creation represents Financial Suicide at its Best!