There Is No We in US

Lulu was right to be skeptical about Willy's new found community. We humans are herd animals for the most part. If we cannot form an appropriate herd, we will invent one. Thus we invent government as an artificial community. 

When God brought His people to the Promised Land, no national government was established.  There were still institutions that we might recognize as government administrated by the Levites, but no king, no standing army, and no taxes! 

But Israel became afraid and wanted a king like everyone else. In Samuel 8 The Message tells us what God predicted would be the result of this desire. 

^10-18 So Samuel told them, delivered God’s warning to the people who were asking him to give them a king. He said, “This is the way the kind of king you’re talking about operates. He’ll take your sons and make soldiers of them—chariotry, cavalry, infantry, regimented in battalions and squadrons. He’ll put some to forced labor on his farms, plowing and harvesting, and others to making either weapons of war or chariots in which he can ride in luxury. He’ll put your daughters to work as beauticians and waitresses and cooks. He’ll conscript your best fields, vineyards, and orchards and hand them over to his special friends. He’ll tax your harvests and vintage to support his extensive bureaucracy. Your prize workers and best animals he’ll take for his own use. He’ll lay a tax on your flocks and you’ll end up no better than slaves. The day will come when you will cry in desperation because of this king you so much want for yourselves. But don’t expect God to answer.”

^19-20 But the people wouldn’t listen to Samuel. “No!” they said. “We will have a king to rule us! Then we’ll be just like all the other nations. Our king will rule us and lead us and fight our battles.”

Since humans feel safer in groups this was understandable. But in the analogy I am using it would be like all the sheep getting together and appointing the local wolves to protect them from foreign wolves. Yes, every April 15 every sheep gets sheared. Yes, sheep mysteriously disappear. But we are safe! 

So while there is no way to avoid the shearing this April 15, I suggest a low profile to avoid being a target otherwise. The purpose of "our" government is not the best interests of the people. It is the best interests of the wolves that matters. Hiring new wolves will not help. 

Remember there is no WE in US. 

Inflation 1933

As I mentioned recently, yes inflation is your friend. This video from 1933 takes this to a whole new level. Basically Roosevelt forced everyone to turn in the gold they owned and gave them $20 for it. Then after everyone, under penalty of law, had turned in their gold Roosevelt revalued gold to $35-stealing 70% of the gold that had been turned in. 

If we are indeed in a depression, expect more irrationality like this.  BTW, the Roosevelt Inflation Plan failed and the depression continued until Roosevelt could engineer a war. 

Is war just around the corner? As Mark Twain noted, "History does not repeat, but it does rhyme." 

Inflation Is Your Friend

While my title is obviously a joke, I am not so sure. Most central banks seem to think that inflation is our friend. Japan especially wants inflation. They may in fact have no choice as this might be the best way for a government to default, and default they will, as most governments have lied and promised beyond their ability to pay. If Japan gets 2 or 3% inflation this might be the best of their options, but once started down that road, they may not be able to stop. This is the risk. Japan cannot afford to let interest rates rise as even a modest increase in these rates will mean that all Japanese government revenue will be spent on interest. 

For Japan I offer the transcript of Dan Ackroyd on Saturday Night Live imitating President Carter. (I have made a few changes to avoid errors.)

We may find out first hand that Inflation is not our friend. 

President Jimmy Carter: Good evening. On Tuesday, we Americans will have the opportunity to exercise our role as citizens in a free democracy. Yet, only a third of the eligible voters will actually cast ballots. The other two-thirds are, in a sense, very lucky. Because they do not know what's going on. 

Last week, I delivered a message on inflation. Since then, the dollar has dropped in value, the stock market has sustained record losses, and the wholesale price index increased 0.9%. In other words, our economic system is screwed, blued and tatooed! We just have to face the fact that there is simply no way to fight inflation in a capital-intensive, highly-technological, conflict-riddled, anything-for-a-thrill world of today. That's why, tonight, I want you to try to look at inflation in an entirely new way: Inflation is our friend. 

For example, consider this: in the year 2000, if current trends continue, the average blue-collar annual wage in this country will be $568,000. Think what this inflated world of the future will mean - most Americans will be millionaires. Everyone will feel like a bigshot. Wouldn't you like to own a $4,000 suit, and smoke a $75 cigar, drive a $600,000 car? I know I would! But what about people on fixed incomes? They have always been the true victims of inflation. That's why I will present to Congress the "Inflation Maintenance Program", whereby the U.S. Treasury will make up any inflation-caused losses to direct tax rebates to the public in cash. Then you may say, "Won't that cost a lot of money? Won't that increase the deficit?" Sure it will! But so what? We'll just print more money! We have the papers, we have the mints. I can just call up the Bureau of Engraving and say, "Hi! This is Jimmy. Roll out some of them twenties! Print up a couple thousand sheets of those Century Notes!" Sure, all these dollars will cause even more inflation, but who cares? Everyone will be a millionaire! 

In my speech last week, I said that America would have to undergo an austerity program, but since this revolutionary new approach welcomes inflation, our economy will be free to grow, and we can spend, spend, spend! I believe the watchwords for the 80's should be "Let's Party!" And in that spirit, I'd like to say, "Live, from New York, it's Saturday Night!" 

The Bubble of All Bubbles

Coming to a financial portfolio near you!Economically we have been cascading from one Bubble to another. The first two bubbles were gold and silver, where gold reached over $800 an ounce in 1980. They crashed. The next bubble is still with us. Interest rates have been dropping for almost 35 years. This bubble has not crashed yet but it will. While this bubble has been going on two other bubbles grew and popped. The Dot Com bubble popped in 2001; the Real Estate Bubble popped in 2008. The continual drop in interest rates fed these bubbles. In fact the low interest rates have been fueling a resurgent Real Estate bubble. The rates are not just low; they are not just at generational lows; they are as low as they have ever been in history.

This one's gonna blow.

Really there are no investment choices, so you gamble. But only do this after you have done the pre-investments I mentioned in a previous blog post.

This is where the following video comes in. Rather than talk about the intrinsic value of gold—nonsense…it has no such value—it admits that gold is once again a bubble.  But we may be early in the bubble process. If so, now is the time to buy.

So join the other punters at the Casino. Yes, there will be a jackpot for somebody.  Just hope, or dare I say it, pray, that the dice are not loaded. Remember that if you are at a gaming table, or in a business deal, and you do not know who the sucker is, it is probably you. 

Валерий Меладзе - Сэра

In Russian the letter "C" is pronounced as a "S." The letter "p" is pronounced as an "r." Who would have thought that one of Russia's most popular singers would be from Georgia!