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Witches Brew: Fingers of Instability - Part V



-- Posted Thursday, 10 October 2013 | | Disqus

By Theodore (Ty) Andros

Blood sport

In what is BECOMING the deadliest game of CHICKEN since the August 2011 US debt ceiling Showdown, we are at the doorstep of part II. In a game of chicken, two cars rush headlong towards each other to see who veers off first. Occasionally, neither driver does and both parties perish in the collision. Usually, it is just the drivers who pass away from their imprudence; in this case it will be the spectators. Just like children playing with FIRE who BURN the HOUSE down. Blood sport of the worst sort.
 
I have commented a number of times that since 2008 elected veto-proof majorities, the implementation of socialism went into HYPERDRIVE during the 2008 to 2010 period. The affordable care act was, and has been, the dream of socialists since 1945.
 
These progressives are blind ideologues and do not respect history; compromise is not to be embraced as they march the future prosperity of the country over the cliff towards the egalitarian society (misery spread widely as the successful are brought down to the level of the lowest common dominator) they dream of. This is a man-made disaster make no mistake.
 
In this game of CHICKEN, we have DIE HARD socialists and big government progressives from both sides of the aisle in Washington DC (aka District of Corruption). Having spent decades, growing leviathan government, grabbing freedoms and income from the private sector since Bretton Woods II finished cutting the chains of sound money. Their greed became unbounded a second time with the corrupt super majority which rode the coattails of the chosen one’s election in 2008.

Insisting that their spending never be limited, that the debt never stops piling up, that growth of government never be limited, that the delivery of government benefits always grows, that people on the dole never be required to work or become self-sufficient, that the prudent and successful be crucified on the altar of fairness, misery is spread widely by government dictate, and looting of the private sector be done at the point of a government gun. Progressives on both sides of aisle that never know when to stop: killing the economy with their prescriptions for happiness.

In 2013, the federal government is spending $12,000 dollars for every man, woman and child in America (with about 1/3 being borrowed) and incurring future obligations for the same group of $9,000 dollars with the bill sent to YOU and future generations. Nowhere are the American people told how much is being spent and what their portion of the borrowed and unpaid bills amount to, which is approximately: $9000 (unfunded liability) plus $4000 borrowed equals $13,000. When do you think Washington might come to your door and DEMAND payment? Take a look at the future obligations COMING YOUR WAY:

Both the Blue and red lines are obligations occurred by Washington DC with the bills earmarked for YOU! EVERY DOLLAR of obligations has been written with you as the payer? The president frequently says we have spent the money and now we must pay the bills, most people think that means someone else when in reality it is YOU, your children and their children.
 
Do you think that might affect your future? To progressives/socialists and the main stream media which control dialogue with the masses, stopping this or restraining this behavior is an act of terrorism.
 
"There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt."
- John Adams, 1823


A total main stream media BLACK out of this THREAT is in full effect. Even the dumbest among us recognizes that $21,000 dollars spending is excessive especially when the public is expected to pay it back (nobody has the courage and honesty to tell them). To stop the march of socialism is a crime against the CENTRALLY PLANNED and CONTROLLED WELFARE state.

You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it.”

This is precisely where we are today in the developed world. The makers versus the takers with both sides fighting for the ability to GROW. Grow the welfare state and the looting that goes with it, or GROW the private sector and the ability to make and retain wealth. It is a battle between personal freedom and slavery to the state. Who will prevail?


In the other corner are conservatives and the Tea party who respect and cherish the constitution. People, who live within their means, work hard and are self-reliant, have had decent educations, know and respect history. And understand that others must do so or they will become the buffet table for those that don’t.
 
“A political party cannot be all things to all people. It must represent certain fundamental beliefs which must not be compromised to political expediency or simply to swell its numbers.”
– Ronald Reagan
 
They believe in the rule of law, understand the deep SYSTEMATIC corruption that Washington has evolved to and are peacefully opposed to it within the law. They are now labeled terrorists and domestic extremists for opposing unconstitutional governance, runaway government expenditures and total disregard for financial prudence and OPPOSE the rise of government as master rather than servant.

Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.
- George Washington

The funding of government is a sideshow compared to the debt ceiling, that is the game for the next several weeks as progressives in the senate and white house try and undo the sequester and return to the unrestrained spending of the last 50 YEARS! When will the American people WAKE UP is the question?
 
This massive expansion of government and regulations is PRECISELY what was done early in the great depression in the early years of FDR, driving and deepening the depression. The more the POOR policies and new taxes were implemented, the more enduring and embedded the depression became.
 
In 2009-2010 the ideologically corrupt supermajority implemented exponentially more poison then FDR did into the economy early in the chosen ones tenure, the full impact which will be unfolding forever as these ill-defined laws allow regulatory favors to be bought and sold forever to crony capitalists and special interests alike. Think the tax code.
 
When you are a socialist, the end result of complete dominance justifies any of the means to their goals. Examples litter history of socialist dictators never allowing anything to stop them. Stalin, Lenin, Mao, Hitler, Pol Pot have literally BURIED large parts of their constituents in attaining their dominance over them. This UNFOLDING episode in Europe and America will be no different.
 
I have referred to it as Socialists smelling the end zone. This time is it Brussels (European commission) and Washington DC at the helm of the DIRTY WORK of gathering dominance at the point of a government gun with SPECIAL assistance from the Federal Reserve and the European central bank.
 
The FINANCIAL and MONETARY collapse into socialist dictatorships as outlined by the Cloward Piven strategy has been executed in horrifying detail.

Since 1971, when big government became unrestrained, it has now worked its way into every conceivable nook and cranny of the private sector (housing/mortgages, small business, education, health care, banking and finance, commerce, labor, energy, transportation, communications, etc). This is not the picture of a free society…


This is a picture of the straight jacket PLACED on the economy and your freedoms since the 1940’s. Notice how it leaps higher with the advent of completely unsound money.

Below is what the UNSEEN cost is. Do you think the middle class would support this if they knew the cost to THEM?

When will the American people be told this? UP TO 1/3 of this must be repealed to restore growth; it is what Reagan did when he took office. The cost of this to every household adds another $14,768 dollars in addition to the money spent, borrowed or promised. And just like the debt, deficits and future promises the straightjackets are in plain view but once again the costs are HIDDEN from the public at large by the main stream media. If you cut it by 1/3 that would free up $5,000 dollars per household which could be spent in lieu of the same amount of cuts to federal spending. The economy would explode higher and foolish government shrink like the cancer tumor it is.
 
Big government progressives ARE creating government dependents at an astonishing rate and promising new entitlements for which there is NO MONEY TO PAY FOR THEM, now or in the future. If this is not a recipe and plan to bankrupt the nation then color me PURPLE. Our leaders WILLFULL blindness to the lessons of history doom us to repeat histories lessons.
 
Duties and promises which the government is incapable of delivering on. The very idea they can run the financial and healthcare industry from the bowels of the regulatory state in Washington is folly. These LAWMAKERS are trying to run these industries with no experience in what they are dealing with. Take a look at this graphic from our leadership in the first four years of the president and understand that the lack of experience in the second term is worse as we have entered the era of Wesley Mouch:


"It's not that liberals aren't smart, it's just that so much of what they know isn't so."
- Ronald Reagan
 
These GOVERNMENT policies can be known as killing the GOLDEN GOOSE, aka the private sector. Now the beltway is stabbing it over and over again as it bleeds to death in their deadly embrace.

Refusing to govern in a responsible manner in which income matches spending they have built a mound of insolvency and unfolding bureaucracy which is impossible to conceive or reverse. Expanding entitlements and promises to pay in reckless and ultimately what will be a catastrophic manner. I call it the POLICIES of INSOLVENCY, where government mandates benefits with NO PLAN to pay for them (sounds like the pension crisis doesn’t it?) except future borrowing, money printing and in actuality BOTH!
 
Last year alone the US treasury’s own reports outline a GAAP adjusted government deficit of almost $6.6 Trillion dollars ($6.6 million million) in an economy which when adjusted for phantom growth (growth conjured out of thin air when no transaction have taken place) may be $13 Trillion dollars means the deficit in REAL terms is about 50+%.
 
Runaway spending coupled with entitlements also known as UNFUNDED promises to pay has mushroomed as socialists have tried to expand their government dependent constituencies. Look at this glimpse at its breathtaking expansion since the chosen one and his PROGRSSIVE minions implemented their agenda without the checks and balances created by the founding fathers and enshrined in the constitution (courtesy of www.gluskinsheff.com :

 
Put your eye on 2008 and work your way to today. This is nothing but a report card of the FAILURE of the chosen one and his congressional minion’s policies of insolvency and destruction of the capitalist economy we all depend on for our future livelihoods. Millions and millions of people forced onto the dole because of the lack of the policies to create the conditions for the private sector to GROW and EMPLOY them!
 
ROCKETSHOTS in the growth of something for nothing constituents wrought by a 20%+ increase in leviathan central government since 2009. How did the chosen one only win the election by such a narrow margin with this army growing this briskly?
 
This is the wholesale disembodiment of the private sector and economy as once productive citizens are moved to the ranks of the disenfranchised by the policies emitting out of the district of corruption. Those are the rations of slaves as Alexis de Tocqueville so eloquently observed:
 
“It is not an endlessly expanding list of rights ---the “right” to an education; the “right” to health care; the “right” to food and housing. That is not freedom. That is dependency. Those are not rights. Those are the rations of slavery – hay and a barn for human cattle.”
 
There is not compassion, this is betrayal as the central government destroys the ability and incentives to save, invest, be self-reliant, create small businesses, and outlaws capitalism. Regulating demand to the special interest supporters and crony capitalists as the pie of economic activity SHRINKS under their policies.
 
The failure of current government policies to encourage and facilitate private sector growth is MASKED by Orwellian GOVERNMENT economic stats. Where growth in debt and consumption is reported as economic growth. When in reality it is the consumption of the future by socialists and something for nothing constituents today.
 
In the two years between the election in 2008 and 2010 the greatest accumulation of legislation, additional spending and its spawn known as regulations have been wrapping themselves around the economy like a PYTHON and now the SQUEEZE to death of the economy and capitalism is at hand.
 
FINANCIAL and MONETARY Armageddon are at hand as well, as it is quite clear as QE infinity is rapidly being EXPOSED as the program it is: FUNDING the moral and fiscal insolvency of the US government, financial repression and a toxic waste dump of bad bank assets known as residential mortgage backed securities.
 
Dodd Frank (enshrinement of too big to fail and crony capitalism rolled into one), the Affordable care act (socialization/redistribution of the health care and, of course, crony capitalism) and the stimulus bill (permanent expansion of the executive branch by over 20%) have and are doing what was predicted. There is NO ESCAPE from their DEADLY EMBRACE.
 
As a participant in the financial industry for almost 3 decades it is impossible to ignore the implications and broad outlines of what Dodd Frankenstein is becoming. It is the wholesale destruction of the smaller players and future competitors to the Too big to fail banks. They are simply being REGULATED out of business to solve and prevent problems which DON’T exist. Political solutions to practical problems whose unintended consequences will seriously IMPAIR the ability to stop the predators the banking industry has become.
 
The financial industry is being dismantled with the spoils going to the banks which control those inside the beltway. For those of you with short memories the futures industry was an oasis of stability during the global financial crisis in 2008. Not one firm failed or had to be bailed because of the central clearing mechanism assured counter party solvency throughout the crash. Everyone was margined up every day (with no exceptions) or blown out as weak hands fell to stronger ones.
 
Contrast this to the wholesale insolvencies in the financial capital of the world known as New York. As Warren Buffet famously said referring to financial liquidity: “when the tide goes out we find out who was swimming naked”. Most if not all were! Too big to fail is crony capitalism with a government guarantee, obscene!
 
Reckless bankers at Bear Stearns, Washington mutual, Wachovia, Lehman Brothers and many more met their demise. Overtly over $700 Billion was sent to Wall Street known as the troubled asset relief program (TARP), and COVERTLY another $15 trillion (15 million million) slipped out the back door of the Federal Reserve and was UNREPORTED at the time. But they had one advantage; they controlled the beltway through various K street lobbying operations.
 
So Dodd Frankenstein was written in a manner in which the benefits flowed to the too big to fail banks and brokerages and the costs and nonsensical regulations to imaginary problems sent to their smaller competitors. Bankrupting them in the process and creating opportunities to roll them up as was done in the great depression. In fact, it was modeled on that period when FDR destroyed the local banking systems and transferred/legislated their businesses to the biggest industry participants.
 
In conclusion: What is transpiring in Washington DC at the moment is a fight over prudence versus an expansion of wholesale moral and fiscal insolvency of the welfare state socialists. Is it too late to stop the destruction of the future by the policies of the beltway?
My opinion is yes.
 
Contrary to the administration’s BELIEFS, this is not a monarchy and dictatorship. It is a constitutional republic with three coequal branches of government. The legislature is not supposed to be a RUBBER stamp like a BANANA republic. All legislation and spending must come from negotiated agreements. The only thing you can expect to be agreed on is more spending and more government then both sides inside the beltway will WIN.
 
The very future of the republic is what is at STAKE in the DEFICIT and BUDGET battles, brass knuckle brawls are called for. But in REALITY NONE will occur. It is IMPERATIVE that the American people are told the truth (the numbers in this commentary), unfortunately no one has the courage to do so on either side if the fight.
The sequester was the first example of government spending RESTRAINT in my 57 years (I thought I might faint when it happened), never to be repeated till Mother Nature and Darwin strike the inevitable blows which will CRUSH the imprudent and everyone who is under their grasp. Also known as the DEVELOPED world.
For the debt to be dealt with Economic growth must occur. All growth today is debt masquerading as growth. This is the greatest blood sport in history as those that don’t produce insist on eating those that do (aka cannibalism), destroying future wealth creation critical to economic survival. Only those on the buffet table will resist this as to not do so is their demise. Of course, this is what originally occurred during the American Revolution. Today those fights are going to be refought.
 
This is a fight for freedom versus dominance by and for elites. It is history repeating as it so often does. The stakes are high and politics is the ultimate contact sport, as it is eat or be eaten and survival of the fittest.
 
Throughout the centuries governments and royalty have tried to create wealth out of thin air. By printing it, debasements of Real money such as silver and gold (roman denarius, etc.)or through alchemy like changing lead into gold. Ultimately all failed as wealth cannot be printed out of thin air and their financial and currency systems COLLAPSED as confidence was lost when people WOKE UP! This time will be NO DIFFERENT, only the timing is in question.
 
But in 1945 at Breton woods and in 1971 at Breton woods II the ability to print money out of thin air was REALIZED. The substitution of US treasury paper for real reserves such as gold and silver began. Now it is complete, treasury paper and dollars are the definition of REAL risk free money. They are the gold standard of the global financial system and an official default would change their definitions forever.
 
The privilege of Seigniorage (printing of money out of thin air) is inculcated in Washington DC, it is the source of their power, it is part of the ongoing business plan of socialist progressives and their Keynesian economic models. The thought of losing the ability to prey upon the public and everyone in their financial and currency systems is the one unthinkable option and that ability will not be surrendered at this point. The collapse lies in the future as too many still live in the matrix/looking glass for that to happen now. Their illusions will be guarded at all costs. The death of the dollar is FAR AWAY as it is woven very deeply into the financial system and it is the only currency in the world where the shorts and the longs don’t want it to change. The shorts print it endlessly and the longs are trying to store wealth in it. Both live in an illusion. Additionally if the US was FORCED to balance its budgets now, US GDP would crater exactly the size of the deficit (which is debt masquerading as production)of about 4%, instantly sending politicos in Washington into unemployment at the next elections.
 
Although there is a lot of wailing, bombast and gnashing of teeth over the debt ceiling and budget fights there is one thing you can count on. Don’t worry, they will PRINT THE MONEY….
 
Don’t miss the next edition of Tedbits, subscriptions are free: CLICK HERE
 
Tedbits subscribers also get video roundtables with Gordon T. Long, Charles Hugh Smith, John Rubino of www.Dollarcollapse.com, Catherine Austin Fitts, Bert Dohmen and many more, keeping you right in front of breaking news and global macroeconomic analysis.

-- Posted Thursday, 10 October 2013 | Digg This Article | Source: GoldSeek.com

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