Ken Nelson

The most dangerous and powerful people you never heard of

That question is essentially what Michael Pento is talking about in his article, Bernanke Out of Bullets but not Bombs.

But what are bombs?  Well, bullets are the traditional way the Fed exerts influence – controlling the cost of its money. But what does it do when that money is free?

Basically, it finds new routes to get it to you, stepping around the pesky banks that are taking the free money but not loaning it out due to profit and reserve goals (and common sense).  They could, in fact, just print up a few trillion and then cut out the middle man:

The Fed could buy a trillion-plus dollars worth of S&P 500 stocks. Consumers that sold stock to the Fed would receive funds that didn’t previously exist. M1 money supply would boom as demand deposits surged

or since things seemed kind of good in the go-go housing days, maybe they could:

guarantee ‘no down payment’ loans of any amount to any borrower, with a promise never to foreclose or seek compensation in the result of default. By making home purchases risk-free, such a policy would surely re-energize the housing sector.

I’m sure they are getting huge political pressure to do just these sort of things. And they have signaled strongly that they do not want… cue ominous music… ‘deflation”.

So… do you prepare for deflation, or inflation. Inflation, of the hyper-kind, seems likely.

I just wish we didn’t have a Federal Reserve, private money seems much more secure.

 
Bigger than any bank, but you didn’t know it was a bank

You may think British Petroleum is an oil company. And it is, sort of. What it really is is a finance company. It leverages its huge asset base (cash, cash flow, oil rights, physical assets) to get cheap credit that it then loans out to others at a higher price.

You didn’t know this?  Well, that is understandable. Do you think Obama and his crew know it? Or care?  They should. By trying to take down BP for their own political gain they could mess up  a precariously balanced, extremely leveraged,  and highly interconnected international finance system where BP is a major player in the 615 TRILLION dollar company to company finance market (also known as OTC or over-the-counter).

OTC is where the real work of global business happens. It is where money is loaned, risk managed, and profits made.

If trillions in BP backed financial instruments, such as derivatives, credit synthetic options, credit default swaps, and other global arbitrage instruments, fail the result could be a deleveraging and liquidity crisis that makes the Lehman Brothers event that precipitated billions in government bailouts look like a hot spring versus Krakatau.

For more on the risk BP financials threads pose, read this helpful article, Sultans of Swap, by Gordon Long.

You can ignore or take to heart his predictions. I find it useful to really know what BP is and why we need to tread carefully in what we impose on it.  This isn’t to say that companies can grow too big to be accountable, but with the good of large companies come plenty of risks. We can’t really have one without the other.

What I suggest is that Obama’s political skin isn’t worth, to the rest of us anyway, another, bigger, 2008 deleveraging event.

We can really only go one of two ways on these things. No controls, but make sure the players are playing with their money (not ours). OR do not permit these types of markets at all.  Government half regulating, 1/4 crony, and 1/4 witless cannot keep up with the pace and complexity of these markets that in many ways welcome regulation as just another thing they can arbitrage.

I favor letting them do their own thing, with their own money. They will learn to not dig holes they can’t climb out of if we aren’t there to bail them out.

Ah… the good old days. 

I don’t understand all this “combat troops” out of Iraq talk.  It still is dangerous there. 50,000 troops remain, all with significant combat capability and with real world patrolling and defense missions. Sounds like “combat” to me.

Reports like this remind me that our newspapers and media outlets just have no idea what they write about. In this case, they just go along with what the Obama administration wants to tout.   The touting, btw, is in support of 100 billion in budget cuts, not “we won”.  It’s “yippee, it’s okay to cut”.  It is okay to be a tool, but at least know it. I doubt the media really get it.

I supported the initial invasion of Iraq. Maybe this was just me being patriotic, but also a lot of it was that I thought we would be smart in victory, not dumb. So after the first three weeks, I supported very little of what went on.  We did not need to drive around getting ourselves blown up. We did not need to defend Sunni against Shiite against Kurd against Wahhabi. Far better would have been to just seal off any WMD sites, and then go to the Iran border and let Iraq sort itself out.

Our military has done an amazing, but unnecessary, and unsustainable, job in Iraq but ultimately the Iraqi culture is not up to the task of being our democratic ally in the region.  Maybe I’ll be proven wrong, hope so, but… I’m usually right and expect to be here.

So at a cost of trillions, 4,000 US deaths, and thousands more casualties we now have a new, sort of democratic nation where only a few hundred are blown up each month in car bombings.  We now have a near nuclear Iran, and we now have a true ally (Israel) mortally threatened. And instead of a forward base against Iran we have a nation we are plotting to retreat from as soon as possible.

All in all… I’d have to say, if this is victory, losing must REALLY suck. Clearly, it wasn’t worth it, and all in all, I’d have to say it is just more evidence that we aren’t the country we once were.  Is it unpatriotic to say this?  Maybe. I’d certainly hate to have a son killed there and read stuff like this.  But… I’ve got a son getting older every day, and I’d like to avoid him being wasted on ventures like this.

Put another way… if I knew then, what I know now, I’d have never supported doing anything other than trying to assassinate Saddam Hussein, or possibly invading and making a sharp right turn.

And… it will take Pearl Harbor II to convince me that anything other than targeted assassination and massive bombing should be our next response against countries that act against our interests.

Not unexpected. Enough peer pressure will get to anyone. Now the “skeptic” wants to declare global warming a “a challenge humanity must confront” and, here is the unshocking shocker, tax YOU to confront it.

In a Guardian interview, he said he would finance investment through a tax on carbon emissions that would also raise $50bn to mitigate the effect of climate change, for example by building better sea defences, and $100bn for global healthcare.

Yeah, like that would a) help and b) not be raised infinitely, c) not hurt way more people than imaginary global warming ever would.  Dumb move Lomborg, but alas, not surprising.

Anyway, Bjorn… I’m sorry, but not surprised, to see you become just another shill spreading fear of global warming to pump up and fund policies you prefer.

May your Danish winters be colder than normal now.

"Magnificent! Compared to war all other forms of human endeavor shrink to insignificance.
God help me, I do love it so!"
- General George Patton Jr

25% of the anemic 2nd quarter growth of 1.4% was caused by defense procurement or consumption (i.e. war):

Alas, even the GWOT has to end sometime. Or does it?  Will we have a permanent military-war-on-terror complex, like we have left over from the Cold War?  That seems likely.

Visual Metaphor

One of six Americans get government aid. And that doesn’t count the people getting federal aid in other ways, like banks, car companies, pork recipients, stimulus boondoggles, and education funding.

I favor helping people that need help but can’t help themselves. I’m talking basic food, shelter, clothing type needs. And that should come first from local, then state systems. Beyond that, you should be on your own.  And the Feds should have no role. If a state can’t handle it, then a region can band together.

Federal takings are not invested properly currently, and haven’t been for a century.  Terrible (negative) returns and missed opportunity costs on these false “investments” harms economic prospects for all of us but especially those near the bottom.   Everybody would be better off if the Federal government limited their role substantially.

But due to greed, stupidity, flaws (16th amendment) in our Constitution, and also the evil desires of some, the Federal role will not shrink, but will has, is, and will grow . So we will suffer until it all collapses.  And that will happen faster than you think.  America is on shaky ground now.

That is what old people say every day as they laugh on the way to bank with young people’s future wealth:

A 65-year-old female can expect a net gain of more than twice that amount; she can expect $163,000 more in benefits than she will pay in taxes

versus

A 20-year-old female can expect to pay $92,000 more in taxes than she will receive in transfer benefits over her lifetime. The future looks more than three times as bleak for her male cohort, who can expect to pay $312,000 more in taxes than he will ever receive in benefits.

Ah… but will young people bother to earn it?  After all, they, at least, have their youth.

My story is a bit different. I get the financial pain of the 20 year old male, but none of the benefits of somebody just 15 years older than me.

    
Earned a school.  Hasn’t

Apparently the Nobel Committee also builds schools in Maryland… what else could explain a school named for Barack Obama before he is out of office, or dead?  Isn’t one of those the normal standard for naming schools?

Now if he didn’t suck so bad, maybe.

But come on Maryland… you only have 2.5 more years to go till he is out of office, and he will be just as (1/2) black then (the real reason it is named after him).

If you have to name it after a black person, and I’m quite sure no whites were considered, why not pick one that has actually succeeded in helping the US, or Maryland, or even black people?  Or as I show above, Denzel Washington who I’d gladly have them name a school after here in St. George.  In other words, if he is still alive, have the role model at least be at the top of his game, not flailing and failing.

I’d actually favor not naming things after politicians. Or, at least be honest, like “The John Murtha ripped off a bunch of taxpayers Airport”, or the “William Byrd gets the credit, you get the bill Federal Building”.

Hey Maryland… how about naming schools after Medal of Honor winners, or those who died in service to their country?  Come on Maryland, there is a better way.

BTW: I quite liked Washington’s recent “Book of Eli”.

 
Ponzi: Underachiever compared to our government

If the Wall Street Journal covers a question, it usually offers the info needed for the reader to make an answer. Not so this piece on the Social Security deficit.

Social Security officials project that beginning in 2014, the program will routinely pay out more in benefits than it collects in taxes, requiring it to draw on reserves that have been funding the rest of the government.

So how much money are we talking about?  For years the government has been wasting my FICA contributions instead of saving them for me.  I think the GOVERNMENT should cut back and focus on paying back what it owes me.  The funds are called “trust” funds.

Raising taxes so it can keep stealing from me hardly appeals. Nor would it be good for the economy.

Raising the retirement age is close to stealing.  And would also make job growth harder.

They’ve taken and squandered hundreds of thousands of my dollars – I want to know how they intend to pay me back.  And I don’t want it in inflated newly printed dollars. I want government to cut back on things less important than paying me back. And FYI.. that is most things it does.

Via the Corner

The chart above charts jobs claimed to saved by the Stimulus boondoogle versus jobs lost.   Read his post for details, but I’ll explain it another, shorter, way here:

  Blue lines represent public union sector jobs “saved” (temporarily).
  Red represents private jobs, like yours, gone (for a long time)

Note that the red lines are actually smaller than they will be after job losses are restated based on actual data not estimates. 

States that went for Obama love to indenture future children. And the trend becomes more pronounced the more they went for Obama.

The strongest Obama states had a per capita debt high of $4,606 for Massachusetts and a low of $709 for Vermont—remember, the average per capita debt in the McCain states was only $749, barely above the debt level in Vermont, with its “less is more” ethic.

And once they trash their state, they are after the rest of us… We OWE them after all.

 
Poster child for urban decay
Image via www.builtstlouis.com an interesting site worthy of a visit

East St. Louis is in the news these days because they are laying off 19 police officers (out of 62).

Drudge responds with:

But why would criminals run wild?  Police don’t usually prevent crime, they respond to it. Arrests can prevent crime, if the criminals are kept locked up.   But just having police out and about in relatively small numbers (sector car for instance), doesn’t.  If St. George didn’t have police on the streets pentyanty money raising traffic tickets would drop but crime would’t rise.

So what is different in East St. Louis?  Primarily culture and government.

One big difference…the town has mostly black residents. St. George is mostly white. For some reason, black folks seem to commit more crime than white folks do, especially when congregated together. Facts are facts.  There are lots of theories on root causes of black crime rates.  But large populations of blacks didn’t have higher crime rates always. The trend seems to be related to the “war on drugs” and the decline of black males as involved Dads.  It is related to culture not race. A failed culture, I’d submit, that has high percentages of its men in prison, and higher percentages of its woman bearing children without male involvement or support.

What else is different?  Democrats run the East St. Louis. Republicans run St. George.  East St. Louis. Googling East St. Louis corruption finds plenty of hits. St. George, none (except for hits on application page for the police force banning corruption).

Those same Democrats also banned handguns in East St. Louis.  So that now that they have run the city’s finances into the ground and severely hampered police coverage, they’ve also left their citizens defenseless.

I’m sure there are other issues, such as St. George treats business well (except for brazenly high electricity rates), and East St. Louis views them as things to plunder.   But at the core, I think culture and governance sums up how East St. Louis has gone astray.

Well done East St. Louis!   You’ve provided a model of WHAT NOT TO DO.  Alas, I fear many cities with similar cultural demographics and management will be in the news for similar reasons in months to come.

Liar

http://lifenews.com/nat6531.html

The abortion funding comes despite language in the bill that some pro-abortion Democrats and Obama himself claimed would prevent abortion funding and despite a controversial executive order Obama signed supposedly stopping abortion funding.

It is one (bad)  thing to say we believe abortion is okay and we will fund it, and then to fund it. It is quite another to pretend to not want to fund it and then to do so.  He and those working for him are lying scum. Too harsh? I’m tired of the lies.  People that voted for this lot ought to be embarrassed.

Via NASA

Here is a picture of the whole gulf:

BP sure screwed up but is trying to fix it. The Feds screwed up and are trying to use it.

Please send money

RedLight cameras…. about the money honey.

Shah’s analyzed Illinois Department of Transportation data obtained by the Chicago Tribune which showed that although accidents dropped seven percent at intersections citywide, fifty camera-monitored intersections saw a five-percent increase in accidents. The city used its own, much narrower dataset to claim a significant decrease in accidents. The city only had ten usable intersections and defined "accident" in a way that limits reporting of rear end collisions that take place farther from the intersection. Shah recrunched the numbers and found a net safety benefit of just 1.5 percent.

The other lesson… you can’t trust politician delivered statistics.