Is Ben Bernanke Losing Sleep Over Possible Great Depression?

Federal Reserve chairman Ben Bernanke loses sleep over the possibility that the United States may suffer a repeat of the 1930s' Great Depression. Inflation hawks and opponents of President Barack Obama's Keynesian "stimulus" warn continually of a possible repeat of the 1970s' stagflation. Yet recent data is beginning to suggest a more unpleasant possibility still: that the United States could suffer both traumas simultaneously - a prolonged period of pathologically high unemployment combined with vicious and unrelenting inflation.

This grim prognostication results from recent developments that have eliminated some economic possibilities but boosted the probability of others, including the apparently unlikely outcome The possibility I thought most likely a year ago, of a relatively strong recovery accompanied by rising inflation (which might then require a Paul Volcker-style remedy to combat it, so pushing the economy into a double-dip similar to that of 1980-82) now seems relatively unlikely.
Likewise, the possibility feared above all others by Bernanke, of a bout of savage deflation sufficiently severe to choke off economic recovery, is also off the table - although in my view it was never truly on it.

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The US might also, like Argentina, suffer a period of hyperinflation. 
The prospect ahead is thus uniquely gloomy. Part of the gloom is caused by a natural and unavoidable change in the terms of trade, making a reduction in US living standards inevitable. However, most of it can be ascribed to wrong-headed policies pursued by the four horsemen of the financial apocalypse, Messrs Bush, Obama, Greenspan and Bernanke. 

Long Read HERE..

Gold Rallying to $1,500 as Soros's Bubble Inflates

Investors are accumulating enough bullion to fill Switzerland’s vaults twice over as gold’s most- accurate forecasters say the longest rally in at least nine decades has further to go no matter what the economy holds.

Analysts raised their 2011 forecasts more than for any other precious metal the past two months, predicting a 10th annual advance, data compiled by Bloomberg show. The most widely held option on gold futures traded in New York is for $1,500 an ounce by December, or 18 percent more than the record $1,266.50 reached June 21. Holdings through bullion-backed exchange-traded products are already at more than 2,075 metric tons, within 0.1 percent of the all-time high.

“Either a swift economic recovery or further dismal economic performance should bring new buyers into the market,” said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt who was the most accurate forecaster in the first quarter and expects the metal to rise as high as $1,400 next year. “A stronger economy would create more jewelry demand. If the economy stays weak or gets worse, then investors will be looking for a safe haven.”

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Obama's New Tax On...Rainwater!?

Would President Obama's Environmental Protection Agency really force Americans to pay a tax on "rainwater runoff" from homes and small businesses?

You bet they would.  In fact, the EPA, under radical environmentalist Lisa Jackson, is proposing regulations to do just that. 

Take a look at the EPA's own Federal Register filing, where the EPA generally describes the initiative it's proposing:

...requirements, including design or performance standards, for stormwater discharges from, at minimum, newly developed and redeveloped sites. EPA intends to propose regulatory options that would revise the NPDES regulations and establish a comprehensive program to address stormwater discharges from newly developed and redeveloped sites and to take final action no later than November 2012. (Source)

This is bureaucratic-speak for having the EPA force cities and counties to limit stormwater runoff to levels the EPA deems acceptable.  Limiting "rainwater runoff" will mean forcing homeowners and businesses to pay new taxes in order to rein in rainwater, and that's no pun intended. 

Think about just how big-government this is.  A Washington, D.C. bureaucracy plans on forcing your local county or city to slap new taxes on you and me because this big-government bureaucracy wants to micro-manage rainwater across the entire country.  Already, several counties and cities across the United States are moving to pass new taxes and fees in anticipation of the new EPA rules, including cities in states as disparate as Florida, Ohio and Kansas.  For more details CLICK HERE

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Second Leg Of World Collapse Coming

September and October hold bad news for stock markets and banks remain overleveraged as we head into the second leg of the financial crisis according to Pedro De Noronha, the managing partner at Noster Capital in London. "We are seeing one of the most challenging years for investors ever," De Noronha told CNBC Tuesday. "Major investors are simply leaving the market. When it looks like markets are about to fall off the cliff they rally and vice versa.

"There are problems coming from the resetting of US mortgages and (the) euro area remains a big worry," he said.

"Germany is unwilling to save any other European country," De Noronha said. "Merkel used up lots of political capital saving Greece and she saved the Greek bond market in order to save the French and German banking system from more big losses."

"There are four or five countries that have major structural problems that should not be in the euro," he said. "I still have (yet) to see a politician who will shoot themselves in the head on austerity."

"The Greeks have no choice but to cut, the others like Spain are not doing enough, I am with the 'Austerian' school and do not buy the Keynesian argument," he said. 

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Japan Airlines : 16,000 Job Cuts
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U.S. Auto Sales May Hit 28-Year Low as Discounts Flop 

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U.S Government Prepares For Crisis

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This brings us to the present dilemma of the U.S. government. The U.S. economy is much sicker than it was when Obama ascended the throne. Wall Street has continued to ruthlessly choke off all credit to the U.S. economy, meaning that tens of millions of American households and tens of thousands of businesses are much closer to the breaking point than they were in January of 2009.

The entire U.S. retail sector is in a terminal death-spiral, and its only response is to eliminate vast numbers of retail outlets, and herd consumers into more online retailing. While this cuts costs for these companies, most of those cuts will be reduced employment -- fueling the next leg lower for consumer demand, resulting in even more store closures, etc.

This means that the trivial "band-aids" being mused-about by government talking-heads are utterly meaningless. Simply, the Obama regime has to "go big, or go home." It must either engage in massive (genuine) stimulus of the U.S. economy -- meaning a multi-trillion dollar commitment, or simply allow the collapse to proceed (and feed upon itself). However, in even contemplating another, massive wave of spending, Obama faces two other problems (which he created for himself).

Throughout this "U.S. economic recovery," the U.S. government has continued to pretend that it was almost ready to begin some actual, fiscal restraint -- halting the exponential increase in federal government debt. That was the only thing propping up the U.S. dollar (putting aside the constant Euro-bashing by the U.S. propaganda-machine). Allow another sickening plunge in the U.S. dollar, and that will drive away the last, few chumps still insane enough to buy grossly over-priced U.S. Treasuries. This is the road that leads to hyperinflation.

If this was not bad enough, the Obama regime has continued to be successful in duping both the vast majority of sheep in the U.S. electorate, as well as Republican knuckle-draggers that the U.S. economy was "strong enough" to begin to curtail runaway spending. This pool of chumps is looking for spending cuts, not a multi-trillion spending spree.

Thus, the U.S. government is facing exactly the same scenario today as the Bush regime faced in the summer of 2008. In hindsight, we all know what choice the previous government made. Lehman Brothers was "assassinated" -- as the first step in a concerted effort to destroy commodities markets. The collapse in these vital markets, combined with the collusion among Western bankers to choke off all credit to credit-based Western economies achieved its desired objective: a global "economic collapse," and the expected panic which such an artificial crisis would naturally produce.
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Retail Sales Continue To Plummet

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Homelessness Up 47%--100% In Brooklyn

If you think you've been seeing more people sleep on city streets, statistics back up the perception. The homeless population living on New York City streets has gone up 50 percent in the past year, according to city statistics reported by the HellsKitchenLife.com blog.
The New York City Department of Homeless Services conducts a yearly survey of the streets of the city to count the number of homeless who are not in shelters. The HOPE survey was conducted in January 2010.
The number of homeless in the borough of Manhattan was up 47 percent in the past year, according to the count. The 2010 count had 1,145 people living in the streets. That is up 368 from 2009.
Brooklyn had the biggest increase of any borough. It saw a homeless increase of more than 100 percent in 2010.
More than 1,000 people now live in New York City's subway system -- up 11 percent in the past year.
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Big Commodity Trader: U.S. President Is Only A Puppet

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RW: I think that could be true. I really believe that 80%–90% of the American public is regularly sold a bill of goods by the Wall Street media from New York and Washington. It just keeps coming day after day and, after awhile, it wears them out. I think the majority of Americans still believe a lot of this information. From my point of view, a good portion of it is just nonsense.

TGR: If you could speak directly to the public and tell them what you believe they should know, what would you tell them?

RW: Well, I would say that the U.S. president is not really the man in charge. The people who are in charge of world economics, world currencies, governments and corporations are a shadow political group that has a great deal of power. Presidents in the U.S. are just puppets. They're selected for their ability to do what they're told. Congress is basically just a tool for these corporations and outsiders to manipulate the rules to get what they want. I think that's obvious when you look at what's happened with all the offshoring of American jobs. The issue that's got a lot of people disturbed right now is the open border between Mexico and the United States. That exists because corporations want cheap labor. And there are obviously a lot of people involved in the Mexican drug trade. There's a sheriff in Arizona who said that even members of Congress are involved. Until the teeth are taken out of pharmaceutical economics, these things are going to continue.

Recently it's become much worse because of what's happened with the global banks and derivatives market. That's what caused the Lehman Brothers collapse and took down the global economy. To make it worse, then–Treasury Secretary Henry (Hank) Paulson basically took government taxpayer money and gave it to the banks. He conjectured that, if we didn't, the global financial system would implode. Quite frankly, I think it would've been better if we had taken our medicine and just moved on. But what's happened now is that 90% of the toxic debt in those banks remains in those banks. They've taken it off balance sheets and put it into other corporations or partnerships (i.e., offshored it). They're just holding the money given to them by the U.S. government earning bond interest. They're not making loans to improve the economy.
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China Loses Billions On U.S. Treasury Bonds

Rumors have circulated in China that People’s Bank of China (PBC) Gov. Zhou Xiaochuan may have left the country. The rumors appear to have started following reports on Aug. 28 which cited Ming Pao, a Hong Kong-based news agency, saying that because of an approximately $430 billion loss on U.S. Treasury bonds, the Chinese government may punish some individuals within the PBC, including Zhou. Although Ming Pao on Aug. 30 published a report on its website indicating that the prior report was fabricated by a mainland news site that had attributed the false information to Ming Pao, rumors of Zhou’s defection have spread around China intensively, and Zhou’s name has been blocked from Internet search engines in China.

Read more: China: Rumors of the Central Bank Chief's Defection | STRATFOR

Wall Street's Biggest Fraud

Over the last two years of the housing bubble, Wall Street bankers perpetrated one of the greatest episodes of self-dealing in financial history.
Faced with increasing difficulty in selling the mortgage-backed securities that had been among their most lucrative products, the banks hit on a solution that preserved their quarterly earnings and huge bonuses:

They created fake demand.
A ProPublica analysis shows for the first time the extent to which banks -- primarily Merrill Lynch, but also Citigroup, UBS and others -- bought their own products and cranked up an assembly line that otherwise should have flagged.
The products they were buying and selling were at the heart of the 2008 meltdown -- collections of mortgage bonds known as collateralized debt obligations, or CDOs.
As the housing boom began to slow in mid-2006, investors became skittish about the riskier parts of those investments. So the banks created -- and ultimately provided most of the money for -- new CDOs. Those new CDOs bought the hard-to-sell pieces of the original CDOs. The result was a daisy chain [1] that solved one problem but created another: Each new CDO had its own risky pieces. Banks created yet other CDOs to buy those.
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They were paid by the CDO, not the bank, and were supposed to serve as a bulwark against self-dealing by the banks, which had the fullest understanding of the complex and lightly regulated mortgage bonds.
It rarely worked out that way. The managers were beholden to the banks that sent them the business. On a billion-dollar deal, managers could earn a million dollars in fees, with little risk. Some small firms did several billion dollars of CDOs in a matter of months.

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Economic Gurus: Economic Armageddon Is Here

The worst nightmare forecast by economic specialists over the previous years has come true: new research by economic gurus in the United States of America has revealed a bleak scenario: the United States’ economy is in a state of depression. Yes, it is the Double Dip, a roller-coaster ride to economic catastrophe and it has arrived. To come: massive debt default, the failure of entire nations and widespread starvation in the western world.

The research referring to the works of a number of leading economists (David Rosenberg, Fred Harrison, Arthur Laffer, Nobel Prizewinner Paul Krugman, Robin Griffiths) is revealed in the article by US based analyst and writer, Terrence Aym*. And it makes terrifying reading.

While these leading economists represent different views from opposite ends of the political spectrums both in the USA and the UK, on one thing they agree: the decade ahead is going to get worse.

David Rosenberg states categorically that the United States’ economy has entered another Great Depression, the beginning of the double dip much referred to in recent years, following the shocking revelation in July that the US real estate market has collapsed 27% compared with July 2009.

British economist Fred Harrison explains that property speculation around the globe was responsible for the boom and bust waves ripping through the world economy and claims that tax reforms could have avoided the crisis. What he predicts now is a decade-long depression fueled by “a massive contraction in demand” resulting in a 45 trillion-dollar debt default and unemployment rates of 25% in the USA and UK. Worse still, Harrison predicts the failure of entire nations and “something unseen for hundreds of years could appear again: wholesale starvation of peoples in some Western countries”.

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The National Debt Will Be Paid In The Form Of The Much Greater Depression.

If you still think we have a two party system in this country please look at the above chart.

Carter (not on chart) far outspent all previous presidents and put us into hyperinflation. Pseudoconservative Reagan outspent all previous presidents. Bush Sr. outspent him. Clinton went nuts. Bush Jr. continued the insanity. Obama is now King of the Spenders. The National Debt will be paid in the form of the Much Greater Depression. Each man, woman and child in America owes $200,000. Every family of four (including infants) owes $800,000. It’s hopeless folks. All debts get paid in the end, either by the buyer or the seller. Always.

TriOptima just reported there are $450 trillion in derivatives worldwide.  Derivatives are basically a complex scam based on smoke and mirrors. The whole $450 trillion dollar house of cards is falling apart as you read this. The entire GNP of the U.S. is a mere $12 trillion and is the largest in the world. We can’t even define what a “derivative” is and they have never existed before on the face of the earth. They are all coming unwound as you read this. The entire world economy is collapsing.  There are far more derivatives than the entire yearly worldwide GNP. This is completely and totally insane of course. If you think this isn’t End Times please think again. Just open your eyes and you’ll see the hopelessness of it all.

Look at the chart below. Gold and silver skyrocket while real estate and the stock markets go completely to hell. Only gold and silver will save you and silver is four times better.

Look at the CPI in the last 40 years. Inflation has robbed you of your savings. It will just get worse from here. The second round of “quantitative easing” (QE2) is coming and more Monopoly money will be printed. HYPERINFLATION IS YOUR FUTURE. Food prices will go from 10% of your salary to at least 30%.  Prices on everything (except real estate and stocks) will go to the moon as the dollar continues to collapse. Your author is still massively short the U.S. dollar. The dollar is worthless. “Debt monetization” is another fraud where the government buys and sells to itself. The idea of a “jobless recovery” is too stupid to discuss, but the sheeple continue to lap it up.

Long GREAT Read Here..

Price Increases Are Costing Millions of People their Health

"Let em pay the price or starve"
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Another Round Of Federal Reserve Air Coming

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History is being made. The American public has never been no nervous, perhaps fearful of something dreadful and imminent. The global monetary system is crumbling. The typical stimulus has failed to jumpstart the USEconomy. The 20 months of near 0% short-term official interest rate has failed to revive the moribund US housing market. The fraudulent FASB accounting rule allowance has only succeeded in delaying the demise for the big US banks, which do not lend much, but do continue to benefit from USFed liquidity facilities. Witness the failure of the US financial sector. Witness the climax chapter of failure for the Fascist Business Model. The US banker brain trust, which possesses only a modicum of economic wisdom, analytic prowess, or foresight, finds itself in a desperate corner. Their talk of an Exit Strategy in the last several months was summarily dismissed as nonsense, propaganda, and wishful thinking by the Jackass here on a consistent irrefutable basis. The US Federal Reserve is ready to embark on the second round of Quantitative Easing. The monetization of US$-based bonds of many types will be done on a second initiative, on cue. Here is the irony, the insanity, the recklessness, the tragedy. What failed, they will do again, maybe even bigger! At risk is global confidence and trust of the United States, hardly a zero cost item.

The urgency of the QE2 Launch will be made quite clear by the leaders occupying positions of power, after they digest the latest housing data. The July existing housing sales fell by 27.2% in a single month. The July new home sales fell by 12.4% in concert. Few analysts operating with USGovt service badges anticipated that the empty-headed home buyer credit of $8000 would rob forward sales and leave an autumn vacuum in home demand. It did. Check out the silver price, which touched $19 on Wednesday. And at $1240, the gold price is poised to make new highs any day. My near-term targets are $23.5 for silver and $1300 for gold. Energy prices are soft but precious metals prices are strong. Think heterogeneity!

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Mexico To Ban Payment In Cash

Mexico says it is planning to tighten the noose around big-ticket cash purchases to curtail the flow of smuggled dollars and fight money laundering.

President Felipe Calderon put forward the sweeping new measures Thursday to crack down on billions of dollars of the illicit money gained by the drug cartels and spent by them for more profit.

"This illicit money is vital for the criminal. That is what they seek, this money. It is also vital to finance their activities," said Calderon, The Washington Post reported on Thursday.
If approved by the legislature, the legislation would not allow anyone to buy real estate in cash. Neither would it permit anyone to spend more than MXN 100,000 (USD 7,700) in cash on vehicles, boats, airplanes and luxury goods.

Violators of the new legislation would face up to 15 years in prison. 

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Collapse Survival Will Be Tribal: Begin Recruiting Now

All truth passes through three stages.  First, it is ridiculed.  Second, it is violently opposed.  Third, it is accepted as being self-evident. 
Everyone on earth knows how fragile the economy is.  It has pushed first-world countries to the brink of revolution.  The pushing can't withstand much more before the pillars of civilization begin to fall.  And once they begin falling, there may be no stopping them from collapsing society altogether.  Unfortunately, the signs of further economic erosion are disturbingly obvious to the onlookers, and the remaining pillars are hanging on by a thread.

What's more, the controllers are orchestrating the collapse of the American economy and society right now, albeit in slow motion, but it is already crumbling.  The economy and the environment have surpassed their critical tipping points, where dollars will inevitably be worthless and resources will be out-of-reach expensive for most of humanity. We are likely to see astronomically-high gas prices ultimately causing food and medicine to be quickly wiped out of the box stores -- first by nesters, then by desperate looters.  One only has to witness the panic buying before predicted snow storms to imagine what a sustained blizzard would do.  It's well past the 11th hour and survival and real solutions must rule the day.

The collapse will surely be a desperate time for many, especially those who live in major cities.  Even some suburbs will not be immune for those who didn't see it coming and plan accordingly.  Jobs will be far scarcer, money will not go nearly as far for essentials like food and energy, and what will be left of the cities will be roving gangs desperate for resources.  The poor helpless citizens will most likely be taken to FEMA "dormitories" as is already being proposed.

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Thousands Stand In Line For Mortgage Help

WEST PALM BEACH — The Palm Beach County Convention Center filled again today with tales of mortgage woe.

Before dawn, with a plump moon overhead, a line of desperate homeowners trailed around the outside of the building. They slept in beach chairs or on blankets on the ground, refugees from a bad economy, bad loans, or bad decisions.

They stayed even as the rain poured down on them. Because for most of the people in the queue, the Neighborhood Assistance Corp. of America is the end of the line. The last chance to save their home.

The non-profit group will be at the convention center through Tuesday helping people get lower monthly payments through loan modifications. At least 1,000 people arrived before the doors opened.

“If the banks won’t come to you, you go to them,” said Detroit resident Brian Kelley, 44, as he blinked rainwater from his eyes.

Kelley, a Ford Motor Company employee, whose salary has been cut nearly in half, flew into Fort Lauderdale on Thursday, got a ride to the Tri-rail station, and took the train into West Palm Beach.

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South Africa Near Anarchy

Police Plan To Join Strike In Defiance Of Court Order. A growing strike of hundreds of thousands of public workers was creating chaos in South Africa on Friday.

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Serious Inflation To Arrive: U.S. Is Worse Than Japan

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The U.S. turning Japanese is now becoming widely accepted. Certainly, it seems to be behind Treasury bond pricing, even if it isn’t quite a consensus view among equity investors. With ever more indicators pointing to a relapse of the U.S.’s recession and the growing risk of deflation–Mohamed El-Erian at the bond fund Pimco gives it a 25% probability.

As for doubters, who argue the U.S.’s circumstances can’t be compared with Japan’s, Edwards says: “they are right.” Right, that is, because “things now in the U.S. are much, much worse than Japan a decade ago” which is to say a decade after the start of Japan’s bust.

Which is maybe why Edwards figures the end game will play out more quickly in the U.S. than in Japan. He sees the U.S. market bottoming out over the next year or so, rather than after yet another decade.

But maybe that’s just impatience talking. Edwards admits he’s getting tired of being bearish. His old companion in arms, James Montier, now at the buy side firm GMO, turned positive on shares last year and continues to find value, particularly in European markets.

More worrying for Edwards, though, is the risk that the deflationary bout he expects to trigger the final bust won’t happen, or won’t last long. That, instead, the U.S. economy will flip from low and declining inflation to a sudden bout of serious inflation, prompted by the Federal Reserve, which the central bank will then be unwilling to control.

That’s a particular worry because central bankers are confident to the point of hubris that they know how to control inflation when it finally springs up. Remember, they’d also allowed bubbles to form because, similarly, they “knew” how to react once they’d burst.

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Its Official: China is Unloading its Treasury Bonds
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"I'm Having A Great Time"

NEW YORK (CBS/AP) — A storm that curtailed outdoor activities for much of President Barack Obama’s vacation was forecast to end Wednesday, but he said he’s been able to fight off cabin fever.

Not only has he been able to sneak in two rounds of golf, but he told reporters Tuesday he’s “doing a lot of reading” at the farm compound he’s rented for the first family. “I’m having a great time,” he said.

The president made the remarks, his first in public since heading out on vacation last week, as he escorted first lady Michelle Obama from the State Road restaurant.

Obama has faced some criticism for his latest vacation, his sixth since taking office. At a time when painful unemployment numbers continue to bear down on the tattered economy, many are frustrated that the nation’s leader is enjoying another luxurious trip. On CBS’ “The Late Show” Tuesday night, David Letterman took a jab at the president, saying: “He’ll have plenty of time for vacations after his one term is up.”

LINK: Watch Dave’s Monologue

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It's Okay To Walk Away: Let's End The "Morality" Double-Standard On Mortgage Defaults

More and more commercial real-estate companies are doing what many indebted homeowners would like to do: Walk away from mortgages on properties that are now worth a lot less than they paid for them.

Today's Wall Street Journal highlights three major developers - Macerich,Vornado Realty Trust and Simon Property Group - that have recently decided to default on mortgages.

When companies do this, no one bats an eye--it's just "smart business."

When ordinary homeowners think about doing it, meanwhile, the mortgage industry and government begin moaning that a mortgage is more than a business contract. It's a social contract, in which homeowners have a "moral obligation" to pay.

That's bunk. An individual mortgage is no different than a corporate mortgage. If corporations are allowed to walk away from mortgage obligations without feeling shame and guilt, then individuals should be able to do so, too.

The contract homeowners sign when they take out a mortgage spells out exactly what happens if the homeowner stops making payments on the loan.  The lender has the right to foreclose on the house, taking the homeowner's downpayment with it.  In addition, the borrower's credit rating will usually get destroyed, and, in some states, the lender can come after his or her other assets to recoup the capital the lender has lost.

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Boiling Frog Syndrome: Full-Body Scan Technology Deployed In Street-Roving Vans

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By ANDY GREENBERG

As the privacy controversy around full-body security scans begins to simmer, it’s worth noting that courthouses and airport security checkpoints aren’t the only places where backscatter x-ray vision is being deployed. The same technology, capable of seeing through clothes and walls, has also been rolling out on U.S. streets.

American Science & Engineering, a company based in Billerica, Massachusetts, has sold U.S. and foreign government agencies more than 500 backscatter x-ray scanners mounted in vans that can be driven past neighboring vehicles to see their contents, Joe Reiss, a vice president of marketing at the company told me in an interview. While the biggest buyer of AS&E’s machines over the last seven years has been the Department of Defense operations in Afghanistan and Iraq, Reiss says law enforcement agencies have also deployed the vans to search for vehicle-based bombs in the U.S.

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Hyperinflation, Part II: What It Will Look Like

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Now let’s return to the possibility of hyperinflation in the United States:

If there were a sudden collapse in the Treasury bond market, I argued that sellers would take their cash and put them into commodities. My reasoning was, they would seek a sure store of value. If Treasury bonds ceased to be that store of value, then people would invest in the next best thing, which would be commodities, especially precious and industrial metals, as well as oil—in other words, non-perishable commodities. 

Some people argued this point with me. They argued many different approaches to the problem, but essentially, it all boiled down to the argument that commodities and precious metals have no intrinsic value. 

Actually, I think they’re right. In a strict sense, only oxygen, food and water have intrinsic value to human beings—everything else is superfluous. Therefore the value of everything else is arbitrary. 

  

Yet both gold and silver have, historically, been considered valuable. Setting aside a theoretical or mathematical construct that would justify the value of gold and silver, look at it from a practical standpoint: If I went to a farmer with five ounces of silver, would he give me a sack of grain? Probably. If I offered him an ounce of gold for two or three pigs, would he give them to me? Again, probably. 

  

Where there is a human society, there is a need to exchange. Where there is a need to exchange, a medium of exchange will soon appear. Gold and silver (and copper and brass and other metals) have served that purpose for literally millennia, but then they were replaced by paper. 

Long Read HERE


THE GREAT DELEVERAGING LIE

Mike Ruppert: We're Going Over the Cliff

Going Over the Cliff from CollapseNet.com on Vimeo.

Retiree Ponzi Scheme Is $16 Trillion Short

Social Security just celebrated its 75th birthday. Love it or hate it, it has done its job and should retire. We need a new system, the Personal Security System, which retains Social Security’s best features, scraps the rest, and covers its costs.
Social Security’s objective -- forcing people to save for retirement -- is legit. Otherwise millions of us would seek handouts in our old age.
But Social Security has also played a central role in the massive, six-decade Ponzi scheme known as U.S. fiscal policy, which transfers ever-larger sums from the young to the old.
In so doing, Uncle Sam has assured successive young contributors that they would have their turn, in retirement, to get back much more than they put in. But all chain letters end, and the U.S.’s is now collapsing.
The letter’s last purchasers -- today’s and tomorrow’s youngsters -- face enormous increases in taxes and cuts in benefits. This fiscal child abuse, which will turn the American dream into a nightmare, is best summarized by the $202 trillion fiscal gap discussed in my last column.
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Judge: Its Legal For Government To Track You In Your Car

The free world was aghast yesterday when the United States decided that it is perfectly acceptable for Government agents to sneak onto your property in the middle of the night, put a GPS device on the bottom of your car and keep track of everywhere you go.

The U.S. Court of Appeals for the Ninth Circuit has decided that this does not violate the Fourth Amendment.

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Why America's Economy Is on the Brink of Going Down the Tubes ... for Good

Recessions, especially the deep downturn that started in 2008, always cause us to scramble. Companies routinely slash spending while governments do the opposite, trying to shock the country's economic heart into beating again through heroic measures such as the recent stimulus package. Concern about a possible "double dip" recession have the hands of corporate CFO's and Washington officials hovering over the panic button again, mere months after the last push.

But our scramble to reduce the impact of the latest disaster distracts us from addressing the deep-seated problems that inexorably create the next disaster, and the one after that. Why waste energy on the distant future, we reason, when we'll never get to that future if we don't solve the problem staring us in the face?

We all focus on addressing here-and-now emergencies because we have no choice. What limits our options are not outside events, such as economic downturns, but internal events that go on inside our brains. As a neuroscientist, I've learned that our brains are hardwired to avoid near term threats and to ignore long term opportunities , because our brains are identical to those of our distant ancestors who faced a daily struggle for survival. When our brains evolved into their present form, about 50,000 years ago, the environment was incredibly harsh and risky, limiting life expectancies to 20-25 years. Diverting attention from day-today survival in those Paleolithic times would have invited disaster. Neuroscientists call this hard-wired preference for quick fixes over long range pursuits temporal myopia: everything past the immediate future looks fuzzy, or even invisible, and is therefore irrelevant.

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Economy Like a 'Drunk That Keeps Drinking'
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Housing May Drop Another 25%?

With all the talk of the awful sales numbers for both existing and new homes in July, there was one small kernel of seeming good news: existing home prices rose slightly. The national median home price actually increased by 0.7% last month compared to a year earlier, according to the National Association of Realtors. But don't expect this trend to continue -- prices still have a ways to fall before they settle at their natural level.

Several weeks ago, Barry Ritholtz posted the following chart. It was originally featured by the New York Times, and updated by a commenter to Ritholtz's blog named Steve Barry.

This is a pretty fascinating picture. First, it shows just how incredibly absurd the housing boom was. Beginning in the 1940s, inflation-adjusted homes prices have settled around the 110 value according to the Case-Shiller index. Yet, the index value exceeded 200 in 2006. Prices began a descent when housing collapsed, but as of May the index remained well above the natural value of 110.

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