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                                                                                                      October 22, 2016

Authentic curmudgeons tend to be crotchety and glum. That's because they look at the world under the harsh light of reality.

    "Give [Hillary] credit for consistency. She is always mendacious, firmly in the pockets of Wall Street, Israel, the Neocon hawks, and the arms industry, never  having accomplished anything on her own, always riding Billís coattails, having a disastrous record as SecState, always for sale. With her, we know what we will get. With Trump, itís a roll of very weird dice."  RONALD McDONALD or LUCRETIA BORGIA.   Fred Reed is skilled in the art of curmudgeonry and serves up a timely sample of his view of the political tableaux that presently conflicts the American voter.  Funloving readers may want to bicycle Fred's web link to friend and foe alike.  

        "[Trump] talks  unflatteringly  about the other sex near open mikes, instead of away from them like everybody else," Fred writes. .We spent a great deal of our adult life hanging around microphones in the days they were nicknamed "mikes" not "mics."  We were warned early on never to say anything in a room with a microphone in it that you wouldn't want broadcast..  This rule applied to all microphones,  including ones you thought were switched off.  

          Today, in a world of hidden microphones and video cameras, it may pay think twice before you speak.   ..   

Voting Absentee?

      We and the Missus have applied for absentee ballots for the first time in our long lives together. We downloaded the application forms from the Internet and mailed 'em in. Our official excuse was a bit thin, we thought.  We checked "Over 65" as our excuse for not going to the polling place on election day, although neither of us thinks the age of 65 should be the gateway into old age as it was in the 1930s when the U.S. Social Security system was set up. (The Missus broke a leg this summer and is not quite up to the trek to the polls.)

   Germany's Otto von Bismark is said to have come up with age 65 in the late 19th century as a reasonable age to start pensioning the old folks. He had checked with the numbers crunchers and discovered that average folks in that day and time cashed in their chips at about that age, so it made good sense from a government point of view to set the retirement age at that level.

   The U.S. copied many elements of the German system of caring for elders when it launched the Social Security system in 1935. 

   With apologies to our Baby Boomer offspring, two of whom are in their sixties, we just don't buy 65 as the doorway to old age any more.  We think it ought to be bumped up to at least 70.   

  "Trump is nasty, but Clinton is dangerous."

     "If you want to turn this country over to Clinton and her minions just because her opponent is a boor and a vulgarian, go ahead. You will probably have 20 years or more to live with the results."    This wise observation is from the lead letter-to-the-editor in our local morning paper.  It was written by Billy Rawl, a long-time acquaintance who has his hands full battling a health setback.  However, the retired TWA flight captain keeps his finger on the pulse of the strange contest for the office of the U.S. presidency and offers an observation that makes abundant sense. 

     Here's his entire letter.  THE STATE

 Student Debt Tops  $1 trillion. 
If the borrowers don't pay it back the taxpayers must.

      " f you're skimming $250,000 as under-assistant dean to the provost for student services (or equivalent) plus gold-plated benefits, higher education is working great. If you're a student burdened with tens of thousands of dollars in student loan debt who is receiving a low-quality, essentially worthless "education" from poorly paid graduate students ("adjuncts") and a handful of online courses that you could get for free or for a low cost outside the university cartel--the system is broken."   Charles Hugh Smith

      This is but one point Smith makes in his latest exploration of the growing split between the governing elite and the rest of us.  

          The ancient words of Publilius Cyrus ring in our ears : "All debt must be paid, either by the borrower or the lender."  That is to say, if the borrower can't or won't pay back a loan the lender must count it as a loss.  If government backs a loan it will be on the hook.  Since government has no money it hasn't taxed from the pockets of its citizens, or borrowed in the marketplace on the promise it will pay it back later, today's student debt, public debt, unfunded promises, and what not, cast a very large shadow on the nation's financial future.  

           We were hoping the presidential candidates would offer solutions to the debt crisis, but they can't get away from their low class mud-=slinging.  But the debt threat is real and it won't dissolve on its own. 



A piddling increase in the Social Security COLA
Social Security recipients get a whopping 0.3 percent increase for 2017.  

   If price inflation rises to the Federal Reserve's goal of 2 percent in 2017 The average purchasing power of today's dollar will drop to 98 cents next year.  For Social Security recipients, however, that will be offset by a whopping 3/10ths of a cent.  WOW!

   Officials estimate the average individual Social Security payment in 2017 will go up by $3.92 a month.  

   Presently, the Federal Reserve is fighting the specter of deflation with its near zero interest rates, but if the easy money policy leads to a sharp rise in price inflation (or worse, hyperinflation), people dependent on their Social Security checks will find themselves paddle-less and far up the creek.  

"I am not going to add a single penny to the national debt," says Hillary Clinton.
"We're going to go where the money is. . . .Weíre going to make the wealthy pay their fair share.Ē

   Old fashioned political double-talk.  Promising to take from the rich and give to the poor is an ancient concept that appeals to  poor and middle income voters.  But we'll rarely hear how "wealthy" is defined, and never a definition of "fair share."  

    As for the Clinton promise not to add a penny to the public debt, that's hard to swallow.  She has also promised free college tuition and plenty of other perks paid for from the public till and a sluggish economy can't bring in enough to pay all the bills, even if the super rich are shaken down to their last dime. 

    More light may be shed on this subject at Wednesday night's final TV "debate" between Clinton and her rival for the White House, Donald Trump.  The format calls for 15 minutes to be devoted to the debt problem, although script may be tossed aside as the contest dissolves into mud-slinging.  

     Mr. Stephen MacLean reflects on the subject and points out:  "Tackling the deficit is a requisite first step, by any one of these three policies: One, by cutting expenditures. Two, by raising taxes for a rise in revenues. Three, by lowering taxes for a rise in revenues. "  CLINTON'S PLEDGE

      Cutting expenditures? Who'll vote for THAT? 

       Raising taxes?  Gov't revenue falls if raised too high. 

       Lowering taxes?  Funny thing.  The economy usually improves when people are allowed to keep more of their own money. 

    P.R. Sorokin pointed out a couple of generations ago that when the sum of one's wishes exceeds the sum of one's means  trouble and unhappiness will arise.  This applies not only to individuals but to crowds of individuals organized into a nation.  

     The current level of confusion and despair indicates Dr. Sorokin was right.  

Political experts say a 3rd party will never have a chance in the USA.
We've been taught that since childhood. The game may change in 2020.

   "Could it be that Donald Trump would react to his defeat, if he is defeated, in the 2016 election by forming a new political party? Thatís the question we keep thinking about as the autophagy of the Republican Party consumes what so many pundits are insisting is his last chance of victory in November. For whatever Mr. Trumpís problems, it is clear that he has millions of loyal followers. Will they return to the Republican fold on the theory that the party establishment was right after all?"  NY SUN < The editorial views of the New York Sun are almost always the exact opposite of those of the New York Times.  The Sun is wondering, in print, if a defeat for Trump would lead him to form his own 3rd party for the 2020 campaign.  

       We doubt it, but the conservative Wall Street Journal today points out that if the Libertarian Party or Green Party could muster 5 percent of the vote next month they would be eligible for public funding.  As we recall the best the Libertarians have ever done in  the run for the presidency is 3 percent.  

   Recently we suggested  we suggested: "If the GOP and the Democrats can't muster better candidates perhaps we should muster a third party with muscle.  Maybe the Radical Independent Party."

  This was tongue-in-cheek, of course.  The RIP has never elected officers nor held a meeting since it was formed more than 22 years ago.  But its ideology is sensible.

Pogo said, "We have met the enemy and he is us!"
It's hard for voters to admit their principal presidential nominees are seriously flawed.

   "We truly have only ourselves to blame. How the greatest nation in the history of the planet ended up with these two candidates for president will be something for historians to figure out as they sift through the rubble of our civilization. But it is where we find ourselves. The societal autopsy of this time likely will reveal a series of self-inflicted wounds. It will show the United States didnít just die; it committed suicide by multiple means. Neither candidate has a plan, or even a desire, to address the national debt or the coming crush of unfunded liabilities in entitlement programs."  This Is No Way To Elect A President With mostly a strongly biased mainstream media to guide them voters are lost souls wondering what to do on November 8th.  Go for four more years of Obama-ism with a vote for HRC or gamble with the loudmouth businessman, DJT.?  People with a socialist bent, which includes a high percentage of journalists, want Mrs. Clinton elected.  

       Overlooked by almost everyone is the historic evidence that shows democracies run out of steam after a couple of centuries when voters discover they can vote themselves huge amounts of money from the national treasury. aThey continue to do so until the system is bankrupt.  Bankrupt democracies almost always sink into dictatorship.        

We quoted Pogo in a short essay more than 10 years ago. It could have been written today. 
Here's an excerpt:

    "Pogo would also be amazed that we stand still to let a full blown WAR be paid for on the credit card.  Up until foolish politicians invented the "guns and butter principle" citizens of a nation that wanted to go to war had to sacrifice a big chunk of their living standard to pay for it.  It was unthinkable to prosecute a war any other way.  Today the political weaklings who run the country would dare not call upon citizens to pay the bills of military adventure.  It's easier to borrow a couple of billion dollars a day from foreigners.  Citizens aren't even asked to buy War Bonds any more!

     "The denizens of the Okefenokee Swamp may be peeking at us from amidst the Spanish moss and remarking about our foolish conduct.  Simple J. Malarkey might mutter something about debtors becoming slaves of creditors, but wouldn't push the point.  He would observe almost at once that we like being slaves, as long as our masters keep the the cable services priced within our means and brewers keep the prices low on beer.  

     "Before he turns, sadly, to vanish into the swamp Pogo might quote his friend Walt Kelly who wrote;  'There is no need to sally forth, for it remains true that those things which make us  human are, curiously enough, always close at hand.  Resolve then, that on this very ground, with small flags waving and tinny blasts on tiny trumpets, we shall meet the enemy, and not only may he be ours, he may be us!' "  ELOQUENT POGO



   Sunday we went for an hour-and-a-half walk in a comfortale middle-class neighborhood in our town  to seek out political yard signs.  The most prevalent one was one for S.C. Sen. John Courson, decked out in red, white, and blue.  

    Conspicuous by their absence were signs for Trump.  We didn't see a single one.  Less than half a dozen were for Hillary Clinton.  

    Where are the yard signs?  One gets the impression voters are shy about their choices, or haven't yet made up their minds.  

     As far as the presidential race is concerned, voters have four choices:

     1/ Vote for Hillary and continue the leftward tilt of federal government. . .

     2/ Vote for Donald and hope for a miracle, as well as somr action on out-of-control spending and ballooning debt... 

      3/ Vote for the Libertarian or Green Party candidates as a sort of "none of the above" message. . .

       4/ Don't vote.




Gold expert Egon von Greyerz explains price manipulation.
Why would central banks fear a sharp rise in the market price of gold?

   The United States says it holds more physical gold than any other nation on earth, but is not willing to let the stash be audited/assayed.  "Take our word for it," say officials. 

    While we don't subscribe to the rumor that Fort Knox is empty of its gold we wish it would nip the rumors by letting inspectors and cameras in for a look-see.  

    In the meantime we must rely on other sources for opinions on what's going on with the price of gold.  One such source is Egon von Greyerz who is doubtful Western nations hold the amount of actual gold they claim, but sees the accumulation building sharply in  the East, such as China.  The above chart shows that China did not add to its physical gold stock for nearly thirty years, then started substantial acquisitions in the 21st century.  VON GREYERZ ON GOLD

    With the entire world absorbed in the Clinton-Trump contest for the White House there's little chance anyone in the news business is going to look into the rising and falling of gold prices, but the person with two or three Krugerrands (or other gold coins) in his/her underwear drawer the question might arise: "Should I buy another one?  Or two? Or more?"

    It all depends on whether general price inflation is set to rise sharply or dreaded DEFLATION  takes hold.  With nations like China and Russia hoarding gold it seems sensible for common folk to tuck away a gold coin or two.  If another round of high price inflation lifts the cost of living sky high the price of gold will go up, too.  If a flood of paper money fails to lift prices and deflation sets in the price of gold will go down, too.  Small wonder so many people are anxious about the future.  

   If Mrs. Clinton wins the November 8th election it's a safe bet that increased deficit spending will occur and with it higher inflation.  If Mr. Trump squeaks into office it MAY lead to a slowdown of debt accumulation by government.  It could even lead to the creation of a commission to stufy the possibility of restoring a form of sound money.  Ronald Reagan tried that in the early '80s.  A return to an honest money system did not prevail, but it led to the minting of gold Eagle coins in 1 ounce, half-ounce, quarter ounce, and 1/10th ounce sizes.  

   The U.S. Mint reports steady sales of gold and silver coins.  They are not all being bought by numismatists!

This week the presidential candidates will discuss the public debt. 
Well, sorta.

    The last of three "debates" takes place next week in Las Vegas.  It'll run 90 minutes, 15 of which are scheduled to look into the candidates' view on how to handle the national debt. 

     It's likely, of course, the exchange will go awry like the first one at Hofstra University did and and the show will deteriorate into the now customary run of innuendo, name calling, and direct accusations of misfeacance.  Lately "bimbo eruptions" of the sort often associated with Bill Clinton have been raised against Trump  Trump's ungentlemanly behavior toward women is hot news at the moment, but we have not heard anyone accuse him of rape.  

      Before Mrs. Clinton announced she would run for the presidency the Missus told us that she would bet the Clintons would be back in the White House.  She even wagered $25.00, although this is not the outcome she would prefer.  Like many Americans she is disgusted by both Mrs. Clinton and Mr. Trump.  

       At this moment it appears your faithful editor will be out $25.00.   That would be a shame.  It will mean the United States will continue its shuffle into bigger government, Socialism,  and bankruptcy.  

Mainstream News Media Boldly Campaign for Clinton
Journalists generally believe they're smarter than run-of-the-mill voters and must guide them to the better choices.

    The New York Sun editorial claims "...the press and the political elites have been trying, since the day Mr. Trump declared, to write off his candidacy as a folly. The airing of the recording of the future Republican nominee speaking of women in the most inappropriate terms would be, the press has been assuring us, the end of it. The Times declared him without hope. Yet in the wake of the showdown in St. Louis, it looks like that wonít be decided until the voters deal with it themselves." NEW YORK SUN

          The editor of the NY Sun appears to believe the U.S. will not prosper by extending Obama liberalism another four years.  He's not alone.  But the mainstream news media are hell-bent on persuading American voters that Hillary Clinton is the better choice. Their support of her is more blatant than usual.  Yesterday we overheard part of an interview on National Public Radio (NPR) in which an athlete assured the interviewer that Donald Trump was wrong in calling his taped earthy remarks with Billy Bush some eleven years ago "locker room talk."  The take-away from the interview was that trashy sex talk was uncommon in locker rooms and Trump was wrong for labeling it as such.  

           Dirt digging and mud slinging is peculiarly rampant in this presidential election.  Too bad, really.  There are some really important issues the new administration must face.  Our guess is Mrs. Clinton has the edge and the voting majority will choose to push the United States further down the road to Socialism.  Why wouldn't they?  More citizens are receiving government largess than ever before.  They will surely vote for more of it, not less. 


Doug Casey sees trouble ahead for for fiat currency - especially the euro.

   "The debts accumulated by the governments of the U.S., Japan, Europe and dozens of other countries constitute a gigantic mortgage on the next two or three generations, as yet unborn. Savings are proof that a person, or a country, has been living below their means. Debt, on the other hand, is evidence that the world has been living above its means. And the amount of government debt and liabilities in the world is in the hundreds of trillions and growing rapidly, even with essentially zero percent interest rates. This brings up several questions: Will future generations be able to repay it? Will they be willing to? And, if so, should they? My answers are: No, no and no." Doomed Euro

    We know the topic du jour is the Sunday night "debate" between Mrs. Clinton and Mr. Trump. We edge closer to the Day of Reckoning when voters decide whether to push American politics further to the left with Hillary or enter the unknown with The Donald.  We think the voting majority will choose of the Pied Piper of more Socialism.  But it could be close. and vote for more Socialism. 

    In the meantime, we can't get the monstrous world debt level out of our head.  Neither the Democrats nor the Republicans seem concerned about it, although the federal government is approaching the Dire Straits by consistently spending more than it brings in.  Consumers, likewise, are drowning in debt.  One recent survey says seven out of ten Americans hold less than $1,000.00 in savings. If this be true it indicates that many consumers are living payday to payday and haven't set much aside for the eventual "rainy day."

     However, Doug Casey says the dollar will outlast the euro.  "I think the euro will reach its intrinsic value long before the dollar does. The euro, in anything like its present form, will likely cease to exist within a decade, and probably far sooner.

     This fellow is often right, which may inspire a few readers to salt away some real assets in forms other than fiat currency.  


The United States began abandoning honest money in 1933. 
It was a mistake.  The dollar of 1933 has lost 94.6 percent of its buying power since then!
(Will the presidential campaigns ever get around to discussing our money ills?)

         To illustrate the magnitude of the money problems we offer this quote from Franklin Roosevelt to the World Monetary and Economic Conference in London in 1933.  The newly elected U.S. president said:  "...the U.S. objective would be that of giving currencies continued purchasing and debt paying power that does not vary greatly in terms of commodities and need of modern civilization.  The U.S. seeks the kind of dollar which a generation hence will have the same. . .power as the dollars we hope to attain in the near future."  

          The New Deal and subsequent monetary "deals" did just the opposite.  The dollar of 1933 has  rotted away to a 2016 purchasing power of  5¢!    What do Mr. Trump or Mrs. Clinton think of THAT?  They won't say - but the next president is going to have to deal with the eroding currency and face the reality of unpayable public and consumer debt.  


The Devil is in the Debt.
No individual or nation can survive when heavily over-indebted.

     "The world is now staring down a deflationary black hole that is on the verge of sucking into it all global debt of $250 trillion plus unfunded liabilities and derivatives of another $2 quadrillion or so. That would be the end of the financial system as we know it. Governments and central bankers around the world are of course totally aware of this and are standing with their fingers ready to push the button for the biggest money printing bonanza that the world has ever experienced."  VON GREYERZ  < The fact that global debt is some $250 trillion is scary enough, but that most of the IOUs are solemnly held as ASSETS is truly frightening. .  (U.S. Treasury notes and bonds come to mind.)  Add the unfunded liabilities  somewhere in the vicinity of $2 QUADRILLION and it's clear humankind is overwhelmed by debt.  

      It doesn't help one bit to remember the ancient adage "All debt must be paid; either by the borrower or the lender."  History show that's true, but the dilemma is: What actually happens when nations cannot meet their debt obligations?

Shocking as it is, a considerable number of voters are tempted to sit this one out. 

   USA Today editorializes against Donald Trump, breaking its tradition of not overtly supporting either major presidential candidate.  The Detroit News breaks its tradition of supporting Republican presidential candidates by endorsing Gary Johnson, the Libertarian.  The Wall Street Journal's Dorothy Rabinowitz endorses Hillary Clinton, complaining that Trump would be "the most unstable, unfit president in history."d

     Rabinowitz adds, "Some, among the anti-Hillary brigades, have decided - in deference to their exquisite sensibilities -  to stay at home on Election Day rather than vote for Mrs. Clinton."

      Who can blame the hapless voter for being bewildered?  The tone of the campaign suggests the principal choices are a crook and a twerp.  The media bias strongly proposes an experienced politician should be elected to continue the leftist trends in governance.  After all, Americans have learned to live with it   To chose an ad-libbing showman with no political experience is said to be insane.

       We still have a bit more than five weeks of robo calls, junk email, political ads, "debates",  frantic commentaries, dire warnings, and other distractions.  Many worn-out voters will wait until the 11th hour before deciding  which candidate is the "lesser of evils."  Some will say, "Count me out.  I choose not to vote for evil. Period."  This will be followed by renewed calls for mandatory voting on the theory that they more people who vote the better will be the outcome.  What they really mean is "If more people who think like I do voted, the better this nation would be."

The Reparations-For-Slavery Question is Back.

   ITEM: The history of slavery in the United States justifies reparations for African Americans, argues a recent report by a U.N.-affiliated group based in Geneva. This conclusion was part of a study by the United Nationsī Working Group of Experts on People of African Descent, a body that reports to the international organizationīs High Commissioner on Human Rights. The group of experts, which includes leading human rights lawyers from around the world, presented its findings to the United Nations Human Rights Council on Monday, pointing to the continuing link between present injustices and the dark chapters of American history. It's heresy at the moment to mention anything but the U.S. presidential election, but the subject of reparations for the descendants of American slaves shows promise of edging its way into the national conversation before the end of this decade. It has the potential of making racial divisiveness even worse. 

        By accident of birth we happen to have been born to Caucasian parents.  We have friends and acquaintances whose parents were black.  According  the United Nations Human Rights Council it is likely some of their ancestors were American slaves and they may be "subject to injustices because of it."  Therefore, we should be required to compensate them whether our ancestors were slaveholders or not.  (They weren't.)  

        The basic question is - Where is the moral logic of penalizing one segment of society, that may even abhor the idea of slavery, to compensate another segment of society whose ancestors may or may not have been slaves?  If we can prove our Yankee ancestors owned no slaves, or even indentured servants, can we be exempted from the proposed penalty?   We doubt it.