December 1st, 2021 A resounding chorus in Europe -
Austria, France, Germany, and Greece - have each put the compulsory vaccination of
adult citizens to the forefront of their policy making priorities. U.S. officials are itching to do this,
too, but they are prohibited by the Constitution. At the moment, at
Greece has announced an arbitrary fine on senior citizens over 60 who
refuse the COVID inoculation. There
are approximately 520,000 people in Greece over 60 who remain
unvaccinated who would be subject to the punitive measure supported by
Prime Minister Kyriakos Mitsotakis.
Here in the U.S. we have a federal administration
and a supporting "news" media doing everything it can think of to
cajole, insult, and shame folks who are hesitant about getting
inoculated with a hstily approved chemical substance. Think what
an uproar would occur if the government mandated flu shots.
(By the way - where are the data on flu cases this year?)
These are murky times for individual
freedom. Heads up!
are not in Florida going to allow any media-driven hysteria to do
anything to infringe peopleís individual freedoms when it comes to any
types of COVID variants.Ē ~Gov. Ron
If Governor DeSantis has his eye on a future run for the U.S. White
House his fiesty stand against federal management of his state is
noteworthy. At a news conference he said, ďIn
Florida, we will not let (the federal government) lock you down. We
will not let them take your jobs. We will not let them harm your
businesses. We will not let them close your schools."
Most states have fallen into the habit of believing
they are mere subdivisions of a swollen federal government and have
misplaced their copies of the U.S. Constitution which clearly outlines
the powers retained by the states and their citizens. DeSantis
seems to be an exception and is willing to stand up to media hysteria
and federal government hamfisted directives aiming at mangement of
Speaking of media hysteria - many polls indicate a
growing fraction of Americans are beginning to take some of the
breathless, repetitive "news" with a grain of salt. That, to us,
is a babystep in a sensible direction.
a Happy Face!"
so dour," our critics say. "Look on the bright side."
pretty much agee with Charles Hugh Smith, the sage from Hawaii quoted
in the upper left-hand box. He's always pointing out hazards in
the present scheme of government operatons.
Being a realist doesn 't neccessarily imply a
negative personality. For example, if one becomes aware that a
local bridge is in such disrepair that it feally should be closed to
traffic he or she may choose to go two or three miles out of the way to
avoid the danger of being the driver whose vehicle plunges into
the stream below.
A voting majority may be attracted to a
socialist method of governance. There's a lot about
Socialism that 's appealing - particularly the promise
of welfare support from the public
treasury. Unfortunately, even a casual study of history
reveals that Socialism never succeeds for the long run.
Granted, many of the noisier
"glood and doom" promoters are in it for money. They always have
books or newsletter subscriptions for sale. Jim Rickards is an
example. Doug Casey is another. Peter Schiff, Egon von Greyerz,
et al, add their dire predictions on a regular basis. Even the
above mentioned Hawaii sage rattles his tin cup on a regular
basis. Reader donations keep him financnially afloat.
To us "gloom and doom" is not yearning for
disaster. It's a form of realism and awareness of bad choices by
the voting majority oftern prodded by liberal news media and
Be cautious. Milton Friedman
was right when he said "There is no such thing as a FREE lunch!"
The possibility of a
stock market crash. It will be unnerving when it happens. It always
liberal voting majority seems to think the federal government can keep
creating dollars and running price inflation to the moon. It
can't and has never succeeded without suffering a sharp setback.
There is always the slight chance we can retrieve the U.S. Constitution
from the trash can and return to its tenents, but neither liberals nor
conservatives want to go that far. They all have faith in the
cleverness of modern humans to invent new ways of dealing with natural
human and corporate greed
We have all been
carefully taught for generations that we are each entitled to live out
of the pockets of others the moment we are inconvenienced by adversity
of any kind. It's the social mistake that has ruined many a
civilization through the ages. The collapse of Athens and the
fall of Rome come to mind.
last night's swoon of stock price futures was an attention
getter. The official Plunge Protection Team is certain tobe
into action. The reason for the collapse is said to be the
frightening news out of South Africa of new virus strains for which
there are no vaccines. That, coupled by the rumor the Fed is
really going to start raising interest rates a little is shaking things
today, Black Friday.
done is done and the bill is coming due. Debt is doing us
in. It must be paid by
a sharply lower standard of living. Period.
Makes Modern Economic Depressions Different There is a general
the government can fix it.
rising rate of price inflation is annoying, to be sure, and it is
generating a level of fear among lower income people who worry they may
not be able to make ends meet. On the other hand there's a belief
the federal government will ride to the rescue and keep the wide
variety of social safety nets
That was not the feeling in America when
the 1930s depression sent a shivver of fear across the land. In
previous depressions had had no tools to rescue failing banks,
railroads, and other "too big to fail" enterprises. If a bank
could not meet its liabilities (bank deposits) it was forced to close
its doors and liquidate. The depositor went away empty handed or
got some puny fraction of his/her money. It was never government
policy to borrow money and bail out big businesses. Therefore, as
FDR took office Americans had every right to be worried. Fearful,
Now, of course, everyone is aware of the Federal
Deposit Insurance Corporation and its guarantee of up to $250,000
coverage of individual accounts. And if the FDIC runs low
Congress can always borrow whatever trillions it takes to make good on
the guarantee. (!?!?)
In 1933 there was no FDIC, no Social Security, no
Medicare, not much in the way of public charity at all. Charity
sprang from private sources, including churches and the Salvation
Army, Morgan Memorial, and many others. We depression era
kids got used to wearing hand-me-downs and waiting what seemed like
years before we sat upon our own used bicycle with balloon tires.
We paid $5.00 for our first one and painted it a flat blue.
Harnessing price inflation is a nearly
impossible task . It's officially quite low. The CPI is
quoted in October as 6.2 percent. We export a great deal of our
inflation because the dollar still enjoys popularity all over the
globe. Foreigners eagerly hoard it. One can buy a euro
today for a fraction more than $1.12. It was not that long ago
one paid $1.34 for a euro. Yet the Federal Reserve must continue
to buy up government bonds with freshly created low-interest
dollars. The Fed is trapped between the proverbial rock and hard
So it's easy to understand why the "fear
level" is a different critter in 2021 than it was in 1933. Concern not
fear may be the more appropriate word. One thing that ought
to keep us on our toes and watchful is the fact that NO INFLATION IN
HISTORY HAS NOT COME TO AN END. Almost always a painful one.
Bank of Poland President
Adam Glapiński said recently his central bank plans to add 100 tons
of gold to its reserves
Gold and silver
futures (paper) plummeted Frirday on the news President Biden planned
to reappoint Fed Chief Jerome Powell to a second term. This is
thought to be good for the stock market bubble and the U.S. dollar
flexed its muscles. One can buy a euro this morning for
But the primary qustion here is why are the world's
central banks adding to their physical hoards of gold? Hasn't it
been settled that gold is old hat and totally out of step with modern
concepts of "money"? Cryptocurrency is the modern trend and even
the U.S. Federal Reserve System is rumored to be working dilligently on
creating an official Fed cryptocurrency that would eliminate most of
the need for pocket cash. Credit and debit cards already function
as conveyers of digital currency.
will step forward and explain the actions of world central banks in
amassing metric tons of gold?
know what's coming.
Eric Peters shrugs his shoulders in uncertainty.
donít know is how markets start to behave when there are so many things
that people donít know. Naturally, there are always many uncertainties
when it comes to such things. But the new set of unknowns we
face today arise from the reappearance of inflation after many decades
of dormancy. And because the economy is vastly different from
last endured an inflation, while our financial markets are
wildly more complex and interconnected,those
of us who are being honest truly donít know. Nor does anyone else. "DON'T
Diogenes, we have found the honest man. Mr. Peters has looked at
the warped economy and cannot guess how it will develop. Droves
of prognosticators write columns and books declaring that
economic doom lies ahead . Most of us, they say, will wind
up in the poorhouse.
The wizards of Washington are gleefully
adding to the public debt and we surely will surpass the official $30
trillion mark in 2022. That's a far cry from the debt the
administration amassed in the Great Depression of the 1930s. The
Public Debt doesn't include the massive unfunded liabilities that
await to hound our posterity. Think in terms of the growing
Medicare deficit - millions of Baby Boomers and their offspring
counting on Social Security.
One great way to handle such
gargantuan debt is, of course, by continuing to let price inflation
roar out of control. But is extinguishing altogether the
buying power of the dollar an answer? The writers of the U.S.
Constitution didn't think so and specifically prohibited debasing the
dollar. Sadly, the money clauses have been abandoneed.
Since the creation of the Federal Reserve system - which began
operation in 1914 - the once mighty U.S. dollar has dropped to 3 or 4
cents in buying power. Shameful, in our view.
Americans of old are nowhere
to be found. What has become of what they believed?
is running in the news? What is the longest and most exciting
serial story in the daily press? It is the story of the
unseemly struggle at the door of the public treasury; classes and
groups of citizens contending there with one another and threatening
government all saying they have the right to help themselves because
formerly the brigands of the skyscrapers [Wall Street] had indirect and
subtle access to it." ~Garet
Garrett, March 28, 1936.
Happened upon this passage from a Saturday Evening Post of
1936. The commentary carried an eerie echo of modern America with the
entire world lined up at the treasury door with palms up seeking alms.
There is no question in the minds of most Americans that if push comes
to shove the government will provide. In fact, in the national election
a year ago the voting majority chose the beguiling socialist-liberal
path and now reaps the rewards of soaring prices, supply shortages, and
an unpayable public debt.
Is there a way of avoiding an economic calamity?
There is if you are young and relatively healthy - and are willing to
face facts and do what's needed to remain solvent. Getting off the
revolving debt merry-go-round is important. Quit buying things you
don't really need with money you don't have. If you have a good job
hang on to it.
For older people, especially the frail
elderly, prospects are not very good. They were taught to pack spare
cash away in savings and that's a losing proposition these days.
Consider the bloke who opened a "High Yield Savings Account" that
paid 2.1 percent per year. Price inflation was running at barely
1 percent at the time so he was netting about a 1 percent yield. Today
that account pays 0.40 percent while official inflation has surged to
6.2 percent and is poised to run much higher thanks to loose government
budget deficits. He obviously needs to close out that account and put
the money into something more inflation resistant.
When all is said and done we think Walt Kelly's
swamp critter, the loveable "Pogo" had it about right when he remarked,
"We have met the enemy. And he is us!"
Garet Garrett was right, too, when he observed
in 1936 that old-time Americans had vanished from the scene. They are
"What if no one living
today has consented to the federal government?" Hmmm. Provocative
question, is it not?
We're not sure when the memorial service for the U.S. Constitution took
place. The dismantling became evident with the advent of the New
Deal in 1933. We were too young to understand or care. We
have a childish memory of someone with the complicated name of
replacing Herbert Hoover on March 4th, 1933 and much shushing around
the living room radio when the evening news came on. There was a
sense of urgent despair in the atmosphere as the Great Depression dug
in. But it didn't make any sense to a 4 year old.
We have a vague recollection of being
taught the fundamentals of the Constituton in middle and high school,
but there was too much going on in the 1940s to absorb facts about a
musty 1789 founding document. It was the coin switch of the
mid-1960s that caught our attention. President Johnson announced
the 1965 dime and quarter-dollar would be minted from copper with a
thin veneer of nickel to give the appearance of the dimes and
quarter-dollatrs in circulation. He warned Americans not to hoard
the old silver - "they will circulate with equal purchasing power
They didn't. By the end of 1965 eager hoarders were paying 7
percnt over face value for all the silver coins they could get.
Notes: The Kennedy half-dollar remained
the old silver alloy in 1965. It was reduced fo 40 percent silver
for a while and is now the standard alloy of copper/nickel.
In 1986 the mint introduced a 1 troy ounce silver bullion coin called
"a dollar." It's face value is $1.00 and it's available from coin
dealers for about $34.00.
The U.S. dollar was finally severed from all Constitutional mandates on
August 15th, 1971. The results of adopting an irredeemable fiat
currency are seen all around us.
Andrew Napolitano is an expert on the
Constitutuion. His "What if?" essay is worth consideration.
NO CHRISTMAS . Price inflation is (officially)
6.2 percent. Our savings account yields only 0.40 percent,
We plan to
observe the spirit of the season - - we will sing the songs of the
season - - may even hang a wreath on our door. Also, we may
publish one more edition of our annual Christmas Letter although the
number of far flung family and friends has sharply diminished in recent
years owing to the passing of time and "natural causes." It's the
human condition from which no one escapes.
"Come on, don' tbe a Scrooge," says the
holiday shopper. "Use one of your credit cards."
Sorry. Going into debt to provide
profit for mostly Chinese manufacturers is something we choose
not to do. The federal government has shown us what damage
can be done by spending trillions of dollars it does not have and and
we dread the uproar from our posterity when they discover the damage to
their living standard caused by years of fiscal sloppiness by both the
socialist liberals and the semi-socialist conservatives.
Everyone, everywhere, is convinced there IS such a thing as a "free
lunch." That's why the voting majority has
Rickards got up on the wrong side of the bed.
"Economists debate whether this recent rise in inflation is temporary
or here to stay, but in the short run it doesnít matter. Inflation is
here today and your purchasing power is going down.
Everyone knows that Jim Rickards has made a
comfortable living writing gloom-and-doom books. That is, books
predicting a perilous economic outcome from the spending spree
triggered by the COVID19 epidemic. With Friday night's Congressional
passage of Biden's $1.2 "infrastructure" spending bill he's convinced a
us. Doug Casey, David Stockman, Peter Schiff and plenthy of other
commentators are are predicting deep economic trouble, too. Mr. Biden
seems to be oblivious to the reality of the moment, and - like the good
shiip captain he pretends to be, he will go down with his ship.
Not all of us find s sinking Ship of State agreeable. Especially those
of us with some recollection of the Great Depression of the 1930s.
So forgive for scrambling for a berth in a lifeboat, or at least
grasping for a life preserver as the weight of unpayable government
debt sinks a once thriving economy. ~JW
"The destruction of the dollar is writ large:
there is no alternative. The only way to keep the
status quo from imploding is to print as many trillions as are needed,
and this inevitably devalues the currency to the point of
worthlessness." ~Charles Hugh Smith
conservative sage is right. The die is cast. There is no turning back
to the "good old days." Unless, of course, you thought the inflation
eruption of the 1970s was fun! Remember? Price inflation soared. The
only course new Fed Chairman Paul Volcker could take was to RAISE
INTEREST RATES INTO DOUBLE DIGITS THEREBY SLAMMING THE BRAKES ON MONEY
CREATION. iT WORKED! Presently the Federal Reserve is doing the
reverse. It floods the economy with low (near zero inerest loans)and
Biden is insisting the Fed create trillions of new dollars to "lift the
economy" and create jobs. Then, after demanding heavy money inflating
by the Fed he strides to the public lecturn and pledges to fight rising
prices. He does not see the connection between inflating the money
supply and the resulting RISING PRICES. He claims it's all a problem in
the "supply chain."
"The gold coin in your sock drawer." The Krugerrand came on the scene in the
1970s selling for less than $500.
there it sits, under the argyles, presently retailing for just
($1,954.50) Earns no interest. Sits there doing nothing,
of selling it for U.S. dollars and buying cryptocurrency with the
proceeds? THAT's where the action is, we're told. Or, buy
stocks. They're rising to new highs every
week. (!) After all, your assets need to be working for you not
just sitting idly by.
But wait. How did the value of that
Kruggerrand get from less than $500.00 to just under $2,000.00
merely sitting in a bureau
drawer? And how come the modern U.S. silver dollar, first
issued by the U.S. Mint at
around $10.00 in 1986, increase its value to more than $34.00,
And why did the late banker John Pierpont Morgan
flatly say that "Gold is money. Nothing else?" He meant
that none of the so-called financial instruments - bonds, cash, even
your bank deposits, can maintain purchasing power over time like scarce
precious metals. Following the terrible inflation of the
Continental dollar in the 18th century the writers of th U.S.
Constitution carefully inserted a mandate that the new U.S. dollar be a
strict measure of silver or gold. The document has never been
changed, although it was tossed into the trash can generations
ago. We're suffering the consequences right now.
So, what is this mystical property of gold that
makes it true money? Because it meets three tests: 1/ A
troy ounce if it is 480 grains of an extremely durable metal and
therefore is a good measuring stick with which to calculate the
exchange of goods and services. Therefore, it is (#1/) a means of
exchange for goods and services.
#2, its scarcity enables it to convey
value over time. A troy ounce of gold buys roughly the same
number of loaves of good quality bread that it did more than 90 years
#3. A standard of measure.
Don't forget that 480 grains of gold constitutes a troy ounce.
Even the U.S. Congress can't change that. Note, also, that the
world's central banks are hoarding as much gold as they can. One
We think holding on to your Krugerrands and
other gold bullion coins such as U.S. Eagles, Canadian Maple Leafs, et
al, may provide a safety net when price inflation seriously