"[Trump is] lucky the mainstream media hate him so much, and is showing that hatred stiffen his supporteers' loyalty. " ~Peggy Noonan (10-20-'18)
OCTOBER 21st, 2018
ODE TO THE WELFARE STATE
N.Y. Daily News, November 4, 1949
Father, must I go to work?
No, my lucky son.
We're living now on Easy street
On dough from Washington.
We've left it up to Uncle Sam,
So don't get exercised.
Nobody has to give a damn -
We've all been subsidized!
But if Sam treats us all so well
And feeds us milk and honey,
Please, Daddy, tell me what the hell
He's going to use for money.
Don't worry, bub, there's not a hitch
In this here noble plan -
He simply soaks the filthy rich
And helps the common man.
But, father, won't there come a time
When they run out of cash
And we have left them not a dime
When things go all to smash?
My faith in you is shrinking, son,
You nosy little brat;
You do too much thinking, son,
To be a Democrat!
This ditty, published nearly 69 years ago, a day after President Truman had delivered a "pie-in-the-sky" speech at St. Paul, Minnesota, had been inserted into the Congressional Record by Representative Clarence J. Brown (R-Ohio). He did not identify the author of the poem, but said he was "a prominent Democrat of the State of Georgia."
It seems clear to us that the Democrat bleeding heart liberals still favor their plan to spend other people's money to help that portion of the population they favor the most. The liberal does not trust private charity to help citizens who have run into economic headwinds. They believe it is up to the politician and bureaucrat to make such decisions. The federal government has tried to put us all on Easy Street and is going broke trying to do it.
'Til debt do we part.
In fiscal 2018 Uncle Sam paid $533 billion in interest on the public debt. That's 553,000 million dollars. The debt, itself, is more than $21 trillion. No one believes it will ever be paid. However, defaulting on the debt would wreck the economy, so no one in the political power structure will even discuss it.
The subject of runaway government debt may intrude in the political campaigns of 2020. The odds on it are beginning to run very high.
Ask people on the street who Egon von Greyers is.
Nineteen out of twenty will respond "who?"
The twentieth person may reply "Isn't he that crazy Swiss gold bug?"
Well, he IS. In fact he's founder of Matterhorn Asset Management in Zurich which is said to store an important part of their wealth in Switzerland in physical gold and silver outside the banking system. Von Greyerz obviously has a strong bias toward gold/silver as good stores of wealth.
Wall Street experts will tell us the precious metals are terrible investments. basing their opinion on the present dollar price of gold and silver. The "smart money" has been pouring into the stock and bond markets. Even the untested cryptocurrencies have been trading in a narrow price range, but attract many gamblers who want to see their dollars multiply themselves as rapidly as possible.
Von Greyerz is building up a following of worriers who see the huge accumulation of world debt as a kind of Sword of Damocles swinging back and forth above the eonomic fray. Modern economists say not to worry about it...that debt is the engine of prosperity. By borrowing from future production developers may erect skyscrapers and pay off the loan through sale or rentals. Individuals can buy fine automobiles and take up to six or seven years to pay off the loan. Houses are rarely sold for cash. Without the mortgage industry the real estate sector would be dead.
There is no record in history of a government or individual that did not run into trouble by mortgaging the future with massive amounts of debt. As Von Greyerz remarks there is a natural limit to how much debt the world can bear. Just as a tree cannot grow beyond its natural limitations, an economy can cannot forever expand on merely hope and promises. The idea of "wealth" cannot prevail on IOUs. Wealth must be something of durable substance and somewhat limited. (If gold were as common as iron it would be useless as a store of wealth. Relative scarcity is what gives objects value. If given a choice between a $50.00 bill and a $50.00 1 ounce U.S. gold coin anyone with common sense would choose the metal money because of its rarity and durability.}
Von Greyerz is no spring chicken. He cut his business teeth in Great Britain in the terrible seventies.
"I came to the UK in the early 1970s from Switzerland. I joined a small photographic retailer. In the early 1970s there was a global oil crisis. In the UK there was a coalminers’ strike, and our retail stores only had electricity 3 days a week. The other days of the week we sold televisions with candlelights. The UK stock market declined by over 60% between 1973 and 1974. In the US the Dow was down by 47%. I received my first options in the company at £1.32. 18 months later they were 9 pence. The interest on my mortgage went up to 21%. But the UK survived and so did our company that we later built up to the UK’s largest consumer electronic retailer and a FTSE 100 corporation. They were certainly testing times, filled with what seemed insurmountable obstacles. What is coming next will be many times worse." DEBT IS A PEST
"Debt is slavery of the free." ~Publilius Cyrus
"Old Publilius is talking through his hat," say the lion's share of modern economists. They explain that economic advice from ancient philosophers has no bearing on today's wonderful custom of funding economic activity by borrowing from the future.
In its latest fiscal year, which ended September 30th, the U.S. borrowed well over a trillion dollars above its budget to meet expenses. The total federal debt at the beginning of the fiscal year was $20,244,900.016,053.51. The Treasury Department closed the fiscal year at $21,516,058,183,180.23.
We'll not dwell on the fact that Congress hasn't got around to raising the legal debt limit, and won't until well after the November election.
If some historian can find any government in all of human history that has successfully run a thriving operation for very long by plunging deeper into debt each fiscal year we'd sure like to know about it. Email: Wrisley.com
How does a 2.8 percent increase in Social Security COLA sound?
It's not official, and won't be until October 11th, but the expert observers believe the cost-of-living increase will rise 2.8 percent in 2019.
A 2.8% COLA in 2019 would be the biggest annual hike since 2012, when Social Security benefits grew by 3.6%. In 2018 the COLA was 2%, following a meager 0.3% increase in 2017 and no increase in 2016. Benefits rose by 1.7% in 2015, 1.5% in 2014 and 1.7% in 2013.
In the cold light of reality it may not be a great deal. With the Consumer Price Index hovering around 3 percent it will probably work out to be a break even deal. But the basic idea was not to deliver a profit to recipients. . .just keep them abreast of the rate of price inf
An item most mainstream media overlook:
Rachel Mitchell, the Arizona prosecutor who questioned Christine Blasey Ford last week during a hearing before the Senate Judiciary Committee, wrote a 5-page memo that was released on Sunday which outlines why she would not bring criminal charges against Supreme Court nominee Brett Kavanaugh. Mitchell´s memo notes nine significant problems with Ford´s testimony and underscores that her case is "even weaker" than a "he said, she said" case. "A ´he said, she said´ case is incredibly difficult to prove," wrote Mitchell.
Why would liberal reporters and commentators skip an item like this? They'll mark it as inconsequential and point out the Kavanaugh hearing was not a criminal trial but merely "a job interview."
From what we have heard from the liberal megaphones that pose as "unbiased news sources" every effort is being made to paint Judge Kavanaugh as a person far too fond of beer in his youth to ever be considered for a position on the nation's highest court.
The question of Kavanaugh's confirmation is on hold while the FBI spends a few days rummaging through the recollections of people who may or may not shed more light on alleged misbehavior of more than thirty years ago. Imagine the pressure on U.S. Senators who may have to vote on Judge Kavanaugh's elavation to the high court before the November elections!
Partisan political history in the making.
"In the modern day it has become absolutely essential that an opinion should only be expressed, especially in public, when you have made sure it’s the right opinion. If anyone becomes upset by what you say, then it’s not correct. Facts are no longer as important as feelings."Rules of Gender and Free Speech"
With tongue in cheek someone has produced a very short video calling attention to the fact that those of us classified as antique people are out of step with the latest rules of public discussion. "Get Woke, Grandpa" we are admonished. If, for example, a male is inspired to purchase breast implants, take estrogen and wear female attire, we are not to make any public commment except to be entirely accepting of the choice. Even if the individual runs for public elective office.
If we are so rude as to point out the phrase should be "Wake Up, Grandpa," we would be held up for close public scrutiny and charged with being woefully out of step with the evolution of modern language.
In this call to awakening we geezers are also reminded that feelings matter. If we raise a fact that may hurt the feelings of an individual or group it is preferred that we keep our mouths shut because feelings matter more than mere truth.
Free speech is a widely advertised feature of life in America, but somehow we failed to note the Constitutional ammendment that modified this right to "Free speech - only if it's politically correct." We'd better pay closer attention. "Get Woke" as they say!
Relative scarcity of money is a good thing.
Citizens of Venezuela will assure you there is no scarcity of bolivars - the money unit of that economically wounded nation. Bolivars have been created by the trillions leading to an awful outburst of price infation, not to mention stunning shortages. Imagine finding toilet paper in short supply!
It's an axiom as old as the hills that when irredeemable paper notes fly off the presses in very large qauntities the prices of goods and services will be driven sharply higher. You've heard the old expression "Too much money chasing too few goods."
When we speak of the need of money having to be relatively scarce in order to properly do its job we turn to the late writer Garet Garrett, who explained it very well in a article he penned in February, 1935:
"No kind of money - even gold and silver - will retain its value unless the quantity be limited. Gold and silver are limited by nature and by the quantity of labor required to produce them. If by discovery gold became as plentiful as pig iron, its monetary value would cease."
When we were born gold was officially priced at $20.67 an ounce. Today it is priced at about $1,200.00 per troy ounce. This effect has been caused by the decline in the purchasing power of the U.S. dollar which has morphed from being a precise measure of a relatively scarce monetary metal - gold - to a fiat currency that is irredeemable. It can be created by nothing more than a printing press or a computer key stroke. The dollar proscribed by the U.S. Constitution has been totally abandoned, although the original mandate was never annulled or amended. The dollar bill once was a claim on the Treasury's supply of precious metal. Today it is purely an IOU - evidence of the multi-trillion dollar unpayable U.S. debt.
Why bring this up when the U.S.is supposed to be totally enthralled with the allegations of youthful sexual misconduct of a Supreme Court nominee? Because America's preoccupation with sex will fade when the consequences of abandoning sound money upsets the world economy.
Just for the record, the nation that had the longest economic run in history was the one which stuck with gold coin (the bezant) for some 800 years. Byzantium.
Can't See The Forest.
The trees are in the way.
We tend to be overly cautious, which accounts for us not having amassed millions of dollars. But our caution has kept us away from the agony of heavy debt. That counts as a plus in our book.
Now comes the Swiss gold bug, Egon von Greyerz : "The final moves before a secular turn in world markets are oftebn emotional roller coasters. Many investors know, at least subconsciously, that markets are overstretched and can turn at any time. Since central banks have consistently "saved" investors in the last few decades, why wouldn't that continue? Stock market bulls may be apprehensive after a 9 year bull move. But very few are prepared to get out. Greed and recent experience tell them that "the market always goes up." Very few know that the market fell over 90 percent in 1929 to 1932 and took over 25 years to return to the 1929 level."
Von Greyerz view is surely colored by his belief that precious metals are real assets while fiat currencies float on the winds of hope and faith. But we are tracking his predictions to see if he's wrong about stocks, bonds, derivatives, and what not. He could be wrong. Maybe a kind of wisdom has settled on the politicians and bankers and they will not let raging inflation or catastrophic deflation grip the economies of the word. We really hope he's wrong. But we aren't ignoring his warnings...just in case. Egon von Greyerz