Simon Black
Provided as a courtesy of Agora Publishing
& The Daily Reckoning
Dec 30, 2010
12/22/10 In 43 BC, over 2,000 years ago, warring consuls Antony, Lepidus, and Octavian were duking it out with each other over control of Rome following Julius Caesar’s assassination the prior March.
Each had legions at his disposal, and Rome’s terrified Senate sat on its hands waiting for the outcome. Ultimately, the three men chose to unite their powers and rule Rome together in what became known as the Second Triumvirate. This body was established by a law named Lex Titia in 43 BC.
The foundation of the Second Triumvirate is of tremendous historical importance: As the group wielded dictatorial powers, it represented the final nail in the coffin in Rome’s transition from republic to malignant autocracy.
The Second Triumvirate expired after 10 years, upon which Octavian waged war on his partners once again, resulting in Mark Antony’s famed suicide with Cleopatra in 31 BC. Octavian was eventually rewarded with nearly supreme power, and he is generally regarded as Rome’s first emperor.
Things only got worse from there. Tiberius, Octavian’s successor, was a paranoid deviant with a lust for executions. He spent the last decade of his reign completely detached from Rome, living in Capri.
Following Tiberius was Caligula, infamous for his moral depravity and insanity. According to Roman historians Suetonius and Cassius Dio, Caligula would send his legions on pointless marches and turned his palace into a bordello of such repute that it inspired the 1979 porno film named for him.
Caligula was followed by Claudius, a stammering, slobbering, confused man as described by his contemporaries. Then there was Nero, who not only managed to burn down his city, but was also the first emperor to debase the value of Rome’s currency.
You know the rest of the story – Romans watched their leadership and country get worse and worse.
All along the way, there were two types of people: The first group was folks that figured, “This has GOT to be the bottom; it can only get better from here.” Their patriotism was rewarded with reduced civil liberties, higher taxes, insane despots, and a debased currency.
The other group consisted of people who looked at the warning signs and thought, “I have to get out of here.” They followed their instincts and moved on to other places where they could build their lives, survive, and prosper.
I’m raising this point because I’d like to open a debate. Some consider the latter idea of expatriating to be akin to ‘running away.’ I recall a rather impassioned comment from a reader who suggested, “leaving, i.e. running away, is certainly not the proper response.”
I find this logic to be flawed.
While the notion of staying and ‘fighting’ is a noble idea, bear in mind that there is no real enemy or force to fight. The government is a faceless bureaucracy that’s impossible attack. People who try to do so usually discredit their argument because they become marginalized as fringe lunatics. Violence is rarely the answer, and it often has the opposite effect as intended, frequently serving to bolster support for the government instead of raising awareness of its shortcomings.
Unless/until government paramilitaries start duking it out with citizen militia groups in the streets, this is an ideological battle…and it’s an uphill battle at best.
Government-controlled educational systems institutionalize us from childhood that governments are just, and that we should all subordinate ourselves to authority and to the greater good that they dictate in their sole discretion.
You’re dealing with a mob mentality, plain and simple. Do you want to waste limited resources (time, money, energy) trying to convince your neighbor that s/he should not expect free money from the government?
You could spend a lifetime trying to change ideology and not make a dent; people have to choose for themselves to wake up; it cannot be forced upon them. And until that happens, they’re going to keep asking for more security and more control because it’s the way their values have been programmed.
When you think about it, what we call a ‘country’ is nothing more than a large concentration of people who share common values. Over time, those values adjust and evolve. Today, cultures in many countries value things like fake security, subordination, and ignorance over freedom, independence, and awareness.
When it appears more and more each day that those common values diverge from your own, all that’s left of a country are irrelevant, invisible lines on a map. I don’t find these worth fighting for.
Nobody is born with a mandatory obligation to invisible lines on a map. Our fundamental obligation is to ourselves, our families, and the people that we choose to let into our circles…not to a piece of dirt that’s controlled by mob-installed bureaucrats.
Moving away, i.e. making a calculated decision to seek greener pastures elsewhere, is not the same as ‘running away’…and I would argue that if you really want to affect change in your home country, moving away is the most effective course of action.
The government beast in your home country feeds on debt and taxes, and the best way to win is for bright, productive people to move away with their ideas, labor, and assets. This effectively starves the beast and accelerates its collapse. Then, when the smoke clears, you can move back and help rebuild a free society.
Regards,
Thursday, December 30, 2010
Wednesday, December 22, 2010
Punish Your Enemies
posted at 11:54 pm on October 26, 2010 by Doctor Zero
In a radio interview for Latino audiences, President Obama laid bare the ugly reality of statist government:
“If Latinos sit out the election instead of saying, ‘We’re going to punish our enemies and we’re gonna reward our friends who stand with us on issues that are important to us,’ if they don’t see that kind of upsurge in voting in this election, then I think it’s going to be harder and that’s why I think it’s so important that people focus on voting on November 2.”
Referring specifically to Republicans such as Senator John McCain, who formerly supported an overhaul but now are stressing border security and supporting strict immigration laws like Arizona’s anti-illegal immigration measure, Mr. Obama said, “Those aren’t the kinds of folks who represent our core American values.”
Did you ever imagine you would witness a President using this kind of rhetoric? Well, get used to it. He was dumping a fresh load of shame upon the office he occupies, but Barack Obama was also giving Latino voters some perfectly reasonable advice.
The power of the State is the power of compulsion. In a free country, this power is used to protect the rights of citizens. The “core value” of the Left is the embrace of “positive rights.” They believe citizens have a “right” to health care, affordable housing, and various other benefits. The State has a moral duty to use compulsive force to secure these “rights” for everyone.
What does a “right” to health care imply about the rights of doctors and insurance companies? The progressive taxation of income, which funds the State’s quest for social justice, compromises the right of highly taxed citizens to ownership of their time and property. The “right” to affordable housing unleashed the Godzilla of Fannie Mae upon the downtown Tokyo of the American economy.
It is logically impossible to provide a positive right to some, without compromising the rights of others. If cheap health insurance is compelled for those with pre-existing conditions, the right of insurance companies to run their business in a prudent, profitable manner is negated. If “free” health care is seized by government and distributed as it sees fit, the medical industry will become first indentured, and then nationalized, without regard to the will of its members. In a land where food is “free,” farmers are slaves.
A socialist government becomes an arbiter of rights. The State decides whose rights must be discarded, so that others can be satisfied. Naturally, politicians will make these decisions in accordance with their political interests, for as long as they must suffer popular elections. An individual’s rights become contingent on the influence of their political collective.
A highly organized group with well-connected leadership can expect its “rights” to be honored, at the expense of others. No doubt you thought of at least half a dozen examples while you read the previous sentence.
President Obama was entirely correct to advise the Latino voting bloc to hang together, obey its leadership, and trade their votes for rewards from the ruling class. When rights are balanced against each other, in an equation resolved by the use of compulsive force, those who belong to opposing groups are your enemies. Your prosperity comes with their defeat. Holding interest groups together becomes vitally important for success under the total State. The force which binds those groups will inevitably sour into hatred.
This is not a core American value, but it is a core value of the modern Democrat Party. Their President gave his Latino audience a taste of things to come. Tomorrow is France, and the day after is Greece
In a radio interview for Latino audiences, President Obama laid bare the ugly reality of statist government:
“If Latinos sit out the election instead of saying, ‘We’re going to punish our enemies and we’re gonna reward our friends who stand with us on issues that are important to us,’ if they don’t see that kind of upsurge in voting in this election, then I think it’s going to be harder and that’s why I think it’s so important that people focus on voting on November 2.”
Referring specifically to Republicans such as Senator John McCain, who formerly supported an overhaul but now are stressing border security and supporting strict immigration laws like Arizona’s anti-illegal immigration measure, Mr. Obama said, “Those aren’t the kinds of folks who represent our core American values.”
Did you ever imagine you would witness a President using this kind of rhetoric? Well, get used to it. He was dumping a fresh load of shame upon the office he occupies, but Barack Obama was also giving Latino voters some perfectly reasonable advice.
The power of the State is the power of compulsion. In a free country, this power is used to protect the rights of citizens. The “core value” of the Left is the embrace of “positive rights.” They believe citizens have a “right” to health care, affordable housing, and various other benefits. The State has a moral duty to use compulsive force to secure these “rights” for everyone.
What does a “right” to health care imply about the rights of doctors and insurance companies? The progressive taxation of income, which funds the State’s quest for social justice, compromises the right of highly taxed citizens to ownership of their time and property. The “right” to affordable housing unleashed the Godzilla of Fannie Mae upon the downtown Tokyo of the American economy.
It is logically impossible to provide a positive right to some, without compromising the rights of others. If cheap health insurance is compelled for those with pre-existing conditions, the right of insurance companies to run their business in a prudent, profitable manner is negated. If “free” health care is seized by government and distributed as it sees fit, the medical industry will become first indentured, and then nationalized, without regard to the will of its members. In a land where food is “free,” farmers are slaves.
A socialist government becomes an arbiter of rights. The State decides whose rights must be discarded, so that others can be satisfied. Naturally, politicians will make these decisions in accordance with their political interests, for as long as they must suffer popular elections. An individual’s rights become contingent on the influence of their political collective.
A highly organized group with well-connected leadership can expect its “rights” to be honored, at the expense of others. No doubt you thought of at least half a dozen examples while you read the previous sentence.
President Obama was entirely correct to advise the Latino voting bloc to hang together, obey its leadership, and trade their votes for rewards from the ruling class. When rights are balanced against each other, in an equation resolved by the use of compulsive force, those who belong to opposing groups are your enemies. Your prosperity comes with their defeat. Holding interest groups together becomes vitally important for success under the total State. The force which binds those groups will inevitably sour into hatred.
This is not a core American value, but it is a core value of the modern Democrat Party. Their President gave his Latino audience a taste of things to come. Tomorrow is France, and the day after is Greece
Tuesday, December 21, 2010
Review of The Great Global Warming Blunder: How Mother Nature Fooled the World’s Top Climate Scientists, by Roy W. Spencer
Prestigious Scientist Spencer Makes Climate Science Understandable
Written By: Jay Lehr
Published In: Environment & Climate News > January 2011
Publication date: 11/29/2010
Publisher: The Heartland Institute
--------------------------------------------------------------------------------
(Encounter Books, 2010), 180 pages, ISBN-13: 978-1594033735
Roy Spencer, one of the nation’s leading climate scientists, says he’s frustrated that activists have hijacked the peer-review process to prevent the publication of sound science contradicting global warming alarmism. Spencer, a Ph.D.meteorologist, currently a principal research scientist at the University of Alabama, and formerly a senior scientist for climate studies at NASA, decided to write a book for everyone willing to take a little time to understand the basic physics behind the issue.
That book, The Great Global Warming Blunder, is a must-read for anyone interested in the scientific facts about global warming. Spencer documents that the science clearly shows man does not in fact control the climate in any significant way and the natural forces that continually alter the earth’s climate are relatively easy to discern and understand.
Spencer shows his brilliance by breaking down complex science into easily digestible facts understandable to anyone willing to read slowly and absorb his simple, real-life analogies. The latter include the effects of heating water in a pot on your stove and opening or closing your windows to moderate heat in a building or car.
Climate Model Flaws
Nobody understands better than Spencer the multitude of incentives which have both caused and allowed the anthropogenic global warming delusion to grow and prosper during the past two decades. I can assure you that anyone with honesty and an IQ exceeding plant life will, after reading Spencer’s book, at last understand the workings and proper role of mathematical climate models.
If the only thing you gain from The Great Global Warming Blunder is a better understanding of the positive and negative climate-factor feedbacks that are still in great dispute but which are central to alarmist global warming computer models, this alone will justify your purchase of the book. Spencer powerfully explains how carbon dioxide-induced global warming is mitigated by many negative feedbacks which keep temperatures from rising as rapidly as alarmists predict. This is perhaps the central flaw in alarmist global warming theory.
Spencer explains with easy logic how climate modelers relied on by the UN’s Intergovernmental Panel on Climate Change (IPCC) have mixed up cause and effect. IPCC decided that when warming coincides with reduced cloud cover, the warming must have reduced the cloud cover. However, it is far more likely that reduced cloud cover actually produced the warming, Spencer notes.
Getting cause and effect right corrects many of the overly alarmist flaws in IPCC’s computer models.
Hidden Agendas
Spencer expertly explains that IPCC, which does indeed employ some talented climate scientists, has its hands tied by bureaucrats who control the process and have financial incentives to continue asserting a global warming crisis.
Spencer is equally and rightly upset with the corporate pandering done to look “green” in the eyes of the public on the global warming issue. He writes, “when big business poses as being on the ‘CO2 is evil’ bandwagon the public perceives it as an acknowledgment that CO2 is a real problem and that something must be done,” when in reality it is just clever and dishonest marketing. Sadly, it all supports legislation that ends up hurting the public interest.
Planet’s Outlook Not Alarming
The Great Global Warming Blunder challenges our nation’s leaders to perform a critical review of the IPCC and its alarmist claims before making any policy decisions to redirect scarce resources from important needs and spend them on a phantom crisis.
Instead of fearing more carbon dioxide in the atmosphere, Spencer argues, we should consider the possibility our use of economically productive fossil fuels improves human wealth and well-being and that the resultant carbon dioxide emissions may actually be beneficial to life on earth.
You should buy this book as a belated Christmas present for anyone interested in global warming science. We all owe Roy Spencer a vote of thanks for his courage in telling it like it is from his position as one of the most prominent and accomplished climate scientists of our day.
Written By: Jay Lehr
Published In: Environment & Climate News > January 2011
Publication date: 11/29/2010
Publisher: The Heartland Institute
--------------------------------------------------------------------------------
(Encounter Books, 2010), 180 pages, ISBN-13: 978-1594033735
Roy Spencer, one of the nation’s leading climate scientists, says he’s frustrated that activists have hijacked the peer-review process to prevent the publication of sound science contradicting global warming alarmism. Spencer, a Ph.D.meteorologist, currently a principal research scientist at the University of Alabama, and formerly a senior scientist for climate studies at NASA, decided to write a book for everyone willing to take a little time to understand the basic physics behind the issue.
That book, The Great Global Warming Blunder, is a must-read for anyone interested in the scientific facts about global warming. Spencer documents that the science clearly shows man does not in fact control the climate in any significant way and the natural forces that continually alter the earth’s climate are relatively easy to discern and understand.
Spencer shows his brilliance by breaking down complex science into easily digestible facts understandable to anyone willing to read slowly and absorb his simple, real-life analogies. The latter include the effects of heating water in a pot on your stove and opening or closing your windows to moderate heat in a building or car.
Climate Model Flaws
Nobody understands better than Spencer the multitude of incentives which have both caused and allowed the anthropogenic global warming delusion to grow and prosper during the past two decades. I can assure you that anyone with honesty and an IQ exceeding plant life will, after reading Spencer’s book, at last understand the workings and proper role of mathematical climate models.
If the only thing you gain from The Great Global Warming Blunder is a better understanding of the positive and negative climate-factor feedbacks that are still in great dispute but which are central to alarmist global warming computer models, this alone will justify your purchase of the book. Spencer powerfully explains how carbon dioxide-induced global warming is mitigated by many negative feedbacks which keep temperatures from rising as rapidly as alarmists predict. This is perhaps the central flaw in alarmist global warming theory.
Spencer explains with easy logic how climate modelers relied on by the UN’s Intergovernmental Panel on Climate Change (IPCC) have mixed up cause and effect. IPCC decided that when warming coincides with reduced cloud cover, the warming must have reduced the cloud cover. However, it is far more likely that reduced cloud cover actually produced the warming, Spencer notes.
Getting cause and effect right corrects many of the overly alarmist flaws in IPCC’s computer models.
Hidden Agendas
Spencer expertly explains that IPCC, which does indeed employ some talented climate scientists, has its hands tied by bureaucrats who control the process and have financial incentives to continue asserting a global warming crisis.
Spencer is equally and rightly upset with the corporate pandering done to look “green” in the eyes of the public on the global warming issue. He writes, “when big business poses as being on the ‘CO2 is evil’ bandwagon the public perceives it as an acknowledgment that CO2 is a real problem and that something must be done,” when in reality it is just clever and dishonest marketing. Sadly, it all supports legislation that ends up hurting the public interest.
Planet’s Outlook Not Alarming
The Great Global Warming Blunder challenges our nation’s leaders to perform a critical review of the IPCC and its alarmist claims before making any policy decisions to redirect scarce resources from important needs and spend them on a phantom crisis.
Instead of fearing more carbon dioxide in the atmosphere, Spencer argues, we should consider the possibility our use of economically productive fossil fuels improves human wealth and well-being and that the resultant carbon dioxide emissions may actually be beneficial to life on earth.
You should buy this book as a belated Christmas present for anyone interested in global warming science. We all owe Roy Spencer a vote of thanks for his courage in telling it like it is from his position as one of the most prominent and accomplished climate scientists of our day.
BEER
source unknown
Humans originally existed as members of small bands of nomadic
hunters/gatherers. They lived on deer in the mountains during the summer
and would go to the coast and live on fish and lobster in the winter.
The two most important events in all of history were:
1. The invention of beer, and
2. The invention of the wheel. The wheel was invented to get man to the
beer, and the beer to the man.
These facts formed the foundation of modern civilization and together were
the catalyst for the splitting of humanity into two distinct subgroups:
1. Liberals
2. Conservatives.
Once beer was discovered, it required grain and that was the beginning of
agriculture. Neither the glass bottle nor aluminum can were invented yet,
so while our early humans were sitting around waiting for them to be
invented, they just stayed close to the brewery. That's how villages were
formed.
Some men spent their days tracking and killing animals to BBQ at night
while they were drinking beer. This was the beginning of what is known as
the Conservative movement.
Other men who were weaker and less skilled at hunting learned to live off
the conservatives by showing up for the nightly BBQ's and doing the
sewing, fetching, and hair dressing. This was the beginning of the Liberal
movement.
Some of these liberal men eventually evolved into women. The rest became
known as girlie-men.
Some noteworthy liberal achievements include the domestication of cats,
the invention of group therapy and group hugs, the evolution of the
Hollywood actor, and the concept of Democratic voting to decide how to
divide all the meat and beer that conservatives provided.
Over the years, Conservatives came to be symbolized by the largest, most
powerful land animal on earth, the elephant. Liberals are symbolized by
the jackass.
Modern liberals like imported beer (with lime added), but most prefer
white wine or imported bottled water. They eat raw fish but like their
beef well done. Sushi, tofu, and French food are standard liberal fare..
Another interesting evolutionary side note: most of liberal women have
higher testosterone levels than their men. Most social workers, personal
injury attorneys, journalists, dreamers in Hollywood and group therapists
are liberals. Liberals invented the designated hitter rule because it
wasn't fair to make the pitcher also bat.
Conservatives drink domestic beer. They eat red meat and still provide for
their women. Conservatives are big-game hunters, rodeo cowboys,
lumberjacks, construction workers, firemen, medical doctors, police
officers, corporate executives, athletes, Soldiers, Sailors, Marines, and
generally anyone who works productively. Conservatives who own companies
hire other conservatives who want to work for a living..
Liberals produce little or nothing. They like to govern the producers and
decide what to do with the production. Liberals believe Europeans are more
enlightened than Americans. That is why most of the liberals remained in
Europe when conservatives were coming to America. They crept in after the
Wild West was tamed and created a business of trying to get more for
nothing.
Here ends today's lesson in world history.......
It should be noted that a liberal may have a momentary urge to angrily
respond to the above before forwarding it.
A conservative will simply laugh and be so convinced of the absolute truth
of this history that it will be forwarded immediately to other true
believers, and to more liberals...just to yank their chain.
Humans originally existed as members of small bands of nomadic
hunters/gatherers. They lived on deer in the mountains during the summer
and would go to the coast and live on fish and lobster in the winter.
The two most important events in all of history were:
1. The invention of beer, and
2. The invention of the wheel. The wheel was invented to get man to the
beer, and the beer to the man.
These facts formed the foundation of modern civilization and together were
the catalyst for the splitting of humanity into two distinct subgroups:
1. Liberals
2. Conservatives.
Once beer was discovered, it required grain and that was the beginning of
agriculture. Neither the glass bottle nor aluminum can were invented yet,
so while our early humans were sitting around waiting for them to be
invented, they just stayed close to the brewery. That's how villages were
formed.
Some men spent their days tracking and killing animals to BBQ at night
while they were drinking beer. This was the beginning of what is known as
the Conservative movement.
Other men who were weaker and less skilled at hunting learned to live off
the conservatives by showing up for the nightly BBQ's and doing the
sewing, fetching, and hair dressing. This was the beginning of the Liberal
movement.
Some of these liberal men eventually evolved into women. The rest became
known as girlie-men.
Some noteworthy liberal achievements include the domestication of cats,
the invention of group therapy and group hugs, the evolution of the
Hollywood actor, and the concept of Democratic voting to decide how to
divide all the meat and beer that conservatives provided.
Over the years, Conservatives came to be symbolized by the largest, most
powerful land animal on earth, the elephant. Liberals are symbolized by
the jackass.
Modern liberals like imported beer (with lime added), but most prefer
white wine or imported bottled water. They eat raw fish but like their
beef well done. Sushi, tofu, and French food are standard liberal fare..
Another interesting evolutionary side note: most of liberal women have
higher testosterone levels than their men. Most social workers, personal
injury attorneys, journalists, dreamers in Hollywood and group therapists
are liberals. Liberals invented the designated hitter rule because it
wasn't fair to make the pitcher also bat.
Conservatives drink domestic beer. They eat red meat and still provide for
their women. Conservatives are big-game hunters, rodeo cowboys,
lumberjacks, construction workers, firemen, medical doctors, police
officers, corporate executives, athletes, Soldiers, Sailors, Marines, and
generally anyone who works productively. Conservatives who own companies
hire other conservatives who want to work for a living..
Liberals produce little or nothing. They like to govern the producers and
decide what to do with the production. Liberals believe Europeans are more
enlightened than Americans. That is why most of the liberals remained in
Europe when conservatives were coming to America. They crept in after the
Wild West was tamed and created a business of trying to get more for
nothing.
Here ends today's lesson in world history.......
It should be noted that a liberal may have a momentary urge to angrily
respond to the above before forwarding it.
A conservative will simply laugh and be so convinced of the absolute truth
of this history that it will be forwarded immediately to other true
believers, and to more liberals...just to yank their chain.
Voters Rebuke Environmental Extremism in Oberstar Defeat
Environment & Climate News > January 2011
Written By: Bonner R. Cohen and D. Brady Nelson
Published In: Environment & Climate News > January 2011
Publication date: 11/29/2010
Publisher: The Heartland Institute
--------------------------------------------------------------------------------
In a powerful rebuke of environmental extremism and a proposed law that would enable the U.S. Environmental Protection Agency to assert unprecedented authority under the Clean Water Act, Minnesota voters removed 18-term Democratic Congressman James Oberstar from office in the Nov. 2 midterm elections.
Huge Political Upset
To many pundits the defeat of long-serving Democratic Congressman Oberstar by a political newcomer, Republican candidate Chip Cravaack, was one of the November elections’ biggest upsets. The stunning upset ended the career of a politician defined by his support for an extreme environmental activist agenda including cap-and-trade and expansive enforcement of the Endangered Species Act and federal wetlands regulations
Prior to the November election, Oberstar had never received less than 59 percent of the vote. But on Nov. 2, he garnered only 47 percent of the vote, 1 percent less than his GOP opponent.
‘Flat Earth’ Comment Backfired
One of the last straws for voters occurred during Oberstar’s October 19 debate with Cravaack in Duluth.
The chairman of the powerful House Transportation and Infrastructure Committee angrily responded to criticism of his support for cap-and-trade legislation to reduce carbon dioxide emissions by declaring, “Well, I'm sorry if the Flat Earth Society over here doesn't believe it.”
The crowd booed heartily, symbolizing Oberstar’s growing disconnect with voters in his district.
Then, in a debate with Cravaak shortly before the election, Oberstar was booed by his Duluth audience when he tried to explain his support for the Waxman-Markey cap-and-trade bill.
Signature Water Bill
In recent years Oberstar had sought to expand federal regulation of wetlands and other bodies of water, which put him at odds with farmers and other landowners in his predominantly rural district.
Originally known as the “Clean Water Restoration Act” and recently renamed the “America’s Commitment to Clean Water Act,” Oberstar’s bill would have brought vast stretches of rural America under Washington’s direct control.
Specifically, his bill would amend the 1972 Federal Water Pollution Control Act, commonly known as the Clean Water Act (CWA), to replace the term “navigable” with “waters of the United States.” By doing so, the CWA would be expanded to encompass all waters currently used, used in the past, or possibly susceptible to commercial use in the future, including all interstate and international waters and all other waters and their tributaries, including intrastate lakes, rivers, streams, mudflats, sandflats, wetlands, ponds, meadows, and sloughs.
The bill was aimed at overturning two recent Supreme Court decisions restricting application of the CWA.
Bill Was Vigorously Opposed
Enthusiastically backed by environmental groups, the bill is vigorously opposed by a wide variety of grassroots citizens’ groups, agricultural producers, foresters, and state and local governments. The National Association of Counties and the Minnesota Association of Counties have fought the bill tooth-and-nail.
Oberstar never succeeded in getting his controversial legislation to the House floor for a vote, but he continued pushing for the bill right up until the November election. A watered-down version of his bill cleared the Senate Environment and Public Works Committee last year, but it was never brought to the floor, where it faced a certain filibuster.
Nothing even remotely resembling the Oberstar bill is given any chance of seeing the light of day when the new, 112th Congress convenes in January.
“Expansion of federal authority under this legislation would create a cumbersome
permitting process, resulting in unnecessary and costly delays,” said Don Munks, former Water Quality Committee Chair for the National Association of Counties.
Water Bill Sealed Doom
Oberstar’s legislation was a defining issue in his defeat, says Don Parmeter, cochairman of the Minnesota-based National Water & Conservation Alliance.
“The citizens of Minnesota’s 8th Congressional District have historically and aggressively opposed this kind of expansive federal legislation,” said Parmeter, a former pollution-control engineer who has lived in Oberstar’s district for 30 years. “Mr. Oberstar had won reelection since 1974 by such wide margins that he failed to see how people in water-rich northern Minnesota would be economically devastated by his legislation.”
Bonner R. Cohen, Ph. D. (bcohen@nationalcenter.org) is a senior fellow at the National Center for Public Policy Research. D. Brady Nelson (d.brady.nelson@mac.com) is a Milwaukee-based freelance economist.
Written By: Bonner R. Cohen and D. Brady Nelson
Published In: Environment & Climate News > January 2011
Publication date: 11/29/2010
Publisher: The Heartland Institute
--------------------------------------------------------------------------------
In a powerful rebuke of environmental extremism and a proposed law that would enable the U.S. Environmental Protection Agency to assert unprecedented authority under the Clean Water Act, Minnesota voters removed 18-term Democratic Congressman James Oberstar from office in the Nov. 2 midterm elections.
Huge Political Upset
To many pundits the defeat of long-serving Democratic Congressman Oberstar by a political newcomer, Republican candidate Chip Cravaack, was one of the November elections’ biggest upsets. The stunning upset ended the career of a politician defined by his support for an extreme environmental activist agenda including cap-and-trade and expansive enforcement of the Endangered Species Act and federal wetlands regulations
Prior to the November election, Oberstar had never received less than 59 percent of the vote. But on Nov. 2, he garnered only 47 percent of the vote, 1 percent less than his GOP opponent.
‘Flat Earth’ Comment Backfired
One of the last straws for voters occurred during Oberstar’s October 19 debate with Cravaack in Duluth.
The chairman of the powerful House Transportation and Infrastructure Committee angrily responded to criticism of his support for cap-and-trade legislation to reduce carbon dioxide emissions by declaring, “Well, I'm sorry if the Flat Earth Society over here doesn't believe it.”
The crowd booed heartily, symbolizing Oberstar’s growing disconnect with voters in his district.
Then, in a debate with Cravaak shortly before the election, Oberstar was booed by his Duluth audience when he tried to explain his support for the Waxman-Markey cap-and-trade bill.
Signature Water Bill
In recent years Oberstar had sought to expand federal regulation of wetlands and other bodies of water, which put him at odds with farmers and other landowners in his predominantly rural district.
Originally known as the “Clean Water Restoration Act” and recently renamed the “America’s Commitment to Clean Water Act,” Oberstar’s bill would have brought vast stretches of rural America under Washington’s direct control.
Specifically, his bill would amend the 1972 Federal Water Pollution Control Act, commonly known as the Clean Water Act (CWA), to replace the term “navigable” with “waters of the United States.” By doing so, the CWA would be expanded to encompass all waters currently used, used in the past, or possibly susceptible to commercial use in the future, including all interstate and international waters and all other waters and their tributaries, including intrastate lakes, rivers, streams, mudflats, sandflats, wetlands, ponds, meadows, and sloughs.
The bill was aimed at overturning two recent Supreme Court decisions restricting application of the CWA.
Bill Was Vigorously Opposed
Enthusiastically backed by environmental groups, the bill is vigorously opposed by a wide variety of grassroots citizens’ groups, agricultural producers, foresters, and state and local governments. The National Association of Counties and the Minnesota Association of Counties have fought the bill tooth-and-nail.
Oberstar never succeeded in getting his controversial legislation to the House floor for a vote, but he continued pushing for the bill right up until the November election. A watered-down version of his bill cleared the Senate Environment and Public Works Committee last year, but it was never brought to the floor, where it faced a certain filibuster.
Nothing even remotely resembling the Oberstar bill is given any chance of seeing the light of day when the new, 112th Congress convenes in January.
“Expansion of federal authority under this legislation would create a cumbersome
permitting process, resulting in unnecessary and costly delays,” said Don Munks, former Water Quality Committee Chair for the National Association of Counties.
Water Bill Sealed Doom
Oberstar’s legislation was a defining issue in his defeat, says Don Parmeter, cochairman of the Minnesota-based National Water & Conservation Alliance.
“The citizens of Minnesota’s 8th Congressional District have historically and aggressively opposed this kind of expansive federal legislation,” said Parmeter, a former pollution-control engineer who has lived in Oberstar’s district for 30 years. “Mr. Oberstar had won reelection since 1974 by such wide margins that he failed to see how people in water-rich northern Minnesota would be economically devastated by his legislation.”
Bonner R. Cohen, Ph. D. (bcohen@nationalcenter.org) is a senior fellow at the National Center for Public Policy Research. D. Brady Nelson (d.brady.nelson@mac.com) is a Milwaukee-based freelance economist.
Tuesday, December 14, 2010
Davy Crockett vs. Welfare
From The Life of Colonel David Crockett,
by Edward S. Ellis (Philadelphia: Porter & Coates, 1884)
Crockett was then the lion of Washington. I was a great admirer of his character, and, having several friends who were intimate with him, I found no difficulty in making his acquaintance. I was fascinated with him, and he seemed to take a fancy to me.
I was one day in the lobby of the House of Representatives when a bill was taken up appropriating money for the benefit of a widow of a distinguished naval officer. Several beautiful speeches had been made in its support – rather, as I thought, because it afforded the speakers a fine opportunity for display than from the necessity of convincing anybody, for it seemed to me that everybody favored it. The Speaker was just about to put the question when Crockett arose. Everybody expected, of course, that he was going to make one of his characteristic speeches in support of the bill. He commenced:
read more
by Edward S. Ellis (Philadelphia: Porter & Coates, 1884)
Crockett was then the lion of Washington. I was a great admirer of his character, and, having several friends who were intimate with him, I found no difficulty in making his acquaintance. I was fascinated with him, and he seemed to take a fancy to me.
I was one day in the lobby of the House of Representatives when a bill was taken up appropriating money for the benefit of a widow of a distinguished naval officer. Several beautiful speeches had been made in its support – rather, as I thought, because it afforded the speakers a fine opportunity for display than from the necessity of convincing anybody, for it seemed to me that everybody favored it. The Speaker was just about to put the question when Crockett arose. Everybody expected, of course, that he was going to make one of his characteristic speeches in support of the bill. He commenced:
read more
Friday, December 10, 2010
Gold to rise $150 in 5 weeks
The contact out of London has updated King World News on the massive Asian buyers which have been accumulating both gold and silver. The London source stated, “A bunch of the weak hands are now on the short side of this market. We are very close to a floor because of the massive Asian buying. People have to remember these Asian buyers are now controlling the gold and silver markets, it is not the little guy.”
The London source continues:
“It’s all about the bond auctions, the bond fell off a cliff. In the derivatives market you’ve got JP Morgan playing the bond market at the behest of the Fed, going long 30 years versus selling short-term paper. They buy 30 year paper and then immediately hedge themselves by selling the 30, 60 and 90 day paper. It’s how they keep interest rates down, it’s how you do it.
The only reason interest rates are not in double digits in the US is because of this game. These guys are short front month paper. If this (the bond market) actually fell much longer, JP Morgan could be wiped out, I mean they would be liquidated. The Fed cannot allow them to do that. We’re witnessing history here.
Money flowing out of bonds is going into precious metals. So what they are doing is trying to paint the tape and make it look like a double-top in gold, with silver also retreating. Open interest went up into the decline, this is a gift (the decline). Asian buyers are laughing, we’re like a cartoon to them. They cannot believe how orchestrated this is.”
Where do you see a floor on silver?
“I think to go through $27 is virtually impossible, it would be suicide. I don’t think it will even get there. They are getting very cheeky even taking it below $28. They are not going to push it below $27 because they would just lose too much physical.
All that’s happening here is the Fed is freaking out because the bond market is collapsing and they want to indicate that everything is fine, and certainly that precious metals is not your alternative. Meanwhile, the Asians will continue to buy any dip and keep adding to their position. For what it is worth, Jim Rickards is correct, the Asians are doing their buying through secret agents.”
What about gold?
“As far as the gold market is concerned, gold will be $150 higher from here within five weeks.”
Well there you have it, this London source has called these markets to absolute perfection. There is a huge floor nearby, and gold will explode $150 higher in a matter of weeks. Stay tuned as we will have more from the KWN source out of London in the days ahead.
Eric King
KingWorldNews.com
The London source continues:
“It’s all about the bond auctions, the bond fell off a cliff. In the derivatives market you’ve got JP Morgan playing the bond market at the behest of the Fed, going long 30 years versus selling short-term paper. They buy 30 year paper and then immediately hedge themselves by selling the 30, 60 and 90 day paper. It’s how they keep interest rates down, it’s how you do it.
The only reason interest rates are not in double digits in the US is because of this game. These guys are short front month paper. If this (the bond market) actually fell much longer, JP Morgan could be wiped out, I mean they would be liquidated. The Fed cannot allow them to do that. We’re witnessing history here.
Money flowing out of bonds is going into precious metals. So what they are doing is trying to paint the tape and make it look like a double-top in gold, with silver also retreating. Open interest went up into the decline, this is a gift (the decline). Asian buyers are laughing, we’re like a cartoon to them. They cannot believe how orchestrated this is.”
Where do you see a floor on silver?
“I think to go through $27 is virtually impossible, it would be suicide. I don’t think it will even get there. They are getting very cheeky even taking it below $28. They are not going to push it below $27 because they would just lose too much physical.
All that’s happening here is the Fed is freaking out because the bond market is collapsing and they want to indicate that everything is fine, and certainly that precious metals is not your alternative. Meanwhile, the Asians will continue to buy any dip and keep adding to their position. For what it is worth, Jim Rickards is correct, the Asians are doing their buying through secret agents.”
What about gold?
“As far as the gold market is concerned, gold will be $150 higher from here within five weeks.”
Well there you have it, this London source has called these markets to absolute perfection. There is a huge floor nearby, and gold will explode $150 higher in a matter of weeks. Stay tuned as we will have more from the KWN source out of London in the days ahead.
Eric King
KingWorldNews.com
Wednesday, December 8, 2010
The FBI’s Stalinist Homeland Security Theater
Whiskey & Gunpowder
By William N. Grigg
December 3, 2010
Payette, Idaho, U.S.A.
In the case of Mohamad Mohamud, the Somali-born U.S. citizen cast as the patsy in the FBI’s most recent pseudo-terrorism plot…
…Mohamud hadn’t done anything that could be defined as a criminal act by even the most emancipated definition. This changed after the young man was radicalized by two specialists from the FBI’s vast and experienced corps of professional provocateurs, who successfully engineered a supposed terrorist plot and manipulated Mohamud into triggering what he was told was a powerful explosive device at a Christmas tree lighting in Corvallis.
“Our investigation shows that Mohamud was absolutely committed to carrying out an attack on a very grand scale,” intoned FBI Special Agent Arthur Balizan, who gets the “Producer” credit for the most recent Homeland Security melodrama. “At the same time, I want to reassure the people of this community that, at every turn, we denied him the ability to actually carry out the attack.”
Even the Devil can cite scripture to his purpose, and even a Fed is capable of telling an isolated truth in the service of a larger lie. Balizan was entirely correct in saying that the FBI “denied” Mohamud the ability to carry out an attack, because the Bureau — following a familiar and tiresome script — supplied both the motivation and the means for this plot, once a suitable stooge had been identified.
The evidence presented in the FBI affidavit offers no reason to believe that Mohamud intended to harm anyone before he fell under the influence of two undercover operatives from the Bureau’s Homeland Security theater troupe.
Court-authorized surveillance of the teenager’s e-mail suggested that Mohamud was in touch with someone residing in northwest Pakistan, “an area known to harbor terrorists.” The affiant, FBI Special Agent Ryan Dwyer, recounts that Mohamud and his correspondent “communicated regularly, and in December 2009 I believe, using coded language” — presumably understood only by the wise and perceptive people employed by the Bureau — “they discussed the possibility of Mohamud traveling to Pakistan to prepare for violent jihad.”
Mohamud allegedly tried to contact another Muslim radical to make travel plans, but sent his e-mails to an inoperative address. Shortly thereafter, an FBI undercover operative contacted Mohamud and did what a federal operative will always do in such cases: He acted as a “terrorism facilitator” (a term actually used by a federal prosecutor in an earlier FBI-orchestrated plot), carefully nourishing whatever spark of potential radicalism he found in his subject.
This is the same template from which the FBI has created dozens or scores of ersatz terrorist plots. There is one critical and telling detail in this case that distinguishes it from the others: Prior to being approached by the FBI’s provocation squad, Mohamud attempted to travel to Alaska to work at a legitimate job, but was prevented from doing so when the Feds — who had him under surveillance — put him on a no-fly list. The teenager was then approached by a covert FBI operative who “hired” him to carry out a terrorist attack, providing the unemployed young man with $3,000 in cash.
Attorney General Eric Holder insists that Mohamud “chose at every step to continue” with the bombing plot orchestrated by the Feds — once other avenues of employment had been cut off, that is. And since the FBI’s undercover operative conveniently “failed” to record the original contact with Mohamud — which took place after he had been prevented from taking the job in Alaska — there’s no way to assess the extent to which the Bureau controlled his “steps” from the very beginning.
Regards,
William N. Grigg
By William N. Grigg
December 3, 2010
Payette, Idaho, U.S.A.
In the case of Mohamad Mohamud, the Somali-born U.S. citizen cast as the patsy in the FBI’s most recent pseudo-terrorism plot…
…Mohamud hadn’t done anything that could be defined as a criminal act by even the most emancipated definition. This changed after the young man was radicalized by two specialists from the FBI’s vast and experienced corps of professional provocateurs, who successfully engineered a supposed terrorist plot and manipulated Mohamud into triggering what he was told was a powerful explosive device at a Christmas tree lighting in Corvallis.
“Our investigation shows that Mohamud was absolutely committed to carrying out an attack on a very grand scale,” intoned FBI Special Agent Arthur Balizan, who gets the “Producer” credit for the most recent Homeland Security melodrama. “At the same time, I want to reassure the people of this community that, at every turn, we denied him the ability to actually carry out the attack.”
Even the Devil can cite scripture to his purpose, and even a Fed is capable of telling an isolated truth in the service of a larger lie. Balizan was entirely correct in saying that the FBI “denied” Mohamud the ability to carry out an attack, because the Bureau — following a familiar and tiresome script — supplied both the motivation and the means for this plot, once a suitable stooge had been identified.
The evidence presented in the FBI affidavit offers no reason to believe that Mohamud intended to harm anyone before he fell under the influence of two undercover operatives from the Bureau’s Homeland Security theater troupe.
Court-authorized surveillance of the teenager’s e-mail suggested that Mohamud was in touch with someone residing in northwest Pakistan, “an area known to harbor terrorists.” The affiant, FBI Special Agent Ryan Dwyer, recounts that Mohamud and his correspondent “communicated regularly, and in December 2009 I believe, using coded language” — presumably understood only by the wise and perceptive people employed by the Bureau — “they discussed the possibility of Mohamud traveling to Pakistan to prepare for violent jihad.”
Mohamud allegedly tried to contact another Muslim radical to make travel plans, but sent his e-mails to an inoperative address. Shortly thereafter, an FBI undercover operative contacted Mohamud and did what a federal operative will always do in such cases: He acted as a “terrorism facilitator” (a term actually used by a federal prosecutor in an earlier FBI-orchestrated plot), carefully nourishing whatever spark of potential radicalism he found in his subject.
This is the same template from which the FBI has created dozens or scores of ersatz terrorist plots. There is one critical and telling detail in this case that distinguishes it from the others: Prior to being approached by the FBI’s provocation squad, Mohamud attempted to travel to Alaska to work at a legitimate job, but was prevented from doing so when the Feds — who had him under surveillance — put him on a no-fly list. The teenager was then approached by a covert FBI operative who “hired” him to carry out a terrorist attack, providing the unemployed young man with $3,000 in cash.
Attorney General Eric Holder insists that Mohamud “chose at every step to continue” with the bombing plot orchestrated by the Feds — once other avenues of employment had been cut off, that is. And since the FBI’s undercover operative conveniently “failed” to record the original contact with Mohamud — which took place after he had been prevented from taking the job in Alaska — there’s no way to assess the extent to which the Bureau controlled his “steps” from the very beginning.
Regards,
William N. Grigg
Mystery Surrounds Cyber Missile That Crippled Iran's Nuclear Weapons Ambitions
This is incredibly cool and scary at the same time.
By Ed Barnes
Published November 26, 2010
FoxNews.com
In the 20th century, this would have been a job for James Bond.
The mission: Infiltrate the highly advanced, securely guarded enemy headquarters where scientists in the clutches of an evil master are secretly building a weapon that can destroy the world. Then render that weapon harmless and escape undetected.
But in the 21st century, Bond doesn't get the call. Instead, the job is handled by a suave and very sophisticated secret computer worm, a jumble of code called Stuxnet, which in the last year has not only crippled Iran's nuclear program but has caused a major rethinking of computer security around the globe.
Intelligence agencies, computer security companies and the nuclear industry have been trying to analyze the worm since it was discovered in June by a Belarus-based company that was doing business in Iran. And what they've all found, says Sean McGurk, the Homeland Security Department's acting director of national cyber security and communications integration, is a “game changer.”
The construction of the worm was so advanced, it was “like the arrival of an F-35 into a World War I battlefield,” says Ralph Langner, the computer expert who was the first to sound the alarm about Stuxnet. Others have called it the first “weaponized” computer virus.
Simply put, Stuxnet is an incredibly advanced, undetectable computer worm that took years to construct and was designed to jump from computer to computer until it found the specific, protected control system that it aimed to destroy: Iran’s nuclear enrichment program.
The target was seemingly impenetrable; for security reasons, it lay several stories underground and was not connected to the World Wide Web. And that meant Stuxnet had to act as sort of a computer cruise missile: As it made its passage through a set of unconnected computers, it had to grow and adapt to security measures and other changes until it reached one that could bring it into the nuclear facility.
When it ultimately found its target, it would have to secretly manipulate it until it was so compromised it ceased normal functions.
And finally, after the job was done, the worm would have to destroy itself without leaving a trace.
That is what we are learning happened at Iran's nuclear facilities -- both at Natanz, which houses the centrifuge arrays used for processing uranium into nuclear fuel, and, to a lesser extent, at Bushehr, Iran's nuclear power plant.
At Natanz, for almost 17 months, Stuxnet quietly worked its way into the system and targeted a specific component -- the frequency converters made by the German equipment manufacturer Siemens that regulated the speed of the spinning centrifuges used to create nuclear fuel. The worm then took control of the speed at which the centrifuges spun, making them turn so fast in a quick burst that they would be damaged but not destroyed. And at the same time, the worm masked that change in speed from being discovered at the centrifuges' control panel.
At Bushehr, meanwhile, a second secret set of codes, which Langner called “digital warheads,” targeted the Russian-built power plant's massive steam turbine.
Here's how it worked, according to experts who have examined the worm:
--The nuclear facility in Iran runs an “air gap” security system, meaning it has no connections to the Web, making it secure from outside penetration. Stuxnet was designed and sent into the area around Iran's Natanz nuclear power plant -- just how may never be known -- to infect a number of computers on the assumption that someone working in the plant would take work home on a flash drive, acquire the worm and then bring it back to the plant.
--Once the worm was inside the plant, the next step was to get the computer system there to trust it and allow it into the system. That was accomplished because the worm contained a “digital certificate” stolen from JMicron, a large company in an industrial park in Taiwan. (When the worm was later discovered it quickly replaced the original digital certificate with another certificate, also stolen from another company, Realtek, a few doors down in the same industrial park in Taiwan.)
--Once allowed entry, the worm contained four “Zero Day” elements in its first target, the Windows 7 operating system that controlled the overall operation of the plant. Zero Day elements are rare and extremely valuable vulnerabilities in a computer system that can be exploited only once. Two of the vulnerabilities were known, but the other two had never been discovered. Experts say no hacker would waste Zero Days in that manner.
--After penetrating the Windows 7 operating system, the code then targeted the “frequency converters” that ran the centrifuges. To do that it used specifications from the manufacturers of the converters. One was Vacon, a Finnish Company, and the other Fararo Paya, an Iranian company. What surprises experts at this step is that the Iranian company was so secret that not even the IAEA knew about it.
--The worm also knew that the complex control system that ran the centrifuges was built by Siemens, the German manufacturer, and -- remarkably -- how that system worked as well and how to mask its activities from it.
--Masking itself from the plant's security and other systems, the worm then ordered the centrifuges to rotate extremely fast, and then to slow down precipitously. This damaged the converter, the centrifuges and the bearings, and it corrupted the uranium in the tubes. It also left Iranian nuclear engineers wondering what was wrong, as computer checks showed no malfunctions in the operating system.
Estimates are that this went on for more than a year, leaving the Iranian program in chaos. And as it did, the worm grew and adapted throughout the system. As new worms entered the system, they would meet and adapt and become increasingly sophisticated.
During this time the worms reported back to two servers that had to be run by intelligence agencies, one in Denmark and one in Malaysia. The servers monitored the worms and were shut down once the worm had infiltrated Natanz. Efforts to find those servers since then have yielded no results.
This went on until June of last year, when a Belarusan company working on the Iranian power plant in Beshehr discovered it in one of its machines. It quickly put out a notice on a Web network monitored by computer security experts around the world. Ordinarily these experts would immediately begin tracing the worm and dissecting it, looking for clues about its origin and other details.
But that didn’t happen, because within minutes all the alert sites came under attack and were inoperative for 24 hours.
“I had to use e-mail to send notices but I couldn’t reach everyone. Whoever made the worm had a full day to eliminate all traces of the worm that might lead us them,” Eric Byres, a computer security expert who has examined the Stuxnet. “No hacker could have done that.”
Experts, including inspectors from the International Atomic Energy Agency, say that, despite Iran's claims to the contrary, the worm was successful in its goal: causing confusion among Iran’s nuclear engineers and disabling their nuclear program.
Because of the secrecy surrounding the Iranian program, no one can be certain of the full extent of the damage. But sources inside Iran and elsewhere say that the Iranian centrifuge program has been operating far below its capacity and that the uranium enrichment program had “stagnated” during the time the worm penetrated the underground facility. Only 4,000 of the 9,000 centrifuges Iran was known to have were put into use. Some suspect that is because of the critical need to replace ones that were damaged.
And the limited number of those in use dwindled to an estimated 3,700 as problems engulfed their operation. IAEA inspectors say the sabotage better explains the slowness of the program, which they had earlier attributed to poor equipment manufacturing and management problems. As Iranians struggled with the setbacks, they began searching for signs of sabotage. From inside Iran there have been unconfirmed reports that the head of the plant was fired shortly after the worm wended its way into the system and began creating technical problems, and that some scientists who were suspected of espionage disappeared or were executed. And counter intelligence agents began monitoring all communications between scientists at the site, creating a climate of fear and paranoia.
Iran has adamantly stated that its nuclear program has not been hit by the bug. But in doing so it has backhandedly confirmed that its nuclear facilities were compromised. When Hamid Alipour, head of the nation’s Information Technology Company, announced in September that 30,000 Iranian computers had been hit by the worm but the nuclear facilities were safe, he added that among those hit were the personal computers of the scientists at the nuclear facilities. Experts say that Natanz and Bushehr could not have escaped the worm if it was in their engineers’ computers.
“We brought it into our lab to study it and even with precautions it spread everywhere at incredible speed,” Byres said.
“The worm was designed not to destroy the plants but to make them ineffective. By changing the rotation speeds, the bearings quickly wear out and the equipment has to be replaced and repaired. The speed changes also impact the quality of the uranium processed in the centrifuges creating technical problems that make the plant ineffective,” he explained.
In other words the worm was designed to allow the Iranian program to continue but never succeed, and never to know why.
One additional impact that can be attributed to the worm, according to David Albright of the Institute for Science and International Studies, is that “the lives of the scientists working in the facility have become a living hell because of counter-intelligence agents brought into the plant” to battle the breach. Ironically, even after its discovery, the worm has succeeded in slowing down Iran's reputed effort to build an atomic weapon. And Langer says that the efforts by the Iranians to cleanse Stuxnet from their system “will probably take another year to complete,” and during that time the plant will not be able to function anywhere normally.
But as the extent of the worm’s capabilities is being understood, its genius and complexity has created another perplexing question: Who did it?
Speculation on the worm’s origin initially focused on hackers or even companies trying to disrupt competitors. But as engineers tore apart the virus they learned not only the depth of the code, its complex targeting mechanism, (despite infecting more than 100,000 computers it has only done damage at Natanz,) the enormous amount of work that went into it—Microsoft estimated that it consumed 10,000 man days of labor-- and about what the worm knew, the clues narrowed the number of players that have the capabilities to create it to a handful.
“This is what nation-states build, if their only other option would be to go to war,” Joseph Wouk, an Israeli security expert wrote.
Byers is more certain. “It is a military weapon,” he said.
And much of what the worm “knew” could only have come from a consortium of Western intelligence agencies, experts who have examined the code now believe.
Originally, all eyes turned toward Israel's intelligence agencies. Engineers examining the worm found “clues” that hinted at Israel’s involvement. In one case they found the word “Myrtus” embedded in the code and argued that it was a reference to Esther, the biblical figure who saved the ancient Jewish state from the Persians. But computer experts say "Myrtus" is more likely a common reference to “My RTUS,” or remote terminal units.
Langer argues that no single Western intelligence agency had the skills to pull this off alone. The most likely answer, he says, is that a consortium of intelligence agencies worked together to build the cyber bomb. And he says the most likely confederates are the United States, because it has the technical skills to make the virus, Germany, because reverse-engineering Siemen’s product would have taken years without it, and Russia, because of its familiarity with both the Iranian nuclear plant and Siemen’s systems.
There is one clue that was left in the code that may tell us all we need to know.
Embedded in different section of the code is another common computer language reference, but this one is misspelled. Instead of saying “DEADFOOT,” a term stolen from pilots meaning a failed engine, this one reads “DEADFOO7.”
Yes, OO7 has returned -- as a computer worm.
Stuxnet. Shaken, not stirred.
By Ed Barnes
Published November 26, 2010
FoxNews.com
In the 20th century, this would have been a job for James Bond.
The mission: Infiltrate the highly advanced, securely guarded enemy headquarters where scientists in the clutches of an evil master are secretly building a weapon that can destroy the world. Then render that weapon harmless and escape undetected.
But in the 21st century, Bond doesn't get the call. Instead, the job is handled by a suave and very sophisticated secret computer worm, a jumble of code called Stuxnet, which in the last year has not only crippled Iran's nuclear program but has caused a major rethinking of computer security around the globe.
Intelligence agencies, computer security companies and the nuclear industry have been trying to analyze the worm since it was discovered in June by a Belarus-based company that was doing business in Iran. And what they've all found, says Sean McGurk, the Homeland Security Department's acting director of national cyber security and communications integration, is a “game changer.”
The construction of the worm was so advanced, it was “like the arrival of an F-35 into a World War I battlefield,” says Ralph Langner, the computer expert who was the first to sound the alarm about Stuxnet. Others have called it the first “weaponized” computer virus.
Simply put, Stuxnet is an incredibly advanced, undetectable computer worm that took years to construct and was designed to jump from computer to computer until it found the specific, protected control system that it aimed to destroy: Iran’s nuclear enrichment program.
The target was seemingly impenetrable; for security reasons, it lay several stories underground and was not connected to the World Wide Web. And that meant Stuxnet had to act as sort of a computer cruise missile: As it made its passage through a set of unconnected computers, it had to grow and adapt to security measures and other changes until it reached one that could bring it into the nuclear facility.
When it ultimately found its target, it would have to secretly manipulate it until it was so compromised it ceased normal functions.
And finally, after the job was done, the worm would have to destroy itself without leaving a trace.
That is what we are learning happened at Iran's nuclear facilities -- both at Natanz, which houses the centrifuge arrays used for processing uranium into nuclear fuel, and, to a lesser extent, at Bushehr, Iran's nuclear power plant.
At Natanz, for almost 17 months, Stuxnet quietly worked its way into the system and targeted a specific component -- the frequency converters made by the German equipment manufacturer Siemens that regulated the speed of the spinning centrifuges used to create nuclear fuel. The worm then took control of the speed at which the centrifuges spun, making them turn so fast in a quick burst that they would be damaged but not destroyed. And at the same time, the worm masked that change in speed from being discovered at the centrifuges' control panel.
At Bushehr, meanwhile, a second secret set of codes, which Langner called “digital warheads,” targeted the Russian-built power plant's massive steam turbine.
Here's how it worked, according to experts who have examined the worm:
--The nuclear facility in Iran runs an “air gap” security system, meaning it has no connections to the Web, making it secure from outside penetration. Stuxnet was designed and sent into the area around Iran's Natanz nuclear power plant -- just how may never be known -- to infect a number of computers on the assumption that someone working in the plant would take work home on a flash drive, acquire the worm and then bring it back to the plant.
--Once the worm was inside the plant, the next step was to get the computer system there to trust it and allow it into the system. That was accomplished because the worm contained a “digital certificate” stolen from JMicron, a large company in an industrial park in Taiwan. (When the worm was later discovered it quickly replaced the original digital certificate with another certificate, also stolen from another company, Realtek, a few doors down in the same industrial park in Taiwan.)
--Once allowed entry, the worm contained four “Zero Day” elements in its first target, the Windows 7 operating system that controlled the overall operation of the plant. Zero Day elements are rare and extremely valuable vulnerabilities in a computer system that can be exploited only once. Two of the vulnerabilities were known, but the other two had never been discovered. Experts say no hacker would waste Zero Days in that manner.
--After penetrating the Windows 7 operating system, the code then targeted the “frequency converters” that ran the centrifuges. To do that it used specifications from the manufacturers of the converters. One was Vacon, a Finnish Company, and the other Fararo Paya, an Iranian company. What surprises experts at this step is that the Iranian company was so secret that not even the IAEA knew about it.
--The worm also knew that the complex control system that ran the centrifuges was built by Siemens, the German manufacturer, and -- remarkably -- how that system worked as well and how to mask its activities from it.
--Masking itself from the plant's security and other systems, the worm then ordered the centrifuges to rotate extremely fast, and then to slow down precipitously. This damaged the converter, the centrifuges and the bearings, and it corrupted the uranium in the tubes. It also left Iranian nuclear engineers wondering what was wrong, as computer checks showed no malfunctions in the operating system.
Estimates are that this went on for more than a year, leaving the Iranian program in chaos. And as it did, the worm grew and adapted throughout the system. As new worms entered the system, they would meet and adapt and become increasingly sophisticated.
During this time the worms reported back to two servers that had to be run by intelligence agencies, one in Denmark and one in Malaysia. The servers monitored the worms and were shut down once the worm had infiltrated Natanz. Efforts to find those servers since then have yielded no results.
This went on until June of last year, when a Belarusan company working on the Iranian power plant in Beshehr discovered it in one of its machines. It quickly put out a notice on a Web network monitored by computer security experts around the world. Ordinarily these experts would immediately begin tracing the worm and dissecting it, looking for clues about its origin and other details.
But that didn’t happen, because within minutes all the alert sites came under attack and were inoperative for 24 hours.
“I had to use e-mail to send notices but I couldn’t reach everyone. Whoever made the worm had a full day to eliminate all traces of the worm that might lead us them,” Eric Byres, a computer security expert who has examined the Stuxnet. “No hacker could have done that.”
Experts, including inspectors from the International Atomic Energy Agency, say that, despite Iran's claims to the contrary, the worm was successful in its goal: causing confusion among Iran’s nuclear engineers and disabling their nuclear program.
Because of the secrecy surrounding the Iranian program, no one can be certain of the full extent of the damage. But sources inside Iran and elsewhere say that the Iranian centrifuge program has been operating far below its capacity and that the uranium enrichment program had “stagnated” during the time the worm penetrated the underground facility. Only 4,000 of the 9,000 centrifuges Iran was known to have were put into use. Some suspect that is because of the critical need to replace ones that were damaged.
And the limited number of those in use dwindled to an estimated 3,700 as problems engulfed their operation. IAEA inspectors say the sabotage better explains the slowness of the program, which they had earlier attributed to poor equipment manufacturing and management problems. As Iranians struggled with the setbacks, they began searching for signs of sabotage. From inside Iran there have been unconfirmed reports that the head of the plant was fired shortly after the worm wended its way into the system and began creating technical problems, and that some scientists who were suspected of espionage disappeared or were executed. And counter intelligence agents began monitoring all communications between scientists at the site, creating a climate of fear and paranoia.
Iran has adamantly stated that its nuclear program has not been hit by the bug. But in doing so it has backhandedly confirmed that its nuclear facilities were compromised. When Hamid Alipour, head of the nation’s Information Technology Company, announced in September that 30,000 Iranian computers had been hit by the worm but the nuclear facilities were safe, he added that among those hit were the personal computers of the scientists at the nuclear facilities. Experts say that Natanz and Bushehr could not have escaped the worm if it was in their engineers’ computers.
“We brought it into our lab to study it and even with precautions it spread everywhere at incredible speed,” Byres said.
“The worm was designed not to destroy the plants but to make them ineffective. By changing the rotation speeds, the bearings quickly wear out and the equipment has to be replaced and repaired. The speed changes also impact the quality of the uranium processed in the centrifuges creating technical problems that make the plant ineffective,” he explained.
In other words the worm was designed to allow the Iranian program to continue but never succeed, and never to know why.
One additional impact that can be attributed to the worm, according to David Albright of the Institute for Science and International Studies, is that “the lives of the scientists working in the facility have become a living hell because of counter-intelligence agents brought into the plant” to battle the breach. Ironically, even after its discovery, the worm has succeeded in slowing down Iran's reputed effort to build an atomic weapon. And Langer says that the efforts by the Iranians to cleanse Stuxnet from their system “will probably take another year to complete,” and during that time the plant will not be able to function anywhere normally.
But as the extent of the worm’s capabilities is being understood, its genius and complexity has created another perplexing question: Who did it?
Speculation on the worm’s origin initially focused on hackers or even companies trying to disrupt competitors. But as engineers tore apart the virus they learned not only the depth of the code, its complex targeting mechanism, (despite infecting more than 100,000 computers it has only done damage at Natanz,) the enormous amount of work that went into it—Microsoft estimated that it consumed 10,000 man days of labor-- and about what the worm knew, the clues narrowed the number of players that have the capabilities to create it to a handful.
“This is what nation-states build, if their only other option would be to go to war,” Joseph Wouk, an Israeli security expert wrote.
Byers is more certain. “It is a military weapon,” he said.
And much of what the worm “knew” could only have come from a consortium of Western intelligence agencies, experts who have examined the code now believe.
Originally, all eyes turned toward Israel's intelligence agencies. Engineers examining the worm found “clues” that hinted at Israel’s involvement. In one case they found the word “Myrtus” embedded in the code and argued that it was a reference to Esther, the biblical figure who saved the ancient Jewish state from the Persians. But computer experts say "Myrtus" is more likely a common reference to “My RTUS,” or remote terminal units.
Langer argues that no single Western intelligence agency had the skills to pull this off alone. The most likely answer, he says, is that a consortium of intelligence agencies worked together to build the cyber bomb. And he says the most likely confederates are the United States, because it has the technical skills to make the virus, Germany, because reverse-engineering Siemen’s product would have taken years without it, and Russia, because of its familiarity with both the Iranian nuclear plant and Siemen’s systems.
There is one clue that was left in the code that may tell us all we need to know.
Embedded in different section of the code is another common computer language reference, but this one is misspelled. Instead of saying “DEADFOOT,” a term stolen from pilots meaning a failed engine, this one reads “DEADFOO7.”
Yes, OO7 has returned -- as a computer worm.
Stuxnet. Shaken, not stirred.
Sunday, December 5, 2010
-H.L. Mencken
"The men the American people admire most extravagantly are the greatest liars; the men they detest most violently are those who try to tell them the truth."
Why Governments Will Buy Silver
by December 1, 2010
Sean Rakhimov
Editor, http://SilverStrategies.com
What if there is no tomorrow? - There wasn't one today!
Groundhog Day, the Movie
Will governments buy silver?
Over the last several months we have been pondering if governments will come into the silver market. Before we get into that, it is important to note that governments are very different animals and there are over two hundred of them out there. Therefore, it is a very liberal generalization to lump them all together as if their needs, objectives and agendas were the same, thus expecting them all to act in the same fashion for the same reasons, is a big stretch. That said, it's the stigma, the psychological effect, the sentiment and the message it would send to markets that prompts us to group them together in investors' minds as a market force.
read more
Sean Rakhimov
Editor, http://SilverStrategies.com
What if there is no tomorrow? - There wasn't one today!
Groundhog Day, the Movie
Will governments buy silver?
Over the last several months we have been pondering if governments will come into the silver market. Before we get into that, it is important to note that governments are very different animals and there are over two hundred of them out there. Therefore, it is a very liberal generalization to lump them all together as if their needs, objectives and agendas were the same, thus expecting them all to act in the same fashion for the same reasons, is a big stretch. That said, it's the stigma, the psychological effect, the sentiment and the message it would send to markets that prompts us to group them together in investors' minds as a market force.
read more
Economic analysis and investment advice from Paul Brodsky
This is one of the best descriptions of the current economic/monetary situation I have ever read. It is unfortunate that it came from a slide show, and graphs that are referenced are not available. Even, so the points are succinct and understandable.
You need to read this if you believe the economy is recovering (Dave A.)(see frame 4), gold is in a bubble (Mom)(see frames 8-13), or that there is a demand deficit (Mike M.) (see frames 3+5).
http://www.ritholtz.com/blog/2010/11/brodsky-on-gold/
You need to read this if you believe the economy is recovering (Dave A.)(see frame 4), gold is in a bubble (Mom)(see frames 8-13), or that there is a demand deficit (Mike M.) (see frames 3+5).
http://www.ritholtz.com/blog/2010/11/brodsky-on-gold/
Friday, December 3, 2010
Want JP Morgan to crash? Buy silver
Max Keiser
guardian.co.uk, Thursday 2 December 2010 12.30 GM
For decades, the world's banking system has been on a fiat currency standard that has led to banks that are "too big to fail". They have overreached their remit of providing loans and have leeched into the political system, using our money to change the political agenda in ways that boost bank management's compensation over the interests of their depositors.
Also on Cif ...
Deborah Hargreaves on how Eric Cantona's bank protest would hurt us all Over the past 11 years, the Gata (Gold Anti-Trust Action) committee has worked to reveal the silver/gold price suppression scheme; thanks to whistleblower Andrew Maguire in London, an investigation has been opened. As part of the ongoing exposé, it has now become clear that JP Morgan is sitting on what is estimated to be 3.3bn ounce "short" position in silver (which they have sold short, meaning they don't own it to begin with) in an attempt to keep the price artificially low in order to keep the relative appeal of the dollar and other fiat currencies high. The potential liability for JP Morgan has been an open secret for a few years.
On my show, Keiser Report, I recently invited Michael Krieger, a regular contributor of Zero Hedge (the WikiLeaks of finance). We posited that if 5% of the world's population each bought a one-ounce coin of silver, JP Morgan would be forced to cover their shorts – an estimated $1.5tn liability – against their market capital of $150bn, and the company would therefore go bankrupt. A few days later, I suggested on the Alex Jones show that he launch a "Google bomb" with the key phrase "crash jp morgan buy silver".
read more
guardian.co.uk, Thursday 2 December 2010 12.30 GM
For decades, the world's banking system has been on a fiat currency standard that has led to banks that are "too big to fail". They have overreached their remit of providing loans and have leeched into the political system, using our money to change the political agenda in ways that boost bank management's compensation over the interests of their depositors.
Also on Cif ...
Deborah Hargreaves on how Eric Cantona's bank protest would hurt us all Over the past 11 years, the Gata (Gold Anti-Trust Action) committee has worked to reveal the silver/gold price suppression scheme; thanks to whistleblower Andrew Maguire in London, an investigation has been opened. As part of the ongoing exposé, it has now become clear that JP Morgan is sitting on what is estimated to be 3.3bn ounce "short" position in silver (which they have sold short, meaning they don't own it to begin with) in an attempt to keep the price artificially low in order to keep the relative appeal of the dollar and other fiat currencies high. The potential liability for JP Morgan has been an open secret for a few years.
On my show, Keiser Report, I recently invited Michael Krieger, a regular contributor of Zero Hedge (the WikiLeaks of finance). We posited that if 5% of the world's population each bought a one-ounce coin of silver, JP Morgan would be forced to cover their shorts – an estimated $1.5tn liability – against their market capital of $150bn, and the company would therefore go bankrupt. A few days later, I suggested on the Alex Jones show that he launch a "Google bomb" with the key phrase "crash jp morgan buy silver".
read more
Meet The 35 Foreign Banks That Got Bailed Out By The Fed (And This Is Just The CPFF Banks)
Submitted by Tyler Durden on 12/01/2010 17:11 -0500
One may be forgiven to believe that via its FX liquidity swap lines the Fed only bailed out foreign Central Banks, which in turn took the money and funded their own banks. It turns out that is only half the story: we now know the Fed also acted in a secondary bail out capacity, providing over $350 billion in short term funding exclusively to 35 foreign banks, of which the biggest beneficiaries were UBS, Dexia and BNP. Since the funding provided was in the form of ultra-short maturity commercial paper it was essentially equivalent to cash funding. In other words, between October 27, 2008 and August 6, 2009, the Fed spent $350 billion in taxpayer funds to save 35 foreign banks. And here people are wondering if the Fed will ever allow stocks to drop: it is now more than obvious that with all banks leveraging the equity exposure to the point where a market decline would likely start a Lehman-type domino, there is no way that the Brian Sack-led team of traders will allow stocks to drop ever... Until such time nature reasserts itself, the market collapses without GETCO or the PPT being able to catch it, and the Fed is finally wiped out in one way or another.
read more
One may be forgiven to believe that via its FX liquidity swap lines the Fed only bailed out foreign Central Banks, which in turn took the money and funded their own banks. It turns out that is only half the story: we now know the Fed also acted in a secondary bail out capacity, providing over $350 billion in short term funding exclusively to 35 foreign banks, of which the biggest beneficiaries were UBS, Dexia and BNP. Since the funding provided was in the form of ultra-short maturity commercial paper it was essentially equivalent to cash funding. In other words, between October 27, 2008 and August 6, 2009, the Fed spent $350 billion in taxpayer funds to save 35 foreign banks. And here people are wondering if the Fed will ever allow stocks to drop: it is now more than obvious that with all banks leveraging the equity exposure to the point where a market decline would likely start a Lehman-type domino, there is no way that the Brian Sack-led team of traders will allow stocks to drop ever... Until such time nature reasserts itself, the market collapses without GETCO or the PPT being able to catch it, and the Fed is finally wiped out in one way or another.
read more
Thursday, December 2, 2010
The precious metals power higher
by James Turk
December 1, 2010 – Both gold and silver demonstrated some spectacular performance yesterday, climbing 1.4% and 3.8% respectively from the previous day’s closing price. November is the eighth month that gold has risen this year to generate its 26.5% year-to-date appreciation. Silver has also risen eight months this year, and so far is up a stunning 67.5%.
We can reasonably expect some more big moves higher, given how tight the market for physical metal remains. Physical metal cannot be conjured out of thin air like national currencies and paper representations of gold and silver. Mine production cannot be turned on overnight to increase the supply of newly mined metal. It takes years to build a mine. So where is the supply going to come from to meet the ever-growing demand for these two precious metal safe havens in a world wracked by sovereign debt worries, volatile currencies, banks loaded with dodgy assets and politicians who are placing with their serial bailouts never-ending burdens on the backs of taxpayers?
read more
December 1, 2010 – Both gold and silver demonstrated some spectacular performance yesterday, climbing 1.4% and 3.8% respectively from the previous day’s closing price. November is the eighth month that gold has risen this year to generate its 26.5% year-to-date appreciation. Silver has also risen eight months this year, and so far is up a stunning 67.5%.
We can reasonably expect some more big moves higher, given how tight the market for physical metal remains. Physical metal cannot be conjured out of thin air like national currencies and paper representations of gold and silver. Mine production cannot be turned on overnight to increase the supply of newly mined metal. It takes years to build a mine. So where is the supply going to come from to meet the ever-growing demand for these two precious metal safe havens in a world wracked by sovereign debt worries, volatile currencies, banks loaded with dodgy assets and politicians who are placing with their serial bailouts never-ending burdens on the backs of taxpayers?
read more
Tuesday, November 23, 2010
Top banks face $100 billion Basel shortfall:
REUTERS/Shannon Stapleton
LONDON (Reuters) - The new Basel III banking rules will leave the biggest U.S. banks short of between $100 billion and $150 billion in equity capital, with 90 per cent of the shortfall concentrated in the top six banks, the Financial Times said, citing research from Barclays Capital.
The newspaper said the study by the investment banking arm of Barclays Plc (LSE:BARC.L - News) assumes the banks will need to hold top quality capital equal to 8 percent of their total assets -- a one point cushion against falling below the effective global minimum of 7 percent set in September by the Basel Committee on Banking Supervision.
The regulations mean banks may need to increase their capital through retained earnings or issuing equity or they can cut their risk-weighted assets by selling off assets and cutting back riskier business.
"These shortfalls are entirely manageable ... The more difficult question is what affect the new rules will have on the cost and availability of credit and bank profitability," the FT quoted Tom McGuire, head of the Capital Advisory Group at BarCap, as saying.
McGuire estimates that U.S. banks can cut their equity needs by $10 billion with each $125 billion reduction in risk-weighted assets, the FT said.
LONDON (Reuters) - The new Basel III banking rules will leave the biggest U.S. banks short of between $100 billion and $150 billion in equity capital, with 90 per cent of the shortfall concentrated in the top six banks, the Financial Times said, citing research from Barclays Capital.
The newspaper said the study by the investment banking arm of Barclays Plc (LSE:BARC.L - News) assumes the banks will need to hold top quality capital equal to 8 percent of their total assets -- a one point cushion against falling below the effective global minimum of 7 percent set in September by the Basel Committee on Banking Supervision.
The regulations mean banks may need to increase their capital through retained earnings or issuing equity or they can cut their risk-weighted assets by selling off assets and cutting back riskier business.
"These shortfalls are entirely manageable ... The more difficult question is what affect the new rules will have on the cost and availability of credit and bank profitability," the FT quoted Tom McGuire, head of the Capital Advisory Group at BarCap, as saying.
McGuire estimates that U.S. banks can cut their equity needs by $10 billion with each $125 billion reduction in risk-weighted assets, the FT said.
Debt Delenda Est by Bill Bonner
An excerpt-
“With all due respect, US policy is clueless,” said German Finance Minister Wolfgang Schauble. “It’s not that the Americans haven’t pumped enough liquidity into the market. Now to say let’s pump more into the market is not going to solve their problem.”
The English speakers conveniently misunderstand the debt problem. The authorities worked hard not to see the debt crisis coming. They made their careers and reputations by not understanding it. Thousands of them work for governments and central banks…if they caught on to the problem now, they’d probably have to resign.
To read the rest-
“With all due respect, US policy is clueless,” said German Finance Minister Wolfgang Schauble. “It’s not that the Americans haven’t pumped enough liquidity into the market. Now to say let’s pump more into the market is not going to solve their problem.”
The English speakers conveniently misunderstand the debt problem. The authorities worked hard not to see the debt crisis coming. They made their careers and reputations by not understanding it. Thousands of them work for governments and central banks…if they caught on to the problem now, they’d probably have to resign.
To read the rest-
Friday, November 19, 2010
Pretty Good for Government Work ???
For those of you who read Warren Buffett's vomit inducing op-ep in the NYT yesterday, http://www.nytimes.com/2010/11/17/opinion/17buffett.html?_r=2&emc=eta1, I found the following spoof on what he should have said amusing.
"I would be remiss if I failed to mention my personal positions in this: I made a killing in Goldman Sachs and GE. My investments in Wells Fargo would have been a disaster if not for you. Don’t even get me started with me being the largest shareholder in Moody’s – that was some clusterf#@k. And considering all of the counter-parties that Berkshire Hathaway has, we risked being just another insolvent investment firm along with everyone else had nothing been done.So I must say thanks to you, Uncle Sam, and your aides. In this extraordinary emergency, you came through for me — and my world looks far different than if you had not.
Your grateful but wide-eyed nephew,
Warren."
To read the whole piece-http://www.ritholtz.com/blog/2010/11/dear-uncle-sucker/
"I would be remiss if I failed to mention my personal positions in this: I made a killing in Goldman Sachs and GE. My investments in Wells Fargo would have been a disaster if not for you. Don’t even get me started with me being the largest shareholder in Moody’s – that was some clusterf#@k. And considering all of the counter-parties that Berkshire Hathaway has, we risked being just another insolvent investment firm along with everyone else had nothing been done.So I must say thanks to you, Uncle Sam, and your aides. In this extraordinary emergency, you came through for me — and my world looks far different than if you had not.
Your grateful but wide-eyed nephew,
Warren."
To read the whole piece-http://www.ritholtz.com/blog/2010/11/dear-uncle-sucker/
Morality, Democracy and the Voting Process, by Robert A. Meyer
Today I noticed a billboard that had the following: “Does your vote reflect your morals?” At first glance it might seem reasonable that an individual should vote according to their moral principles. At second glance you might think—that could be dangerous to the liberty and freedom of someone who lives by a different moral code.
How do we determine if a system of morality is conducive to the needs of a rational individual—or if it is based on myths, illusions and faulty principles?
There is only one way to determine if a moral principle is correct or incorrect. It must correspond to the following:
a. Natural Law
b. Economic Law
If a moral belief violates either one of these laws—it is invalid.
We can make a case that Economic Law is derived from Natural Law. Natural Law starts its reasoning from axiomatic concepts such as identity, consciousness and existence. Economic Law’s starting point in a chain of reasoning is—a priori categories such as time, change and causality. Both use deductive reasoning.
The Problem
Unfortunately we live in a society that is called a “democracy.” The voting process has turned into a predatory means of extracting wealth from one group and giving it to another—and (or) forcing the moral beliefs of a majority on the rest of the populace. Of course, the smallest minority of all—the individual—has his life, liberty and freedom sold out wholesale. Government consistently violates his property through taxes, inflation, prohibitions and regulations. This apparatus of violent compulsion and coercion even tells him what he can or cannot consume.
Unknown to most is the fact that our founding fathers considered the United States of America a Republic. They believed they had created a Republic. They understood democracy was doomed to failure because it always resulted in mob rule—the tyranny of the majority.
If they could hear the promises of the candidates for office in modern times—they would be appalled. Politicians make big spending promises they can only keep—by stealing from others through taxes and inflation. In many cases they end up pilfering the money from the very same voters that supported them. H.L. Mencken’s description of an election is “an advanced auction of stolen goods.”
Natural Law
An individual has a right to his life, liberty and freedom. He also has the right to own property without anyone infringing on it—and that includes government infringement. Since all individuals own their bodies— they can consume anything they desire.
All moral pronunciations about the so-called evils of drugs, alcohol, cigarettes, gambling, and prostitution are irrelevant and downright dangerous. It may true that a rational individual could decide to avoid these “vices”. However since an individual owns his life, which includes his body, mind and soul, he has every right to indulge in these activities without the interference of absolute moralists and governments. And the voters have no right to deprive him of these through the voting process.
Economic Law
Many people support a system of morality that completely violates the laws of economics. Once these faulty moral systems become law—and governments start enforcing them—nobody’s life, liberty and property are safe. Wars, atrocities, economic crisis, mass liberty violations etc. permeate world affairs. The lone individual is crucified on a cross of myth and drowned in a sea of illusion.
The war on drugs has been taking place for decades. Over half of million Americans have been incarcerated in a “place of rehabilitation” called prison for drug offenses. Let’s decide if drug use is moral or immoral—and whether it should be legal or illegal.
Voluntary and Involuntary Exchange
First you have to distinguish the difference between voluntary and involuntary exchange. You must realize it is individuals who are involved in exchanges. In any two person exchange, one sells (gives) and the other buys (receives). "Society can not take part in an exchange—only individuals can."
A voluntary exchange takes place when two or more individuals agree to become involved with one another. Each participates of his own free will. The exchange could involve anything from giving and receiving love to buying and selling commodities. All believe they will benefit.
An involuntary exchange takes place when at least one party to the transaction is in it against his (her) will. Examples of this type of exchange are robbery, rape, assault and murder. Only this type of exchange can be defined as criminal. All voluntary exchanges are legitimate and non- criminal—no matter what the Absolute Moralist and governments declare.
Since drug exchanges are voluntary they should be legal—which means that all drug use is perfectly moral behavior and of course, should be legal
Conclusion
As you can see—a morality that is in violation of Natural and Economic Law is faulty and destructive. Just because someone feels something is immoral or bad doesn’t give him (her) the right to force their subjectivity on others. And voting on this belief is immoral—which demonstrates this individual is descending to the gutters of hypocrisy. A person must first subject their belief(s) to Natural and Economic Law.
The Libertarian Way is a system of morality that corresponds to these laws. And what makes this so delightful is that all the Libertarian Pleasures correspond to Natural and Economic law.
About the Author
Robert A. Meyer has been investigating and studying economics, philosophy, psychology and metaphysics for 30 years. He realizes there are basic principles of Human Action that will help you become successful. His knowledge that life is to be lived on a physical, emotional, mental and spiritual level allowed him to discover "The Libertarian Way." He experiences its many pleasures and ecstasies on a daily basis. http://libertarianway.com/
How do we determine if a system of morality is conducive to the needs of a rational individual—or if it is based on myths, illusions and faulty principles?
There is only one way to determine if a moral principle is correct or incorrect. It must correspond to the following:
a. Natural Law
b. Economic Law
If a moral belief violates either one of these laws—it is invalid.
We can make a case that Economic Law is derived from Natural Law. Natural Law starts its reasoning from axiomatic concepts such as identity, consciousness and existence. Economic Law’s starting point in a chain of reasoning is—a priori categories such as time, change and causality. Both use deductive reasoning.
The Problem
Unfortunately we live in a society that is called a “democracy.” The voting process has turned into a predatory means of extracting wealth from one group and giving it to another—and (or) forcing the moral beliefs of a majority on the rest of the populace. Of course, the smallest minority of all—the individual—has his life, liberty and freedom sold out wholesale. Government consistently violates his property through taxes, inflation, prohibitions and regulations. This apparatus of violent compulsion and coercion even tells him what he can or cannot consume.
Unknown to most is the fact that our founding fathers considered the United States of America a Republic. They believed they had created a Republic. They understood democracy was doomed to failure because it always resulted in mob rule—the tyranny of the majority.
If they could hear the promises of the candidates for office in modern times—they would be appalled. Politicians make big spending promises they can only keep—by stealing from others through taxes and inflation. In many cases they end up pilfering the money from the very same voters that supported them. H.L. Mencken’s description of an election is “an advanced auction of stolen goods.”
Natural Law
An individual has a right to his life, liberty and freedom. He also has the right to own property without anyone infringing on it—and that includes government infringement. Since all individuals own their bodies— they can consume anything they desire.
All moral pronunciations about the so-called evils of drugs, alcohol, cigarettes, gambling, and prostitution are irrelevant and downright dangerous. It may true that a rational individual could decide to avoid these “vices”. However since an individual owns his life, which includes his body, mind and soul, he has every right to indulge in these activities without the interference of absolute moralists and governments. And the voters have no right to deprive him of these through the voting process.
Economic Law
Many people support a system of morality that completely violates the laws of economics. Once these faulty moral systems become law—and governments start enforcing them—nobody’s life, liberty and property are safe. Wars, atrocities, economic crisis, mass liberty violations etc. permeate world affairs. The lone individual is crucified on a cross of myth and drowned in a sea of illusion.
The war on drugs has been taking place for decades. Over half of million Americans have been incarcerated in a “place of rehabilitation” called prison for drug offenses. Let’s decide if drug use is moral or immoral—and whether it should be legal or illegal.
Voluntary and Involuntary Exchange
First you have to distinguish the difference between voluntary and involuntary exchange. You must realize it is individuals who are involved in exchanges. In any two person exchange, one sells (gives) and the other buys (receives). "Society can not take part in an exchange—only individuals can."
A voluntary exchange takes place when two or more individuals agree to become involved with one another. Each participates of his own free will. The exchange could involve anything from giving and receiving love to buying and selling commodities. All believe they will benefit.
An involuntary exchange takes place when at least one party to the transaction is in it against his (her) will. Examples of this type of exchange are robbery, rape, assault and murder. Only this type of exchange can be defined as criminal. All voluntary exchanges are legitimate and non- criminal—no matter what the Absolute Moralist and governments declare.
Since drug exchanges are voluntary they should be legal—which means that all drug use is perfectly moral behavior and of course, should be legal
Conclusion
As you can see—a morality that is in violation of Natural and Economic Law is faulty and destructive. Just because someone feels something is immoral or bad doesn’t give him (her) the right to force their subjectivity on others. And voting on this belief is immoral—which demonstrates this individual is descending to the gutters of hypocrisy. A person must first subject their belief(s) to Natural and Economic Law.
The Libertarian Way is a system of morality that corresponds to these laws. And what makes this so delightful is that all the Libertarian Pleasures correspond to Natural and Economic law.
About the Author
Robert A. Meyer has been investigating and studying economics, philosophy, psychology and metaphysics for 30 years. He realizes there are basic principles of Human Action that will help you become successful. His knowledge that life is to be lived on a physical, emotional, mental and spiritual level allowed him to discover "The Libertarian Way." He experiences its many pleasures and ecstasies on a daily basis. http://libertarianway.com/
Going Back to a Gold Standard?
Here's a slightly different take on the use of gold by govts as a monetary standard. I'm still bullish.
Adrian Ash
Published 11/11/2010
So did gold's first foray over $1,400 mean we're going back to a gold standard?
Nope. Not in the West, nor anytime soon anywhere, and for three simple reasons.
First, gold prices aren't high enough. Second, modern governments don't hold enough of the stuff – not for their tastes, at least. And third, the pace of physical monetization, out of jewelry and mined ore into coin and large-bar form, just isn't great enough. Yet.
Gold Pricing & Value
Backing the world's broad-money supply with gold – even at the 40% cover-ratio set by the United States in the interwar years – would require a price nearer to $4,000 per ounce than $1,400. That's with all the gold ever mined in history locked inside central-bank vaults, by the way. Full cover for a reserves-backed "bullion standard" would need prices above $10,000 per ounce.
read more
Adrian Ash
Published 11/11/2010
So did gold's first foray over $1,400 mean we're going back to a gold standard?
Nope. Not in the West, nor anytime soon anywhere, and for three simple reasons.
First, gold prices aren't high enough. Second, modern governments don't hold enough of the stuff – not for their tastes, at least. And third, the pace of physical monetization, out of jewelry and mined ore into coin and large-bar form, just isn't great enough. Yet.
Gold Pricing & Value
Backing the world's broad-money supply with gold – even at the 40% cover-ratio set by the United States in the interwar years – would require a price nearer to $4,000 per ounce than $1,400. That's with all the gold ever mined in history locked inside central-bank vaults, by the way. Full cover for a reserves-backed "bullion standard" would need prices above $10,000 per ounce.
read more
Thursday, November 18, 2010
Jesús Huerta de Soto: Socialism, Economic Calculation and Entrepreneurship
By Andy Duncan, on 14 November 10
There are three books that take pride of place in my Austrian bookcase. These are Socialism, by Ludwig von Mises; The History of Intellectual Thought, by Murray N. Rothbard; and Democracy the God that Failed, by Hans-Hermann Hoppe. In my own mind these books glow when I look at them, up there on the shelf, and I even have one of them signed by one of the authors, while he was ensconced within the cloisters of Oxford University.
You might be asking where is Human Action? Where is Man, Economy, and State? And where is Money, Bank Credit, and Economic Cycles? Well, these books are there too, further along the shelf. But the Big Three bob in an exalted gravitational bubble of their own, because they form the solar core of my own personal life-long cure from socialism, along with various lesser satellites which rotate around them, including Nineteen Eighty-Four, Atlas Shrugged, and An American in the Gulag.
As a hard-core Stalinist by the age of nine, after having read Das Kapital in my local state library, by the time I had reached thirty I had mellowed slightly into a hard-core Marxist and a willing clandestine ex-Militant Tendency foot-soldier in the Machiavellian rise of the New Labour army in Britain, most of us following the camp magazine, Marxism Today, edited by Martin Jacques, the man who invented the term “Thatcherism”. I was so far entombed within this appalling Death-Eating dark side, that I’m convinced, looking back, I must have had snake’s eyes, a forked tail, and diabolical horns.
Fortunately, I managed to cure myself from this orcish horror, mainly due to the fact, of course, that socialism is utter self-serving elite-generated nonsense and the most evil destructive bone-headed religion that mankind has ever invented. Amongst many other disastrous human-hating onslaughts it has engaged in, in its bid to keep people stupid, sick, and poor — and thus easier to rule over and exploit as tax cattle — socialism has slaughtered tens of millions of people, particularly in the twentieth century, which must truly be its envious bloody golden age. Alas, it took many years to cure myself from this virulent mental infection, involving a decade of self-realisation, self-study, and many tough self-directed questions, as well as several broken relationships, memorable bitter accusations of treachery, and the painful sloughing of mental habits burned into my mind through years of angry hatred and vicious envy.
The three books which finally wiped the usually-immune virus of socialism clean from my mind were the exalted Big Three above, especially Socialism, by Ludwig von Mises, a book which always remains fresh and inspirational on every re-read, a sort of non-fictional equivalent of Lord of the Rings.
But did room exist for a fourth book within my hallowed core? Was I genuinely fully cured or was there the remotest chance I could slip back into the skeletal clutches of Voldemort’s sauronesque worshippers, the fatally conceited socialist Death Eaters?
Fortunately, I think I am now fairly resistant to the drenching poison of Marxism, and all of its goblinesque derivatives such as environmentalism. However, as the fabulous George Carlin pointed out in one of his amazing HBO specials, you always need to keep your immune system in tip-top fighting order to kill off the re-entry of old familiar viruses. Perhaps I needed a fourth book to provide this required re-innoculation of my fighting spirit against the seemingly endless mindless legions of the state-indoctrinated cannon fodder of socialism?
I think I have now stumbled upon this fourth book.
Although my self-education had kicked socialism back into the envious schoolyard nursery where it belongs, all the books I had read had never clarified one last question, which had nagged at me for years. Why does socialism keep taking so long to fail, with the Soviet Union surviving for 70 years and the fiat currency union of the west surviving for 40 years, since 1971? Yes, there is economic calculation, the short-sightedness of fools, and the system of organised criminal lies which we name government, but what is the essential mechanism that separates the free market from the jackboot of socialism and how does a typical rancid and rotten bloom of socialism survive for decades, when from my previous readings such a malodourous bloom ought to fail within years or even months, once the hideous mask of its hateful spiteful envy is revealed?
Even the most virulent and aggressive form of the creed — the National Socialist German Workers’ Party — managed to survive for a dozen years, from 1933 to 1945, before this particularly cancerous party of socialism imploded, with milder forms of the disease, such as our own British Labour Party, managing to survive for a hundred years before collapsing in 1979, only to re-appear in a more camouflaged form as the more fascist variant of New Labour, which predictably blew itself out after thirteen unlucky years of boom and bust, hopefully to now die under the feeble and pathetic leadership of the spectacularly inglorious Ed Miliband, son of the influential Marxist intellectual, Ralph Miliband.
Yes, we can talk about western subsidies to the Soviets and the misplaced faith of people in central banks to refrain from inflating, but this is skirting the central issue; why does socialism survive for decades, no matter how appalling its variant form? If we are to believe that socialism is stupid and self-destructive, why has it taken such a hold of humanity and why does it keep surviving and prospering for so long in its various incarnations? If the flowering Hayekian market of ideas and the evolving Schumpeterian market of freely creative destructionism really do work in partnership to drive out failed innovations and to promote successful inspirations, why are there so many Keynesians and so few Austrians? Why is there so much government and why is there so little freedom?
Jesús Huerta de Soto uncovers and reveals the mysterious ghost-in-the-machine hiding behind these questions in a beautifully simple connective way, in Socialism, Economic Calculation, and Entrepreneurship. He distils the rough juniper berries of human action into the Bombay Sapphire gin of entrepreneurship and elegantly blends this with the chilled quinine tonic of economic calculation. Delicately mixing this with the limes of Salamancan history and the Andalusian bitterness of political analysis, the resulting 300-page book is one of the finest Austrian monographs I have ever had the privilege of reading and easily breaks into my triumvirate of heroic works, to help form a new quadrumvirate.
Yes, the top-ranking book is still Socialism, as Gandalf the White, with the other three jostling alongside as Aragorn, Gimli, and Legolas; Socialism, Economic Calculation, and Entrepreneurship now plays the role of the far-seeing prince of the Mirkwood elves.
So how does Legolas achieve this far-sightedness, where Gandalf, Aragorn, and Gimli fall short? Because Huerta de Soto uses both sides of the mind in equal measure, including the parallel-processing right-mind, whereas most writers typically concentrate on the serial-processing left-mind. Drawing parallel-processed pictures with his words to complement a serial-processed stream of ideas, Huerta de Soto achieves a delicately balanced act between the right and the left conscious minds, enabling them to work together to see through to the root causes of the failure of socialism and the triumph of the free market. As I sat reading his book, I could see a sparkling and ever-changing set of shimmering human connections constantly changing and shifting, with the lights of new ideas twinkling in a flexible Hayekian blend of free human thoughts and actions, always evolving towards — though never achieving — a final perfect form where humanity is best served by this diaphanous liquid molecular structure.
I could also see the destructive boot and the mindless compartmentalising scalpels of the blind self-serving socialist elite, constantly trying to wreck this evolving form and to cut its connections to make this glittering form do what they wanted and to do what served their personal immoral interests, against the independent temporal wishes of the rest of the nodal system. However, despite this constant unwelcome interference, no matter where the socialist boot falls and no matter where its regulatory controls cut the informational connections, the entity always tries to survive, like an ants’ nest disturbed by a spade in your back garden.
Socialism thus survives because of the free market, which constantly tries to repair the damage socialism causes through its taxations, regulations, and debt-fed inflations. The free market self-repairs, re-connects, and re-organises itself — spontaneously — like a river in flow coping with the damming of malcontented beavers. The final triumph of socialism can thus be seen as the complete damming of the river and the obliteration of humanity, and the final triumph of the free market will be when this evil dam is finally dissolved, destroyed, and eradicated, and the river can flow freely again without obstruction.
Thus, the more socialism we have, the quicker it kills itself, destroying that which it parasitises, as with full-blooded national socialism and soviet communism; the more anaemic versions of socialism allow a more bloodless monster to survive longer, as with social democracy in the western world.
However, socialism is an always-expansive beast, feeding upon the seven deadly sins of wrath, greed, sloth, pride, lust, envy, and gluttony, via the mechanisms of warfare and welfare. Although the ongoing fight between socialism and the free market may sometimes be balanced for long periods, as in a fiercely contested but static Sumo wrestling contest or a brutal but static rugby scrum, socialism is thus constantly trying to break out and to crush the free market, therefore we need to obliterate this green-eyed aberration completely, if we are to achieve a safe, free, and prosperous world.
All this, and much more, becomes clear when you read Professor Huerta de Soto’s book and this short review does it little justice; you must read the book yourself to form your own conclusions. I can only say, however, that I thoroughly recommend that you do, especially all those people who wish to understand the insidious and self-righteous evil of socialism and therefore how to remove its suicidal and destructive human-hating impulses from the face of the Earth, before these self-immolating impulses destroy us in their turn.
Andy Duncan works as an independent educational and professional practice consultant within the quantitative finance industry.
There are three books that take pride of place in my Austrian bookcase. These are Socialism, by Ludwig von Mises; The History of Intellectual Thought, by Murray N. Rothbard; and Democracy the God that Failed, by Hans-Hermann Hoppe. In my own mind these books glow when I look at them, up there on the shelf, and I even have one of them signed by one of the authors, while he was ensconced within the cloisters of Oxford University.
You might be asking where is Human Action? Where is Man, Economy, and State? And where is Money, Bank Credit, and Economic Cycles? Well, these books are there too, further along the shelf. But the Big Three bob in an exalted gravitational bubble of their own, because they form the solar core of my own personal life-long cure from socialism, along with various lesser satellites which rotate around them, including Nineteen Eighty-Four, Atlas Shrugged, and An American in the Gulag.
As a hard-core Stalinist by the age of nine, after having read Das Kapital in my local state library, by the time I had reached thirty I had mellowed slightly into a hard-core Marxist and a willing clandestine ex-Militant Tendency foot-soldier in the Machiavellian rise of the New Labour army in Britain, most of us following the camp magazine, Marxism Today, edited by Martin Jacques, the man who invented the term “Thatcherism”. I was so far entombed within this appalling Death-Eating dark side, that I’m convinced, looking back, I must have had snake’s eyes, a forked tail, and diabolical horns.
Fortunately, I managed to cure myself from this orcish horror, mainly due to the fact, of course, that socialism is utter self-serving elite-generated nonsense and the most evil destructive bone-headed religion that mankind has ever invented. Amongst many other disastrous human-hating onslaughts it has engaged in, in its bid to keep people stupid, sick, and poor — and thus easier to rule over and exploit as tax cattle — socialism has slaughtered tens of millions of people, particularly in the twentieth century, which must truly be its envious bloody golden age. Alas, it took many years to cure myself from this virulent mental infection, involving a decade of self-realisation, self-study, and many tough self-directed questions, as well as several broken relationships, memorable bitter accusations of treachery, and the painful sloughing of mental habits burned into my mind through years of angry hatred and vicious envy.
The three books which finally wiped the usually-immune virus of socialism clean from my mind were the exalted Big Three above, especially Socialism, by Ludwig von Mises, a book which always remains fresh and inspirational on every re-read, a sort of non-fictional equivalent of Lord of the Rings.
But did room exist for a fourth book within my hallowed core? Was I genuinely fully cured or was there the remotest chance I could slip back into the skeletal clutches of Voldemort’s sauronesque worshippers, the fatally conceited socialist Death Eaters?
Fortunately, I think I am now fairly resistant to the drenching poison of Marxism, and all of its goblinesque derivatives such as environmentalism. However, as the fabulous George Carlin pointed out in one of his amazing HBO specials, you always need to keep your immune system in tip-top fighting order to kill off the re-entry of old familiar viruses. Perhaps I needed a fourth book to provide this required re-innoculation of my fighting spirit against the seemingly endless mindless legions of the state-indoctrinated cannon fodder of socialism?
I think I have now stumbled upon this fourth book.
Although my self-education had kicked socialism back into the envious schoolyard nursery where it belongs, all the books I had read had never clarified one last question, which had nagged at me for years. Why does socialism keep taking so long to fail, with the Soviet Union surviving for 70 years and the fiat currency union of the west surviving for 40 years, since 1971? Yes, there is economic calculation, the short-sightedness of fools, and the system of organised criminal lies which we name government, but what is the essential mechanism that separates the free market from the jackboot of socialism and how does a typical rancid and rotten bloom of socialism survive for decades, when from my previous readings such a malodourous bloom ought to fail within years or even months, once the hideous mask of its hateful spiteful envy is revealed?
Even the most virulent and aggressive form of the creed — the National Socialist German Workers’ Party — managed to survive for a dozen years, from 1933 to 1945, before this particularly cancerous party of socialism imploded, with milder forms of the disease, such as our own British Labour Party, managing to survive for a hundred years before collapsing in 1979, only to re-appear in a more camouflaged form as the more fascist variant of New Labour, which predictably blew itself out after thirteen unlucky years of boom and bust, hopefully to now die under the feeble and pathetic leadership of the spectacularly inglorious Ed Miliband, son of the influential Marxist intellectual, Ralph Miliband.
Yes, we can talk about western subsidies to the Soviets and the misplaced faith of people in central banks to refrain from inflating, but this is skirting the central issue; why does socialism survive for decades, no matter how appalling its variant form? If we are to believe that socialism is stupid and self-destructive, why has it taken such a hold of humanity and why does it keep surviving and prospering for so long in its various incarnations? If the flowering Hayekian market of ideas and the evolving Schumpeterian market of freely creative destructionism really do work in partnership to drive out failed innovations and to promote successful inspirations, why are there so many Keynesians and so few Austrians? Why is there so much government and why is there so little freedom?
Jesús Huerta de Soto uncovers and reveals the mysterious ghost-in-the-machine hiding behind these questions in a beautifully simple connective way, in Socialism, Economic Calculation, and Entrepreneurship. He distils the rough juniper berries of human action into the Bombay Sapphire gin of entrepreneurship and elegantly blends this with the chilled quinine tonic of economic calculation. Delicately mixing this with the limes of Salamancan history and the Andalusian bitterness of political analysis, the resulting 300-page book is one of the finest Austrian monographs I have ever had the privilege of reading and easily breaks into my triumvirate of heroic works, to help form a new quadrumvirate.
Yes, the top-ranking book is still Socialism, as Gandalf the White, with the other three jostling alongside as Aragorn, Gimli, and Legolas; Socialism, Economic Calculation, and Entrepreneurship now plays the role of the far-seeing prince of the Mirkwood elves.
So how does Legolas achieve this far-sightedness, where Gandalf, Aragorn, and Gimli fall short? Because Huerta de Soto uses both sides of the mind in equal measure, including the parallel-processing right-mind, whereas most writers typically concentrate on the serial-processing left-mind. Drawing parallel-processed pictures with his words to complement a serial-processed stream of ideas, Huerta de Soto achieves a delicately balanced act between the right and the left conscious minds, enabling them to work together to see through to the root causes of the failure of socialism and the triumph of the free market. As I sat reading his book, I could see a sparkling and ever-changing set of shimmering human connections constantly changing and shifting, with the lights of new ideas twinkling in a flexible Hayekian blend of free human thoughts and actions, always evolving towards — though never achieving — a final perfect form where humanity is best served by this diaphanous liquid molecular structure.
I could also see the destructive boot and the mindless compartmentalising scalpels of the blind self-serving socialist elite, constantly trying to wreck this evolving form and to cut its connections to make this glittering form do what they wanted and to do what served their personal immoral interests, against the independent temporal wishes of the rest of the nodal system. However, despite this constant unwelcome interference, no matter where the socialist boot falls and no matter where its regulatory controls cut the informational connections, the entity always tries to survive, like an ants’ nest disturbed by a spade in your back garden.
Socialism thus survives because of the free market, which constantly tries to repair the damage socialism causes through its taxations, regulations, and debt-fed inflations. The free market self-repairs, re-connects, and re-organises itself — spontaneously — like a river in flow coping with the damming of malcontented beavers. The final triumph of socialism can thus be seen as the complete damming of the river and the obliteration of humanity, and the final triumph of the free market will be when this evil dam is finally dissolved, destroyed, and eradicated, and the river can flow freely again without obstruction.
Thus, the more socialism we have, the quicker it kills itself, destroying that which it parasitises, as with full-blooded national socialism and soviet communism; the more anaemic versions of socialism allow a more bloodless monster to survive longer, as with social democracy in the western world.
However, socialism is an always-expansive beast, feeding upon the seven deadly sins of wrath, greed, sloth, pride, lust, envy, and gluttony, via the mechanisms of warfare and welfare. Although the ongoing fight between socialism and the free market may sometimes be balanced for long periods, as in a fiercely contested but static Sumo wrestling contest or a brutal but static rugby scrum, socialism is thus constantly trying to break out and to crush the free market, therefore we need to obliterate this green-eyed aberration completely, if we are to achieve a safe, free, and prosperous world.
All this, and much more, becomes clear when you read Professor Huerta de Soto’s book and this short review does it little justice; you must read the book yourself to form your own conclusions. I can only say, however, that I thoroughly recommend that you do, especially all those people who wish to understand the insidious and self-righteous evil of socialism and therefore how to remove its suicidal and destructive human-hating impulses from the face of the Earth, before these self-immolating impulses destroy us in their turn.
Andy Duncan works as an independent educational and professional practice consultant within the quantitative finance industry.
Wednesday, November 17, 2010
The horrible truth starts to dawn on Europe's leaders
The entire European Project is now at risk of disintegration, with strategic and economic consequences that are very hard to predict.
In a speech this morning, EU President Herman Van Rompuy (poet, and writer of Japanese and Latin verse) warned that if Europe’s leaders mishandle the current crisis and allow the eurozone to break up, they will destroy the European Union itself.
“We’re in a survival crisis. We all have to work together in order to survive with the euro zone, because if we don’t survive with the euro zone we will not survive with the European Union,” he said.
Well, well. This theme is all too familiar to readers of The Daily Telegraph, but it comes as something of a shock to hear such a confession after all these years from Europe’s president.
read more
In a speech this morning, EU President Herman Van Rompuy (poet, and writer of Japanese and Latin verse) warned that if Europe’s leaders mishandle the current crisis and allow the eurozone to break up, they will destroy the European Union itself.
“We’re in a survival crisis. We all have to work together in order to survive with the euro zone, because if we don’t survive with the euro zone we will not survive with the European Union,” he said.
Well, well. This theme is all too familiar to readers of The Daily Telegraph, but it comes as something of a shock to hear such a confession after all these years from Europe’s president.
read more
Senate Republicans Adopt BBA Common Sense Balanced Budget Amendment
PRESS RELEASE BELOW
November 17, 2010
Contact: Rick Tyler
540-338-1250
rick@bbanow.org
Washington, D.C. – On Tuesday, the U.S. Senate Republican Conference took a dramatic step toward fiscal sanity by adopting a Balanced Budget Amendment to the United States Constitution that mirrors the Common Sense Balanced Budget Amendment (BBA) proposed and promoted by the BBA Now Coalition, which includes over 90 national and local conservative policy and grassroots groups representing millions of Americans.
Like the Common Sense BBA, the Senate Republican resolution requires the president to submit a balanced budget to Congress prior to each fiscal year with a new rule requiring two-thirds of each chamber to approve any tax increase.
Texas Senator John Cornyn, one of the authors of the resolution, called the action a "necessary” step “to restore fiscal discipline.”
The BBA Now Coalition commends the Senate Republicans for listening to the American people and joining the national movement for the Common Sense Balanced Budget Amendment.
“The GOP Senators are showing the country that the people still have the final say. This is a positive solution for ending the out-of-control spending and debt that is putting America’s fiscal solvency and national security at risk,” said Rick Tyler, Chairman of the BBA Now Coalition and the ReAL Action Network. “There is little doubt that the 2010 Congressional elections were a referendum on massive government spending. We are encouraged to see that the Senate Republicans have heard the American people and are taking actions that are long overdue.”
The Common Sense Coalition is now calling on the rest of the U.S. Senate and the House to move forward and pass the same Balanced Budget Amendment to begin the ratification process in the states.
BBA Now is a coalition of more than 90 policy and grassroots groups working for a Balanced Budget Amendment to the U. S. Constitution. National members include Americans for Tax Reform, American Solutions, Contract From America, Institute for Liberty, Let Freedom Ring, National Taxpayers Union, ReAL Action and 60 Plus Association. Learn more at www.bbanow.org.
We hope you are encouraged by this terrific news and together we will keep moving forward to help save our great nation!
In Liberty,
The BBA Now Team
contact@bbanow.org
BBA Now - A Coalition Project of ReAL Action
November 17, 2010
Contact: Rick Tyler
540-338-1250
rick@bbanow.org
Washington, D.C. – On Tuesday, the U.S. Senate Republican Conference took a dramatic step toward fiscal sanity by adopting a Balanced Budget Amendment to the United States Constitution that mirrors the Common Sense Balanced Budget Amendment (BBA) proposed and promoted by the BBA Now Coalition, which includes over 90 national and local conservative policy and grassroots groups representing millions of Americans.
Like the Common Sense BBA, the Senate Republican resolution requires the president to submit a balanced budget to Congress prior to each fiscal year with a new rule requiring two-thirds of each chamber to approve any tax increase.
Texas Senator John Cornyn, one of the authors of the resolution, called the action a "necessary” step “to restore fiscal discipline.”
The BBA Now Coalition commends the Senate Republicans for listening to the American people and joining the national movement for the Common Sense Balanced Budget Amendment.
“The GOP Senators are showing the country that the people still have the final say. This is a positive solution for ending the out-of-control spending and debt that is putting America’s fiscal solvency and national security at risk,” said Rick Tyler, Chairman of the BBA Now Coalition and the ReAL Action Network. “There is little doubt that the 2010 Congressional elections were a referendum on massive government spending. We are encouraged to see that the Senate Republicans have heard the American people and are taking actions that are long overdue.”
The Common Sense Coalition is now calling on the rest of the U.S. Senate and the House to move forward and pass the same Balanced Budget Amendment to begin the ratification process in the states.
BBA Now is a coalition of more than 90 policy and grassroots groups working for a Balanced Budget Amendment to the U. S. Constitution. National members include Americans for Tax Reform, American Solutions, Contract From America, Institute for Liberty, Let Freedom Ring, National Taxpayers Union, ReAL Action and 60 Plus Association. Learn more at www.bbanow.org.
We hope you are encouraged by this terrific news and together we will keep moving forward to help save our great nation!
In Liberty,
The BBA Now Team
contact@bbanow.org
BBA Now - A Coalition Project of ReAL Action
Monday, November 15, 2010
What the Rioting French Mean for Your Wealth
Gary’s Note: Nations can’t afford to pay people to do nothing for half their adult lives anymore. Learn what China had to do with the riots in France…and how to protect and grow your wealth as the Western world spirals into poverty. Just read on below…
from Whiskey & Gunpowder
By Byron King
November 15, 2010
Pittsburgh, Pennsylvania, U.S.A.
The French nation was hobbled by strikes, rolling strikes, street violence and other protests. It sprung from the proposal of French Pres. Sarkozy to raise the minimum retirement age to 62, by 2018 — or so the newspapers tell us. Let’s think about it, though.
As a long-time follower of the world oil industry, I was immediately struck by how one key target of the rioters and protesters was France’s petroleum distribution system. Clearly, the protesters understand the ideas of the 19th Century military theorist Karl von Clausewitz, who advanced the concept of finding the opponent’s “center of gravity,” and then bringing force to bear on that point.
The protesters were going for the jugular of modern societies, which is the energy supply. In France this week, over 3,000 — out of 13,000 — gas stations ran out of fuel after panic-buying by motorists. Also, eleven out of France’s 12 oil refineries remain on strike. Add to this that “flying pickets” are moving around, blocking fuel distribution depots. Thus has lack of fuel shut down major sectors of the French economy.
Indeed, the Charles de Gaulle Airport in Paris — a key transportation hub for the world, and not just France — suffered from a severe shortage of fuel for arriving aircraft. French authorities advised air carriers to land with enough fuel to take off, and fly somewhere else to gas up.
Pres. Sarkozy sent riot police to confront the blockades of refineries and fuel terminals. He knows that his response to the energy-based tactics of the opposition will make or break his political power. The jury is still out, but my hunch is not to bet against the power of the French state on this one.
What’s the Real Issue?
On the surface, the French rioting seemed like a political squabble over a high-visibility social entitlement. Considering the passion of the protesters, it’s like the current retirement age in France — 60 years — is some sort of sacred number. The protesters make it sound like Pres. Sarkozy wants to destroy a deep-rooted individual right that dates back to time immemorial of which, to use an old phrase, “the memory of man runneth not to the contrary.”
But the age-60 retirement number is not exactly some icon of bloody struggle, hewn out of the rock of revolution and war. No, the age-60 retirement eligibility dates only back to 1983 when the Socialist Party, under then-president François Mitterrand, reduced the former age of retirement from 65.
That is, the age-reduction for retirement was just a vote-buying political move during a time of relative peace and prosperity in France. Which gets us closer to identifying the real core issue behind the social unrest in France. It’s a lesson for all of us, in fact.
Times Have Changed — An Earthquake Across History
Neither France, nor the Western world generally, is living in a time of relative prosperity. Not anymore. Maybe not ever again.
Things have changed in this world, probably forever. The economic rise of China has caused an earthquake across history. That, coupled with the self-inflicted collapse of much of the Western way of running capital markets and managing economic growth over the long haul.
In just the past 15 years or so, China has evolved into a nation of immense demand. China has become the key player in a world of fierce resource competition. Look around. Things like energy, minerals, water and food are scarce, and getting scarcer. China is driving a long-term bull market in resources of every sort, from oil to iron, copper to cotton, cement to soybeans.
No “Value” in Value-Creation
On the other side of the coin, China is a land of mind-boggling, low-cost productivity. In almost every industrial arena and sector, the overall competition from Chinese firms has driven costs for many things. How low? Well, often down to right around the intrinsic value of the inputs — the plastic, the copper, the steel. As for the labor input? It’s not too much to say that Chinese competition has removed much of the “value” from value-creation.
Indeed, one of the major global economic issues today is that when Western businesses go head-to-head against Chinese competition, in almost any industry, nobody makes much money anymore.
So if this is the world in which we live, how can France remain a wealthy country? How can the West retain its status and historical standards of living? Tough questions, eh? But well worth asking.
What Can Nations Afford?
It takes us back to those French retirement riots. In France — and in the U.S. as well — government has promised far more than it’ll ever be able to deliver.
Retire at age 60? Who can afford that? Who’ll pick up that bill? Where’s the money? The government will collect taxes from who, exactly?
Really, when it comes to the French riots, it’s NOT just that the age-60 retirement idea lacks any sort of serious historical pedigree. Not at all. The problem is that the days of an entire nation retiring early are over.
Age-60 retirement is an idea that’s ridiculous and unsustainable in a world of Peak Oil — and Peak “Everything Else,” for that matter. We in the U.S. — and Canada, U.K, Australia, and so many other places across the world — need to take heed.
from Whiskey & Gunpowder
By Byron King
November 15, 2010
Pittsburgh, Pennsylvania, U.S.A.
The French nation was hobbled by strikes, rolling strikes, street violence and other protests. It sprung from the proposal of French Pres. Sarkozy to raise the minimum retirement age to 62, by 2018 — or so the newspapers tell us. Let’s think about it, though.
As a long-time follower of the world oil industry, I was immediately struck by how one key target of the rioters and protesters was France’s petroleum distribution system. Clearly, the protesters understand the ideas of the 19th Century military theorist Karl von Clausewitz, who advanced the concept of finding the opponent’s “center of gravity,” and then bringing force to bear on that point.
The protesters were going for the jugular of modern societies, which is the energy supply. In France this week, over 3,000 — out of 13,000 — gas stations ran out of fuel after panic-buying by motorists. Also, eleven out of France’s 12 oil refineries remain on strike. Add to this that “flying pickets” are moving around, blocking fuel distribution depots. Thus has lack of fuel shut down major sectors of the French economy.
Indeed, the Charles de Gaulle Airport in Paris — a key transportation hub for the world, and not just France — suffered from a severe shortage of fuel for arriving aircraft. French authorities advised air carriers to land with enough fuel to take off, and fly somewhere else to gas up.
Pres. Sarkozy sent riot police to confront the blockades of refineries and fuel terminals. He knows that his response to the energy-based tactics of the opposition will make or break his political power. The jury is still out, but my hunch is not to bet against the power of the French state on this one.
What’s the Real Issue?
On the surface, the French rioting seemed like a political squabble over a high-visibility social entitlement. Considering the passion of the protesters, it’s like the current retirement age in France — 60 years — is some sort of sacred number. The protesters make it sound like Pres. Sarkozy wants to destroy a deep-rooted individual right that dates back to time immemorial of which, to use an old phrase, “the memory of man runneth not to the contrary.”
But the age-60 retirement number is not exactly some icon of bloody struggle, hewn out of the rock of revolution and war. No, the age-60 retirement eligibility dates only back to 1983 when the Socialist Party, under then-president François Mitterrand, reduced the former age of retirement from 65.
That is, the age-reduction for retirement was just a vote-buying political move during a time of relative peace and prosperity in France. Which gets us closer to identifying the real core issue behind the social unrest in France. It’s a lesson for all of us, in fact.
Times Have Changed — An Earthquake Across History
Neither France, nor the Western world generally, is living in a time of relative prosperity. Not anymore. Maybe not ever again.
Things have changed in this world, probably forever. The economic rise of China has caused an earthquake across history. That, coupled with the self-inflicted collapse of much of the Western way of running capital markets and managing economic growth over the long haul.
In just the past 15 years or so, China has evolved into a nation of immense demand. China has become the key player in a world of fierce resource competition. Look around. Things like energy, minerals, water and food are scarce, and getting scarcer. China is driving a long-term bull market in resources of every sort, from oil to iron, copper to cotton, cement to soybeans.
No “Value” in Value-Creation
On the other side of the coin, China is a land of mind-boggling, low-cost productivity. In almost every industrial arena and sector, the overall competition from Chinese firms has driven costs for many things. How low? Well, often down to right around the intrinsic value of the inputs — the plastic, the copper, the steel. As for the labor input? It’s not too much to say that Chinese competition has removed much of the “value” from value-creation.
Indeed, one of the major global economic issues today is that when Western businesses go head-to-head against Chinese competition, in almost any industry, nobody makes much money anymore.
So if this is the world in which we live, how can France remain a wealthy country? How can the West retain its status and historical standards of living? Tough questions, eh? But well worth asking.
What Can Nations Afford?
It takes us back to those French retirement riots. In France — and in the U.S. as well — government has promised far more than it’ll ever be able to deliver.
Retire at age 60? Who can afford that? Who’ll pick up that bill? Where’s the money? The government will collect taxes from who, exactly?
Really, when it comes to the French riots, it’s NOT just that the age-60 retirement idea lacks any sort of serious historical pedigree. Not at all. The problem is that the days of an entire nation retiring early are over.
Age-60 retirement is an idea that’s ridiculous and unsustainable in a world of Peak Oil — and Peak “Everything Else,” for that matter. We in the U.S. — and Canada, U.K, Australia, and so many other places across the world — need to take heed.
U.S. of "Irony and Hypocrisy": We're No. 1 ... At Currency Manipulation, Pento Says
Posted Nov 12, 2010 09:48am EST by Aaron Task in Investing, Politics
Related: TBT, TLT, UUP, UDN, GLD, FXI, ^DJI
After the G20 failed to reach any consensus on currency issues and trade imbalances, President Obama took a direct shot at China Friday, saying the renminbi "is undervalued...and China spends enormous amounts of money intervening in the market to keep it undervalued."
The President's comments cap (at least for now) a period of extraordinary public debate among politicians and policymakers -- past and present -- over currencies and the Fed's QE2 program.
Ahead of the G20 confab, Germany's finance minister, Wolfgang Schauble called U.S. policy "clueless," while foreign ministers from China, South Africa and France (among others) questioned the wisdom of QE2.
Adding insult to irony, former Fed Chairman Alan Greenspan piled on in The FT, where he warned the U.S. is "pursuing a policy of currency weakening." That in turn, prompted a sharp rebuke from Treasury Secretary Tim Geithner, who told CNBC: "We will never seek to weaken our currency as a tool to gain competitive advantage or to grow the economy."
Michael Pento, senior economist at Euro Pacific Capital, says the U.S. doesn't have a leg to stand on when it comes to discussions about currencies, calling Alan Greenspan's comments the "height of irony and hypocrisy," given his easy money policies at the Fed.
"The U.S. is the number one currency manipulator on the planet," he says. "We print up a lot of dollars [and] we can consume more than we produce because of that."
But that policy makes for a "chronically weak" dollar and puts America at the mercy of its foreign creditors, Pento says, restating a warning about the risks of a true dollar crash and sky-rocketing interest rates if we don't change course, soon.
It won't happen overnight, but China is plotting its own exit strategy by slowing rolling its Treasury holdings into the short end of the curve, he says, suggesting other foreign investors will follow suit.
"The credibility of this country is falling faster than the dollar," Pento says. "One day you'll have a Treasury auction without indirect bidders and only Ben Bernanke" will want to buy U.S. debt, he says.
To avoid such a "watershed event," Pento recommends we adopt the bulk of the Deficit Commission Panel's recommendations, as detailed here. He also wants a return to the gold standard, a controversial idea World Bank President Robert Zoellick broached this week.
Going back to the gold standard "would be painful" and even lead to a depression in the near term, Pento concedes. But "all the imbalances would be reconciled and we can start over again with a real economy."
Aaron Task is the host of Tech Ticker. You can follow him on Twitter at @atask or email him at mailto:altask@yahoo.com
Related: TBT, TLT, UUP, UDN, GLD, FXI, ^DJI
After the G20 failed to reach any consensus on currency issues and trade imbalances, President Obama took a direct shot at China Friday, saying the renminbi "is undervalued...and China spends enormous amounts of money intervening in the market to keep it undervalued."
The President's comments cap (at least for now) a period of extraordinary public debate among politicians and policymakers -- past and present -- over currencies and the Fed's QE2 program.
Ahead of the G20 confab, Germany's finance minister, Wolfgang Schauble called U.S. policy "clueless," while foreign ministers from China, South Africa and France (among others) questioned the wisdom of QE2.
Adding insult to irony, former Fed Chairman Alan Greenspan piled on in The FT, where he warned the U.S. is "pursuing a policy of currency weakening." That in turn, prompted a sharp rebuke from Treasury Secretary Tim Geithner, who told CNBC: "We will never seek to weaken our currency as a tool to gain competitive advantage or to grow the economy."
Michael Pento, senior economist at Euro Pacific Capital, says the U.S. doesn't have a leg to stand on when it comes to discussions about currencies, calling Alan Greenspan's comments the "height of irony and hypocrisy," given his easy money policies at the Fed.
"The U.S. is the number one currency manipulator on the planet," he says. "We print up a lot of dollars [and] we can consume more than we produce because of that."
But that policy makes for a "chronically weak" dollar and puts America at the mercy of its foreign creditors, Pento says, restating a warning about the risks of a true dollar crash and sky-rocketing interest rates if we don't change course, soon.
It won't happen overnight, but China is plotting its own exit strategy by slowing rolling its Treasury holdings into the short end of the curve, he says, suggesting other foreign investors will follow suit.
"The credibility of this country is falling faster than the dollar," Pento says. "One day you'll have a Treasury auction without indirect bidders and only Ben Bernanke" will want to buy U.S. debt, he says.
To avoid such a "watershed event," Pento recommends we adopt the bulk of the Deficit Commission Panel's recommendations, as detailed here. He also wants a return to the gold standard, a controversial idea World Bank President Robert Zoellick broached this week.
Going back to the gold standard "would be painful" and even lead to a depression in the near term, Pento concedes. But "all the imbalances would be reconciled and we can start over again with a real economy."
Aaron Task is the host of Tech Ticker. You can follow him on Twitter at @atask or email him at mailto:altask@yahoo.com
Stupidest Lawsuit Ever Has Us Suing Ourselves: Jonathan Weil
By Jonathan Weil - Nov 10, 2010 8:00 PM CT Bloomberg Opinion
Of all the absurdities to emerge from the government’s never-ending bailout of the U.S. financial system, here’s a new one that’s hard to top: The government, through Freddie Mac, in effect is now suing itself.
Never let it be said that Bailout Nation doesn’t have a sense of humor. It would be only a slight hyperbole to say this may be the stupidest lawsuit ever.
Here’s what happened. In July the Internal Revenue Service told Freddie Mac, the congressionally chartered housing financier, that it owed $3 billion of back taxes and penalties for the years 1998 through 2005. Rather than pay up, the McLean, Virginia-based company sued the IRS on Oct. 22 in U.S. Tax Court to contest its claims.
Before Freddie Mac could do that, it had to seek written permission from its conservator, the Federal Housing Finance Agency. FHFA, whose mandate is supposed to include looking out for taxpayers, consented. Freddie Mac disclosed the suit last week in a footnote to its third-quarter financial report.
Talk about biting the hand that feeds you. Here we have a government-sponsored enterprise -- which depends on Treasury’s financial support to remain solvent -- suing an arm of the Treasury Department. Some thanks this is. To date, Treasury has injected about $64 billion into Freddie Mac and collected $8.4 billion of cash dividends on its senior preferred stock in the company.
The Treasury Department also holds a warrant to buy 79.9 percent of the company’s common stock for a nominal price. So Freddie Mac can’t claim it’s simply protecting shareholders by taking on the IRS. Under its conservatorship, the company’s board answers only to the FHFA, which has complete authority over Freddie Mac’s affairs.
Lawyers Win
The details of the tax dispute are beside the point. No matter how the case turns out, the result more or less should wind up being a wash for taxpayers. The only people who stand to make money from the litigation are Freddie Mac’s outside attorneys at Shearman & Sterling.
Consider some possible scenarios. If the IRS loses, that would be a win for taxpayers in the sense that Treasury won’t need to send as much bailout money to Freddie Mac in the future. Yet the public also would lose because the government wouldn’t get its $3 billion of revenue.
Alternatively, if the IRS wins, it would be a victory for taxpayers, too. Of course, they would still lose because Freddie Mac would have an even bigger capital hole after paying the $3 billion. The Treasury then would have to inject more money into the company to keep it from becoming insolvent and falling into mandatory receivership.
Matter of Principle
An IRS spokesman, Eric Smith, declined to comment. So did Robert Rudnick, a partner at Shearman & Sterling in Washington. Corinne Russell, an FHFA spokeswoman, declined to comment when I asked why the agency gave Freddie Mac permission to sue the IRS. FHFA’s acting director, Edward DeMarco, didn’t return phone calls.
A Freddie Mac spokeswoman, Sharon McHale, cast the company’s decision to sue the IRS in terms of principle.
“We believe that we did not in prior years have federal tax deficiencies and that we are not liable for any penalties,” she said. Freddie Mac, she added, “has an obligation to run the company according to the laws of the land. And in an instance where we believe we’re in the right, we believe we have an obligation to assert that.”
No Call
OK, fine. But shouldn’t it also have been the job of someone in the government to exercise some common sense here? Surely the head of FHFA could have picked up the phone and called someone at Treasury to work out a truce. Or, if that wasn’t possible, FHFA could have told Freddie Mac to pay its IRS bill, tap Treasury for more bailout money, and stop ringing up legal fees.
For what it’s worth, I checked the disclosures at Freddie Mac’s cousin, Fannie Mae, which also was seized by the government in 2008. Fannie Mae reached a settlement with the IRS over its tax returns for 1999 through 2004. Score one for cooler heads.
Freddie Mac said in its latest quarterly report that “it is reasonably possible” the company will reach a settlement with the IRS within the next 12 months. We can only hope.
(Jonathan Weil is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: Jonathan Weil in New York at jweil6@bloomberg.net
Of all the absurdities to emerge from the government’s never-ending bailout of the U.S. financial system, here’s a new one that’s hard to top: The government, through Freddie Mac, in effect is now suing itself.
Never let it be said that Bailout Nation doesn’t have a sense of humor. It would be only a slight hyperbole to say this may be the stupidest lawsuit ever.
Here’s what happened. In July the Internal Revenue Service told Freddie Mac, the congressionally chartered housing financier, that it owed $3 billion of back taxes and penalties for the years 1998 through 2005. Rather than pay up, the McLean, Virginia-based company sued the IRS on Oct. 22 in U.S. Tax Court to contest its claims.
Before Freddie Mac could do that, it had to seek written permission from its conservator, the Federal Housing Finance Agency. FHFA, whose mandate is supposed to include looking out for taxpayers, consented. Freddie Mac disclosed the suit last week in a footnote to its third-quarter financial report.
Talk about biting the hand that feeds you. Here we have a government-sponsored enterprise -- which depends on Treasury’s financial support to remain solvent -- suing an arm of the Treasury Department. Some thanks this is. To date, Treasury has injected about $64 billion into Freddie Mac and collected $8.4 billion of cash dividends on its senior preferred stock in the company.
The Treasury Department also holds a warrant to buy 79.9 percent of the company’s common stock for a nominal price. So Freddie Mac can’t claim it’s simply protecting shareholders by taking on the IRS. Under its conservatorship, the company’s board answers only to the FHFA, which has complete authority over Freddie Mac’s affairs.
Lawyers Win
The details of the tax dispute are beside the point. No matter how the case turns out, the result more or less should wind up being a wash for taxpayers. The only people who stand to make money from the litigation are Freddie Mac’s outside attorneys at Shearman & Sterling.
Consider some possible scenarios. If the IRS loses, that would be a win for taxpayers in the sense that Treasury won’t need to send as much bailout money to Freddie Mac in the future. Yet the public also would lose because the government wouldn’t get its $3 billion of revenue.
Alternatively, if the IRS wins, it would be a victory for taxpayers, too. Of course, they would still lose because Freddie Mac would have an even bigger capital hole after paying the $3 billion. The Treasury then would have to inject more money into the company to keep it from becoming insolvent and falling into mandatory receivership.
Matter of Principle
An IRS spokesman, Eric Smith, declined to comment. So did Robert Rudnick, a partner at Shearman & Sterling in Washington. Corinne Russell, an FHFA spokeswoman, declined to comment when I asked why the agency gave Freddie Mac permission to sue the IRS. FHFA’s acting director, Edward DeMarco, didn’t return phone calls.
A Freddie Mac spokeswoman, Sharon McHale, cast the company’s decision to sue the IRS in terms of principle.
“We believe that we did not in prior years have federal tax deficiencies and that we are not liable for any penalties,” she said. Freddie Mac, she added, “has an obligation to run the company according to the laws of the land. And in an instance where we believe we’re in the right, we believe we have an obligation to assert that.”
No Call
OK, fine. But shouldn’t it also have been the job of someone in the government to exercise some common sense here? Surely the head of FHFA could have picked up the phone and called someone at Treasury to work out a truce. Or, if that wasn’t possible, FHFA could have told Freddie Mac to pay its IRS bill, tap Treasury for more bailout money, and stop ringing up legal fees.
For what it’s worth, I checked the disclosures at Freddie Mac’s cousin, Fannie Mae, which also was seized by the government in 2008. Fannie Mae reached a settlement with the IRS over its tax returns for 1999 through 2004. Score one for cooler heads.
Freddie Mac said in its latest quarterly report that “it is reasonably possible” the company will reach a settlement with the IRS within the next 12 months. We can only hope.
(Jonathan Weil is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: Jonathan Weil in New York at jweil6@bloomberg.net
How gold and silver compare as investments
An argument for holding both gold and silver including 22 things to ponder in comparing and contrasting the two precious metals.
Author: Jerry Western
Posted: Monday , 15 Nov 2010
TORONTO (FinancialArticleSummariesToday) -
Silver has had quite a run the last couple months so it's no surprise that it has gained much attention and interest from investors - even more so than gold. It is extremely volatile, however, and tends to rise or fall in spurts so I'd like to focus on its attributes as compared to gold, make a case for holding some, and discuss some ultimate price possibilities.
Gold is known as the ultimate form of money; the king of money. Silver is generally thought of as gold's little brother or ‘Poor Man's Gold'. It is said that:
Gold is the money of Monarchs,
Silver is the money of Gentlemen,
Barter is the money of Peasants, and
Debt is the money of Slaves.
Both gold and silver have been used as money forever. Historically, the price of gold has almost always been greater than that of silver. This is because silver is ten to twenty times more plentiful in nature.
SHOULD WE ONLY HOLD GOLD?
I say no for the following reasons:
1. You get more (metal) for your money holding silver.
2. The price of silver has more room to appreciate, both because of its relative low price and because of the current relatively high gold:silver price ratio.
SHOULD WE ONLY HOLD SILVER?
I say no again - for the following reasons:
1. Gold is highly recognizable and highly coveted in all societies. Most world governments and central banks hold gold but virtually no silver, save a few notable exceptions (Russia, China, and India). They know that gold is the ultimate money.
2. Just as you would diversify your portfolio among asset classes and large/small cap stocks, etc., so too should you diversity between gold and silver. No one knows which will appreciate faster or further and be the superior investment going forward. Therefore, I hold both.
WHAT ARE SILVER'S MAJOR ATTRIBUTES?
Silver has three huge attributes that make it special, valuable, and unique:
1. Versatility: silver has many and varied important uses where it is the best solution. It is either the best material to use for a given application or it is the least expensive of all the alternatives.
2. Inelasticity: more silver is not produced as price increases because most silver comes from other-than-silver mines, and less is not consumed as the price increases because there are no less-expensive alternatives.
3. Duality: silver has the potential to do well price-wise in both an up and a down economy. Being both an industrial metal as well as money in and of itself, silver tends to have a market no matter the condition of the economy.
HOW DO GOLD AND SILVER COMPARE?
Below are 22 things to ponder when comparing and contrasting gold and silver, in no particular order:
1. Gold is hoarded and the above-ground stockpile is continuously expanding. Silver is consumed and is uneconomical to recycle in most uses.
2. There is greater than 300 times the dollar value of gold in above ground form as there is silver. Silver is the smaller market by far.
3. According to the U.S. Geological Survey, there are fewer years of production of silver left in the ground than any other metal or mineral, including gold.
4. Silver is used in more applications than any other commodity (aside from petroleum).
5. About 30% of silver comes from primary silver mines. Approximately 70% is byproduct of other primary metal mines. Most gold is produced from primary gold mines.
6. There is less gold mined than silver, but there is more gold than silver bullion in existence.
7. Both gold and silver have been selling near or even below the cost of production for the last 15 years.
8. Both gold and silver are up over five fold since the beginning of this current bull market.
9. Silver is used in industry and for investment. Gold is used almost entirely for investment.
10 Silver is more expensive or difficult to store (or hide) than gold because you get more for your money.
11. It would be easier for silver to rise higher on a percentage basis than gold due to the ‘law of large numbers'.
12. Only about 2% of the 160,000 tonnes of gold unearthed over the last 5,000 years has been lost and is unrecoverable according to Goldfields Mineral Service (GFMS) and the World Gold Council (WGC) while most of the silver ever mined is unrecoverable and gone for good.
13. Silver supply and demand are both ‘inelastic'. This means that supply cannot be ramped up quickly when its price rises.
14. The National Inflation Association (NIA) picked silver as its investment of the decade in December 2009 .
15. The Silver:Gold Price Ratio favors silver appreciation to return to historic norms.
16. Both gold and silver tend to rise and fall in price together but not necessarily in percentage terms. Their price movements are still highly correlated though.
17. In precious metal bull markets, silver always outperforms gold before it is over. Silver has a tendency to underperform gold as a rally in the metals gets going, however, it tends to greatly outperform gold near the market tops. At its peak, for example, gold was up nearly 250% in early 2008 but silver was up well over 300% at the same time from the beginning of 2002. As the metals both declined throughout the remainder of 2008, silver fell farther than gold from peak to trough. Silver fell nearly 60% while gold fell about half as much or 30%. Now on the way back up silver is again leading.
18. Gold and silver related stocks tend to greatly outperform on the way up but terribly underperform on the way down. On the way up, many stocks leveraged the metals 3, or 4, or 5:1 but on the way down some gold and silver stocks lost 90% or more of their pre-crash market value.
19. When the economy is good, silver will tend to outperform and when the economy is bad, gold will tend to outperform. This occurs because silver is also an industrial metal besides being a monetary metal and, [as such,] is in great demand when the economy is rolling along but less in demand when the economy is in recession. Conversely, gold tends to be forgotten when times are good and remembered when times are bad. Even though gold fell substantially during the financial meltdown of 2008, it fell less than did the stock indexes, silver, or oil.
20. I believe silver may outperform gold dramatically before the bull has run its course. Silver rose more than 38 fold in the 70's bull market; from a fixed price of $1.29 to $50 ($52.50 CBOT). Silver bottomed just above $4 in 2001. 38 x 4 = $152. Not a bad initial target.
21. Interestingly, the Silver/Gold ratio bottomed at ~ 16:1 in 1980. In other words, you could exchange one ounce of gold for 16 ounces of silver near the end of that bull market. Today, the ratio is about three and a half times higher (~56:1). Should gold get to $6375 and the ratio return to 16:1 at the top, silver will reach almost $400 an ounce. That's a 100 fold increase from its pre-bull low. Remember, we're only playing with numbers here, the markets will surprise and do their own thing in due course.
22. The following two extremely important and potentially explosive events for silver have happened just recently:
a) CFTC commissioner Bart Chilton, in regards to the trading of silver on the Commodities Exchanges, said; "There have been fraudulent efforts to persuade and deviously control that price", and "I believe there have been repeated attempts to influence prices in the silver markets", and "the public deserves some answers to their concerns that silver markets are being, and have been, manipulated."
b) Two separate lawsuits against JPMorganChase and HSBC for manipulating and suppressing the price of silver futures on the Comex in violation of the Commodity Exchange Act and the Sherman Anti-Trust were filed as class action suits. Any hint that these suits have merit and may be settled in favor of the complainants or a finding of price suppression by the CFTC in its current silver market investigation, could send the silver price sharply higher.
WHICH IS BETTER TO OWN - GOLD OR SILVER?
I own some of both but I believe that silver will outperform gold in the end.
Jerry Western is the author of the newly published "Got Gold? Get Gold!: The Everything Gold Book" on how to protect one's wealth in the 21st century gold rush. He is a guest contributor to www.FinancialArticleSummariesToday, Jerry can be contacted at westernoutlook@yahoo.com.
Author: Jerry Western
Posted: Monday , 15 Nov 2010
TORONTO (FinancialArticleSummariesToday) -
Silver has had quite a run the last couple months so it's no surprise that it has gained much attention and interest from investors - even more so than gold. It is extremely volatile, however, and tends to rise or fall in spurts so I'd like to focus on its attributes as compared to gold, make a case for holding some, and discuss some ultimate price possibilities.
Gold is known as the ultimate form of money; the king of money. Silver is generally thought of as gold's little brother or ‘Poor Man's Gold'. It is said that:
Gold is the money of Monarchs,
Silver is the money of Gentlemen,
Barter is the money of Peasants, and
Debt is the money of Slaves.
Both gold and silver have been used as money forever. Historically, the price of gold has almost always been greater than that of silver. This is because silver is ten to twenty times more plentiful in nature.
SHOULD WE ONLY HOLD GOLD?
I say no for the following reasons:
1. You get more (metal) for your money holding silver.
2. The price of silver has more room to appreciate, both because of its relative low price and because of the current relatively high gold:silver price ratio.
SHOULD WE ONLY HOLD SILVER?
I say no again - for the following reasons:
1. Gold is highly recognizable and highly coveted in all societies. Most world governments and central banks hold gold but virtually no silver, save a few notable exceptions (Russia, China, and India). They know that gold is the ultimate money.
2. Just as you would diversify your portfolio among asset classes and large/small cap stocks, etc., so too should you diversity between gold and silver. No one knows which will appreciate faster or further and be the superior investment going forward. Therefore, I hold both.
WHAT ARE SILVER'S MAJOR ATTRIBUTES?
Silver has three huge attributes that make it special, valuable, and unique:
1. Versatility: silver has many and varied important uses where it is the best solution. It is either the best material to use for a given application or it is the least expensive of all the alternatives.
2. Inelasticity: more silver is not produced as price increases because most silver comes from other-than-silver mines, and less is not consumed as the price increases because there are no less-expensive alternatives.
3. Duality: silver has the potential to do well price-wise in both an up and a down economy. Being both an industrial metal as well as money in and of itself, silver tends to have a market no matter the condition of the economy.
HOW DO GOLD AND SILVER COMPARE?
Below are 22 things to ponder when comparing and contrasting gold and silver, in no particular order:
1. Gold is hoarded and the above-ground stockpile is continuously expanding. Silver is consumed and is uneconomical to recycle in most uses.
2. There is greater than 300 times the dollar value of gold in above ground form as there is silver. Silver is the smaller market by far.
3. According to the U.S. Geological Survey, there are fewer years of production of silver left in the ground than any other metal or mineral, including gold.
4. Silver is used in more applications than any other commodity (aside from petroleum).
5. About 30% of silver comes from primary silver mines. Approximately 70% is byproduct of other primary metal mines. Most gold is produced from primary gold mines.
6. There is less gold mined than silver, but there is more gold than silver bullion in existence.
7. Both gold and silver have been selling near or even below the cost of production for the last 15 years.
8. Both gold and silver are up over five fold since the beginning of this current bull market.
9. Silver is used in industry and for investment. Gold is used almost entirely for investment.
10 Silver is more expensive or difficult to store (or hide) than gold because you get more for your money.
11. It would be easier for silver to rise higher on a percentage basis than gold due to the ‘law of large numbers'.
12. Only about 2% of the 160,000 tonnes of gold unearthed over the last 5,000 years has been lost and is unrecoverable according to Goldfields Mineral Service (GFMS) and the World Gold Council (WGC) while most of the silver ever mined is unrecoverable and gone for good.
13. Silver supply and demand are both ‘inelastic'. This means that supply cannot be ramped up quickly when its price rises.
14. The National Inflation Association (NIA) picked silver as its investment of the decade in December 2009 .
15. The Silver:Gold Price Ratio favors silver appreciation to return to historic norms.
16. Both gold and silver tend to rise and fall in price together but not necessarily in percentage terms. Their price movements are still highly correlated though.
17. In precious metal bull markets, silver always outperforms gold before it is over. Silver has a tendency to underperform gold as a rally in the metals gets going, however, it tends to greatly outperform gold near the market tops. At its peak, for example, gold was up nearly 250% in early 2008 but silver was up well over 300% at the same time from the beginning of 2002. As the metals both declined throughout the remainder of 2008, silver fell farther than gold from peak to trough. Silver fell nearly 60% while gold fell about half as much or 30%. Now on the way back up silver is again leading.
18. Gold and silver related stocks tend to greatly outperform on the way up but terribly underperform on the way down. On the way up, many stocks leveraged the metals 3, or 4, or 5:1 but on the way down some gold and silver stocks lost 90% or more of their pre-crash market value.
19. When the economy is good, silver will tend to outperform and when the economy is bad, gold will tend to outperform. This occurs because silver is also an industrial metal besides being a monetary metal and, [as such,] is in great demand when the economy is rolling along but less in demand when the economy is in recession. Conversely, gold tends to be forgotten when times are good and remembered when times are bad. Even though gold fell substantially during the financial meltdown of 2008, it fell less than did the stock indexes, silver, or oil.
20. I believe silver may outperform gold dramatically before the bull has run its course. Silver rose more than 38 fold in the 70's bull market; from a fixed price of $1.29 to $50 ($52.50 CBOT). Silver bottomed just above $4 in 2001. 38 x 4 = $152. Not a bad initial target.
21. Interestingly, the Silver/Gold ratio bottomed at ~ 16:1 in 1980. In other words, you could exchange one ounce of gold for 16 ounces of silver near the end of that bull market. Today, the ratio is about three and a half times higher (~56:1). Should gold get to $6375 and the ratio return to 16:1 at the top, silver will reach almost $400 an ounce. That's a 100 fold increase from its pre-bull low. Remember, we're only playing with numbers here, the markets will surprise and do their own thing in due course.
22. The following two extremely important and potentially explosive events for silver have happened just recently:
a) CFTC commissioner Bart Chilton, in regards to the trading of silver on the Commodities Exchanges, said; "There have been fraudulent efforts to persuade and deviously control that price", and "I believe there have been repeated attempts to influence prices in the silver markets", and "the public deserves some answers to their concerns that silver markets are being, and have been, manipulated."
b) Two separate lawsuits against JPMorganChase and HSBC for manipulating and suppressing the price of silver futures on the Comex in violation of the Commodity Exchange Act and the Sherman Anti-Trust were filed as class action suits. Any hint that these suits have merit and may be settled in favor of the complainants or a finding of price suppression by the CFTC in its current silver market investigation, could send the silver price sharply higher.
WHICH IS BETTER TO OWN - GOLD OR SILVER?
I own some of both but I believe that silver will outperform gold in the end.
Jerry Western is the author of the newly published "Got Gold? Get Gold!: The Everything Gold Book" on how to protect one's wealth in the 21st century gold rush. He is a guest contributor to www.FinancialArticleSummariesToday, Jerry can be contacted at westernoutlook@yahoo.com.
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