Archive for December, 2013

NSA, Patriot Act, Bail-in’s, Govt Lies, & Poor Economy – It’s All Related!

A report was delivered to the President this week by a group of outside advisors regarding the NSA’s unconstitutional data collection techniques. Among many of the complaints cited in the report, the most unreported consequence of the NSA’s surveillance is the impact on commerce, and therefore capital flows and growth.

The report specifically mentions that, “Silicon Valley executives complained to Mr. Obama that the N.S.A. programs were undermining American competitiveness in offering cloud services or selling American-made hardware, which is now viewed as tainted.” A specific example was provided on Wednesday, when Brazil ditched Boeing jets, and grants $4.5 bln contract to Saab, citing NSA concerns.

What’s ironic about the concern from Silicon Valley is that it was the big tech companies that cooperated with the NSA (took money) to permit back-door access to their systems and data sharing. It’s almost as ironic as people giving the Fed credit for saving us from a financial collapse that was caused by the Fed; or the govt’s war on terrorism, drugs, poverty, and ignorance that are largely the result of its own insidious policies.

The violation of our Constitutional rights is obvious. So is the perjury by top “intelligence” brass, that should result in serious jail time. After all, if govt officials are permitted to lie with impunity, how do we know they are not lying every time they open their mouths? It is also important to understand the impact of a loss of trust and confidence in government on capital flows and growth.

However, the over-riding point that people should realize is that the NSA’s surveillance and data collection has nothing to do with stopping terrorism, and EVERYTHING to do with tracking down money for a broke government, and maintaining power.  General Alexander admitted months ago in his own words in front of the Senate Judiciary Committee that “one, perhaps two” plots were thwarted, and this new report says no proof exist that any of the NSA’s Constitutional violations have thwarted a single terrorist attack. Yet, people are still permitted to state on TV that if we had these unconstitutional tactics in place before 9/11, then the attacks could have been stopped. Based on what? The Govt had plenty of data that an attack was imminent, and they did nothing. The same thing is true about Bernie Madoff, MF Global, and all of the other cases of fraud and manipulation that have been documented over the last five years. Does it matter if the fraud was “missed” due to incompetence, neglect, or complicit behavior? In a free and just society, incompetence and neglect would result in business failure; and being complicit in a crime would also result in jail time. Only in govt can these type of activities result in bigger budgets, bonuses, and promises of high paying jobs in the private sector.

People have a hard time comprehending that it is their own govt that is at the heart of our biggest problems. After all, our political leaders tell us they are here to help. I’m sorry, but the facts and data say the opposite.  By its nature, govt must take money from its productive citizens to survive; and through its bureaucratic incompetence and inefficiencies, it does more harm than good for the groups it claims to help. The only people who benefit from govt, are those in govt.  If one does not yet understand the big picture or appreciate the Constitutional violations, they would at least have to admit that the NSA and DHS are incompetent, wasteful, and deserve to be shut down now. The only kind of security provided by the Dept of Homeland Security is of the investment type, and therefore they should at least take their security public.

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A Lesson from a World Class Trader

Martin Armstrong, who at one time may have been the most sought after money manager in the world, always assumes his trades are wrong. This skepticism forces him to quadruple check his assumptions and rationale. If only the mainstream media, pundits, and almost all of us would have the same discipline before offering up an opinion, or doubting what America is all about.

Most intellectually honest people have a good idea how we got ourselves in the current economic and ethical quagmire. Success breeds complacency and arrogance, and absolute success produces an absolute corruption of power. Yes, there are many people who have no clue, or want to keep their heads buried in the sand to keep from turning their idealistic world upside down. However, the silent majority values honesty, integrity, and all of the other traits that once made this county the envy of the world, and would at least support a movement to restore those values.

There are also proud Americans that use their memories of past successes to defend hijacked policies, or any politician that remotely trumpets values of yesteryear. Even though, those same politicians simultaneously abuse the trust for their own self-interest. Other Americans point to past abuses of power and human flaws as evidence that the American experiment is a failure, not acknowledging that those same abuses and flaws exist in every society. They also fail to realize things for what they are, like the fact that we have not had free-market capitalism for well over 30 years. Both of these groups need to quadruple check their assumptions, rationale, and recommended solutions.

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Black Friday, Stocks, and the Flexing of Russia’s Muscle

Let me save you all the grief of trying to analyze the drop in Black Friday sales. The consumer has less discretionary income, and some have learned that debt is bad (for people and govt’s). Wow, that was hard!?!

The big misconception (actually deception) by those in the media is that all the money being pumped into the economy by the Fed will make its way into retail sales. First of all, the printed money is NOT being pumped into the economy. It’s pumped into banks (the printed money from the Fed is used to buy bonds from the banks to keep rates suppressed, while creating free interest income for the banks). The banks then use that printed money for speculation, which can generate significantly more risk-less returns than loaning to Main Street, where the risks are higher due to the fragile economy that banks created.

Secondly, the upper 1% that does benefit directly from having first access to the cash, and indirectly from the Fed-induced bubble in assets, will spend less than the 99% (if they had the money). For example, if a bankster pulls down a $1 million bonus from speculating on subprime debt in the European periphery, he or she will not spend as much as 1000 people getting an extra $1,000, and it will also not be spread as widely.

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Who’s Really King Of The World Today

Submitted without comment, because none is needed –

“How do you like them apples, right? Still, if I were a betting man, I’d put my money on these stories sounding so hard to believe, and on people being so unwilling to believe them, that they’ll be filed under ‘too far out of left field’, and we all go about our days as if nothing ever happened.”

The Automatic Earth