Brian Schuettler

I have been in financial management for about 20 years now and have decided to initiate a blog that addresses the complex financial, accounting and general business issues that confront our society. These issues vary in content and complexity but there is no time in the past half century that has demanded more the identity and clarification of them. This is a start. Thank you. Brian John Schuettler

Why Is Jamie Dimon Still On The NY Fed Board?

Analysis & Commentary, Derivatives Reform No Responses »

May 142012

What to do with Jamie Dimon? The CEO and Chair of JPMorgan Chase has tried so hard in the past several years to seem the “good banker.” He is so charming and gracious, yet all the while lobbying, cajoling, pushing, and wheedling to eviscerate any semblance of real reform on Wall Street. He shrugged off the cataclysm of 2008 as just something that happened, like the weather—no need for any structural reform.

Now the chickens have come home to roost—at least 2 billion of them—and it is clear that Chase is like every other big financial institution with distorted incentives. Thanks to a backstop of a federal guarantee, these gigantic institutions get to keep all the upside of crazy bets while the government gives them all the downside protection they need. Earlier this year, Dimon pooh-poohed concerns about the risks his traders were taking. Did Dimon not understand those risks, not care to know about them, or actually mislead the public about them?

But it isn’t so much money, they cry! True, in the context of Chase’s balance sheet, a $2 billion loss can be absorbed. But it shows once again the impossibility of trusting the banks in the absence of structural reform and regulation to control their willingness to take almost unmitigated risk. Of greater significance than the size relative to Chase’s balance sheet is that the loss was in a relatively stable market in which most people are finding it easy to trade. Imagine if the market had been choppy—the losses could have been even more gargantuan—and if several institutions had been in the same position, then the aggregate effect could have become once again cataclysmic.

31707575_1_volcker-rule-bank-gdp

Job Numbers Become Instant Campaign Fodder

Back to the basics, Unemployment Catastrophe No Responses »

May 062012

For Mr. Romney, who has treated previous job reports somewhat gingerly, the latest numbers elicited a searing tone, one that critics said edged into hyperbole. Speaking on the campaign trail in Pittsburgh, Mr. Romney said the economy ought to be adding 500,000 jobs a month — a growth rate the United States has achieved only five times in the last 50 years — and that any unemployment rate above 4 percent was a cause for concern.

In an open letter to Mr. Obama, published in The Plain Dealer a day before his rally at Ohio State University in Columbus, Mr. Romney wrote, “I have a simple question for you: Where are the jobs?”

Mr. Obama reacted to the bad news Friday much as he absorbed the better-than-expected job reports in January and February: accentuating the positive elements while conceding it was not enough. The economy, he noted, created 130,000 private sector jobs, while the unemployment rate dropped to 8.1 percent from 8.2 percent.

“That’s the good news,” the president said at Washington-Lee High School, after meeting with college-bound seniors. “But there are still a lot of folks out of work, which means we’ve got to do more.”

Then he pivoted swiftly to a looming increase in borrowing costs for student loans, which would cause interest rates on these loans to double, to 6.8 percent from 3.4 percent. Last week, the House passed a bill, 215 to 195, to maintain the rate for one year, but required that the $5.9 billion cost be offset by ending the Prevention and Public Health Fund contained in the health care law.

The president has threatened to veto the measure but he is not likely to be given the chance. Senate Democrats say they will bring their own bill to the floor for a procedural vote as early as next Tuesday. That bill would pay for the cost of the loan rate extension by closing some tax loopholes used by high-wage earners.

“My message to Congress is going to be, ‘Just saying no to ideas that will create new jobs is not an option,’ ” Mr. Obama said in Arlington, Va. “There’s too much at stake for us not to be all rowing in the same direction.”

White House and campaign officials said Mr. Obama spoke often about the broad economy, but filled in his canvas with concrete ideas and policy proposals. Mr. Romney, they said, has not done that, and the remedies he has proposed are the kinds of tax breaks and rollback of regulations that deepened the financial crisis of 2008.

“A robust recovery continues to elude the White House”.

A Yankee invention

Bilderbergers 1 USA 0, Catholic Social Teaching, Labor Issues, The Sorry State Of American Manufacturing, The Suffering Poor No Responses »

Apr 282012

What some historians call “the long Depression” of the nineteenth century, which lasted from the mid-1870s through the mid-1890s, was marked by frequent panics and slumps, mass bankruptcies, deflation, and self-destructive competition among businesses designed to depress costs, especially labor costs. So, too, we are living through a twenty-first century age of panics and austerity with similar pressures to shrink the social wage.

Convict labor has been and once again is an appealing way for business to address these dilemmas. Penal servitude now strikes us as a barbaric throwback to some long-lost moment that preceded the industrial revolution, but in that we’re wrong. From its first appearance in this country, it has been associated with modern capitalist industry and large-scale agriculture.

And that is only the first of many misconceptions about this peculiar institution. Infamous for the brutality with which prison laborers were once treated, indelibly linked in popular memory (and popular culture) with images of the black chain gang in the American South, it is usually assumed to be a Southern invention. So apparently atavistic, it seems to fit naturally with the retrograde nature of Southern life and labor, its economic and cultural underdevelopment, its racial caste system, and its desperate attachment to the “lost cause.”

As it happens, penal servitude — the leasing out of prisoners to private enterprise, either within prison walls or in outside workshops, factories, and fields — was originally known as a “Yankee invention.”

Pavlina Tcherneva: No, Mr. Krugman, Bernanke’s Conundrum is Completely Different

The excellent adventures of Ben Bernanke, The Inherent Disorder of Empires, The Intrusion of UNLAWFUL Authority, The Obama OMG magic factory, The Suffering Poor, This self-serving arbitrariness, Time For A New Third Party, Unemployment Catastrophe, Unindicted Co-Conspiritors, Unintended Consequences, US Trade Imbalance, We Are All Cooked, We Have Become Beggars To The World, Who Guarantees the Guarantor?-You Do!, Who owns Congress-Still! No Responses »

Apr 282012

By Pavlina Tcherneva, Assistant Professor of Economics at Franklin and Marshall College, Research Scholar at The Levy Economics Institute, and Senior Research Associate at the Center for Full Employment and Price Stability. Cross posted from New Economic Perspectives

Our mainstream colleagues keep banging their heads against the wall. “Why, oh why wouldn’t Chairman Bernanke do more to rescue the economy?” Today Paul Krugman took on this question again, arguing that Chairman Bernanke should listen to Professor Bernanke who had far more sensible ideas about rescuing an economy from a deflationary environment, as seen in his research on Japan during the 90s.

Krugman revisits a 2000 paper by then professor Bernanke, which many of us have scrutinized before, titled “Japanese Monetary Policy: A Case of Self-Induced Paralysis?” Krugman faults Bernanke for not following his own advice…..

The difference is that, unlike Paul Krugman, I actually read Bernanke’s paper from start to finish.

Pavlina Tcherneva: No, Mr. Krugman, Bernanke’s Conundrum is Completely Different

“Politics Is at the Root of the Problem”

Jacksonian Democracy, Joseph Stiglitz, Political Chaos, Political Implications, Politicians No Responses »

Apr 282012

Austerity policies are driving us towards a double-dip recession, warns US economist Joseph Stiglitz. He sat down with Martin Eiermann to discuss new economic thinking and the influence of money in politics.

The European: Four years after the beginning of the financial crisis, are you encouraged by the ways in which economists have tried to make sense of it, and by the ways in which those insights have been taken up by policy makers?

Stiglitz: Let me break this down in a slightly different way. Academic economists played a big role in causing the crisis. Their models were overly simplified, distorted, and left out the most important aspects. Those faulty models then encouraged policy-makers to believe that the markets would solve all the problems. Before the crisis, if I had been a narrow-minded economist, I would have been very pleased to see that academics had a big impact on policy. But unfortunately that was bad for the world. After the crisis, you would have hoped that the academic profession had changed and that policy-making had changed with it and would become more skeptical and cautious. You would have expected that after all the wrong predictions of the past, politics would have demanded from academics a rethinking of their theories. I am broadly disappointed on all accounts.

Posted from The European

A Message on the Need to Reform the Financial System — From Herbert Hoover

A Moral Question - Not A Political One, A State of Distress, A Time To Repent, AIG and all that....., Economic Prophet No Responses »

Apr 212012

This speech was given by Herbert Hoover as the country was caught in the depths of the Great Depression 6 December 1932, as he was leaving office, largely perceived as a failure.

I have sympathy for Hoover and rightfully so. For many years I saw his portrait every time I would visit the headquarters of the IEEE in New York City. I read about his magnificent acts of logistical organization and the relief of suffering in the European famines. He was an accomplished and talented person.

And yet he failed, or at least has been judged a failure as President, because of a timidity and unwillingness to act, boldly and in a timely manner. He was constrained by bad advice, and an ideological bent that prevented common sense action from moving the country forward. Afterwards in his Memoirs he blamed the advice he received from his Treasury Secretary, Andrew Mellon, the great liquidationist, who had been appointed by Warren Harding in 1921, and who throughout the 1920′s preached the gospel of tax cuts for the wealthy to stimulate growth.

“Liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate… it will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people.”

This speech could be given with little alteration by Barack Obama today, although I am sure he would add quite a bit more flair.

The Too Big To Fail Banks are still with us, but even larger and more dangerous and powerful. Obama himself, despite pledges to the contrary, is taking large amounts of funds from the corrupt campaign process.

Instead of acting quickly to correct the causes of the financial collapse, he expended most of his early political capital on a healthcare plan that, despite some genuinely beneficial changes, serving to increase the control and reach of a few private healthcare monopolies by requiring all people to purchase insurance from them.

Fed policy still serves the few and is largely opaque in its dealings, becoming even more powerful as regulator.

And the markets are dominated by even fewer players, and tainted by a major scandal in which over a billion dollars was stolen from the customers.

Corporate profits are excellent and the very wealthy few are making enormous strides in increasing their wealth. And yet the bulk of the nation suffers from fear and uncertainty.

The people’s vehement objections to the bailout, marked by faxes, calls and emails in their millions, were ignored.

A Message on the Need to Reform the Financial System — From Herbert Hoover

An Insufficient Firewall

European Union?, Global Trade, History of Finance, IMF Issues - Discussion, Integrity and Responsibility, It's the Tribes, J M Keynes, Monetary Policy - Discussion, Negative Cash Flow, Patience is a virtue...Delusion is a vice, Pig-Headed Economic Policy May Still Lead to Disaster, PIIGS, PIIGS Default? No Responses »

Apr 152012

European credit markets have appeared calm in recent weeks, but none of the underlying issues of the debt crisis have been adequately addressed. Spanish interest rates have again begun creeping up, and a new wave of anxiety could burst forth any time.

Related News

I.M.F. Seeks More Money for Struggling Economies (April 4, 2012)
Europe Agrees to Bailout Fund for Euro of Over $1 Trillion (March 31, 2012)
Europe Urged to Increase Firewall to a Trillion Euros (March 28, 2012)
Times Topic: European Financial Stability Facility and European Stability Mechanism

Yet European finance ministers were busy congratulating themselves last weekend for creating a robust “firewall” to keep the debt crisis from spreading, deter speculative attacks in the bond markets and keep interest rates manageable. Like so much else done by the European Union in the past two years since the start of the Greek debt crisis, the ministers’ newly announced plan was too little, too late. No one should be fooled.

The ministers proclaimed a bailout fund of 800 billion euros, or about $1 trillion, but, in fact, it was far less than that. The agreement keeps the 300 billion euros in the current bailout fund temporarily available while a new fund of 500 billion euros is built up over the next two years. The old money will phase out as the new money phases in, so it is misleading to add the totals together. The amount actually available for new bailouts may never get much above 500 billion euros. That might be enough to keep doling out life support to Greece, Portugal, Ireland and, now, possibly Spain. But it is not nearly enough to fend off speculators, hold down interest rates or aid the pro-growth policies needed for economic recovery.

Experts from around the world had called for a firewall of at least 1 trillion euros, or $1.34 trillion. Germany rebuffed that idea, and other ministers, as usual, followed its lead. One of Germany’s main arguments for limiting its contributions is to maintain pressure on Greece, Ireland, Spain, Italy and others to keep them from pulling back on their austerity programs, which have, so far, only deepened their debt problems. Yet European leaders now expect the International Monetary Fund to help by lending some of its own resources to the new bailout fund. Before it adds any money, the fund should demand more contributions from the European Union itself, with Germany leading the way, since the policies pushed by Germany have hurt many I.M.F. member nations through reduced exports to Europe.

Even the highest firewall created by a big bailout fund can just buy time to address the euro zone’s underlying problems, including overregulated markets, costly trade barriers and archaic educational systems. Fixing those requires an immediate policy turn from debt-deepening austerity to substantial public investment. Unemployment rates are rising steadily across Europe. The official euro-zone average now stands at 10.8 percent. A prolonged recession driven by austerity will not help governments repay old debts. We are still waiting for Europe’s political and financial leaders to recognize that reality.

The Housing Recovery Still Isn’t Here

Our phony middle class, Residential Market No Responses »

Apr 092012

n the real world, buyers have to be able to meet two key financial factors: down payments and mortgages.

Today, most families are cash poor and debt rich. They are deleveraging, not building up savings. Most simply do not have the $40,000 to put 20 percent down on a median priced house.

If you happen to have a down payment, there’s another hurdle: Qualifying for a mortgage. You must have a good credit score, not too much debt, a steady income, good employment history, etc.

The simple truth: House prices are down 35 percent from their peaks and mortgage rates are at record lows, but for those lacking the down payment and /or ability to access mortgage credit, houses are only theoretically affordable — but not for them

The Housing Recovery Still Isn’t Here – Barry Ritholtz, Washington Post

US Manufacturing Renaissance Just Beginning

The Sorry State Of American Manufacturing No Responses »

Apr 092012

In March, manufacturing expanded for the 32nd straight month, and contributed 37,000 of the 120,000 U.S. jobs added, the government reported. That’s partly because of the ongoing recovery from the Great Recession. But the economy is also changing.

Manufacturing’s share of gross domestic product plunged to 11% in 2009 from 26% in 1947, according to the Commerce Department. In 2010, it rose to 11.7% — the biggest yearly gain in more than 50 years. The 2011 numbers will be released on April 26, and the anecdotal evidence is promising; companies like Caterpillar (CAT: , , ), Ford Motor (F: , , ) and NCR say they are moving some operations back to the U.S.

Three trends suggest America’s “manufacturing renaissance” is just getting started, says Neil Dutta, U.S. economist at Bank of America Merrill Lynch. First, the cost advantages of outsourcing factory work are narrowing. Emerging market wages, while still much lower than U.S. wages, are rising, and high oil prices have made shipping more expensive. That is expanding the range of goods U.S. factories can produce at competitive prices (think sophisticated machines, not toys).

Second, a weakening dollar makes U.S. goods more attractive to foreign buyers. The dollar has fallen by nearly one-third over the past decade against a basket of currencies including the euro, British pound and yen.



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Third, energy production is booming in the U.S., and domestic natural-gas prices have recently plunged. That gives an edge to U.S. producers of fabricated steel, transportation equipment, machinery and chemicals, which use natural gas extensively, according to a recent report from Citigroup (C: , , ) .
US Manufacturing Renaissance Just Beginning – Jack Hough, SmartMoney

EXODUS

A Time To Repent, Back to the basics No Responses »

Apr 072012

In the first month, on the fourteenth day of the month between the two evenings is the Lord’s Passover. And on the fifteenth day of the same month is the feast of unleavened bread unto the Lord; seven days ye shall eat unleavened bread. In the first day ye shall have a holy convocation; ye shall do no manner of servile work. And ye shall bring an offering made by fire unto the Lord seven days; in the seventh day is a holy convocation; ye shall do no manner of servile work. (Leviticus 23:5)

14th century Haggadah

An argument in favor of the Hebrew reduced form ישוע Yeshua, as opposed to Yehoshua, is the Old Syriac Bible (c. 200 AD) and the Peshitta preserve this same spelling but using the equivalent Aramaic letters . Yeshu /jeʃuʕ/ (Syriac does not use a ‘furtive’ pathach so extra /a/ is not used) is still the pronunciation used in the West Syriac dialect, whereas East Syriac has rendered the pronunciation of these same letters as Išô‘ /iʃoʔ/. These texts were translated from the Greek, but the name is not a simple transliteration of the Greek form because Greek did not have an “sh” [ʃ] sound, and substituted [s]; and likewise lacked and therefore omitted the final ‘ayin sound [ʕ]. It can be argued that the Aramaic speakers who used this name had a continual connection to the Aramaic-speakers in communities founded by the apostles and other students of Jesus, thus independently preserved his historical name. Alternatively, Talshir (1998) suggests that Aramaic references to the Hebrew Bible had long used Yeshua for Hebrew names such as Yehoshua Ben Nun.^[30] So the possibility of Jesus having been Yehoshua remains.

TO MY JEWISH BRETHREN: HAPPY PASSOVER!

They had heard him speaking to both of them about his “exodus” to Jerusalem.

Jesus’ exodus to Jerusalem – how mysterious are these words! Israel’s exodus from Egypt had been the event of escape and liberation for God’s People.

What would be the form taken by the exodus of Jesus, in whom the meaning of that historic drama was to be definitively fulfilled?

The disciples were now witnessing the first stage of that exodus – the utter abasement which was nonetheless the essential step of the going forth to the freedom and new life which was the goal of the exodus.

The disciples, whom Jesus wanted to have close to him as an element of human support in that hour of extreme distress, quickly fell asleep. Yet they heard some fragments of the words of Jesus’ prayer and they witnessed his way of acting. Both were deeply impressed on their hearts and they transmitted them to Christians for all time.

Jesus called God “Abba”. The word means – as they add – “Father”. Yet it is not the usual form of the word “father”, but rather a children’s word – an affectionate name which one would not have dared to use in speaking to God. It is the language of the one who is truly a “child”, the Son of the Father, the one who is conscious of being in communion with God, in deepest union with him.

If we ask ourselves what is most characteristic of the figure of Jesus in the Gospels, we have to say that it is his relationship with God. He is constantly in communion with God. Being with the Father is the core of his personality. Through Christ we know God truly.

“No one has ever seen God”, says Saint John. The one “who is close to the Father’s heart … has made him known” (1:18).

Now we know God as he truly is. He is Father, and this in an absolute goodness to which we can entrust ourselves.

The evangelist Mark, who has preserved the memories of Saint Peter, relates that Jesus, after calling God “Abba”, went on to say: “Everything is possible for you. You can do all things” (cf. 14:36). The one who is Goodness is at the same time Power; he is all-powerful. Power is goodness and goodness is power. We can learn this trust from Jesus’ prayer on the Mount of Olives.

Before reflecting on the content of Jesus’ petition, we must still consider what the evangelists tell us about Jesus’ posture during his prayer.

Matthew and Mark tell us that he “threw himself on the ground” (Mt 26:39; cf. Mk 14:35), thus assuming a posture of complete submission, as is preserved in the Roman liturgy of Good Friday. Luke, on the other hand, tells us that Jesus prayed on his knees. In the Acts of the Apostles, he speaks of the saints praying on their knees: Stephen during his stoning, Peter at the raising of someone who had died, Paul on his way to martyrdom. In this way Luke has sketched a brief history of prayer on one’s knees in the early Church.

Christians, in kneeling, enter into Jesus’ prayer on the Mount of Olives. When menaced by the power of evil, as they kneel, they are upright before the world, while as sons and daughters, they kneel before the Father. Before God’s glory we Christians kneel and acknowledge his divinity; by that posture we also express our confidence that he will prevail.

Jesus struggles with the Father. He struggles with himself. And he struggles for us.

He experiences anguish before the power of death.

First and foremost this is simply the dread natural to every living creature in the face of death. In Jesus, however, something more is at work. His gaze peers deeper, into the nights of evil. He sees the filthy flood of all the lies and all the disgrace which he will encounter in that chalice from which he must drink.

His is the dread of one who is completely pure and holy as he sees the entire flood of this world’s evil bursting upon him.

He also sees me, and he prays for me.

This moment of Jesus’ mortal anguish is thus an essential part of the process of redemption. Consequently, the Letter to the Hebrews describes the struggle of Jesus on the Mount of Olives as a priestly event. In this prayer of Jesus, pervaded by mortal anguish, the Lord performs the office of a priest: he takes upon himself the sins of humanity, of us all, and he brings us before the Father.

Lastly, we must also pay attention to the content of Jesus’ prayer on the Mount of Olives. Jesus says: “Father, for you all things are possible; remove this cup from me; yet not what I want, but what you want” (Mk 14:36).

The natural will of the man Jesus recoils in fear before the enormity of the matter. He asks to be spared.

Yet as the Son, he places this human will into the Father’s will: not I, but you. In this way he transformed the stance of Adam, the primordial human sin, and thus heals humanity.

The stance of Adam was: not what you, O God, have desired; rather, I myself want to be a god.

This pride is the real essence of sin. We think we are free and truly ourselves only if we follow our own will. God appears as the opposite of our freedom. We need to be free of him – so we think – and only then will we be free.

This is the fundamental rebellion present throughout history and the fundamental lie which perverts life. When human beings set themselves against God, they set themselves against the truth of their own being and consequently do not become free, but alienated from themselves. We are free only if we stand in the truth of our being, if we are united to God.

Then we become truly “like God” – not by resisting God, eliminating him, or denying him. In his anguished prayer on the Mount of Olives, Jesus resolved the false opposition between obedience and freedom, and opened the path to freedom. Let us ask the Lord to draw us into this “yes” to God’s will, and in this way to make us truly free. Amen.

From : BENEDICT XVI’s HOMILY FOR HOLY THURSDAY 2012

Hope

A Moral Question - Not A Political One, A Time To Repent, Analysis & Commentary, Catholic Social Teaching No Responses »

Apr 072012

It is not surprising that the first reaction of the disciples to the report of the Resurrection was not joy, relief, gladness and rejoicing. The women who came to the tomb to anoint Jesus’s body were told by the ‘young man dressed in white’: ‘He has been raised; he is not here’. And they went out and fled from the tomb, for terror and amazement had seized them; and they said nothing to anyone, for they were afraid’ (Mark 16: 5-8). St Luke says that when the women later reported to the Apostles what they had seen and heard, ‘these words seemed to them an idle tale, and they did not believe them’ (Luke 24: 11).

In all the Resurrection appearances in the Gospels there is this mixture of belief and unbelief, of slow recognition and incredulity, of being sure but not yet sure. He was the same and yet transformed. They hesitated; it was all too good to be true. The two disciples on the road to Emmaus did not recognise him until he broke the bread for them, and then he vanished from their sight. Later, when they were having their breakfast of fish and bread by the lakeside, St John says: ‘None of the disciples dared to ask him, “Who are you?”, because they knew it was the Lord’ (John 21: 12).

If our experience of the Risen Christ is unlike that of the Apostles, it is much nearer to that of St Paul. He knew how the story had ended. He had heard, like us, that Jesus had been crucified. And he had also heard, like us, the report that Jesus had risen from the dead. But he resisted this, fiercely, passionately, so that he pursued the followers of Jesus even to death. Then suddenly the light broke in on him too. He was blinded, literally and metaphorically, dazzled by the light that shone on his eyes and in his mind. ‘Who are you, Lord?’ … ‘I am Jesus who you are persecuting’. The crucified, risen and glorified Jesus identified himself with those whom Paul was persecuting – and therefore also with all of us. Instantly, he recognised Jesus as Lord, and his life could never be the same again.

If then you have been raised with Christ, seek the things that are above, where Christ is, seated at the right hand of God. Set your minds on things that are above, not on things that are on earth. For you have died, and your life is hid with Christ in God. When Christ who is our life appears, then you also will appear with him in glory. Colossians 3

Your boasting is not good. Do you not know that a little leaven leavens the whole lump? Cleanse out the old leaven that you may be a new lump, as you really are unleavened. For Christ, our paschal lamb, has been sacrificed. Let us, therefore, celebrate the festival, not with the old leaven, the leaven of malice and evil, but with the unleavened bread of sincerity and truth. Corinithians 5

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“It is not for man to seek, or even to believe in God. He has only to refuse to believe in everything that is not God. This refusal does not presuppose belief. It is enough to recognize, what is obvious to any mind, that all the goods of this world, past, present, or future, real or imaginary, are finite and limited and radically incapable of satisfying the desire which burns perpetually with in us for an infinite and perfect good… It is not a matter of self-questioning or searching. A man has only to persist in his refusal, and one day or another God will come to him.”
—Simone Weil, the great French Jewish mystic who died in 1943 at the age of 34, On Science, Necessity and the Love of God, edited by Richard Rees, London, Oxford University Press, 1968.

“The concept of ‘hidden God’ (Deus absconditus) and the image of a weak or absent deity in history have been the subject of philosophical and theological debate after the tragedy of the Shoah. One question in particular has emerged: ‘Why did God allow Auschwitz?’… Rabbi Richard L. Rubenstein (1924- ) has written that the Holocaust has challenged the content of the Biblical covenant, together with the concept of divine omnipotence. The philosopher Emil Fackenheim (1916-2003) in his work has emphasized that the traditional philosophical and theological categories are insufficient to understand the Holocaust.” —Alberto Castaldini, The Hidden God and History: Philosophical and Theological Perspectives on the Holocaust, “Babeş-Bolyai” University – Cluj-Napoca, Romania, Faculty of European Studies, Ph.D. Dissertation, 2012

“When in Matthew’s account the ‘whole people’ say: ‘His blood be on us and on our children’ (27:25), the Christian will remember that Jesus’ blood speaks a different language from the blood of Abel (Heb 12:24): it does not cry out for vengeance and punishment; it brings reconciliation. It is not poured out against anyone; it is poured out for many, for all. ‘All have sinned and fall short of the glory of God… God put [Jesus] forward as an expiation by his blood’ (Rom 3:23, 25). Just as Caiaphas’ words about the need for Jesus’ death have to be read in an entirely new light from the perspective of faith, the same applies to Matthew’s reference to blood: read in the light of faith, it means that we all stand in need of the purifying power of love which is his blood. These words are not a curse, but rather redemption, salvation. Only when understood in terms of the theology of the Last Supper and the Cross, drawn from the whole of the New Testament, does this verse from Matthew’s Gospel take on its correct meaning.”
― Pope Benedict XVI, Jesus of Nazareth: From the Entrance Into Jerusalem to the Resurrection

A Cruel Budget

A Moral Question - Not A Political One, A State of Distress, Catholic Social Teaching, The Inherent Disorder of Empires, The Judeo-Christian Political Coalition, The Suffering Poor, THEY ARE ALL THE SAME, This self-serving arbitrariness, Time For A New Third Party, Unemployment Catastrophe, Unindicted Co-Conspiritors, Who owns Congress-Still! No Responses »

Mar 312012

In February, after embarrassing himself by saying he was “not concerned about the very poor,” Mitt Romney explained that the government’s safety net would take care of them, and he promised to repair any holes in the net. That promise didn’t last very long. On Thursday, House Republicans approved, on a party-line vote, a disastrous new budget that would leave millions of struggling families desperate for food, shelter and health care — and Mr. Romney has embraced it.

The budget, developed by Representative Paul Ryan of Wisconsin, would cut $3.3 trillion from low-income programs over 10 years, according to the Center on Budget and Policy Priorities, even more than the $2.9 trillion in Mr. Ryan’s first disastrous budget last year.

“It’s an excellent piece of work,” Mr. Romney said. (Rick Santorum said it didn’t cut enough.)

The biggest of the cuts would be to Medicaid, the joint federal and state program that is already gasping for money in many states that put a low priority on health care for low-income people. Mr. Romney often talks casually about turning the program over to the states entirely and simply writing a check to dispose of a half-century federal commitment. The Ryan budget exposes just how paltry that check would be: a cut of $810 billion through 2022, one-fifth of current spending, which would lead states to drop coverage for an estimated 14 million to 28 million people.

By eliminating the expansion of Medicaid in the health care law, cutting $1.6 trillion, it would leave another 17 million low- and moderate-income people uninsured.

Just as revealing is the acceptance by Mr. Romney and the other Republican presidential candidates of the Ryan plan to cut food stamps, now known as the Supplemental Nutrition Assistance Program, or SNAP. The budget would cut 17 percent of the SNAP budget, or $133.5 billion over a decade. As the center points out, there are only two ways to achieve that savings: Mr. Romney could simply take the benefits away from 8 million of the 47 million who now receive them, or he could cut everyone’s benefits. For a struggling family of four, that would mean a loss of $90 worth of food a month.

Already, most people who get SNAP benefits use them up in the first two weeks of a month, and many turn to food banks by month’s end. Cutting benefits so sharply would lead to a significant increase in hunger, particularly among children, which would quickly create dangerous ripples through the health and education systems.

At the same time, though, those families would find themselves unable to pay for health care, and they would also face reductions in housing assistance, job training and Pell grants for college tuition, all of which Mr. Ryan wants to cut, with Mr. Romney’s approval.

In all, 62 percent of the budget’s cuts come from low-income programs, and that’s on top of the substantial cut in spending already in place from last year. But the Ryan budget does contain a substantial tax cut for the rich, which is one of the reasons Mr. Romney said he was “very supportive” of the plan.

“It’s a bold and exciting effort,” he said, “and it’s very much consistent with what I put out earlier.” It is also consistent with his stated lack of concern for the very poor.

The Age of the Shadow Bank Run

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Mar 282012

Since the end of World War II, economists have generally thought that runs on banks were dead, at least as a phenomenon in advanced nations. In the United States, for example, bank deposits are insured by the Federal Deposit Insurance Corporation, and, as a last resort, the Federal Reserve can back deposits by printing money.

The new complication is that bank deposits are no longer the dominant form of modern short-term finance. The modern bank run means a rush to withdraw from money market funds, the disappearance of reliable collateral for overnight loans between banks or the sudden pulling of short-term credit to a troubled financial institution. But these new versions are in some ways still similar to the old: both reflect the desire to pull money out of an endeavor — and to be the first out the door. And both can set off a crash.

These newer forms occur in the so-called shadow banking system, involving short-term financial credit not guaranteed by the deposit insurance umbrella. According to the Federal Reserve Bank of New York, shadow banking accounts for about $15 trillion in assets — more than the traditional banking system. But as recently as 1990, the shadow-banking total was much lower, at less than $4 trillion. The core problem is that the growth of short-term credit has been outracing our ability to protect it, and since 2008 most investors have realized that these shadow-banking transactions are not risk-free.

On top of this problem is the market for derivatives. The quantity of open derivatives amounts to trillions, and these positions are another source of short-term credit risk. So a need for sudden payouts could also prompt a run on a financial institution.

It now seems that the 21st century will resemble the 19th and early 20th centuries, with periodic panics and runs on financial institutions, perhaps followed by deflationary collapses. In the euro zone, these problems have plagued banks and entire countries, like Greece and Portugal. The “country as bank” is a new and not entirely reassuring catch phrase, and it shows that the problem goes beyond the private sector.

If a central bank is deft enough, it can avoid deflation by using loans and monetary policy to guarantee the liabilities of run-prone institutions. That worked reasonably well in 2008, but in the long term such a policy sets up the system for even more danger, by subsidizing bank risk-taking and precarious financial structures.

Another problem is that ending those central bank guarantees isn’t always easy. The European Central Bank has stemmed a financial collapse for now, but only by lending large amounts to banks at 1 percent for a three-year window. And yet the euro zone has entered a recession, so it’s unclear when troubled European banks can return to private capital markets. The central bank may end up taking over much of the allocation of capital.

The arrangement also assumes that economic growth will pick up fairly quickly in the euro zone — hardly a certainty. And there is little market discipline to force European banks to clean up their balance sheets or to exercise caution for the future. So the system remains extremely vulnerable.

Another feature of this new order is that more and more financial transactions will be collateralized with the safest securities possible: United States Treasuries. Demand for them will remain high, and low borrowing costs will ease our fiscal problems. Still, the resulting low rates of return serve as a tax on safe savings, encourage a risky quest for yield and redistribute resources to government borrowing and spending. It isn’t healthy for the private sector when investors are so obsessed with holding wealth in the form of safe governmental guarantees.

THIS entire package of problems seems to be part of “the new normal” — it’s not going away anytime soon.

Some economists, like Ricardo J. Caballero of the Massachusetts Institute of Technology , have called for extending governmental guarantees well beyond traditional bank deposits. That would check the problem, but at what cost? In a larger financial crisis based on insolvency, our government would face intolerable financial burdens, as happened in Ireland when its government guaranteed bank debts.

A broader government guarantee would also spread the moral-hazard problem to an even larger class of financial transactions, raising the odds that the guarantee will someday have to be paid out. In any case, bailouts for creditors are already politically unpopular, and are unlikely to be expanded.

In short, no promising financial path is before us. It’s good that the American economy seems to be recovering, and this may shove some problems into the future. But banking and finance remain a mess at their core. Welcome to the 21st century.

Tyler Cowen is a professor of economics at George Mason University.
The Age of the Shadow Bank Run – Tyler Cowen, New York Times

Obama’s Clueless, Contemptuous Energy Speech

A Growing List Of One Term Presidents, Electrifying!, Energy Alternatives No Responses »

Mar 262012

A president who appointed an Energy Secretary that sang the praises of $8.00/gallon gasoline, now claims to be sympathetic to people forced to pay $4.00/gallon. A man that rode to the event in an 8-MPG armored vehicle nicknamed “The Beast”, accompanied by a flotilla of 14-MPG Chevy Suburbans, bragged about how he was going to force the rest of us to drive cars averaging 55 MPG.

It is possible to list dozens, if not hundreds, of energy production options, but there are really only two basic types: there are projects that produce energy that is worth more than it costs, and there are ventures that produce energy that costs more than it’s worth. Obama’s energy strategy, which he seemed so proud of in his speech, is to tax the former in order to subsidize the latter.

During his speech, Obama asked (rhetorically), “…whether or not we should keep giving $4 billion in taxpayer subsidies to the oil industry.” These so-called “subsidies” consist of allowing oil companies to use the same tax depreciation rules as other companies. Being a Progressive, Obama sees no difference between allowing a profitable company to keep some of its own money and giving taxpayer money to unprofitable ventures.

Obama’s FY2013 budget proposes tax hikes on oil and gas companies to pay for subsidies for solar cells, wind power, and electric cars. Obama said in his speech, “…we can take that $4 billion (from the oil companies)—we could be investing it in clean energy in a good energy future, in fuel efficiency”. Of course, the “we” that he was referring to are the bureaucrats at the Department of Energy that thought that Solyndra was a good idea. Progressivism may talk the talk of the national interest, but it walks the walk of corrupt crony capitalism.

Obama’s Clueless, Contemptuous Energy Speech – Louis Woodhill, Forbes

Regulating Derivatives

Regulation - the Discussion, Regulatory Failures, Risk Management Strategies, We Need Open Derivative Models No Responses »

Mar 252012

If there is one lesson from the financial crisis that should be indelible, it is that unregulated derivatives are prone to catastrophic failure. And yet, nearly four years after the crash, and nearly two years since the passage of the Dodd-Frank law, the multitrillion-dollar derivatives market is still dominated by a handful of big banks, and regulation is a slow work in progress.

That means Americans, and the economy, remain at risk. Properly regulated, derivatives — financial instruments that hedge risk — help to stabilize the economy. Unregulated, they are all too easily converted into tools for vast speculation, as demonstrated by their role in inflating the real estate bubble, amplifying the bust and provoking the bailouts. Unreformed, they will cause havoc again.

Even if they don’t cause a meltdown, unregulated derivatives are still an economic threat. That’s because derivatives have become deeply embedded in the economy. Pension systems use them to hedge investment risk. Food companies use them to lock in crop prices. Airlines and manufacturers use them to lock in prices for fuel or metal. But because there is no central exchange where derivatives’ prices are listed, no one knows if the prices banks charge are reasonable.

What is known is that the banks make billions of dollars a year on derivatives deals — lush profits that are surely higher than they would be if the market were transparent and competitive. Overcharging means that bankers are enriched with money that companies could otherwise invest in their businesses and that consumers could otherwise keep in their pockets.

The Dodd-Frank law charged two agencies with writing a broad range of new rules to rein in derivatives — the Commodity Futures Trading Commission, which oversees derivatives linked to oil, crops and other commodities, and the Securities and Exchange Commission, which oversees securities-based derivatives. There has been progress. The C.F.T.C, in particular, has moved ahead with sound rules to create competition, promote safety, increase transparency and tame speculation. But some of the toughest rules are languishing — like the crucial Dodd-Frank requirement that most derivatives be traded on an open exchange, with prices visible before deals are made.

That would minimize the practice of trading derivatives as private bilateral contracts, in which the price is whatever the bank says it is. Over a year ago, the C.F.T.C. sensibly proposed a system in which buy and sell offers would be electronically posted and widely accessible. In response, industry lobbyists and some lawmakers have made the absurd argument that open trading would hurt banks’ flexibility to continue doing business as usual.

Unfortunately, in today’s political environment, even absurd arguments have the power to delay or derail vital reforms. Republican lawmakers, with some Democratic support, have proposed legislation to roll back the rules on open trading even before regulators have finalized them. Rules that have been finalized are increasingly subject to protracted legal challenges by the financial industry. And regulators are routinely reduced to pleading with Congressional appropriators for chump change to carry out their duties.

It is up to President Obama, who takes credit on the campaign trail for reforming Wall Street, to provide full-throated support for implementing and enforcing the Dodd-Frank rules. Otherwise the law will be a reform in name only.

The Banks Win, Again

AIG and all that....., Stress Test Mess No Responses »

Mar 182012

Last week was a big one for the banks. On Monday, the foreclosure settlement between the big banks and federal and state officials was filed in federal court, and it is now awaiting a judge’s all-but-certain approval. On Tuesday, the Federal Reserve announced the much-anticipated results of the latest round of bank stress tests.

How did the banks do on both? Pretty well, thank you — and better than homeowners and American taxpayers.

That is not only unfair, given banks’ huge culpability in the mortgage bubble and financial meltdown. It also means that homeowners and the economy still need more relief, and that the banks, without more meaningful punishment, will not be deterred from the next round of misbehavior.

Under the terms of the settlement, the banks will provide $26 billion worth of relief to borrowers and aid to states for antiforeclosure efforts. In exchange, they will get immunity from government civil lawsuits for a litany of alleged abuses, including wrongful denial of loan modifications and wrongful foreclosures. That $26 billion is paltry compared with the scale of wrongdoing and ensuing damage, including 4 million homeowners who have lost their homes, 3.3 million others who are in or near foreclosure, and more than 11 million borrowers who are underwater by $700 billion.

The settlement could also end up doing more to clean up the banks’ books than to help homeowners. Banks will be required to provide at least $17 billion worth of principal-reduction loan modifications and other relief, like forbearance for unemployed homeowners. Compelling the banks to do principal write-downs is an undeniable accomplishment of the settlement. But the amount of relief is still tiny compared with the problem. And the banks also get credit toward their share of the settlement for other actions that should be required, not rewarded.

For instance, they will receive 50 cents in credit for every dollar they write down on second liens that are 90 to 179 days past due, and 10 cents in credit for every dollar they write down on second liens that are 180 days or more overdue. At those stages of delinquency, the write-downs bring no relief to borrowers who have long since defaulted. Rather than subsidizing the banks’ costs to write down hopelessly delinquent loans, regulators should be demanding that banks write them off and take the loss — and bring some much needed transparency to the question of whether the banks properly value their assets.

The settlement’s complex formulas for delivering relief also give the banks too much discretion to decide who gets help, what kind of help, and how much. The result could be that fewer borrowers get help, because banks will be able to structure the relief in ways that are more advantageous for them than for borrowers. The Obama administration has said the settlement will provide about one million borrowers with loan write-downs, but private analysts have put the number at 500,000 to 700,000 over the next three years.

The settlement’s go-easy-on-the-banks approach might be understandable if the banks were still hunkered down. But most of the banks — which still benefit from crisis-era support in the form of federally backed debt and near zero interest rates — passed the recent stress tests, paving the way for Fed approval to increase dividends and share buybacks, if not immediately, then as soon as possible.

When it comes to helping homeowners, banks are treated as if they still need to be protected from drains on their capital. But when it comes to rewarding executives and other bank shareholders, paying out capital is the name of the game. And at a time of economic weakness, using bank capital for investor payouts leaves the banks more exposed to shocks. So homeowners are still bearing the brunt of the mortgage debacle. Taxpayers are still supporting too-big-to-fail banks. And banks are still not being held accountable.

Manipulation of the Silver Market

A Moral Question - Not A Political One No Responses »

Mar 172012

COMMISSONER…DO SOMETHING! J.P. MORGAN OWNS 25% OF THE SHORT SIDE.

Butler On How Silver Manipulation Works (audio)

How Alchemists Invented Modern Finance

History of Finance No Responses »

Mar 112012

QUEUE

The amazing capacity of credit to create value — and to destroy it — has often been compared to alchemy. After the alchemists failed in their search for the philosopher’s stone, the mythical substance that could turn ordinary metals into gold, the power of creating something out of nothing has come to rest solely in the hands of the financiers.

Although George Soros, who titled one of his books “The Alchemy of Finance,” may only have used alchemy as a colorful metaphor to point to the wondrous generative capacity of credit, it turns out that there is a much deeper connective bond between alchemy and modern finance, dating back to the 17th century, when the modern financial system was just forming.

The big problem facing England at the time was a scarcity of money. Because the country lacked an adequate circulating medium, commerce was lagging, textile manufacturing was in a tailspin and various unemployment-related social problems kept on increasing. As a solution, pamphleteers famously called for trade restrictions to promote an inflow of precious metals from abroad.

By mid-century, however, a fundamentally different way of thinking about the economy and money emerged. It was informed by Francis Bacon‘s insistence that mankind has the capacity to restore dominion over nature through the pursuit of pragmatic science, and the alchemists’ understanding of nature as a constantly evolving organic process, the speed of which can be hastened by human intervention.

A group of adherents to this view — social reformers, scientists and political economists — gathered around the London-based Prussian emigre Samuel Hartlib. The Hartlib Circle, as they became known, wrote and disseminated advice on how to transcend nature’s scarcity by advancing agriculture, horticulture, botany, mechanics, manufacturing, chemistry, fishing and so on. They hoped to spark a process of infinite improvement that would gradually eliminate all social, economic and political problems and eventually establish a kingdom of heaven on Earth.

For this process of infinite improvement to become a reality, it was more important than ever to solve the scarcity-of-money problem. The Hartlib Circle first pursued a large-scale alchemical project. They brought together some of the most renowned alchemists and provided them with the requisite resources to conduct their laboratory experiments, hoping that they would discover the magic tincture whereby lead could be turned into gold. However, as their transmutation efforts failed, they turned their attention to other ways of expanding the money stock. They published the first proposals for a generally circulating credit currency, which provided the basic inspiration for the eventual creation of the Bank of England in 1694.

The first credit-money proposal — to issue paper money backed by land — was written by William Potter and published in his pamphlet “The Key of Wealth” (alchemists often referred to the philosopher’s stone as “the key”). He argued that because his credit currency had the potential to facilitate the infinite-improvement process, its “capacity of inriching this Nation, is in a sort infinite.” Indeed, another member of the Hartlib Circle even suggested that a well-functioning system of credit was capable of “multiplying the stock of the Nation, for as much as concernes trading in Infinitum: In breife, it is the Elixir or Philosophers Stone.”

The link between alchemy and credit thus existed on three levels. Much like Soros, the first proponents of a generally circulating credit currency used alchemy as a metaphor to describe the value-producing potential of credit. They also viewed alchemy and credit as different solutions to the same problem: the scarcity of money. Most importantly, given that the political-economic worldview of the Hartlibians provided the intellectual foundation for the creation of the modern world of credit, the case can be made that there was a conceptual link between alchemy and credit — one that was more profound than mere metaphor.

(Carl Wennerlind is an associate professor at Barnard College, Columbia University, and author of the recently published “Casualties of Credit: The English Financial Revolution, 1620-1720.” The opinions expressed are his own.)

How Alchemists Invented Modern Finance – Carl Wennerlind, Bloomberg

Satan is behind Obama’s teleprompter

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Mar 102012

Satan as depicted in the Ninth Circle of Hell in Dante Alighieri‘s Inferno, illustrated by Gustave Doré.

Satan’s Agents want 4 more years of Hell

Two of them Catholic betrayers

It is the time of evil intentions, and the grim reaper cuts into the ripe grain with wide strokes. Mourning takes up her abode in the abandoned houses, and there is no one to dry the tears of the mothers. Yet Obama feeds lies to those people whose most precious belongings he has helped to steal and whom he has driven to a lonely, difficult life with lies, deceptions, and betrayal.

Every word that comes from Obama’s mouth is a lie. When he says peace, he means war, and when he blasphemously uses the name of the Almighty, he means the power of evil, the fallen angel, Satan. His mouth is the foul maw of Hell, and his power is at bottom accursed. True, we must conduct a struggle against the growing neo-Nazi terrorist state silencing it with rational means despite it’s endorsement by a gutless Justice(less) Department ; but whoever today still doubts the reality, the existence of demonic powers, has failed by a wide margin to understand the metaphysical background of this war.

Behind the concrete, the visible events, behind all objective, logical considerations, we find the irrational element: The struggle against the demon, against the servants of the Antichrist.

Everywhere and always demonic powers lurk in the dark, waiting for the moment when man is weak; when of his own volition he leaves his place in Creation, as founded for him by God in freedom; when he yields to the force of evil, he separates himself from the powers of a higher order; and after voluntarily taking the first step, he is driven on to the next and the next at a furiously accelerating rate.

Everywhere, and at times of greatest trials, men have appeared, prophets and saints who cherished their freedom, who preached the One God and who with His help brought the people to a reversal of their downward course. Man is free, to be sure, but without the true God he is defenseless against the principle of evil. He is like a rudderless ship, at the mercy of the storm, an infant without his mother, a cloud dissolving into thin air…”

+++

“God has a way of standing before the nations with judgment. And it seems that I can hear God saying to America, ‘You’re too arrogant! And if you don’t change your ways, I will rise up and break the backbone of your power, and I will place it in the hands of a nation that doesn’t even know my name. Be still, and know, that I’m God.’”

Martin Luther King, a true God loving Black leader.

God rest his soul.

It’s A Dark Day In Our Nation, 30 April 1967

___________________________________

We live in an age where there is great emphasis on individual freedom. We live, in fact, in a secular age that has abandoned objective truth as understood through natural law. All the forefathers of our nation accepted natural law and objective truth. The Declaration of Independence and the Constitution of the United States of America are premised upon this philosophy. But we have wandered far from truth, and, as a consequence, we are descending into social chaos and despair. We are deconstructing into an abyss, a hole that has no bottom except Hell. This is an age of contradiction, an age of heterodoxy, a word that is translated from the Greek as two or more ways of understanding something. This is opposed or in contradiction to orthodoxy, a word that basically means the one and the true way of understanding something. This is why the Orthodox Jews and the Orthodox Churches use this term. They want a self-revealing identity. They are telling the world that they consider themselves as being holders of the truth. They believe that their faith system is the one and the true teaching of God. But, of course, there can be only ONE TRUE TEACHING OF GOD! How do we know the Truth? How do we choose wisely? Because it is through the voice of the Holy Spirit, the authentic and only voice of the Spirit, the Church speaks infallibly. This is what Saint Paul referred to at the beginning of his Letter to the Romans (1:5) as “the obedience of faith.” This is obedience, through faith, to the voice of the Spirit. It then follows that the teaching authority of Jesus, through the Spirit, is passed on to His Mystical Body, the Church. The authority that Jesus left to His Apostles was manifested, as Luke tells us in the Acts of the Apostles chapter 2, when the Holy Spirit came upon them at Pentecost. At that moment the Church of the original and only Apostles, led by Peter, became the “Spouse of the Holy Spirit” (John 14:26)! So we must recognize that this entire discussion of grace has no meaning whatsoever without our understanding that grace can only be obtained within the context of faith in Jesus Christ. The one exception to this profound truth would be, as we discussed previously, “invincible ignorance,” an exception that has become more and more unlikely in the 21st century. This is a time, after all, when the message of Christ is being spread worldwide through the communicative powers of global networks of television, radio, short wave, and the Internet. Praised be Mother Angelica and EWTN! Add to this the work of men like Mel Gibson who use their brilliant talents to convey through cinema Grace Himself and His Passion.

If grace is indeed the manifestation of Jesus, through the Spirit, then it certainly makes a great deal of sense to say that the closer you are to Jesus in an “up close and personal” way, then the more His grace will be able to work in you by the exercise of your free will. I again turn to Saint Paul’s Letter to the Romans (8:17): “Now if we are children, then we are heirs—heirs of God and co-heirs with Christ, if indeed we share in his sufferings in order that we may also share in his glory.” And again Romans (8:29): “For those God foreknew he also predestined to be conformed to the likeness of his Son, that he might be the firstborn among many brothers.” The presence of evil has always been in opposition to the salvation of Christ and throughout history the forces of Satan have been busy in the work of human destruction. The grace of God, however, has been the weapon that Satan cannot defeat. Grace raises us to supernatural dignity, and if we cooperate with it, then the Evil One can and will be defeated. There is only Jesus!

So we come to the end of our journey toward grace. I have attempted in a simple and straightforward way to discuss my journey and yours, my destiny and yours. The world today is so complex and full of spiritual pitfalls, and the Enemy is waiting at every moment to weave a web of evil and despair around each and every one of us. But we have available to us something that makes the Enemy run in fear, something that he knows that he cannot ultimately defeat. That something is a someone, and His name is Jesus the Christ. He also promised that the gates of hell will not prevail against His Church and that He will be with us even to the end of the world. He left us a Church guided by the Holy Spirit, a Church that will dispense His Grace and His Sacraments to sustain us in love until the end.

J. Brian Schuettler

DEFEATING EVIL IN YOUR PERSONAL LIFE – THE TRIUMPH OF GRACE

author of GOT GRACE?

______________________________________________________________________

How a Gold Standard Would Perfect Money Supply

A Gold Standard No Responses »

Mar 102012

Let’s say that, on a given day, there are people who want to disacquire $1,000,000, and people who want to acquire $500,000. What I mean by this is that people have $1,000,000 of currency, either paper banknotes or bank reserves, and they would like to trade this for something else, like goods and services or other assets. They want to end the day with $1,000,000 less currency.

Likewise, the acquirers want to hold more currency. Maybe there is only $20 in their wallet, which they feel is not enough for their daily needs, and they take some sort of action (selling goods, services or other assets) that results in their having $120 in their wallet. The acquirers want to end the day with $500,000 more currency.

Obviously, there is a mismatch. In this case, $500,000 would end up at the government’s doorstep, to be sold for gold.

However, the government may be aware of this mismatch, particularly if it has been persistent for weeks or months, and instead of waiting for someone to show up asking for gold, they do something else. For example, the government could sell a government bond for $500,000, and in the process take $500,000 in payment. The government thus takes $500,000 out of circulation (they can’t spend it again because that would put it back in circulation), in this way balancing acquirers and disacquirers without having to make any gold transactions.

This is the way gold standard systems actually worked. That is why they produced the kinds of statistics we looked at recently, which many people find bewildering. Look at the statistics again and see if they make sense to you now.

There are even academics who have spent their whole careers as supposed “experts” on monetary history, who don’t understand how this worked. Actually, they were never really interested. Their real goal has been to provide justifications for today’s Keynesian floating currency system, by making the gold standard system seem ridiculous.

Ignore what the munchkin economists say. You can figure this out on your own. It’s actually a very simple system. The only strange thing is that people find it so confusing.

How a Gold Standard Would Perfect Money Supply – Nathan Lewis, Forbes

Legal skull-duggery in Greece may doom Portugal

European Union?, Pig-Headed Economic Policy May Still Lead to Disaster, PIIGS Default?, Political Chaos, Political Implications 1 Response »

Mar 102012

Matters will come to a head soon. The IMF must decide by September whether Portugal needs more money and debt relief. If Portugal now spirals into a Grecian vortex, large haircuts loom. This time EU leaders will have to accept that their own taxpayers will suffer losses – avoided until now – or violate their pledge.

Bondholders are not waiting to learn whether Europe will keep its word this time. There has been no rally in Portuguese debt since the ECB flooded banks with €1 trillion. Ten-year yields are stuck at 13.2pc. Return to market access is a distant dream.

The risk for Europe is that investors will charge a “political risk” premium to invest in any EMU country subject to EU legal whim. The greater risk is that Euroland’s crisis rumbles on as fiscal contraction in Italy and Spain plays havoc with debt dynamics, and reforms come much to late to close the North-South trade gap.

Europe’s handling of Greece has guaranteed that global funds will rush for Club Med exits at the first sign of trouble. The next spasm of the debt crisis will that much dangerous if it ever comes. As the saying goes: Hell hath no fury like an abused bondholder.
Lawless Greek Deal May Doom Portugal – A. Evans-Pritchard, Telegraph

Adam Smith vs. Crony Capitalism

Economic Prophet No Responses »

Mar 102012

Merchants and master manufacturers are . . . the two classes of people who commonly employ the largest capitals, and who by their wealth draw to themselves the greatest share of the public consideration. As during their whole lives they are engaged in plans and projects, they have frequently more acuteness of understanding than the greater part of country gentlemen. As their thoughts, however, are commonly exercised rather about the interest of their own particular branch of business, than about that of the society, their judgment, even when given with the greatest candour (which it has not been upon every occasion) is much more to be depended upon with regard to the former of those two objects, than with regard to the latter. . . . The interest of the dealers . . . in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens. [Emphasis added.]

Smith harbored no romanticism about those who have long seen rent-seeking as the path to wealth not available in the freed market. In case we didn’t quite get his point, Smith goes on:

“The proposal of any new law or regulation of commerce which comes from this order [that is, 'those who live by profit'], ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.” [Emphasis added.]

Smith grew up under mercantilism and knew well of what he wrote. America grew up largely under mercantilism and its cousin, Hamiltonian-Lincolnian corporatism. In this respect advocates of the freed market should embrace Smith’s understanding of political economy: that a powerful force against freedom emanates from where they might least expect to find it.

Sheldon Richman is editor of The Freeman, where this article originally appeared.

Barack Obama: The Anti Economic Growth President

A Growing List Of One Term Presidents, A Moral Question - Not A Political One, A State of Distress, Back to the basics, Bilderbergers 1 USA 0, Catholic Social Teaching, Collateral Damage, Coming Social Unrest, Commercial Real Estate Bust, Constitutional Questions, Construction Issues, Consumption Ran the Old Economy, Coup d'etat in America, Death of the Dollar, Deflation-Inflation-Stagflation, Dismal Science-Ignorant Scientists?, Economic Analysis Isn't Science, Even the Terminator Can't Help California, Fiat Currency, Goldman: Underwriter or Undertaker?, Greenspan is kind of stupid, HEY AMERICA-STICK 'EM UP!, Investment in Infrastructure Is A Win/Win, It Is Supposed to be a Republic!, IT'S ALL ABOUT POWER AND MONEY, Jacksonian Democracy, Let's Call What It Is - DEPRESSION, No Bank Is Indispensable, Obama Bingo, Obama's Hypocrisy, Our phony middle class, Pig-Headed Economic Policy May Still Lead to Disaster, QE2-You know as...inflation!, Read and Weep Entries, Small Business-Bedrock of America, Smaller Can Be Better, The American Financial Oligarchy, The Arrogance of Power, The Big Fat Greek Question, The Consequences of Greed, The Currency Wars Officially Begin, The Democrats Blew It Again, The Dollar's Demise, The End of American Capitalism As We Know It? - Discuss, The excellent adventures of Ben Bernanke, The Financial Elite, The Growing American Fascist State, The Importance of Strategic Planning, The Inherent Disorder of Empires, The Intrusion of UNLAWFUL Authority, The Judeo-Christian Political Coalition, The Obama OMG magic factory, The Sorry State Of American Manufacturing, The Suffering Poor, This self-serving arbitrariness, Time For A New Third Party, Truth In Charity, Unemployment Catastrophe, Unindicted Co-Conspiritors, Unintended Consequences, US Trade Imbalance, USA Is the New Japan, Wage Deflation, We Are All Cooked, We Have Become Beggars To The World, Who Guarantees the Guarantor?-You Do!, Who owns Congress-Still! No Responses »

Mar 032012

Human progress began eons before there were modern welfare states, and it has continued up to the present wherever governments weren’t disrupting markets with taxation, regulation, expropriation or war. Economist Julian Simon noted that “In the nineteenth century, the planet Earth could sustain only one billion people. Ten thousand years ago, only 4 million could keep themselves alive. Now, more than 5 billion people are living longer and more healthily than ever before, on average.”

By contrast, it is during crises when economies stop growing or decline that multitudes become anxious, resentful and envious. Economic crises often spawn extremist political movements. In the United States during the Great Depression, Louisiana senator Huey Long developed a national following for his “Share the Wealth” class warfare campaign. During the 1940s, the Argentine demagogue Juan Péron gained power by appealing to the “descamisados” (“shirtless ones”). Adolf Hitler emerged as a political figure to reckon with during Germany’s runaway inflation of 1923, when he appealed to “starving billionaires” who had bundles of paper money worth less than a loaf of bread. Both Lenin in Russia and Mao in China seized power amidst economic as well as political chaos.

So, the stakes are high. If the anti-growth view prevails, we might find ourselves slipping into a new dark age. But if voters choose political leaders committed to economic growth, there could be a new boom ahead.
Barack Obama: The Anti Economic Growth President – Jim Powell, Forbes

The Snowball of Empire

Back to the basics, Bilderbergers 1 USA 0, Coup d'etat in America, The Inherent Disorder of Empires, The Intrusion of UNLAWFUL Authority, The Judeo-Christian Political Coalition, The Oil Question, Truth In Charity, Unindicted Co-Conspiritors, Who owns Congress-Still! No Responses »

Feb 192012

The snowball began its first cycle in 1899 when on February 4 of that year the United States began a war against the Philippines. Two days later the Senate voted to annex the country despite the islanders’ opposition. That country would not be returned to its people until 1934.

Not 20 years later, in 1917, America decided to enter World War I, forgoing Jefferson’s plea to avoid entangling alliances, and, as a result, lost roughly 116,000 men, and millions of dollars, in the war.[1]

The snowball kept rolling with World War II, perhaps the only just war of the century, but as a result, our role in world affairs dramatically changed and NATO was formed in 1949. NATO was the ultimate entangling alliance — forever ensuring our seat at the table of any just or unjust future war.

The rest, as they say, is history. The snowball has been rolling full speed ahead ever since, creating an empire that is both all encompassing and pervasive.

Korea, the Soviet Union, Vietnam, Iran, Iraq, Pakistan, Somalia, Bosnia, Kosovo, Iraq again, and Afghanistan: the United States has had military personnel in (or engaged with) all these countries at one point or another throughout the past 50 years, and today is responsible for over 600 military bases in 40 countries across the world.[2]

As the Department of Defense states, “the United States military is currently deployed to more locations than it has been throughout history.”[3]

The snowball, which started out as a flake, has now reached Leviathan status and is on a downward slope growing larger and larger with every revolution. The empire of the United States now touches every country, directly or indirectly, in the entire world.

The Snowball of Empire
by Nico Perrino on February 17, 2012

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