Grateful People Are Happy People

Searching for ordinary ideals of Americana is like looking for consistency in the Internal Revenue Service’s tax code.  It’s virtually nonexistent.  The stimulating conviction of one American vastly differs from that of another.

One may celebrate adventures in mysticisms.  Another may find inspiration from the bleacher seats of a college football game.  While a third struggles to free himself of the orthodox hobgoblins that suffocate his soul.

In the more reputable papers, the story of the national struggle is told with feeble symmetry.  The news seems to be reported from the position that the two party political system filters out any ideas to the contrary.  We’re told a Marxian tale of the evil rich exploiting the noble poor.  Even worse, we’re led to believe that buffoons like Ben Bernanke know exactly what the heck they’re doing.

We find this ongoing codswallop to be woefully different from the America we see and experience when we step out our front door each morning.  Moreover, we find the abundance of thought polluting newspeak and commonsense destroying political correctness to be insulting and intolerable. Continue reading

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Jump!

“If we right away say 98 percent of Americans are not going to see their taxes go up – 97 percent of small businesses are not going to see their taxes go up,” said President Obama on Wednesday.  “If we get that in place, we’re actually removing half of the fiscal cliff.”

We are…really?  Just like that?

We’re certain there have been worse presidents.  Surely, there have been dumber presidents.  But has there ever been a president that was so doggone funny?

Not in living memory, if ever, that we can think of.

The critical thing about the fiscal cliff that President Obama is unwilling to mention is that the current debate is just the jumping off point.  The fall into the abyss will be long and painful.  Moreover, it’s unavoidable.

Austerity, in the form of higher taxes and spending cuts, is coming.  It will either be voluntarily achieved through government policy or it will be forced upon the country by markets.  Given Congresses inability to understand the problem, it will likely be up to the markets to force real change upon the country’s finances. Continue reading

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The Temporary Madness of an Ugly Mathematics World

There are obvious contradictions in government finance that are both shocking and absurd.  There are opposing forces colliding before us with consequences hardly a soul can escape.  To sum up the plot, there’s the soft delusion of prosperity through public spending running up against the hard reality of arithmetic.

The climax, and its brutal impartiality, is still a scene or two away.  But once the inflection point is reached chaos and disorder will follow.  This is the unfavorable place inhabitants of western nations find themselves these days.

“Beauty is the first test: there is no permanent place in this world for ugly mathematics,” wrote British number theorist Godfrey Hardy in 1941.  When making this observation, Hardy didn’t likely have a fiat money world in mind…where the government borrows money created by the central bank to pay for things the economy can’t afford.

If Hardy could’ve taken a gander at the mammoth gap between government revenues and obligations, circa 2012, we guess he’d have concluded the Treasury is engaged in a serious case of ugly mathematics. Continue reading

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Get Me Out

Following Tuesday’s election we offer one word of advice: Panic!

Not just because Obama was reelected – that’s just one reason.  But because, as John Embry, chief investment strategist at Sprott Asset Management notes, 2013 could be “one of the ugliest years on record.”

“I think we will see the first manifestations of the negative aspect (of money printing in 2013),” says Embry.  “To date, money velocity has been falling because even though all of this high powered money is being stuffed into the market by these central banks, the banks and the public really can’t seem to get the lending mechanism working.

“The banks are afraid, and the public is over-indebted.  But I think that will just make them push QE even harder, and at some point there will be a collective realization from all these people that are holding bonds and cash, etc., that ‘My God, the money is being destroyed.  Get me out.’

“That’s what will get the velocity to change direction, and then you will see mounting inflation very quickly.” Continue reading

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