Here is a video made by a group trying to promote reduction of our personal carbon footprint:
Now watch a video by those who mock the idea of anthropogenic global warming:
Now my question is, who would you rather associate with? The people who made the first video or those who made the second one?
It is the height of irony that the US federal government has put Bernie Madoff in prison for running a ponzi scheme: he took people’s retirement funds and spent it frivolously instead of investing it. Many have pointed out that the largest ponzi scheme in the history of humanity is actually run by the US federal government itself: the Social Security System. The US government has taken people’s retirement–but not voluntarily, as the felon Madoff, but by force through payroll taxes. Then it spent it frivolously instead of investing it.
Yet today, Zacks (via Yahoo) defends the ponzi security system:
There is a huge amount of hysteria in the country that says that Social Security is nothing but a ponzi scheme and is about to go bankrupt. This is simply not true, and is mostly being propagated by those who would love to see Social Security turned over to Wall Street. Doing so would put the retirement security of millions of Americans into grave danger. …
Starting in 1982 with the Greenspan Commission, Social Security recognized the demographic time bomb posed by the “baby boom” and subsequent “baby bust.” As a result, the idea was that people would pay in more than required for Social Security to run on a pay-as-you-go basis (which is how it was run up until that point). The extra funds would go into a trust fund. That trust fund now holds $2.5 Trillion. So how is that money invested? It is invested in the safest assets around: T-Notes and Bonds. The government holding its own liabilities is a bit strange, and that is where the claim that the Social Security trust fund is composed of nothing but “worthless IOUs comes from. However, if that is true, then it is equally true that the assets of a T-bond fund run by Vanguard or PIMCO are also composed of worthless IOUs.
So the Social Security System has basically taken people’s retirment money and lent it to the Federal government which has spent it as part of its continual deficit spending. It did not invest it in anything that could give workers a return on their investment, but spent it. Now, in order for the government to pay back the Social Security System–all those wonderful t-bills and bonds–it will have to either borrow from someone else, or steal it a second time in the form of further taxes from the very people who are paying into the system. Either the anonymous author of the article is dumb, or she thinks all the rest of us are.
Meanwhile, Monty Pelerin asks his readers to name the author of the following quote:
The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. Deficit spending is simply a scheme for the confiscation of wealth.
… the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale.
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold.
And Vasko Kohlmayer writes about the demise of the US dollar:
The dollar has already entered its terminal phase. The word “doom” is written across it for anyone with the eyes to see. Sad to say, there is no way to reverse its downward slide. With more than $13 trillion in public debt and some $100 trillion in unfunded mandates, our federal government has assumed far more obligations than it can ever make good on. Worse still, these figures are growing larger every year.
Thus, the basis of a civil society is breaking down in the US because the world’s most powerful political entity is a criminal organization which is running ponzi schemes and uses its power to borrow and create money, producing inflation which robs citizen’s of their wealth.
Monty Pelerin has a excellent article on inflation this morning. He maintains that the great temptation for government will be to try to solve the problem of debt and unfunded obligations by inflating it away, and that, since politicians are cowards, they will not make the tough decisions to avoid inflation. He writes, however, about the consequences of inflation: “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.”
I believe that the real danger of inflation may lie in the consequences it will have on the food supply. Never mind that food shortages have never been a problem in the living memory of most North Americans (unless they are over 75 or immigrated here from a war zone or something). Today, obesity in developed countries is feared more than starvation. So I made the following comment on Pelerin’s blog:
I am reading Adam Ferguson, When Money Dies (1975). He tells the story of Frau Eisenmenger, an Austrian who at the end of WWI had sufficient investments to live on and care for her family (31). She went into her bank in 1918 to withdraw some funds and her banker advised her to buy Swiss Francs, but it was illegal to hoard foreign currencies, and so she declined. Eventually, her savings became worthless. Her situation was greatly helped by her daughter working in the “American mission” paid in dollars, renting a room in her apartment to an American, and speculative investments in the Austrian stock market.
I fear that what will happen is similar to Europe in that period, when food was scarce and required a large percentage of income to procure. Eventually, the price of food will sky rocket and so more dollars will be created ex nihilo. Eventually the farmers will refuse to supply their food to people for worthless dollars and foods stamps from the government, and they will have to stop producing–because their costs have to be covered too. Then, we will see shortages like never before. A farmer offered Frau Eisenmenger three month’s provision for her grand piano (33); and acquaintance of hers sold her own piano for a sack of wheat flour.
Andrew wrote at the City of God about inflation as welfare for the rich:
(I’m using “inflation” in the Austrian sense here: increase in the money supply, rather than increase in CPI price levels)
I just heard this recently, and it made sense to me:
1. The entire Keynesian scheme of monetary/fiscal spending to stimulate the economy only works because it takes time for people to catch on to the reality that newly printed paper is not real wealth. That is, people don’t immediately realize that they are spending fiat-money, and thus act based on thinking they have more money than they really do.
2. This temporarily causes greater investment, which has the potential to create real wealth and real economic growth.
3. However, as time goes on, sellers realize that buyers have more money, and thus prices rise accordingly, bringing the economy back to status quo ante, except with possibly increased debt (if enough real economic growth did not occur before the sellers caught on).
4. In the case of monetary policy specifically, newly printed money inevitably goes to the rich first: to banks, and from there to massive corporate investments.
5. As time goes on, more of the poor get the new cash, but it also simultaneously becomes less valuable, since prices are rising.Thus, monetary policy seems to be, inevitably, welfare for the rich.
(Note that none of this would be an argument against government welfare, based on tax-hikes (not spending fiat money), for the poor.)
I responded with some thoughts as an investor:
(1) CPI has not been affected by the inflation of fiat money because there has been no velocity (MV=PQ). Instead of lending money, banks have bought safe US treasury notes to pad their reserves. They have used TARP money to do this. Essentially the US government lends TARP to banks which lend it back to the US government. Also the Federal Reserve bank has bought CDOs from the bank, and the banks have used that money to buy US treasury notes as well.
(2) What we’ve seen since the 2008 credit collapse can therefore be better described as reflation–reflating shrunken credit with fiat money. There are still some mortgages that are collapsing so it may be sometime before we see the most serious detrimental effects of current US fiscal policy (1-2 years?).
(3) Investors are probably more aware of the potential dangers than the public. Therefore we have been making moves in anticipation of a US dollar collapse. This is known as the US dollar carry trade.
(4) Gold is an indicator of inflation, but it also experiences the anticipatory effects of panic about the dollar, as well as periods of profit taking. Its price may therefore at times suggest an overcompensation.
(5) The best hedge against inflation is debt. But you have to buy something with the funds you borrow in order to cover the interest: real estate, dividend bearing stocks, or income investments in foreign currencies or countries (a.k.a., carry trade). The risk is that the investment you make with the debt will not maintain its value, but I consider the current risk of loss of holding currency to be an absolute certainty. So better to own anything except money. For this reason, my current non-registered investment portfolio is 150% in stocks.
(6) Inflation caused by government deficits is not really generational theft as suggested so often by conservatives (or those criticizing current deficits). It is theft of current creditors, bank account holders, fixed income earners and workers, whose current paycheques are garnished through the hidden cost of inflation. It is true that CPI lags inflation, but then pay raises lag CPI. I consider inflation to be especially a heist of the retirement accounts of the older generation–financial advisers often recommend subtracting your age from 100 and that remaining number is what you should have in volatile assets like stocks. The remaining is to stay in fixed income. So if you follow this advice and you are over 70 years old, then 70% of your portfolio is subject to government theft by inflation. Many of these retirees just abandoned stocks altogether during the collapse and now they have cash which is being killed by inflation. It is not a pretty picture. But inflation is not a theft of the younger generation because when the enter the workforce they will earn the currency at its current value.
(7) Inflation in the US will be necessary: (i) to be able to pay the interest and principle on the current debt, inflation is the only way–it is a form of bankruptcy; (ii) to create an effective decrease in the recent minimum wage hike which has put millions of teens and other low wage earners out of work. (iii) to use bracket creep in order to increase everyone’s taxes; (iv) to make effective reductions of entitlement obligations which can’t be paid for.
(8) I am not “rich”, but as an investor, I’ve been able to ride this wave, and I’ve done very well thanks to being able to make the right kinds of move in anticipation of current US inflationary policy, but I may have to bite the bullet on an investment I made with my brother in Austin just before the collapse and that hurts.
(9) While not “rich”, we were able to get a huge amount of bank credit just when I needed it in Oct 2008. That has been great boost to my investments. So indeed, the banks were giving credit to some people, contrary to the widely held belief that no one could get loans.
(10) It is much better right now to be in Canada than the US.
(11) Inflation doesn’t rob the poor but the middle class and wealthy who have holdings which are not hedged against inflation.
(12) Ferengis will make money during periods of inflation.
I’ve since learned that CPI (Consumer Price Index) is manipulated and underestimates inflation by about 7% per annum.
The latest endorsement from Streams of Justice, Dave Diewert’s social justice group, is of “The One ‘R’ Posse”:
Communiqué from The One ‘R’ Posse!
Operation Knock Over Recycle Bin and Strew The Contents All Over The Street!
Just say no to Recycling! If you Reduce and Reuse, there is no need to Recycle. Recycling is just a way for capitalism to ride the back of environmentally conscious people with out ever having to actually change their fundamental system.In Seattle during the anti-WTO convergence, in 1999, we set a dumpster of cardboard recycling on fire. This action was widely misconstrued as a bunch of hooligan police provocateurs attempting to besmirch the good name of respectable protesters and rioters alike.
Our goal in Operation Set Cardboard Dumpster On Fire was to prevent the recycling trucks from coming to pick it up, using fossil fuels and ever increasing road networks to bring it to the recycling depot, process it then transport it in more trucks to factories to manufacture it into goods consumers would drive their cars to malls to yet again purchase, starting this whole ‘recycling’ charade all over again. How many times can one recycled box be recycled before the recycling process itself becomes just another toxic pollutant!
After being lambasted in the corporate media and ruthlessly chastised by all factions in the Left, we stopped everything we were doing and retreated to re-evaluate and perfect our strategies. After a decade of intensive internal theoretical and strategic development, we finally returned, only to find our actions meeting the same merciless critique by our allies.
On Feb 13, 2010 as part of the convergence against the 2010 Olympics in Vancouver, the One ‘R’ Posse knocked over a recycle bin in solidarity with the Left, and to move forward our own cause of stopping the ‘recycling’ ruse consumers have been duped into by so called environmentalists who are decreasing their carbon footprint with one foot while just making another one with the other foot!
The One ‘R’ Posse took into consideration that setting that cardboard dumpster on fire, while preventing the production of greenhouse gasses in transport and manufacturing only added to Global Warming by adding milligrams of smoke into the atmosphere. After being thrust into the global spotlight of criticism and a decade of internal reflection, we changed our tactic. We realized the world just wasn’t prepared for the radical reality of a dumpster fire. We needed to take action that makes sense under current social conditions. Littering was the solution we chose. City workers were thus employed to clean up the plastic bottles, creating jobs and showing solidarity with Union workers. At the same time Environmentalist NGO’s can rest easy that no carbon emissions were unnecessarily created. Workers and environmentalists are finally united over the same bin!
This is beyond satire. I’ve tried to satirize these people. But the reality is so much more farcical and ridiculous than any satire that I could imagine.
This sort of thing on the part of Christian social justice group makes Glenn Beck’s recent statements seem not only justified but eminently fair and sober minded:
In recent radio show, that was broadcast on more than 400 affiliates, he told his listeners to leave any church that uses the phrases “social justice” or “economic justice.” “I beg you, look for the words ’social justice’ or ‘economic justice’ on your church Web site,” he said.
“If you find it, run as fast as you can. Social justice and economic justice, they are code words. Now, am I advising people to leave their church? Yes!” He went on to say, “If you have a priest pushing social justice go find another parish. Go alert your bishop and tell them. [Ask them] are you down with this whole social justice thing?” (Read more: http://network.nationalpost.com/; The National Post is now on Facebook. Join our fan community today.)
Of course in the National Post article did not interview Canadian theologian Dr. Craig Carter who has a series on the problem with the term “social justice” that pretty much agrees, in a sophisticated manner, with Glenn Beck’s warnings.
Craig Carter did two recent posts on “social justice”:
The Righteous Investor 