Saturday, March 30, 2013

The Pillage People . . .

So many things going on, and I have less and less desire to comment on them. I would rather fiddle around with my beloved Corvette, clean my Kimber .45, store my ammo, and practice head shots to defend family and friends in the coming zombie apocalypse. That said, I will take my cod liver oil and produce, uh, some remarks.

The western world continues on a totally unnecessary suicidal path. What was once common sense is no more. Everywhere one looks, the insanity is evident: The refusal to deal with real issues and the insistence on taking up marginal or even totally extraneous issues instead is stunning. Here in the USA, our economy remains stagnated for no logical reason. Instead, for example, of freeing up the exploitation of our vast fossil fuel resources, we continue to push money at phony green industries, throw road blocks in the way of our private sector's ability to get those fuels, block importation of fuel from our friends in Canada, and blather on and on about discredited, voodoo science global warming. Our leaders rulers take lavish vacations on our dime, push ruinous tax and spend policies, including the criminally destructive Obamacare, and avoid cutting even a bit of our bloated spending. A hypothetical "threat" to reduce ever so slightly the rate of growth in spending is declared disastrous and the equivalent of a nuclear attack. We get wrapped up debating gay "marriage," and "control" of mythical "assault" weapons when neither of those topics has any bearing on real issues facing the vast majority of real Americans, as opposed to Hollywood's fake Americans.

And Europe? Ah, yes, Europe. What can we say about the "cradle" of our civilization? Not much positive. For at least the past 250 years or so, the Europeans have seen their collective insanity grow at an exponential rate. They seem determined, even more so than we, particularly in the past fifty years, to erase all vestiges of western civilization and principles from their quaint, colorful and increasingly irrelevant little countries. This motley collection of has-been, never-were, and never-will-be states goes from one lunacy to another. Some of the latest, of course, being the combination of anti-natalist policies and open immigration policies. This lethal cocktail has changed the nature of Europe's society, and turned parts of European cities into "no go" zones resembling the urban nightmares of some third world countries--and Detroit, but then I repeat myself. The phrase Old World is now a literal description of Europe--if, that is, one leaves aside the booming Muslim population. The self-destructive continent that brought us Communism, Fascism, Nazism, two world wars, the Holocaust, the cold war, and a colonial legacy that continues to create problems throughout the world, also has brought us the ultimate "social-democrat," supra-national nanny state, the EU. This weird Marxist-Fascist attempt to destroy what was left of Europe with bureaucracy, taxation, and "homogenization" has been wildly successful. Europe likely will never recover from the ravages of the EU and its obsession with replacing the dollar with the euro.

I have written before about Cyprus, and before that on the euro. I won't repeat all that. I just want to note that the situation is even worse than what I had thought initially. While it seemed that depositors with more than $130,000 in Cypriot banks would lose about 40% of their money, the percentage keeps climbing. It now seems it will be for some over 60%. The latest scheme has depositors forced to accept bank bonds valued at 37% of the value of their deposits in excess of $130,000. In essence, the banking system in Cyprus has been put to death. I don't know whether the banks there were good or bad. Perhaps they were run by cruel, heartless overlords so vile that they oppose gay marriage, smoke cigarettes, love fast cars, eat red meat, and refuse to believe Al Gore. Hard to believe anybody could be that evil, but perhaps. Was this the depositors fault?

Interesting also, and almost ignored in the press, is that the proximate cause of the Cyprus crisis/bail-out was the way the Greek crisis/bail-out was handled. Let me explain.

The politically driven creation of the euro ensured shady bookkeeping. There was no way that countries such as Greece, Spain, Portugal, and Italy (even France) were going to meet the budgetary requirements ostensibly demanded by membership in the euro. Everybody involved in the project knew that, but for political reasons they accepted the phony accounts as real and put on a brave Bernie Madoff front in public. You can do that for so long until the world economy goes into a recession--sparked, truth be told, by certain pronounced levels of economic insanity in the United States. The phony accounts came to light and--presto!--crisis. Making matters worse was that the political leaders decided that at all costs they had to save the euro. Instead of allowing countries to return to their own currencies and establish market dictated values for those currencies and their economies, the rush was on to keep the euro alive. I have previously written about the Greek bailout but just want to draw attention to the fact that persons and institutions who held Greek bonds, in other words those who had lent the Greeks money in the belief that the EU sanctioned national accounts were accurate, were forced by the bail out provisions to take a huge "haircut." The value of their bonds was slashed by fiat. Guess who held a big chunk of Greek bonds? Yes, my friends, the banks of Cyprus. Wonder why they then went into crisis, hmmm? I guess they deserve it for believing EU politicians and statistics.

We have in other words, rolling crises. The manner in which a crisis is handled in one place, produces a new crisis in another. The manner in which the Cyprus crisis is being handled is going to produce other crises. In Cyprus, we see restrictions put on the movement of money. So, therefore, while in theory the euro is an international currency, in practice euros in Cyprus are restricted to the island. So if you are an account holder who already has seen the EU take about 60% of your dough, you find that you cannot take out what's left. We now see rumblings in Spain and Italy of politicians there looking at a similar wealth grab. France's hapless government will not be far behind as President Hollande tries desperately to come up with new and creative ways to grab more revenue for France's collapsing public sector.

All this goes to show that perhaps it takes a pillage to wake up people to the cold hard economic facts. Those facts are the same as they always have been:

1) You cannot indefinitely spend more than you have;

 2) If you squeeze the goose that lays the golden eggs too hard, you will kill it.

Not difficult to understand, unless you are a politician.

Thank goodness that in the USA, we are not trying to emulate Europe. We would never come up with some crazy socialized medicine scheme that would completely bankrupt our public sector. Nah, that could never happen here.

26 comments:

  1. "If you squeeze the goose that lays the golden eggs too hard, you will kill it."

    It always amazes me that more civil servants can't figure this out. I've been saying this for years and no one wants to hear it.

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    1. I suspect a civil servant would point out that they're just forfilling the wishes of the elected representatives... of course the politicians would respond that they must respond to the expert advice they are given (by or via the civil servants for the most part). We are so screwed by this buck-passing. :/

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  2. We are So screwed...

    It MUST be Bush's fault.../sarc

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  3. re: "Thank goodness that in the USA, we are not trying to emulate Europe...."

    Ummm....not to put to fine an edge on matters, but how much has the Obama Administration and by proxy American banks, loaned the banks in Europe? When our old pal, the EU, goes TU methinks the backdraft might singe our pubes just a tad.

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    1. Diplomad is being a trifle sarcastic

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  4. Let us not forget MF Global bet on these bonds and lost in '08 and '09. http://en.wikipedia.org/wiki/MF_Global Nobody has gone to jail for.. "Rolling Stone reported in April 2012 that the number stands at $1.6 billion, and that "nobody disputes the fact that MF Global officials dipped into customer accounts and took...customer money."[5]

    One could also note the bond holders of Government Motors that were forced by government to take a "haircut", leaving the worker's pensions in place- something that would be.... if you'll pardon the expression... unprecedented.

    Meep.

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  5. Like I said, they will do it , because they have to and it will happen here.

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  6. Replies
    1. Its been happening since 2008. When the Fed prints money to hold interest rates artificially low to stimulate what happens is the banks make huge profits(00.25% for the banks to borrow and lend via credit cards @19%)
      And more important small savers in CDs get maybe 1 or 2% which after inflation of the things they buy like food gas rent etc @8%+ means negative real returns.

      This is not unexpected. Its a back door confiscation of savers $ to fund the .gov spending. The effect in the end is the same as Cyprus. The wealthy insiders and banks get richer and individuals and small businesses take it in the rear.

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  7. Dip:

    Another good analysis. I would only add that many of the losers in the Cypriot banking fiasco were Russians who were banking ill-got gains. That being the case, I am guessing a lot of Europeans will be saying "serves them right" just about now. And in a way, I feel the same way. They stole bunches of money, parked it in a bank in Cyprus, and lost 60% of it. Serves them right is only off the mark insofar as a few honest investors were caught in the swindle. Collateral damage, I guess. Pity.

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    1. What makes you think those Russians didn't get their money out?

      ACCO

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    2. We don't know (yet). But the people who seem to have gotten money out were politically well-connected: party hacks, government and labor union officials. Russian mafiosi don't much fall into that category, so it seems less likely the were the lucky ones and more likely their accounts were pillaged. But you're right -- I don't know for sure.

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    3. (F?

      Agreed we can't "know" for sure - but when the shyEUsters first announced, the 'set-back' for the timing of the takeback - Vlad did visit Cyprus for that short visit.

      'Course who knows what "all" was talked about?

      Initially I figured it had to do with Russia's naval access to the oceans but the timing was, uhm ... "pretty neat maybe"? Surely it wasn't only to do with the Tartus port in Syria.

      But like you - I don't know for sure.

      Arkie

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  8. I, for one, have stopped actively pursuing monetary investments (IRAs, CDs, etc). Inflation will eat it even if the gubmint doesn't actually nationalize our retirement accounts "for our own good." I'll still do the 5% TSP since it's dumb not to take the 100% matching contribution, and the market is going wild with hot money right now anyway. But everything else I'm putting towards real estate in fly-over country and paying down existing mortgage debt. Sure, they might try to take our land, too, but I figure that's the last thing they will grab. 'Cause that's when the shootin' will start....

    ACCO

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  9. Insanity is right. It just keeps getting worse in every way. To wit: "....A server at Buffalo Wild Wings reportedly refused to serve eight police officers, because they had their weapons displayed. The Prince William County Police officers were on-duty, but were in plain clothes, reports the Manassas Patch. They were refused service by an employee who stated that the property was a gun-free establishment...."

    This just had happened at a Denny’s elsewhere, only less than a month earlier, not to mention the pop tart gun type affairs.

    Everywhere the zombie apocalypse appears to be growing. Zombies are showing up all over, and there are actually people wondering where they are, waiting for them. Ha!

    And to think, the whole economic mess started way back with the advent of dumb Jimma, who decided to go for change and make it easier for more people to own their own dang homes, even if they couldn’t afford them.

    Then chaos and the butterfly wing principle took over, and the rest of a series of not to be outdone Prez’s built the bigger houses of cards, that finally caught on in a truly sick way with bawl street, then someone coughed too loudly and poof, the whole, by now global, dang house of cards tumbled into everyone’s toilets.

    Another right on column, Oh Great One!
    Jack

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    1. Actually, a bit late, but had to add this to the thread, for posterity, just tonight noted in the Frontpage, April 4, 13. A proof that Carter was to blame for the housing bubble collapse, along with the Demz, herein established: http://frontpagemag.com/2013/robert-moon/new-study-confirms-economy-was-destroyed-by-democrat-policies/

      Just in case even one person reads it, it appears valuable.

      Jack

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  10. Anonymous (12:05AM)

    I would go back even further.
    I think it really began with Johnson and his 'War on Poverty'
    Also complicit in a major way was Nixon, who took us off of the Gold Standard. Check out this link.

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  11. Diplomad,

    Two more things.
    1. Thanks for yet another well written & well reasoned post. I always enjoy reading your writing.
    2. Happy Easter!

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  12. Happy Easter and a Chag Pseach Shimeach!

    Unhappily, I must respectfully disagree with some of your analysis. I do not believe that matters such as SSM and abortion are "side issues". They are symptoms of a very deep rot at the heart of our civilization, a rot that spills over into the economic realm as well.

    John Adams said that the US Constitution was written for a moral and religious people, and that it would work for none other. That the Democratic Party in the USA and SD's across the pond are wholeheartedly aiding and abetting our transformation into an amoral (or immoral?) and irreligious people for whom the chief end is personal indulgence rather than the glorifying and enjoyment of God leaves our culture unwilling to think about the future and oblivious to actual threats (such as militant Islam).

    Culture matters. Have a future-oriented, godly, and self-disciplined culture and the economy will be healthy; have one that lives only in the present and prefers to indulge its every whim, and the economy will suffer. Hence, I salute the Christian right, Laura Schlesinger, and all those other cultural reactionaries now fighting a rearguard action.

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  13. I well agree, Kepha. Accurate remarks. Further support of Dip and comments, are in this excellent exploration by Dan Greenfield, so much more valid and reasoned, than the Supreme Court, and liberal progressives and their realities of the moment.

    http://sultanknish.blogspot.com/2013/03/the-bad-good.html

    In more examples of insanity and sickness of America, deep sickness, is the event of the formerly respectable Johns Hopkins rebuking a truly accomplished and herioc figure, Dr. Ben Carson, as a graduating class speaker of young unbright and unwise so called doctors. With their display of lack of education, wisdom, intelligence and knowledge of the 1st Amendment, I would not want such individuals involved with my medical care, any more than an MD of the muslim membership, and with very good and sufficient real logical reasons. And I do have experience with such types of individuals, both, on several occasions.

    Personally, I'm increasingly displeased to see on display, and the increasing results of, the low information Americans, the immoral, unethical, illogical, nonsensical and generally ridiculous.

    For those wishing more intelligent ethical based discussion on issues, go here: http://factsnotfantasy.blogspot.com/2013/03/a-very-bad-idea-redefining-marriage.html

    And for the truly insane, tongue-in-cheeky, analysis, that may send you over the top, try the people's cube analysis: http://thepeoplescube.com/peoples-blog/love-czar-for-marriage-equality-and-biblical-alterations-t10916.html

    But finishing seriously kind of, if the weather gods, so often argued over, can ever be taken seriously in this world, one can catch a glimpse of which way the "wind" is blowing, in reality, not the imaginary warming, see this revealing piece, in more ways than just one: http://www.dailymail.co.uk/news/article-2301757/Governments-climate-watchdog-launches-astonishing-attack-Mail-Sunday--revealing-global-warming-science-wrong.html#ixzz2P7lo5jmt

    Ah well, so goes the existence in the smoke and mirrors world of today. Is it really today, or just a progressive, relativist assertion?
    Jack

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  14. A few months ago I raised this question with my financial advisor. I asked did he see our officials seizing accounts here. He practically laughed. He is not laughing now.

    To wit, I have read that our national deficit, owned mostly by China, could be wiped out IF all IRA's, 401K plans, and maybe personal savings accounts, could be seized...that the total of those funds exceeds 30 Trillion dollars.

    Now, who thinks that Obama didn't rub his hands together in ecstasy? Yeah, I thought so.....

    Happy Holy Easter...... He is Risen, He is Risen, Indeed!
    God still is in control....if I didn't believe that, I couldn't find grace in every day.

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    1. Amen on the last two sentences. I have always felt a little guilty for not investing and saving as much as I thought we should for "retirement" but now perhaps that is a good thing. Seems that perhaps we are going to have to actually trust in God just like our money says.

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  15. I've been telling my family since Obama was elected the first time to pay things off. Not things like credit cards. REAL things. Tools. Property. Food storage. Guns and Ammo. A house in a deteriorating neighborhood? Oh, HELL, no.

    And pull their money out. Retirement accounts. Savings accounts. Keep the minimum in checking accounts.

    I know a sucker play when I see it.

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  16. Teach your people crazy things as facts and then, when they assume leadership positions, they will try these crazy things for the good of the people. Transgender's competing as women? We're talking men in drag are now allowed in women's sports. That's nuts but public policy evidently. Expanding Obamacare to illegals is under consideration in the Senate despite that emerging facts that we can't afford Obamacare for US citizens. That's nuts.
    Allowing China to become our debt holder while it amasses a military designed singularly to defeat the US in a major war is nuts. Yet all of things are either facts or open to discussion.

    These nutty ideas come from our institutions of higher learning.

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    1. Trannies are not men in drag. They're eunuchs with silicone injections in drag. While I'm at it, when they're old, they're bigger eyesores than five junked cars in the yard.

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  17. “Behind the physical outrages—the systematic murder and torture and debasement of men…—there lay, as Albert Camus said, a metaphysical one. It was as if the Nazis and their people were possessed by an insane resolve to finish all that World War I had left undone—not merely the conquests but the annihilation of what remained of man’s decency and of his hopes for himself.” — Charles Fair, “From the Jaws of Victory"

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