When Ron Paul goes into his usual shtick, as he did during the hearings on Wednesday, and claims that Bernanke is not authorized by the Constitution to print fiat dollars, he is clueless to the fact that the Constitution itself would not even exist without the fiat Continental Dollar.
Ron Paul has obviously not even read the history of the Revolutionary War. So let me simplify it for him:
George Washington spent most of his time trying to raise money to fund his army because “taxpayers” and “voters” would not cough up. Eventually, the government just said “to hell with it” and started printing up Continental Dollars and stole the money from the “taxpayers” and “voters” via inflation and won the war.
Inflation is an alternate means of taxing reluctant populations. Today, “taxpayers” and “voters” are hell bent on tearing down the banking system and ending this nation as we know it. I say Chairman Bernanke should print whatever amount of money is necessary to prevent that. It’s time once again for a massive Stupid Tax on this nation of ignorant fools in the tradition of our Founding Fathers.
Let the record show that am against a new Depression and the dissolution of the United States of America.
Put that in your pipe and smoke it Ron Paul!
Matt,
you are in a very good mood today.
Dressguard; (This is a repost in response to your post “the world is not coming to an end).
Our world here in the area where I live is already going under. There is no fuel available except for sporatic deliveries.
It’s pitiful. People have taken their cars to gas stations and parked them waiting on gas. That makes sense to me because you never know when a station will get some, if ever. If a station does get gas, the roads are blocked with lines waiting to get their $20 worth. It is a virtule log-jam of a parking lot. Abandoned cars line the highways.
The school board had a meeting and there is 1 day of fuel remaining for buses, then they close. Their maintenance department is out of fuel already. Employees who can’t get to work will be charged a day of vacation.
My daughter’s company brought lunch to their employees so they wouldn’t have to go out. They asked everyone to divide up the remaining gas among themselves so all would have an equal amount. She has my car because hers is empty.
I parked her car in town with just enough gas to get to a station in the event they get supplies. Trucks are not bringing food and goods supplies to stores. The grocery stores are out of milk, bread, and other staples.
The governor has declared emergency action a week ago – still no fuel.
And, this is supposed to last 2 more weeks. There is no way they are going to bring a “normal” amount of gas a keep up with the backlog. This is worse than the embargo back in the 70’s.
Ironically, you can go to Greenville, SC, about 2 1/2 hours away, and they have plenty of gas.
If this is ANY indication of what will happen with a financial crisis, it will put the fear in anyone.
Imagine something as simple as not being able to use your automobile. Do without it for a week. Doesn’t feel good.
No, the world is not coming to an end but it sure is at a standstill.
George,
you posted that several times. What I can’t remember is the cause for it. Was there a hurricane or something where you live?
Dressguard,
I think George is living at the end of a pipeline – that’s another trickle down effect… Inventories in the US had been very low already and then the hurricanes hit. Impact on crude production & especially refinieries seems to have been underestimated quite severly. Therefore you had the nice spike in prices at settlement and now some areas have run out of gas. Tanker rates have already gone up, stuff is being shipped from Europe.
“The constitution itself would not exist without the fiat Continental dollar”
The constitution itself would not exist without the british monarchy.
Both statements are probably true, but neither the federal reserve nor a monarchy were included in the Constitution when it was written after the Revolutionary War.
Agreed that inflation is an alternative means of taxing the population. Does your support for Bernanke “printing whatever money is necessary” indicate a belief that taxation without representation is acceptable.
Quote from Thomas Jefferson:
“The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered. “
I believe George is sufferring, literally, from the classic hurricane shutdown of the Gulf refineries. The exact number escapes me but I do softclip that stuff and something like 30-50% of the capacity was shut down by the two storms. Particularly Gustav. Of course one can believe as my nieces’ sigoth argued that this was all a vast big oil conspiracy to gouge he little guy. Or one can notice that no new refineries have been built in 30 years and many of the ones that exist are concentrated in a very small area of La. and Tx., partly due to logistics and economics but mostly because no other states would let them. While I’m waxing eloquent here for those of you who listened to the debates if you filter out the posturing, disingenuous distortions of what they other guy never said and parse it done to the substances both candidates favor a balanced, integrated national energy program including more drilling, clean coal, nuclear and investment in alternative energy sources ? But did you further know that this administration put together a comprehensive national energy plan in ’01 and assigned the major cabinet secretaries to the steering committee ? And that it largely mirrors all the things we have yet to do ? Or, for those of us involved in environmental and energy policy back in the day, that all this was discussed and proposed in the late ’70s and early ’80s but discarded.
George I’m very sorry for you problems…as they say I feel your pain, literally. Soon we all might. On a 1-10 Richter scale, which is a) logarithmic but b) funny in the calculations (cf Wikipedia) so that an Rn+1 is a 1,000 more powerful than an Rn these are 2′s and we’re facing 5′s and 7′s ?
I’m not sure what the rest of you “idiots and fools” are doing here at this time of the day. Me – chilly enough with the heat turned down that I got leg cramps and popped wide awake. IN reading my morning mail found something that I thought ought to be shared with all my new found friends. John Mauldin’s latest Outside the Box newsletter is as careful an explanation of the rescue package as any I’ve read: http://tinyurl.com/4sz25g
Run don’t walk to read it and share it with all you friends, neighbors, families and acquaintances. Or we’re about to trigger that R5 thru self-inflicted you-know-whats.
One good thing about creating paper money – it’s counterfeitable, which the British used to undermine the “value” of the continental dollar.
I prefer to believe what Thomas Jefferson said:
“If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered.”
The bailout has been a done deal for some time, it’s just the scratching, screeching, bickering and TV drama that is all just a show. I wouldn’t even be surprised if Hollywood scriptwriters were brought in for the event.
Every day the market opens I’m willing to lose my opinion so I don’t lose my money http://tinyurl.com/4c9e8q
Dblwyo;
There was a hurricane in the Gulf that hit Texas. It wasn’t all that bad at Houston but other areas along the coast got hit hard with flooding. My son works at a refinery in Houston and said they shut down for only ONE day.
Since my first post about this situation, I thought I would keep updating the status. That’s probably getting old by now.
Lord knows this gas shortage is nothing compared to hurricane Hugo that hit in ’90 in S.C. and N.C. and other areas of the South East. This area was devastated. I was without power for two weeks and had no way to get water because I had a well. Two cars in my driveway were smashed by falling trees, etc., etc.
My point with this gas outage is not to complain about the pain but to state the facts. The fact, that as a nation, we are on a thin rope with respect to energy. With no energy policy, no proactivity toward being less dependent, no progress in 30 years since the U.S. was held hostage by the Middle East, we are in a serious energy situation.
Sure, some small progress has been made. The Alaska pipeline in 1977, the relatively recent Bakkan oil discovery in North Dakota which is supposed to have enough light sweet crude (400+bln) to supply the U.S. independently for 40 years – if we were serious about energy, why aren’t we having a “Manhattan Project” to get this stuff? Is it because we want to use “theirs” up before we use “ours” up?
I have stated before that things aren’t always what they seem. We think that if the economy tanks, there will be less use of gas and oil, the avalibility will increase and all that. Perhaps not. The Middle East has already tipped their hand just a couple of months ago when oil demand was reduced – they cut production by 500,000 barrels per day. Why? They are used to the level of income from these high prices and they intend to keep it there.
I am, by nature, an optimist. I believe everything, given enough time and resources, will turn out okay. I am not an alarmist, but I know when to be alarmed. Solutions don’t happen by hoping, rather by being proactive and being prepared.
Bottom line: I am more worried about the energy crisis than the economy. We can adjust to the economy. We can’t adjust to not having energy. That’s just the way it is when we have a tenuous mono-fuel dependency.
I want to be prepared for the worst and hope for the best – just like trading.
Best Wishes
“When the well’s dry, we know the worth of water”.
(Benjamin Franklin:”Poor Richard’s AlmanacK”.)
Those are some nice links you all are posting.
Thanks
Any opinions on the viability of The Prudential Insurance Company of America would be greatly appriciated. Thank you all.
Nice potst George. I agree with your sentiments regarding the top issue of this election will have to be a proactive, all inclusive, energy policy. Without cheap and abundant energy sources the debt laden consumer will be crushed by higher energy costs which could be fatal blow to the dynamic yet fragile U.S. economy.
If we don’t start putting something together now we may lose our window of opportunity.
Paul F;
Some Wachovia news:
http://www.chron.com/disp/story.mpl/business/6026117.html
Matt,
Can you share your thoughts on some of the books/lessons etc that have been most helpful in your trading and understanding of the markets. Thank You.
Contractor;
Thanks. The economy and energy are two very big issues. I agree we need to use this window to intensely resolve our energy problem.
I believe, without question, that air and water must not be polluted. I highly respect the cause of environmentalists due to that fact. This is not a black or white, all or nothing, situation I also believe we can achieve environmental goals and still use fossil fuels and nuclear energy safely. The technology exists to achieve that goal, and where it doesn’t we can develop it.
Alternative energy is abundantly available. To date, only small initiatives have been pursued. Some hybrid cars are available. There are several departments such as; EERE, RReDC, within the DOT working on this problem. What we lack is a national urgency. The solution(s) will come from the private sector.
Without cost-effective energy…
Another Ron Paul tirade? Well, I guess this is a different subject.
Gold-based currency arbritrary and inflexible.
Fiat currency is fine.
Over leverage and debt is the problem. Especially when the real leverage is underestimated because of options, CDOs, and other derivatives. Perhaps larger reserve ratios (after we are out of this crisis) is the best counterbalance to this.
I agree with you Matt. “Bailing out Wall Street” is just pure BS. Every single person in this country is responsible for this mess except for those who rent, have paid off their mortgages, or those that received loans they could handle.
Wall Street is also a victim here of the ratings agencies, people who lied on their loan applications, and the people who packaged the garbage and sold it to them. at the same time they fell victim to thier own stupidity and greed.
Therefore, it is not only main street that is getting bailed out here too, it is also main street that is partly responsible for this crap in the first place. Not only did they lie on the their loans, but also fell vicitm to their own stupidity. Main Street is responsible for their own DD too, not just Wall Street.
David – good heavens man, you can’t say that ! Why that would imply people are responsible for their own decisions even when they haven’t a clue nor knowledge of what’s going. We’re just fish swimming in the sea, eating, making out and crapping. That the latter poisoned the water is not our fault ! BTW while you’re building you stone bucket addin all the folks who bought cars, vacations and educations using the inflow of foreign savings glut funds that created the low rates. We all rode the gravy train without asking where it came from or where it’s going.
George – check out this Fortune story on the Southern gas shortages and the refinery problems: http://tinyurl.com/3et6yk
Back to business for a minute. Looked 3Mo and Oct-now trends playing around with StockCharts Fib tool. On the shorter timeframe, once you filter out Th/Fr and Mo/Tu aberrations which basically canceled each other out a) we’re bouncing against a 50% retracement as resistance; and, on my trendlines, still headed down but pretty sanguine, even complacent.
http://llinlithgow.com/bizzX/MktCharts/MktQ308/SPFib26Sep08a.jpg
Shifting to the longer timeframe the March rally bounced on that 50%, the July rally off the 68% and the trend is still down and we didn’t break it. Again it looks to me like terminal chaotic panic set it, was feed enough Prozac by the rescue package story and now we’re waiting for some more good news while ignoring the massive accumulations of bad. Earnings outlooks for next year are not unreal – they’re surreal.
http://llinlithgow.com/bizzX/MktCharts/MktQ308/SPFib26Sep08ab.jpg
That’s all my amateur arm-waving of course. Comments and reactions welcome.
The area gas shortage is also on CNN.
Dblwyo;
“George – check out this Fortune story on the Southern gas shortages and the refinery problems: http://tinyurl.com/3et6yk”
Hey, great job getting this article. I think EVERYONE should read it.
Exactly Db! And then the American Taxpayer turns around and has the unmitigated gall to oppose the “bailout” with faxes running at a 30:1 ratio and threaten their representatives while do this.
What a bunch of ignorant fools!
Matt – I agree that the Continental currency was necessary to fund the Revolutionary War (which of course caused inflation). However after the war ended the public rejected them so they went back to silver/gold for a while. The main reason that they went back to hard currency was there no inflation at all from 1665 to 1776 (over 100 years). Amazing and hard to imagine that in today’s environment.
Enjoy reading your blog!
Its a matter of degrees. Risk should be in proportion to rewards. The Wall Street banks have made Scrooge McDuck money while taking Goofy risks. Now that it is turning round, they have become economic terrorists.
I believe that the US needs some form of this Bailout passed, because Wall Street will carry out their implied threat. However, there is a difference between agreeing with the need for a bailout and deserving one. I still have not heard any arguements towards the latter.
“A lifelong libertarian”, as another one of your posts say…
Yet you are for the deliberate stealing of the people money by government. Makes sense to me. You are against another Great Depression? Well that was government caused as well…so you should embrace a free market solution to this mess. I enjoy reading your posts, but this is reckless. I understand you think the economy will collapse without a bailout, but it is only the messenger you are shooting. Printing money will not change the fundamentals of this economy. It will simply swap fall-guys.
Ron Paul is the only elected Congressman in DC that gets it.
I can’t afford more taxes and more inflation. Voting against the bailout was the right thing to do.
The American Empire is broke and has been since Nixon removed what was left of the link to gold for the currency.
Since you so smart, perhaps you can tell us where in the Constitution that a quasi private unaccountable and unaudited central bank is legal? For those that care about the ‘rule of law’, the Coinage Act of 1792 has never been repealed. The penalty for debasing currency was death. Sounds like we need to take a closer look at the Coinage Act of 1792.