Tag Archives: national debt

2 Cents Worth On Life Its Ownself

If you can spare a dime, I’ll give you two cents worth of unvarnished wisdom in exchange…or at least stoutly stated opinions on life and the world.

What is it with all this dithering at the White House about which side to choose in Egypt?  There are clear lines of demarcation.  The Muslim Brotherhood is the enemy of democracy as we know it and are definitely prone to violence and suppression.  The Generals are a bunch of angels but at least there would be much more stability under their rule and a greatly reduced risk of violence and terrorism being spread from Egypt or indeed fomented by the Brotherhood.   In the real world you have to deal with those in power and those more closely aligned with your own country’s interest.   That doesn’t make the Generals are best friends forever but they are clearly the best alternative.  Get on with it and support them and foster as much influence as we can in that region.  The other course is self-destructive to our own interest unless we want even more terrorist attacks.

Go back a few months to those headlines in the Spring about the global warming threat de jour.  You may recall that we were scheduled, due to global warming per the Al Gore ideologues,that we were going to have a really bad hurricane season with 11 predicted and four making landfall; also we were to have a very bad wildfire season and a significant increase in tornadoes.  The facts so far this year–zero hurricanes, and in spite of the real problems for those directly affected, the wildfire season is much less than a normal year so far and lastly, even the NOAA folks have acknowledged that the tornado season has been remarkably quiet even with the tragedy in Moore.   I predict boldly we will have extreme weather somewhere ever year.  Giant blizzards and searing heat waves and outbreaks of hurricanes and tornadoes.  Thus it has ever been in recorded history and thus it will be.   Oh, the IPCC draft also owns up to the standstill in warming worldwide for the last 16 years.   According to the wizards of smart it is the Sun (duh), ocean bottoms heating up or even as they admit, maybe, just maybe they overestimated the effects of CO2 in the atmosphere.   Stay tuned, the report will change when the politicos at the UN get their hands on it.

Like bureaucrats everywhere ever time the Fed when it gets caught doing something generally viewed as wrong they simply re-define the issue.  Bernancke with a straight face says he is not monetizing the national debt.  Yet for two years now the Fed has been buying 75% of all the Treasuries issued.   But he says that is monetary policy and investing and not simply allowing the US government to spend money it doesn’t have by printing more money every time it buys those Treasuries to fund deficit spending.   It would be different if real investors from around the world were buying up those Treasuries and putting real money into the coffers but the Fed with a keystroke on its computer merely creates money out of thin air.

It is still hot as the devil, but you can look at the calender and take hope.  Fall is approaching and the start of school, high school football and the hunting season.  When all those get going it just feels cooler.

All that hype about Musk’s hyperlink or hyperloop transportation made us smile.  That idea has been around for decades.   Any casual reader of science fiction will have come across descriptions of such transportation methods.  They all involve a tunnel and the carriage being suspended by magnetic opposing forces or air and they always travel in their own self-contained system because you couldn’t have two of those carriages traveling at those speeds passing each other.  The wind vortex would dislodge them.   It is a quite old idea and very feasible with one huge caveat.  The cost would be prohibitive.   Like the New York subways system on steroids but the tunnels even more structurally secure and the carriages would have to be more or less bullets in motion.

Anyone besides me remember that phrase the guy in the White House repeated ad nauseam in the run up to the passage of the Obamacare law where he stated over and over that “the average family will save $2500.00 a year in premiums”.    All those who expect to save that much be advised we are meeting in the phone booth on the corner next week.  Have ANY of you or any of your friends or relatives reported to you they are going to be saving $2500.00 next year on their health care?

In view of the alleged gas attacks in Syria I read like you did that our military was “updating” its target list for Syria to attack the manufacture or distribution of gas weapons.  I suppose we’ll never get away from political spin and propaganda.   They issue such press releases and nonsense to give the great unwashed the impression they are doing something special in response to those alleged gas attacks.  Some facts and clarity–it is the military’s job to constantly “update” potential targets around the world.  That is their job.  Don’t know if they do it daily, weekly or whatever but the process is always ongoing.   The Air Force and Navy intelligence guys are doing that as part of their regular duties.    And no doubt our drones are watching carefully for any signs of gas weapon deployment daily.   There is no “updating” going on just the routine duties of our guys in uniform.

“Truth is the greatest of all national possessions.  A State, a people, a system which suppresses the truth or fears to publish it, deserves to collapse.”  K. Eisner  19th century Bavarian journalist.  http://www.olcranky.wordpress.com

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2 Cents Worth On Life Its Ownself

We will scan the headlines and the back pages today for your edification….

Per the Democrat Elijah Cummings the IRS scandal is all over because a conservative Republican was responsible for all the targeting and the case is solved and over.   He did back off that a bit, but only a bit.  But his original assertion and that of fellow Democrats that everything was contained to those low- level folks in Cincinnati runs into one pretty big contrary fact.  If it is really true that everything was done by those peons in Ohio and actually just the one guy–then riddle me this Batman–why did Lois Lerner feel the need to plead the Fifth during her Congressional testimony?   If that Democratic narrative is true then all the higher level people should have absolutely nothing to fear or hide.

The Nazis in Germany are rightfully vilified for their actions during the War.  One can reasonably wonder though why some of the same moral outrage isn’t directed at their allies during the War.   For example when Germany invaded Russia in June 1941, the Finns quickly joined into the fray as allies with the Germans and attacked toward Leningrad.  They understandably wanted payback for the unpr0voked attack of the Russians in the fall of 1939 into their country.  Indeed the Finnish forces helped complete the encirclement of that city which lasted for over two years and cause the death there of more civilians through starvation than all the losses of both Britain and the US during the entire War.  Likewise many aren’t even aware of the armies supplied to support the German crusade against the Soviets from Hungary, Bulgaria, Romania and the hundreds of thousands of Russians who all gladly joined the Germans to fight against the Commies.  It is always best to know some true history or you will be intellectually trapped into knowing only “headline” history or the headings in the Chapters of your World History book.   That will give you a distorted picture of your world today.

Noticed the report just this last week that in spite of that pathetic photo in Al Gore’s book and movie that there are more Polar  Bears today than in the last 40 years.

The peach crop was pretty meager this year. Don’t know why but the crop does vary from year to year even when the weather and other conditions remain pretty constant.  But the ones we did pick were juicy and delicious as ever.  Let my 10-year old grandsons help me pick them this year.

Always interesting to note that your Federal government can do things that people in the private world would go to jail for doing.  I mean the Fed is literally cornering the market on the US Treasuries buying up 75% of all the new issues for the last couple of years.  At the same time is it manipulating the interest rates for all banks and mortgage companies.  Can you imagine the outcry if JP Morgan was buying up 75% of all US Treasuries?   The Fed is also in clear violation of the Sherman Anti-Trust Act because it is definitely restricting trade in financial markets.

Recall last year when several Democrats floated the idea of simply printing a trillion dollar platinum coin and using it to pay down the national debt.  As predicted here earlier you will see at some point as the debt ceiling debate heats up again that the Fed should simply legally  forgive a trillion or two of the US Treasuries held by the Fed.  Again that would magically reduce the national debt.   We would all have the free lunch and Democrats love those free lunches.  I can’t find any statutory injunction that would prevent such an action.  Forgiveness of debt and a release by a lender is well-established law and could be done.   The Lender doesn’t have to offer any reason for the forgiveness.   Of course that could mean the Fed would have less money to pay over to the Treasury Department and Lord only knows what the domestic and international markets would think of such an action.  It wouldn’t be favorable.  It would be like pulling back the curtain on the Wizard of Oz.

The IRS scandal has caused so many pundits and commentators to make comparisons to the Nixon era and his alleged abuse of government.  He was a tough politician in the same mold as Roosevelt and LBJ, no different.   Some of the comments are so far from the truth it makes me cringe.  I didn’t care for Nixon on many issues such as he embrace of pretty big government but darn these people can’t get any of their facts correct.  Most of them weren’t even around during Watergate and darn sure haven’t done any real research of the facts.  They are simply spewing out the headline story from the era.  I have personally read the Watergate tapes.  Please don’t form any opinions of Watergate until you have read them yourself.  Also I watched every minute of those hearings into Watergate.  The tapes do NOT reveal Nixon ever proposing or demanding anything remotely criminal.  Read them for yourself.  The secret Oval Office taping  went all the way back to Roosevelt and LBJ.  Indeed the system used by Nixon was merely a continuation of that utilized by LBJ.  Yes, Nixon and his cohorts discussed lots of things mostly of a purely political nature to minimize the p0litical damage from the break in.   But unsavory conversation is not criminal.   Nixon was understandably ticked off that the break in had occurred; he was doing well and on his way to re-election and the whole thing was a terrible distraction from what he wanted to concentrate on doing.  This is not an apologia for Nixon but I abhor historical distortion.  You need to know facts to reach your own determination of culpability or moral turpitude.

Which modern American party adheres most closely to the following tenets of K. Marx? 1 Abolition of property in land….2. a heavy progressive or graduated income tax.  3. Abolition of all right of inheritance.   5. centralization of credit in the hands of the state.  6.  centralization of the means of communication and transport in the hands of the state.  http://www.olcranky.wordpress.com

 

 

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Apple And The Debt Allure

Apple has made the news big with its recent decision to borrow 40 bn and utilize those funds to pay a dividend.  It has about 137bn cash on hand so why is it borrowing that much money.  The explanation offered is twofold.  First lots of that cash is overseas and under the current tax laws if that money comes back to the US shores then Apple would owe a huge tax obligation.  That is probably true as it is with many other major American companies.  Second the interest rates are at absolutely historical lows and they can borrow the money very cheaply.  Again that is certainly true.  The Fed has pushed down rates to the bottom of the barrel.  Ask old grandma or grandpa about what they are earning on their CD’s these days when they try to keep their money in a very safe place but earn something on it.  They are getting less than one percent.  So there is good logic to what Apple is doing.  People and companies always borrow lots of money when credit is easy and cheap as it is now because of Fed and Federal government policy.   Just take a look at the easy credit policies and the borrowing during the mid 80’s, late ’90’s and the middle of the ’00’s.   The eighties ended up producing the S and L  and bank crisis of that day; the ’90’s saw the ultimate terrible Clinton crash of the NASDAQ in 2000 after the cheerleading for buying the NASDAQ by  both Clinton and Gore; then of course our most recent correction because of the Federal government policy to loan money to anybody with a pulse to buy a home and the CORE act to promote minority ownership.   So Apple and many others at the moment are doing what sure seems prudent at the moment and taking out big loans at really low rates.  They can cite an example of this course of action by simply directing your attention to both the Fed and the Federal Government.  One is printing money like no tomorrow and the other is spending and running up debt like tomorrow will never come.

Having specialized in debtor-creditor relations, bankruptcy, workouts and Chapter 11’s for nigh on 50 years I do have a bit of experience with debt and the problems it can cause.   The first element of debt and the most significant and the one factor that is overlooked by almost everyone is that it is a reality, it won’t go away on its own, it has to be dealt with one way or the other.   This is true for individuals, companies and even governments.   All debt is a restriction and limit on future courses of action.  Provision has to be made for the payment or rolling over of that debt.  Some of future cash flow or earnings must be dedicated to that debt.   In five years when the 40bn comes due Apple will have to either pay it or re-work the payment terms.  In the meantime it will have to spend a certain amount of cash flow for debt service.   Maybe they will make even more money in the next few years, who knows.  But we do know they will have to deal with the debt.  What if when the debt comes due they are working on “The Next Big Thing” and really need 30, 40 or 50 bn for more development or marketing?  What if tax laws have changed and they no longer can even deduct the interest on that bonds they issued?  What if they lose pending litigation and have to pay out some huge judgement reward to a competitor?   The possible needs for money are as endless as the vagaries of the daily business world and markets.    But through it all, the debt remains and must be handled.   Their future options for use of cash on hand has been diminished by the 40bn plus all the interest, even at low rates, and the associated costs like legal and accounting fees.  It is no different than you having to service your mortgage.  A dedicated portion of your future earnings must go to that debt, you can’t use it for anything else.  Debt limits future options.  That is an absolute of economics.   Of course companies that are debt free can go bankrupt.    Hey, lots of buggy whip makers went out of business in the early 20th century.

Credit is needed and it is indeed the lubricant for any modern society.  This is not a cry against all debt, not at all.  But debt is just like fire, it is of great benefit; it gives us light and power but it can also burn the house down if not handled carefully.   I am not predicting any hardship for Apple down the road but I do think this was an inappropriate decision.  This was a voluntary debt; not essential to growing their business but designed to bolster stock prices with dividends from the borrowed money.   I think it is a good company.   But I think they did overlook like some many before them the fact of the restrictions and limits on future actions that debt always brings with it.  They should satisfy their debt as soon as they can.  Debt free companies and individuals always, always have more options available to them than those who must pay debt.  They may have just given some competitor an advantage down the road that they would not otherwise have had.   Some of those competitors are also debt free.  Every heard of Microsoft?  Samsung?

Clorox, the common household bleach, is an amazing product.  It is now over 100 years old and still the best disinfectant for bacteria there is.  It breaks down the cells in bacteria so they can’t adapt to the Clorox and those become immune to its effects.  Clorox is such a simple product.  It is nothing but salt water, regular brine from sea lagoons and such that has had an electric pulse beamed through it.  Changes it properties just enough to make it a household must have.

“Neither a borrower or lender be”  both Proverbs and Ben Franklin.  http://www.olcranky.wordpress.com

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2 Cents Worth On Life Its Ownself

In spite of sequester the computer still works and I even managed to fill up the tank this morning, at a high price I might add, so let’s review the thoughts, comments and musings of the day…..

Why didn’t anyone at last week’s testimony of Bernancke ask the most salient question?   He should be made to answer under oath what the interest rates would be for US bonds if the Federal Reserve quit buying any of them.  Since the Fed is buying approximately 80% of all such bonds their price and interest rates are being manipulated outrageously.  The Fed is in fact cornering the market on such bonds.  We all need to know what the true “market” value  is for such US debt.  That false and fraudulent market manipulation is simply allowing the US to run deficit and higher debt ceilings as the Fed prints up new money to “buy” the bonds.  The market for US debt is phony now.  We all need to know what people around the world would loan and what interest rate they would demand for our debt.  Those rates and market demand drive everything in our economy from credit card debt and car loans to house mortgages.   The cost of profligacy can only be postponed, not eliminated.   Yes, because of the Fed we have very low interests costs now.  But that doesn’t mean we’ll not have to pay for the borrowing later when interest do go to a real normal market driven level and spike even higher to compensate for the higher debt level of your prior profligate ways.

Folks say the Republican party is absolutely doomed because of demographics.  Assume they are right.  When the Democrats have won everything there is to win and control the political process nationally and even in most of the States one wonders what their immigration policy will be then.  After all at that time they won’t be needing any new voters coming to their clarion call.  They will have won.  Who will care about new votes?  What incentive will they have for new immigrants and of course at that point the unions will be riding very high and they certainly won’t  be promoting any new immigration platform because their whole purpose is to protect union jobs not open them to competition from immigrants.  Be interesting to see how that turns out, if the predictions are true of complete Democratic dominance.

Maxine Waters says sequester will cause us to lose 170 millions jobs.  Hmmm, didn’t realize we had that many 12 and 10 years olds in the workforce.   Last I heard there were only about 150 million workers of all types in our economy.  But facts and logic never get in the way of a good Leftist rant.   Just think you and I pay her 174K a year for that brilliance plus whatever under the table profits her hubby makes off of his banking investments from regulators that get calls from her.

Greece established colonies around the Med.  One such was Marseilles.  They called in Massilia.  About the time of Alexander the Greek, one Pytheas sailed from there for the open sea beyond Gibraltar to  search for tin and amber from England.  It had been the dominance of the Carthaginians for centuries.  He was a merchant and obviously a true explorer.  He worked his way up the west coast of Europe from Portugal to France then across to Cornwall where the tin mines were. He wrote of an ancient monument that may well have been Stonehenge and gave a description of the land and his climate and people.   He sailed north beyond the Scottish coasts and went to Iceland or Norway although the descriptions are too vague to specify.  He was far enough north to describe sea ice and pack ice floes.  He wrote of the nights being only a few hours long.  What is amazing is that he made in and essentially open boat all that way and returned through the English Channel and home.   Julius Caesar may have had access to his writings to influence his decision to make a reconnaissance in strength into England almost three centuries later.   No magnet, no GPS and no maps or sea charts.  Pretty remarkable feat.

North Korea makes another threat to nuke us because we are hostile and our sanctions amount to war on their people.  That Kid they have running the place must be as dumb as he looks and he sure looks dumb.  I don’t know why we don’t take out all their nuke facilities now, right now.  Yes, there would be the usual hue and cry from certain quarters around the world.  Even China would verbally raise hell but the truth is that everyone would be relieved.  The Chinese, Russians, Japanese  and the South Koreans would love to have that threat removed from their back yard.   The world would be a safer place.  Nuclear bombs shouldn’t be in the hands of dolts and guys who think it is cool to hang out with the likes of Rodman.  Having access to nukes is way beyond his pay grade.   It makes no sense for the rest of us to suffer catastrophic harm because of his schoolboy antics.

All our politically correct and civil rights laws could be summed up in a short phrase from Proverbs:  “I will render to the man according to his work”. Proverbs 24/29.  We really don’t anymore guideline than that.

“Take heed lest thou become a Caesar indeed; lest the purple stain thy soul”.  Marcus Aurelius.  Roman Emperor and philosopher.  180 AD.  http://www.olcranky.wordpress.com

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2 Cents Worth On Life Its Ownself

Spring beckons in the near term and like the buds promise full blooms soon and ideas and ruminations sprout from the mind after the winter lull…..

As the comments over “sequester” roil the headlines it is useful to remember a fact or two.  First sequester comes from the law and means in plain English that an asset is held or frozen until a later ruling.  This sequester does not automatically result in a reduced Federal spending level.  It merely authorizes it to a certain lower level of growth.  Even that modest reduction does not occur until directed and that comes in later March with the Continuing Resolution funding bill.   If the reductions occur it will be then.   Recall also that we are already half way through this fiscal year so the immediate reductions will not be the full 120 billion (average over ten years) but cut about in half because we have  been spending this fiscal year at the old higher rates.

Speaking of spending why can’t each and every department of the Federal government take a real, honest to God 1% cut in its budget?   Just 1% lousy per cent.   That would be out of a 3.8 Trillion dollar budget.

Liberal Democrats love to look to Europe as they model for so much of our social and economic policies with one glaring omission–immigration.  We are about to allow 11 million or so illegals citizenship simply because they are here in violation of our laws.  France, Germany, Switzerland, the Netherlands and several more have much stricter immigration policies.  They usually do allow a fairly generous guest worker program and those folks have legal status in the respective countries but they are never allowed citizenship.  Look at the record for yourself.  Many Turks and others from Eastern Europe have come to work legally but they don’t get to vote or have full benefits of citizenship.

The current controversy over the use of drones to kill bad people is confusing to some of us.  Sure we all want our rights respected and protected but we’ve killed bad guys for years even in the US borders in violation of the 5th Amendment right to protection of life, liberty and property without due process of law.  Today many are concerned that the US citizens who might be killed in a drone strike are denied those rights and that is true, their rights are ignored.  Check a little history though and the actual circumstances of taking out bad guys in times past.  John Dillinger was assassinated not arrested as were many over notorious criminals over the years.  They weren’t read their Miranda rights or offered a chance to surrender.   How about those nuts in Waco twenty years ago?  Women and children were there and they were assaulted with military weapons.   A drone is just another weapon like a cannon or hand gun in the hands of our military or law enforcement.  Regrettably our leaders will always have this power and we can only hope it will be used wisely.   For political reasons it likely will never be used inside our own borders unless we spotted a pack of terrorists moving to a specific target like a nuclear power plant.

This week the politicos at the top-level of the Pentagon, the top generals and admirals, announced that the Navy will be reduced down to under 300 ships in the near future.  Yes, that level Romney talked about being lower than what we had during the WWI era.  Sure those ships are more powerful, run faster and can do more.  But they are still ships and vulnerable to attack.  Most of the modern defense systems for those ships have never been tested in real combat conditions.  They have missile defense and those automated gatling guns to bring down incoming aircraft or missile but they’ve only done test.  What if an enemy like Iran attacked a flotilla with four missiles at once?  How about if they attacked with 20 all within a couple of minutes of each other?  Even the gatling guns can’t fire straight up only at elevations of less than 90 degrees.  The most recent episode of “modern” warfare at sea was the Falkland’s War of 30 years ago.  You may recall that those relatively unsophisticated Exocet missiles (compared to today) wreaked tremendous havoc on the British fleet.   That was only a few missiles.   Just as at Pearl Harbor there should be serious concern that a significant part of our fleet in the Persian Gulf area could be eliminated in matter of minutes.   Quality is wonderful and to be sought, but a little bit of quantity even if of a lower capability could be comforting and very useful.  A large gun on ship could still inflict real damage to a potential enemy using WWII technology.

As the East gets buried in a huge snow storm this week it is noteworthy that the UN, yes, the UN, recently gave an update on global warming.  It noted in the back pages that at least 25% of recent weather changes can be attributable to the effects of the Sun and its cycles.   Hmm,  perhaps we should pass a Sun Regulation Act to make the Sun conform to our notions of friendly renewable energy standards.  Someone should make the EPA form a committee to investigate right away.

One of the major Japanese car makers is apparently seriously considering abandoning totally the lithium-ion batter or any similar battery and looking into the hydrogen powered car for the future.  Makes sense, the battery cars didn’t work 100 years ago and they aren’t the best path to the future now.  They are too heavy, to slow to recharge and too expensive to replace when the time comes as it always does because all batteries wear out.  Don’t know what the future will bring but it will happen one day–just not next year or the next decade.  Be patient, it will happen.

“When a Government takes over a people’s economic life it becomes absolute, and when it has become absolute it destroys the arts, the minds, the liberties and the meaning of the people it governs”  M. Anderson–American dramatist  http://www.olcranky.wordpress.com

 

 

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2 Cents Worth On Life Its Ownself

The Earth wobbles and spins and makes its orbit and we managed to find the keyboard again so let’s get to it….

Is there anything that will get a bigger or more genuine smile than a parent or grandparent seeing that little tyke with their first couple of missing teeth when they come running with that gap and tell you about the Tooth Fairy.

Unfortunately, it seems that far too many of the Liberals continue to believe in the Tooth Fairy into adulthood.  Just like the Tooth Fairy, they think money can fall off trees magically and that the money doesn’t really come from anyone.   There is only so much GDP and money to go around and it is a zero sum game–money out of the private economy is lost for production of new technology, jobs and higher standards of living.

The GPS system is ubiquitous these days and taken for granted.  So few have even the most basic understanding of it workings or history yet we have become very dependent upon it.   Lord help us if in some future war an enemy takes out those satellites with an Electronic Pulse Bomb or missile.  The program started with the US Navy wanting a more accurate and quicker method for navigation.  It requires satellites in orbit about 12,000 miles distant from Earth.  There are 24 of them today and we have 6 backups.  They send signals which are absorbed by the receiver in your car or mobile GPS.  Like radar is measures distance by speed relative to time.  It requires more than one of course to get an accurate fix.  There days your GPS device uses four most likely so they can triangulate your location.  Also those satellites have an onboard clock which is vital to its functioning.  The Satellites and the clocks are of course affected by Einstein’s theories of relativity, both the Special Theory and the General theory.  Special Theory is the one about the speed of light; General Relativity is about the effects of gravity.  Remember that clocks in motion run slower due to the Special Theory, likewise the clocks are affected by the Earth’s gravitational pull.   The little nerds figure all this out to adjust for those effects otherwise your GPS wouldn’t be nearly as accurate; they adjust the time calculations to account for the differential as the electromagnetic speed back and forth from space to Earth.   It is a concern if that system is ever lost due to hostile action.  How many, even in the military, can navigate and locate their destination with a compass or sextant or the Stars have men have done for centuries?   We have a lot invested in a very fragile and exposed method of navigation.

Feel sorry for those millions of Yankees that have never been out West to see the night sky.  Someplace where there is not a light in sight, no street light, building lights or even home lights.  The only light is that from a campfire or your Coleman lantern.  You can actually see the Milky Way with the naked eye quite clearly.  It is quiet.  The only sound is the talk with your family or friends or the scuff of boots on the ground or the sipping of hot coffee around the campfire.   Such a place is where you can feel God reaching down and making you look at that marvel of a universe and challenges the notion that is was all merely an accident of nature.  Nature ain’t a Michelangelo; it doesn’t have the concepts of beauty or majesty or worth.

We note the spate of articles about the tunnels from Mexico to the US, mostly in Calif. and Ariz. that are used to convey drugs, money and/or weapons.  Some go on and on about the how well- engineered they are and that they are quite marvelous.  Uh, pardon me, folks have been building elaborate tunnels forever.  Geez, look at all the tunnels built by POW’s during the War, or during the trench warfare of the War Between the States.  Usually they would simply enlist someone with a bit of mining experience if available and off they would go.   Motivation will prod innovation.   I doubt if any engineers were needed to construct these things.  The labor would be cheap and they have the time to keep  looking for the right direction and exit point by trial and error.   It is simply a matter of time and plenty of money and that cheap labor that builds these thing, not genius as some have claimed.

Some economic pundits worry about what will happen when the Federal Reserve starts reducing its balance sheet by selling its trove of Treasuries and mortgage-backed securities because they will take enormous losses.  A few thoughts on this matter–first there will have to be buyers for those instruments and there is no question that the buyers will not pay face value for those Treasuries thus driving up the yield (buy for 90 cents but collect 100 cents on the investment for example);  this will drive up dramatically the interest rates on new Treasuries issued simultaneously; the Fed will take a loss.  Of course the loss doesn’t really matter to the Fed because it can print up all the money it wants without authority from anyone else.   The political outcry will be huge however.  Likewise the Fed and the Federal government will not enjoy the idea of the general public looking behind the curtain to see the way the sausage of an economy is run.  They might realize that the Fed is “monetizing” the Federal debt making it easier for the Liberals to continue spending and running deficits with no end, ever.  Even  the most liberal Keynesian Democrat would acknowledge though that the Fed can’t keep buying 85 Billion forever.  We’ve allowed the Government to make us all jump on the rotating merry-go-round when it was slower but now it is at warp speed and its going to be really hard to jump off.   By year’s end the Fed will have about 4 Trillion of assets versus about 900 Billion a few years ago.  Good luck to us all.

Another definition of crony capitalism–“Private profit by public servants at the expense of the general welfare is corrupt period.”  E. Kefauver, Democratic Senator and Presidential candidate.  http://www.olcranky.wordpress.c0m

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2 Cents Worth On Life Its Ownself

As long as the politicians keep moving their lips we’ll have something to discuss besides the weather….

The recent lively discussions regarding renewed efforts for more gun control mostly avoid or completely avoid the elephant in the room.   Cuomo talks about his restrictions complying with the 2nd Amendment rights of hunters as though hunting was what those folks had in mind with the Amendment was approved.  Not true.  Also so many proponent talk about the abuse of that Amendment or that it leads to abuse.  True that does occur but, my Lord, how many abuses of the 1st Amendment right of freedom of the Press do we have to endure every day?   Some severely challenge our trust in that Amendment right but we stick by it.  Those who use and abuse the 1st Amendment don’t have to explain or justify their use of that right and that is as it should be.  Same should be true for the 2nd Amendment.  I don’t need to justify to anyone for any reason why I wish to exercise my right to own a gun or guns.   Fact is that the most important reason for the citizens to have guns is to let the Government know we do have them and can use them if the Government over reaches or tries to rule in a tyrannical manner.  Yes, the Government should always take pause that a free people can only be pushed so far.   That is the unspoken raison d’etre behind the 2nd Amendment.

The Germans in the last week or so have announced their intention to repatriate over 374 tons of their gold held and the New York Federal Reserve and the central bank in Paris.   I have no special insight into the future price of gold; you can make your own assessment but it is clearly highly valued by even the socialist leaning egg-heads who run the monetary and financial affairs of the Germans.  If gold doesn’t really have any intrinsic value and isn’t a hedge against inflation then what difference could it possibly make where it is stored?   Indeed ask yourself why the Germans have any gold at all if it is of no consequence.    As an aside it is interesting that the New York Fed still stores the physical gold for some many nations around the world.  It is stored in secured bins in the bowels of the building and they literally move the ingots from one cage to another when nation pays nation and such instructions are received.

Japan and China continue their games in the East China sea over those small islands.  Small places can have enormous effects on world affairs.    Look how WWI started in an obscure Balkan nation with the assassination of an obscure prince or archduke.  Most around the world would not have been able to get within a few hundred miles of locating that place or knowing who the archduke was but they certainly learned of the consequences a few months later as the war settled into the trenches from Switzerland to the North Sea.   Japan and China will not go to all out war over those islands but there might well be some shots fired and deaths between the two before all is resolved.   It will be big headlines sometime in the next few years for a while.

Many hate globalization for ideological and social reasons.  They argue that it is capitalism’s way to thwart the ambitions and hopes of the middle class and third world nations.   You have seen their protests in Seattle and other locations over the last decade or so.  Of course some of the greatest beneficiaries and participants in the globalization movement are those paragons of capitalism China and Russia, to say nothing of the socialist European Union.  One factor cannot be denied and that is that globalization whatever its faults, if any, it dramatically reduces the likelihood of another great world war or a war between major powers.  The interconnectedness of globalization makes it very difficult for those large powers to contemplate a major armed conflict.  It could happen of course but the odds have been reduced because regardless of outcome of any future major war even the “winning” side would suffer huge economic loss and its own people would have a much lower standard of living for decades because of the cost and disruption of any such war.

The guy in the White House is either historically challenged or so filled with hubris as to boggle the mind.  That line about “peace in our time” echos such sad mistakes and missteps of the last century.  You recall that Hitler had already invaded the Rhineland and absorbed some of the Czechs and Austria when Neville Chamberlain went to confer with him in Munich.   He negotiated with Hitler without pre condition (like some have proposed with Iran) and even brought back a deal.  That famous quote comes from his remarks after he got off the plane returning to Britain as he waved a piece of paper in his hand saying we have “peace in our time” because of his negotiating skills.   Of course what he and the world got was WWII 18 months later.  He had claimed he could bargain with Herr Hitler.  He showed him respect.   He didn’t say bad things about him.  Chamberlain did all the touchy-feely things some in the Democratic party claim we should be doing with the Muslim world today.    Appeasement is not a winning strategy; it is simply surrender to an opponent just on a more gradual time reference.

The Democrats and press keep harping on the alleged “default” if the debt ceiling isn’t raised.  Well, there wouldn’t need to be a default at all.  The Federal Reserve could simply buy all the Treasury bills and notes as they mature.  The Fed regrettably can print money for any reason it deems appropriate.    Hell, they have bought over 2 trillion dollars worth of mortgages and Treasuries since the guy in the White House took office to fund the deficits of the Federal government.   What’s a few hundred billion more?   Last year the Fed bought 75% of ALL Treasuries issued.   While this would be perfectly legal it is probably more transparency than the Democrats would want; some might start to think long and hard about what the dollar is really worth when they see fake money printed to buy debt to support programs that can’t otherwise be paid for.

Social and economic advice from a strange source–“Call it what you will, incentives are what get people to work harder.”  N. Khrushchev.   Soviet leader of the ‘5o’s and early 60’s.  http://www.olcranky.wordpress.com

 

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2 Cents Worth On Life Its Ownself

Well, the Holidays are done and the extra pounds need work and the time off is a memory, back to the grind and does the daily news ever make it a grind….

Ever wonder where the expression about  being a scapegoat originated?   Well, learn it here.  In Leviticus when God was giving His statutes to Moses and Aaron about the sacrifices to be made to Him and their purpose for the people of Israel there was an example of goats to be sacrificed.  One goat was selected for a sin offering and used for that end.  However another goat, the scapegoat, was selected as an atonement sacrifice for the sins of others.  That goat did nothing wrong whatsoever but was killed and placed on the altar for what others did wrong.  That expression has become part of our vernacular and is used when some poor soul is picked out to take the fall or blame for the wrongdoing of others.  The politicians in Washington are particularly adept at finding scapegoats for their own shortcomings.  Shakespeare and the Bible are the two greatest sources of our adages and Shakespeare liberally used those from the Bible.

Some pundits and others are complaining loudly about the possibility that AIG might sue the government over the bailout takeover of that company and its management under government control.   We wrote here months ago that such a suit might be likely.  You might want to recall that the takeover of the company was a complete violation of the 5th Amendment and there never was even a token acknowledgement of following established corporate law.  The shareholders never had a voice in what was to happen to their investment.  It was simply confiscated by the Feds.   Full, disclosure, I had litigation with AIG several years ago and don’t even like the company or its management but I do have a regard for the rule of law as opposed to rule by edict of the anointed ones.   AIG could have filed a Chapter 11 and reorganized itself and paid all its debts and retained value for its shareholders but it and the shareholders were denied that opportunity by the Feds.   Many thoughtful legal scholars agree they have a solid case to make.   Here’s hoping they do sue and win big time.    They didn’t go begging the Feds to give them money and AIG had assets of substantial value as events have proved.   Are we a country of laws or dictators?

We also wrote some time back about the crazy notion of the Trillion dollar platinum coin to be minted by the Treasury and used to “pay” a trillion dollars of debt to the Federal Reserve.  Viola, we reduce the national debt by a trillion dollars.  You may have now noticed that several Democratic Congressmen are actually promoting such a proposal to avoid the argument over raising the debt limit beyond its already staggering 16.4 trillion dollars so even more spending and debt can occur.   Remember that the demand for US notes is manipulated and phoney at this time due to the fact that the Federal Reserve is currently buying 75% of all the new debt issued by the Treasury.  Others in the Democratic Party are beginning to push the idea of simply writing off some of the Treasuries owed to the Federal Reserve.   Either idea is horrific.  It will cause an immediate and steep decline in the stability and confidence in the US dollar.  Even Joe Six Pack at that point would begin to question exactly what is the dollar worth if legitimate debt could be wiped out with a minted coin deemed by the Treasury to be worth one trillion.    The international community would be apoplectic and demand hugely higher rates to lend us money or worse what if they decided to pull the same trick and pay their obligations to the US and US companies with minted coins they deem worth a designated amount?   Its like someone who has maxed out their credit card and then just manufacture their own credit card in their basement and expect all their creditors to accept their self-created credit card as having real value.   How did all these people escape from the institution at the same time?

Would the appointment of Chuck Hagel as Secretary of Defense make Israel more or less likely to strike Iran on its own?

In spite of what Democratic spokesmen may scream the full faith and credit of the US would not be jeopardized if the debt ceiling was not raised.  The phrase refers specifically to the Treasury notes issued by the Feds.  That is the “credit” of the US; by the way that credit and credit worthiness belongs to us, the people, no the politicians.  It is our credit being used.   All the other payments made by the Feds is just statutes and those could be met too.   The Feds will still be collecting billions of dollars ever month to pay bills  and specifically the interest and principal on the Treasury notes.  The employees at Commerce, EPA or HUD or those zillion other departments and agencies are not guaranteed a job, although it is true you can’t hardly fire them even for incompetence.   So what if Planned Parenthood and gobs of other organizations don’t get their monthly dole from the Feds?  The money is there for defense and the three big social programs–Social Security, Medicare and Medicaid.   If the debt is raised there should be cuts real cuts for each dollar it is raised.  And we don’t mean those “baseline” projected growth cuts but an actual reduction in budgetary expenditures year over year.

Our tides are affected by both the Moon and the Sun.  The Moon moves the oceans and seas by about a foot and the Sun by about half that.  Even though the Sun is enormous it is 93 million miles away whereas the Moon is literally right on our doorstep figuratively speaking.  The full Moon and the new Moon produce the high tides and the half Moon creates those small neap tides.

Sherman famously said that War is Hell but a worse Hell is subjugation to a central dictatorial authority.   http://www.olcranky.wordpress.com

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2 Cents Worth On Life Its Ownself

Another whirl around the block and we still find new stuff that amuses or confuses us……

Little inside info for the non-lawyers out there–in the old days when the criminal defense lawyer hadn’t yet been paid his fee in full before the trial date the lawyer would often make a motion for a continuance to delay the trial because an important witness “Mr. Green” was not yet available.  Of course that meant the money was short and if he had decent relationships with the local DA office and judges it would be usually be granted at least a time or two.   Wonder how they handle that these days.  Probably about the same.

Two items that ought to be getting your attention–one, the Feds in the current administration have already indicated that they will be seeking an increase in the Federal debt by another 2.4 TRILLION!   That will bring the total debt to almost 19 TRILLION.  Two, your good friend and tax cheat Timmy Geithner at Treasury has put voice to the long sought Democratic goal of having no limit on the debt ceiling.   He uttered those sentiments just this past week.  They want the people to simply hand over our national credit card and trust them to use it wisely.  Does history support the notion that the Feds are trustworthy when it comes to controlling debt?

One wonders how many Italians will use the new self test for taxes due that the government there has put on the Web.  You download this program and enter all kinds of personal information about income and assets and then this program will flash red or green indicating whether you owe more taxes.  Supposedly it is an idea to reduce the amount of tax cheating in that country.  How many stooges will use that thing?  Of course you are told that the government can’t and won’t access the information.   Sure, and I’ll respect you in the morning he told her.

Speaking of privacy and your private emails did you read about the law proposed by that wonderful Lib Leahy.  He wants a very long list of Federal agencies and bureaus to be able to access your email if they declare an “emergency”.  Of course they get to decide what is an emergency.  Some of those friendly folks in the Federal government that would be able to utilize this new warrantless search of your email would include–the Dept. of Labor, SEC, FDIC, IRS, EPA, National Maritime Board, the Federal Reserve, among about 25 more.   Why in the world does the Labor dept, the Federal Reserve or the EPA have any business looking at your private email?   Leahy said he didn’t realize it went that far and is reconsidering but watch out; it will be back in modified form but amount to the same intrusion into your private life.   You have to fight to protect your freedom or it will slip away in the avalanche of Federal laws and regulations constantly cranking out in Washington.  Where is the ACLU?

As a young lawyer I called and offered to do work for the ACLU.  I was willing to work on freedom of religion and free speech matters. But I was rejected because I didn’t buy into the complete left-wing agenda.  They insisted I be willing to work on affirmative action and gender cases.   I suppose those non-union electrical volunteers from Alabama and Florida turned away from helping the Sandy victims felt pretty much the same way I did.   Ideologues would rather make common cause with a rogue than accept aid from a Good Samaritan.

Ask one of your doctor friends and you will find out that Thursday night and Friday after Thanksgiving is one the very busiest times in the ER.  People just can’t seem to resist over indulging in all manner of rich food and drink.  Yep, they overload their systems and clog them up.  Lots of emergency gall bladder operations at that time and the stomach pumps are kept busy.  Just ask and take heed.

For those who believe we can run up unlimited debt, run the printing press as long as it feels good, even consider defaulting on national debt and taxing the “rich” into oblivion, you might want to take a peek at the current state of the economy and political atmosphere in Argentina.  They have done all of that in the last decade or so.   The government has finally about run out of other people’s money, those with any money left are trying to get it out of the country around laws preventing that and making it a crime to remove your money.  The inflation rate is about 25% and they have unrest in the streets.    Kirchner and her left cohorts kept promising more stuff to the alleged poor and middle class and they are running out of “stuff”.   Will they go the complete authoritarian route and just confiscate all property a la the Commies or endure yet another revolution and a return to some semblance of private enterprise.  It could tip either way it appears at the moment but change for sure is a coming.

You always resent it when a friend or relative  tells you they know what is best for you.  Then why the devil do so many of us allow the Feds to do the same thing in every aspect of our lives?

As a child I loved Thanksgiving.  All the uncles and close friends of my mom and dad would come over for the big meal.  That was OK but what I really enjoyed was after the meal all the men folk would gather and begin talking about their experiences during the Depression and the War.  I always f0und those stories fascinating.   Some of the very best lessons I learned about life was sitting quietly over in the corner listening to those men talk.  They never bragged about anything but simple shared their experiences, the good and the bad ones.  In my mind’s eye I got to travel the world with those tales, from the Mediterranean to the Atlantic, the shores of Normandy, the jungles and atolls of the Pacific and the skies overhead.   It was instructive to hear how they all managed without any government assistance to endure the Depression and the lengths they and their families went to in surviving that episode.   The current generation thinks Operation Enduring Freedom was a real war and that not having an “entertainment” room in the house is suffering a real hardship.  That is if they get off their smartphones long enough to ponder such matters.

I personally wish almost all retail was close on Thanksgiving but I truly don’t understand the fuss about Wal-Mart and the workers protests.  I mean lots of people have had to work on Thanksgiving since forever.  Even the greenest Liberal likes the electric power to work and the toilets to flush on Thanksgiving.  You think those power plants and water treatment plants operate on automatic during a holiday?  They have workers.  Then of course there are the firemen, cops and the like and we all want at least a few gas stations to be open in case we have to travel on a holiday.  The list of those who have to toil on holidays is and has always been pretty long.  If you get the day with your family then merely being with them should be a reason for Thanksgiving.

Tax fairness as defined by the Old Testament–“The rich shall not give more, and the poor shall not give less, than half a shekel”   Exodus 30, 15.  http://www.olcranky.wordpress.com

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2 Cents Worth On Life Its Ownself

Buckle up and here we go for some thoughts, reflections and opinions from the cheap seats…

There have been some murmurs about the Federal Reserve taking action to reduce its Treasury holdings without destroying the bond market and at the same time reducing the National debt and the deficits.  They would simply forgive the debt owed by the US Treasuries they have bought in the last few years.  This would reduce the debt by at least hundreds of billions if not over a trillion easily and simultaneously would reduce the deficit because no interest would  be due on that forgiven debt.  It sounds so simple.  But the problem is that such an action would focus attention on the fact that is funny money to begin with printed out of thin air by the Fed as a means for the government to fund its deficit spending and that there is nothing really supporting the value of the dollar other than “confidence” in our money.  It would be severe blow to that confidence.  After all if they can do it once they can do it twice.  Why not then just default on the Treasuries held by the Chinese; we don’t like them all that much anyway and they manipulate their currency.   It would be so appealing politically short-term but devastating in the near and long-term to our economy.  The politicos could brag and say “see, we fixed all that debt and deficit stuff” .  Of course what would it make the dollar worth in your pocket?

Both Dow and Dupont have recently announced pretty negative outlooks for the near and mid-term future of their businesses and industry.  Between they have also announced plans to cut 4000 jobs.  That is not a good sign.  When the economy is doing well those plants are humming putting out products for both industrial  and consumer use.  We all use tooth paste whether the economy is good or bad and that use doesn’t really indicate the health of the economy but when basic materials used in everything you can imagine are cut back we aren’t doing so well.

Greece just got a two-year extension of time to comply with it bailout loan terms.  Two more years to meet both revenue and deficit reduction goals.  This should come as no surprise.  Regrettably it is like a person going on a diet saying they will have only two more pieces of chocolate cake and then start next week.  Good luck with that.

The Federal Reserve at this month’s meeting stated it is continuing its ongoing purchases of goodies in the market place to the tune of at least 40 billion a month and will continue to crush savers by keeping interest rates near zero for two more years minimum.   They also posited that the economy is still sluggish.  Hey, we all know about the latter but some of us are concerned about the former.   How much more money can they prune off that money tree growing in their back yard before they kill it and our soon to be hyper-inflated economy they are fostering?

Good for the Brits.  They had the good sense and back bone  this week to tell the EU court to stuff it.  That court in a spasm of political correctness gone berserk had ordered Britain to allow all its prisoners to be allowed to vote in elections.  Not gonna happen at least with Cameron there.

With regard to Biden and his comments at the debate about Iran’s nuclear capacity one should caution him to know a bit more about engineering and history before he states so positively that Iran can’t have a nuke for a long time because even after they have the fissile material they still have to have a weapon for it.   Well, Joe, the weapon is the easiest and quickest part.  All they have to do is watch the History channel to see how to construct the bomb. They just need a big iron ball with ordinary explosives on the outside to ignite and force the fissile material to the middle where the nuclear reaction will take place.   Does the Joke really believe they are developing the material and haven’t given a moment’s thought to how they will deliver it to the intended target?   They already have some missiles we know and it doesn’t even have to be delivered that way necessarily.  They could simply build the device and put it 0n a truck or on a small ship and or even a cranky old DC-3.   They could quite likely get any of those all the way across Iraq to Israel without being intercepted.  They for sure good get them to the Strait of Hormuz which is their own shoreline.   I hate glibness with serious issues.

Sanctions against Iran are very problematical.  History should teach us that.  Doesn’t hurt to give them the old college try but don’t bet the ranch on them working.  The Soviet Union had an effective and real blockade against it for decades both by law and by inclination of much of the world and the Soviets themselves self-imposed sanctions by not trading with most of the West because to do so went against their ideology. They couldn’t allow their people to import Mercedes or Cadillacs and let them be compared to the cars the Commies made; nor TVs and a long list of other items.  They never reduced their danger to the western world in spite of being cut off.   Likewise North Korea has been a pariah for decades and sanctioned out the wazoo but that hasn’t fazed them, ditto for Myanmar.   Fanaticism and locked-in ideology doesn’t bend to normal logic.  The Iranians in spite of timid protests here and there are obviously content to let their country be dominated by the Ayatollah and his cohorts.   As long as their religious beliefs and goals remain pure in their minds they really don’t care about the condition of their people, after all, they will all end up in paradise for their sacrifices.  Sadly my friends it will require a much firmer hand than saying they will have a lower standard of living.

“There is no worse heresy than that the office sanctifies the holder of it.”  Lord Acton, British historian and statesman.  http://www.olcranky.wordpress.com

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