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Belmont Club

‘In God We Trust’—Are You Serious?

February 22nd, 2014 - 1:00 pm

Michael Ledeen notices something curious.  Regimes which have long shrugged off the best efforts to overthrow them are reeling on their foundations. What’s going on?

The headlines are grim, the pictures from Syria, Venezuela and Ukraine are blood-chilling, executions and demonstrations are mounting in Iran, and Obama doesn’t know what to do about anything. So he doesn’t do anything; he and his strategists just dither. And yet…

And yet, our enemies may be on the verge of losing. Big time. …

The global alliance consists primarily of jihadis and radical leftists, the two principal forces committed to the destruction of what is sometimes known as the Western world.

That alliance is cracking, because many millions of people are fighting the anti-Western tyrants. They aren’t pundits, and they haven’t calculated the odds on success. They just fight. Almost none of the major events of the past few years was foreseen by the deep thinkers, most all of whom thought that Egypt was lost to the jihadists, Assad was firmly in control of Syria, and Chavismo was destined to rule in Venezuela for years to come.

Ladies and gentlemen, let me introduce you to two distinguished historical personalities. Professor Arithmetic and his able assistant Engineer Murphy. These two gentlemen, though often unnoticed, exert a powerful — some would say a decisive — influence on events. Megan McArdle describes their exploits in Venezuela:

It seems to me that this was always the inevitable end game to the disastrous policies of the late President Hugo Chavez. Diverting funds from capital investment into the nation’s oil fields was politically popular. But it was also disastrous: Venezuela’s oil is sludgy stuff, hard to get at and hard to refine, and it requires a high level of capital expenditure just to keep production level. Predictably, production is now well below pre-Chavez levels. That wasn’t so much of a problem as long as oil prices kept rising, because they offset lost production. But the price of Venezuela’s crude is no longer rising.

With minor variations this narrative can be used to explain all the implosions we are currently witnessing. Incompetence has a quality all of its own. Even when unnoticed it works to bring down down error, tirelessly, relentlessly and completely, like a colony of termites gnawing on some seemingly invincible pillar of wood.  In late 2013 I suggested that president Obama had “single-handedly trashed the Arab world”, commenting on how many of his policies had the exact opposite effect of his stated intentions.

They had that effect because they were wrong policies, whatever he intended them to achieve.  Wrong gets marked “wrong” no matter what the student thought.

The Obamacare debacle may yet hand the Senate back to an astonished Republican Party. They will be as surprised as anyone else, with the possible exception of Obama.  Francis Fukuyama, who once wrote on the end of history, is now Tweeting about a possible new cold war. How did this reversal happen? Well,  Ladies and Gentleman, I bring you Professor Arithmetic and Engineer Murphy.

Screw up and stuff happens. America has been screwing up and therefore Q.E.D. Of course none of these turnabouts should surprise us. The Soviet Union (remember them?) were going to take over the world all the way up to the moment it collapsed. How could they have collapsed when they had the KGB, the Red Army and half the papers in their pocket? Well they were overmatched. Dr. Evil however powerful he imagines himself to be, always loses to God, Reality, Professor Arithmetic, Engineer Murphy — whatever you want to call them, because that’s the way things work.

But before anyone breaks out the champagne, remember this doesn’t mean that “we” will always win. We are not always on the side of reality.   The disaster visited on Chavez might just as soon overtake anyone who thinks he can print and inflate his way out of economic destruction. We will share their fate should we imitate their corruption, because reality doesn’t understand “too big to fail”.

The world is partial to competence; as mathematics is partial to correctness; as natural selection favors the survival of the fittest. People knew that once. The phrase “In God We Trust” was once a shorthand for “get it right”. It appears to have originated in “The Star-Spangled Banner”, written during the War of 1812. The fourth stanza includes the phrase, “And this be our motto: ‘In God is our Trust.’”

The context of the fourth stanza suggests that we can only trust in God “when our cause it is just” — when things add up. In every other case it doesn’t apply.

Then conquer we must, when our cause it is just,
And this be our motto – “In God is our trust,”
And the star-spangled banner in triumph shall wave
O’er the land of the free and the home of the brave.

Yahoo Answers‘ highest voted response to the meaning of “In God We Trust” is given as “It means that people would rather trust in a myth instead of trusting in humanity and our ability to overcome problems on our own.” But it probably means something completely different: to trust in the reality of facts rather than in the myth of human spin.

Recently Cain TV posted video of the Venezuelan police shooting civilians in the street. He writes, “there is a scandal in the United States, and this one is not about anything the government has done. This one is squarely on the media, which is virtually ignoring what’s going on in Venezuela. There, the population is rising up en masse against the socialist government of Nicolas Maduro – the successor to the late anti-American strongman Hugo Chavez.”

But the more important point is whether media manipulation ultimately matters. Maybe it does in the short term,  but whatever the editors do or don’t do, Murphy rules. The facts prevail or as the old time Americans quaintly put it, God rules the world. The Kings and Queens forget what calls the shots but the poor and the downtrodden never do.

“It’s like in the great stories, Mr. Frodo. The ones that really mattered. Full of darkness and danger they were. And sometimes you didn’t want to know the end… because how could the end be happy? How could the world go back to the way it was when so much bad had happened? But in the end, it’s only a passing thing… this shadow. Even darkness must pass.” …

There, peeping among the cloud-wrack above a dark tower high up in the mountains, Sam saw a white star twinkle for a while. The beauty of it smote his heart, as he looked up out of the forsaken land, and hope returned to him. For like a shaft, clear and cold, the thought pierced him that in the end the Shadow was only a small and passing thing: there was light and high beauty for ever beyond its reach.

The only thing anyone really has to fear are evil and error, because remember, nobody ever beat Arithmetic.


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The War of the Words for $3.99, Understanding the crisis of the early 21st century in terms of information corruption in the financial, security and political spheres
Rebranding Christianity for $3.99, or why the truth shall make you free
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Top Rated Comments   
Blast from the Past: "He [Putin] does not have the ability to win a conventional war against NATO."

That is debatable. What is not debatable is that Putin/Russia certainly does have the ability to win a conventional war agains the EU. NATO has the US as well as the EU -- but with Soetero & the Democrats in charge, it would be foolish for the EU to count on help from the US, regardless of what treaties their predecessors signed.

Indeed, even without Barry's detached incompetence, the nations of Europe have been biting the US hand for so long that it would be tough even for a reborn Reagan to make the case to the US people that we should give a damn about which set of Communists/Fascists is in charge in Europe.

But Putin does not need to fight a war to dominate Europe. The EU is the largest fossil fuel importer in the world, importing almost as much as China & the US put together. And much of those fossil fuels comes from Russia, or can be controlled by Russia. Plus the EUnuch Political Class is basically on Putin's side.

Would that the US had a political leader who cared as much for his country as Putin does for Russia!

48 weeks ago
48 weeks ago Link To Comment
Note that the reason given for the FCC monitors - which were to be in print newsrooms as well as TV and radio - was to see that "minority interests" were protected and to "identify barriers" to minorities becoming journalists.

So they were again playing the race card to seize more power.

Can you blame them? After all, it has worked so well elsewhere.
48 weeks ago
48 weeks ago Link To Comment
What we SHOULD do is declare war on Mexico for their many incursions onto our soil, not only the illegal immigrants but their army while protecting the drug cartels' interests. Seal Teams should without warning dispatch all drug cartel leaders and their armies simultaneously. All illegals should be considered enemy combatants and placed in internment camps. Before anyone thinks me mad (maybe too late), prosecute the war quickly and annex Mexico making all previous POWs American citizens (what they wanted to begin with). Yes, it would cost us money and a few lives but it would be cheaper in the long run. We are already getting the overload in unskilled labor, we might as well take the natural resources in return. There is a lot of empty land in Mexico, held by the ruling class and their pals. 1st order of business would be land grants to former Mexican citizens to go home and be productive. We won't even have to change our name, just add a number of states and stars.

I can dream.
48 weeks ago
48 weeks ago Link To Comment
All Comments   (106)
All Comments   (106)
Sort: Newest Oldest Top Rated
SpokenEasily: "What really surprised me was his [Barry Soetero's] re-election."

Add me to the list of those who were not in the least surprised. Disappointed, yes! (Hope springs eternal). But not surprised.

Arithmetic does not lie. Percentages, however, can seriously misrepresent the truth -- which is why what we hear from the Democrat Media is all about percentages & swings (usually to the Far Left). But look at the absolute numbers of votes cast in Presidential elections going back to Watergate and something becomes absolutely clear -- the deciding factor is the Republican candidate.

The Democrat candidate always gets pretty much the same share of registered voters, regardless of the candidate. (Hillary! would have got the same number of votes as Barry, as would the proverbial yellow dog). Sad to say -- at least for all those guys who consider themselves smart informed Democrats -- voting Democrat is as much a biological characteristic as eye color. The votes for the Republican candidate are what goes up and down -- a lot!

Once the Institutional Republicans succeeded in nominating a "wet" like Romney, the election was over. There was no need for Barry to sell his soul to murky overseas characters for campaign contributions. As soon as Barry's guys had succeeded in placing a mild left-winger like Romney at the top of the Republican ticket, he had won. Constitutionalists and conservatives (true liberals) -- Contingent Voters -- will stay home rather than vote for someone who does not share their views.
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47 weeks ago
47 weeks ago Link To Comment
The fed has been doing QE's since 2009. The reason for their doing so was that M2-- the velocity of money-- has been falling since the meltdown of 2008 http://research.stlouisfed.org/fred2/series/M2V/
Velociity of money here just means that the big companies are not borrowing money in order finance expansion new equipment. They're not borrowing because of confusion over obamacare and dodd/frank
The fed figured they needed to print money in order to make up for the loss of this velocity of money because without doing so the economy would suffer from deflation.

Now since the fed has printed all this fiat money--in theory the dollar should be going down since 2008, That's not what's happening. The dollar has been rising since 2008 and that despite the fed's efforts to reduce the value of the dollar. http://research.stlouisfed.org/fred2/series/M2V/

Something really big has to countervailing the tremendous downward pressure on the dollar exercised by the fed.

I have proposed that oil/gas sector cutting federal deficits and trade deficits is principally responsible for the rise in the dollar. You also might say that even though the US economy sucks--it sucks less than other countries. So everyone parks their money here. That's reasonable enough but it doesn't move the trade deficit numbers or the budget deficit numbers.

Please don't use the word "math" shamenistically.
48 weeks ago
48 weeks ago Link To Comment
Speaking of arithmetic, where did Alias Echo get his ten likes? Is it Alias Echo and the Echo-ettes? Or is the Belmont Club that opened minded?

Now, if Alias means to say that there was more enthusiasm for a Romney victory at pjmedia than in the Romney Campaign, he may have a point. I sure never thought it was a lock. Where arithmetic hurt Romney was the 5 million voters who voted for McCain (!) and then stayed home. In the Primary Romney ran against a field of conservatives and attacked them with negative ads and alienated their supporters. So they figured he was Democrat-lite and they are probably right.

If we are judging politicians on their predictions, Alias, where's that Summer of recovery hiding? All those quarters of 4 percent growth? And so on. Yes. I know.There is only one standard and that is the double one.
48 weeks ago
48 weeks ago Link To Comment
The "like votes" are indeed interesting. I too would question their veracity with opinionated regular Belmont Club readers. The bottom line regarding the 2012 votes is the impact of fraud. Not only the known briefly mentioned , Florida, Ohio, Pennsylvania contests but numerous other states with questionable un-investigated results. (110% of registered voters) All of these results seem to have gone down the memory hole. As Subotai has pointed out the pubbies signed off on contesting fraud. Someday it will finally come to light and the true arithmetic will out right before the lamp-post party.
47 weeks ago
47 weeks ago Link To Comment
Speaking of arithmetic, where did Alias Echo get his ten likes?

Sock puppets cooked up with Gmail accounts springs to mind. Someone is still squatting on my original Belmont Club name (nice to be noticed)....

Actually this is a good thing. When George W. Bush was still president, the folks from Daily Kos often visited Belmont Club to play their tricks. With the rise of Obama, most of that traffic disappeared. Their reappearance means that the pendulum is about to swing the other way.
48 weeks ago
48 weeks ago Link To Comment
Why do people think this current resident of 1600 Pennsylvania Ave was re-elected! There was no “Election” there was a Façade of an election but He was not freely and openly elected nether the first time nor the second! The first time there was a massive misinformation campaign run by 99% of the Television and nearly the same level in print, to boot we had a RINO candidate (McCain) forced upon us. In the Second election you had not only misinformation but complete disinformation by the press, Federal suppression of freedom of speech on a level never done before and Voter fraud at levels never attempted before against a candidate that after the first debate seemed to give up completely even after it was a decisive win for him! THERE WILL NOT BE A FREE AND FAIR ELECTION IN 2014 or 2016!
48 weeks ago
48 weeks ago Link To Comment
itellu3times/Josh:

Can you recommend readings about the whole bankster/vulture capitalist issue in particular, and the present economic conundrums and crises in general? I need reliable sources to learn more about this stuff, and you seem to have a handle on the subject.

Anyone else, please chime in with your suggestions.

I wonder what happened to Blert? I enjoyed his remarks.
48 weeks ago
48 weeks ago Link To Comment
Relative to the housing meltdown, there is Thomas Soul's book, and another book I heard of here, The Big Short

There is also the article "Trillion Dollar Shakedown" at City Journal, Winter 2000, "Anatomy of a Train Wreck" at Independent.org, and "The Collapse of the US Sub Prime Mortgage Market" at Charteredaccountants.com.au
48 weeks ago
48 weeks ago Link To Comment
I don't have anything like a summary on it although I assume such things exist. Came upon my knowledge the hard way, working in that world on and off for thirty years.

(actually you know what, you probably have already heard the general stories. just - believe them! but I continue a bit anyway)

There are probably three "alternative" views one can get, leftist, libertarian, and hard-core economic. Basically where they intersect, and they do, is the most likely to be true. Let me ping an old friend who might have specific books to recommend.

You can browse the entries over at ZeroHedge but (and most there would hate this comparison, lot of antisemitism in the comments) it's a bit like reading the old Debka files, a fine mix of news, lies, and madness, the trick is knowing which is which, but you can pick up some of the flavor anyway.
48 weeks ago
48 weeks ago Link To Comment
Thanks, guys.

I don't like ZeroHedge.
48 weeks ago
48 weeks ago Link To Comment
Zero-hedge definitely has signal-to-noise issues. It also reminds me of Debka file. Like Debka file, I suspect a national intelligence agency is running agit-prop through Zero-hedge. Stuff sometimes appears at Zero-hedge before anywhere else which is consistent with it being an agit-prop outlet.
48 weeks ago
48 weeks ago Link To Comment
In 2008, I thought there was ultimately no way this country would elect that guy President. To my surprise, it did. I think it was equally surprising to Barry and all those on the far left, although none of them would ever admit it, but once they realized what was actually possible, the light went on. We have been seeing the result for five years now.

That same realization has been going on across the world, good and bad. After sixty years of having the KGB or whatever secret police organization up your butt, some organic protest rises up and is not utterly and ruthlessly crushed, and "hey, maybe this is possible" thoughts creep into a lot of heads, and not just the heads of the noble and well-meaning.
48 weeks ago
48 weeks ago Link To Comment
I was not so surprised on his election, the US was smack in the middle of affirmative action fever- and why not? The US system has checks and balances, give him a shot, couldn't be any worse than Carter. Except he is. In fact he would need some sort of competence to even make the bottom of the list.

What really surprised me was his re-election. We had four years to realize the suit was empty, he was incompetent, he was feckless. No. It boggles the mind.
48 weeks ago
48 weeks ago Link To Comment
The opposite for me. Not surprised by 2012. I know there were a lot of variables aligning themselves in 2008, but I still thought enough people had enough sense to see the fraud for what it was. No matter. After 2008, seeing that the fraud actually gained them power, the Left saw no restraint. I think that's where we're at now.
48 weeks ago
48 weeks ago Link To Comment
MSO misapprehends the import of Feynman's conclusion, which is right to the subject of this thread. His point was that the Shuttle was likely to fail at a rate of about once every 200 missions. Yet it was being sold as being safe enough for Christa McAuliffe to fly on. She was a martyr to feminism. And Sally Ride was one of the biggest advocates for that dogma. Originally, they only took test pilots as astronauts because of the obvious dangers. Neil Armstrong proved the wisdom of that decision when he guided the Eagle to the surface of the Sea of Tranquility.

But, at the time, women could not become test pilots. The feminists asserted that a woman could do anything a man could do, Ginger Rogers did it backward wearing heels! (Watch Fred Astaire bring out the life in her, against her inclination, in Too Hot to Handle. http://www.youtube.com/watch?v=UnUfY-URXzA ) . Balanchine got it right, the man's duty is to "display the beauty of the woman". The woman's is to "show her appreciation for the support she receives from the man".

Richard Petty, the King of NASCAR, just rained on Danica Patrick's parade by speaking the truth. Despite the hype, she is no Jimmie Johnson. She gets a weight allowance no man gets, which is part of the reason she won the pole last year.

Out on the edge of the bell curve, you can't fight the arithmetic. The World's Fastest Woman, will never be the World's Fastest Human. The women's Olympic champion in the 100 meter dash would fail to qualify for the men's 100. She can beat 99% of men, but that is not who she would have to race against. She would have to race the top 1% and would come in last.

"Feminist dogma be damned" says Mother Nature. Nature is a b*tch!
48 weeks ago
48 weeks ago Link To Comment
The third Space Shuttle launch was declared to be the first "operational" mission.

Two Space Shuttle failures and more than 20 years later, the Columbia Accident Investigation Board would point out that the Shuttle could never be an operational vehicle but was more akin to an experimental aircraft in terms of the technical approaches and attitudes required.

But at the time of the loss of the Challenger, NASA had little choice but to proceed as if every launch was a humdrum event. Based on their promises and enormous Apollo prestige, they had formulated a national policy of stopping not only new development but production of US expendable launch vehicles, a policy that was enforced with Gestapo-like ruthlessness. Even perfectly usable boosters already in storage were scrapped and production of new rocket engines ended.

They were supposed to launch 50 Shuttle missions a year at a cost of $14M each. In reality it was no more than 8 missions a year at most at a direct cost of $1.5 billion each.

And as one member of the Columbia board stated, the most important lesson learned from the loss of the two Shuttles was that NASA did not learn.
48 weeks ago
48 weeks ago Link To Comment
In hindsight, the entire Shuttle program was one of the greatest mistakes the US ever made.
48 weeks ago
48 weeks ago Link To Comment
The road to hell is paved with good intentions.

The Space Shuttle was a reaction to the termination of the Apollo Program. Honest aerospace engineers wanted to keep the Space Program alive but they knew the big problem was Cheap Access to Space (CAtS). The Space Shuttle was an attempt to solve the problem of CAtS. The early Shuttle designs might(?) have succeeded with CAtS but their development costs were too high. The resultant Space Shuttle with its single use external tank and solid rocket boosters was a bastardized design. It was clear to many people on the inside that this Space Shuttle version could never achieve its originally stated objectives of low operational cost and safety. However the engineers had no alternative. The bastardized Space Shuttle passed the US Senate by only one vote. To have insisted on a rationally designed CAtS capable Space Shuttle would have resulted in termination of the Space Program in the mid 1970s. There was the hope that a second generation Space Shuttle would have been developed before the original Space Shuttle program was terminated. However it was always the same problem, the development costs were too high. The Space Shuttle terminated without a replacement.

The Space Program has effectively ended (the corpse is still twitching). All that really remains are busy work projects that will terminate when it is politically convenient.
48 weeks ago
48 weeks ago Link To Comment
I ran against The World's Fastest Human:

(Only beat me by 5 yards, or so, in the 100 yard dash)

"Tommie Smith was born on June 6, 1944 in Clarksville, Texas, the seventh of 12 children born to Richard and Dora Smith. He suffered from pneumonia as a child, but still grew to be an athletic youth.

While attending Lemoore High School in Lemoore, California, Smith showed great potential, setting most of the school's track records, many of which remain.

He won the 440-yard dash in the 1963 CIF California State Meet.[2] He was voted Lemoore's "Most Valuable Athlete" in basketball, football, and track and field.[3] His achievements earned him a scholarship to San Jose State.[4]

On May 7, 1966 while he was at San Jose State, Smith set a world best of 19.5 seconds in the 200 metres straight, which he ran on a cinder track.[5]

That record for 200 metres was finally beaten by Tyson Gay on May 16, 2010, just over 44 years later,[6] though Smith still holds the record for the slightly longer 220-yard event.

Since the IAAF has abandoned ratifying records for the event, Smith will retain the official record for the straightaway 200 metres/220 yards in perpetuity.[7]"

The men's 200m winners podium was the stage for arguably one of the most iconic moments of the 20th century. As people railed against Apartheid in South Africa and racial segregation in the United States, black American runners Tommie Smith and John Carlos raised their fists to show solidarity with people fighting internationally for human rights. During what is usually referred to as the 1968 Olympics Black Power salute, the two athletes were booed and forced out of the Games by the president of the International Olympic Committee at the time, Avery Brundage.

The third man on the podium, a white Australian named Peter Norman, was vilified by his home nation for wearing his Olympic Project for Human Rights badge in solidarity.[8]
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48 weeks ago
48 weeks ago Link To Comment
Kinuachdrach said:

"... Putin/Russia certainly does have the ability to win a conventional war agains the EU. NATO has the US as well as the EU -- but with Soetero & the Democrats in charge, it would be foolish for the EU to count on help from the US,"

Well said and very perceptive!

Putin is a classic autocrat (a modern day Czar) who clawed his way into power through "real politic". Obama is an incompetent moonbat entirely focused on his clueless ideology (think "Neville Chamberlain"). Putin will play hard ball and do a repeat of Budapest in 1956. Obama will stupidly draw his red line, be ignored and then fold like he did in Syria.

Putin will roll in the tanks. He has no choice. Putin can not allow Odessa to fall to a hostile power aligned with NATO. The only question is will Putin try to conquer all of the Ukraine or will he be satisfied with only the eastern portion.

Russia still has thousands of nukes left over from the Soviet Union. The EU might miscalculate and issue a military ultimatum in response to Putin reconquering the Ukraine.

We maybe seeing a repeat of England declaring war against Nazi Germany after Germany invaded Poland. This is an incredibly dangerous situation!
48 weeks ago
48 weeks ago Link To Comment
Hope is the part that makes men live when it is at it least likely hood. When it comes to Man, Evil wins most of the time, God wins in the end (Gods is outside of Arithmetic and Mr. Murphy).
48 weeks ago
48 weeks ago Link To Comment
The disaster visited on Chavez might just as soon overtake anyone who thinks he can print and inflate his way out of economic destruction.
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The terrible thing here is that the fed is going to get away with it. What's terrible about getting away with it? Because they will learn exactly the wrong lesson. They will never know, nor will the democrats know just how lucky they were. What luck is this? Well the oil/gas fracking revolution. While the rest of the US economy is frozen by obamacare and frank/dodd--the oil/gas fracking revolution is contributing roughly 400 billion new dollars annually on its way to 1 trillion new dollars annually in four years or so--while adding 100 billion dollars annually to the federal revenues. While the fed during Obama's time-- has created 7 trillion dollars or so from nothing ex nihilo--pushing the dollar down. The oil/gas industry has created an extra 20 trillion dollars or so in oil/gas reserves to back the dollar--pushing the dollar up. Oil revenues are cutting the federal deficits and the trade deficits. As a result the dollar is currently going sideways because the downward pressure of the fed's QE's 1,2,3 etc on the dollar is met by the upward pressure on the dollar of the fracking revolution. BYO comparison the Japanese thought they could do the same kind of QE deal. They figured that a 20% lower yen would raise their exports. This is what happened. But a 20% lower yen also raised their energy costs by20%. Since they have to import most of their energy. The Japanese QE was a bust. Meanwhile back in the USA --rising stock prices and rising energy production will create an extra 200 billion in revenues to the federal government in 2014. Rising revenues from the oil patch are so predictable that even though the economy is frozen by obamacare and dodd/frank--the US economy will still grow by 2% as a result of the fracking revolution. Further the chances are good that the federal deficit will be near gone by the time obama gets out of office. His legacy will be pretty much like Clinton's legacy. He'll be the guy who balanced the budget. Even though in fact, he fought tooth and claw to prevent that from happening. The USA will succeed but the tragedy is that the democrats will learn all the wrong lessons from the success of the economy.
48 weeks ago
48 weeks ago Link To Comment
Nope. This is a great theory, and I would love to believe in that theory but in the end it won't work. Because of math.

While energy is the most important commodity, it isn't the only one which makes up he economy, or even a plurality of the various commodities which make up the economy. No one thing by itself is capable of bringing cleaning up the economic mess we are in. Fracking isn't, no matter how much we wish it were so, the "next thing" in the fashion of cars in the '20's or '50's, WWII defense buildup,or the defense buildup in the '80's, or computers/software in the '90's. Merely an expensive way of doing an old thing that makes sense at the moment, and which would evaporate if US offshore drilling, the Saudis opening the floodgates and lowering prices, or some massive new discovery were to occur. We all have to get it through our heads that there IS NO NEXT NEW THING and there probably won't be for a long while.

Secondly, any additional tax revenues that come in will not be used for debt/deficit reduction. They will be used, as was the so-called stimulus, to maintain and enhance the material lifestyle of the public workforce, grant and subsidy recipients, and the welfare class, in order to bribe them (once again) into voting for Democrats (the only math that matters right now electorally, that being Romney's 47%).

We are just about at the point when the private sector is ready to take to the streets, angry that public school teachers, cops, public workers, and paper-shuffling bureaucrats make nearly twice as much, in real terms and relative to private workers, what their counterparts did two generations ago. A society which pays its public functionaries that much relative to the private sector is not only doomed mathematically, being an economic ourobouros, it is immoral, oppressive, and ultimately destined to end in civil unrest. The 47% plus urban NPR-listening liberals in private work who are scared to death of what will happen if the EBT cards stop working have only one goal, and that is to soak private industry to prop up the failed blue state model for as long as they can, hoping that it doesn't collapse until after they have died. That may sound extreme but it is the damned truth.

The proof? When two public sector workers meet each other for the first time, within two minutes they have each related the exact amount of time they have - down to the day, usually - before the magic pension kicks in. I have observed this 100% of the time I have seen them interact in that situation - no exceptions. That by itself is the reason that fracking and the money it generates wont do what needs to be done in terms of rescuing our society.
48 weeks ago
48 weeks ago Link To Comment
Charles42 said:

"The terrible thing here is that the fed is going to get away with it."

I do not think they can get away with it. As Charles42 said, the Fed created trillions of dollars out of thin air. That bubble collapses one of two ways:

1) Stock market crashes back to where it was in February 2009.
2) The printed money is "monetized" through inflation and the true value of the markets go back to where they were in February 2009.

What we are seeing now is merely a "transient', i.e. the bubble is inflated and then it pops/deflates. No net long term effect except for trust being reduced in the markets and the central banks.

Also, I suspect the fracking thing is a flash in the pan. Hope I'm wrong about that....
48 weeks ago
48 weeks ago Link To Comment
well, the thing which is subject to the most mathematical analysis in the world is the dollar. Here is a graph of the dollar since 2008.
http://on.mktw.net/1bAuNw9
Draw a trend line on the graph. What you'll see is that the direction of the dollar is up. How can this be with the fed printing fiat dollars? Something has to pushing the value of the dollar up. Something powerful enough to even overcome the feds efforts to push the dollar down. The only thing that can be is the oil/gas sector because that's what is pushing the trade deficit down and the federal deficit down. But what the hey. Maybe I'm wrong. Maybe you can tell me of some other big event that is responsible for shifting capital flows on this scale.
48 weeks ago
48 weeks ago Link To Comment
The snappy response is the so called "race to the bottom". Just as the Fed is debasing the US$, so is the ECB debasing the Euro (the Chinese currency is pegged to the US$). The Japanese are always trying to drive down the value of the Yen. A more interesting plot is value of gold, i.e.

http://www.kitco.com/charts/popup/au3650nyb.html

Note that the value of gold doubled from Feb 2009 to Feb 2012. To some extent this reflects the Fed's debasement of the US$. However what's also interesting about this plot is that the value of gold dropped significantly after Feb 2012. This happened despite the Fed's continued money printing. Gold Bugs would probably respond that this drop in the value of gold was due to price manipulation by the central banks. I'm not comfortable with that answer. The economic impact of fracking might be the real reason why the value of gold dropped. Note that gold is currently buzzing around $1300/ounce. Again, I have a gut feeling that fracking is a flash-in-the-pan.
48 weeks ago
48 weeks ago Link To Comment
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