Future Shock, Part I

What's good people??

Today's post is the beginning of one man's analysis on the future of Men, Marriage, and Platonic/Socialist/Marxist Feminism.

To make a long story short, I expect aggregate demand for Men and Manliness to go up, Marriage to make a roaring comeback, and the death of the Political Feminist machine that literally has had much of the Western World by the balls, for a very long time.

To kick things off, I would like to share some snippets of an excellent article entitled Gold: The Nationalization of Wall Street.

The author, Mr. John Ing, tells us what needs to happen before America and other overextended Western economies can begin to grow and prosper once more:

Needed is the recapitalization and restructuring of Wall Street, which is bloated from a decade of financial innovation. Needed is the repricing of risk. Needed is a new way for the rating agencies to rate risk, in that they cannot be principals but truly arms-length advisors. Needed is a restoration of faith in the U.S. dollar, which requires a fundamental change of policy in the current and next U.S. administrations. Needed is a boost in the U.S. savings rate, which now sits at zero. Needed is a reduction in the twin U.S. deficits. Needed is more candour from officials and policymakers. Needed is a deleveraging process.

Needed is for the Fed to allow the investment banks to take their losses, support those in need of liquidity, but not assume those losses...

...Needed is a change in the accounting rules to reflect mark-to-market losses and the impact on the investment banks' capital. Needed is a reversal of the accounting rules that allowed the banks to leverage up and instead put an emphasis on capital building rather than leverage. Needed are the changes in the impact of securitization that converted illiquid debt into new instruments. Needed is a change in accounting rules for off-balance sheet vehicles.

The United States must also address its continuing problem of too much consumption and its reliance on debt. America's credit woes come at a time when the rest of world is no longer willing to finance its current account deficits. After a quarter century of wealth creation, Americans have no choice but to work harder, tighten their belts, retire later and save more...

... And Finally, Needed Is a Role For Gold...

Mr Ing, in a few short paragraphs, sums up to a T what needs to happen before investors and citizens of Western nations can regain confidence and start out on the long path to a vibrant economy and healthy society.

These are the things that need to happen before I and billions of souls around the world can bet serious skin on American equities, bonds, and currency. Unless and until these things occur, my motto shall be:

In God we Trust. All others pay in GOLD.

You and I both know that, for a host of reasons, these common sense measures will not be taken. The economy will either fall into a Deflationary quagmire, or an Inflationary Depression.

Choose your poison.

But it should be understood, Dear Reader, that all of our economic woes are the direct results of our experiments with Socialist economic and social policies. Like I've said before, what happens on Wall Street is nothing more than a reflection of what's happening in the real world.

Our crisis is the fruition of years of ignorance, greed, selfishness, insecurity, vanity, and corruption. And I'm just as guilty as anyone else, I might add.

No one living in Western society can escape from the intoxicating influence of plentiful fiat money and credit, and a "something for nothing" mentality.

And this (mainly government backed) culture of injustice and deceit has corrupted damn near everyone; from the average Joe on the street all the way to the Supreme Court and the White House. John and Jane Q Public have been bamboozled, brainwashed, and duped in some cases; and others, sheeple have put their heads on the chopping block with full knowledge of the destructive consequences of their choices.

What the Hell?? Die now, Pay Later! they cry. Give us BREAD and GAMES!

Think about it. How can the world's largest economy continue to dominate the world when its bedrooms have been turned into battlefields?

In any event, this is an extremely important point. And we should also take a moment to understand what the Financial Services business is all about.

Like government, the Finance industry does NOT create value. Finance is a support function. Finance is a scorekeeper. Finance is like the grease of industry, as it aids in the reallocation of savings from those who have them to those who do not.

Think about it.

When a company is interested in increasing door to door sales, does it turn to the Finance guy and say, "Get out there and Sell, Sell, Sell!"

Of course not.

Finance is a support position. It plays a valuable role in any economy by extending credit, researching promising companies, evaluating which investment projects are the most rewarding and sound, among other functions. But finance (like government) cannot create wealth, savings, or capital. It can only redistribute it.

Get it?

This is important to understand because what is going on in our troubled markets is a symptom of a larger sickness.

And that symptom is Platonic Socialism, its sister ideologies, and above all, men who seek power. Which is a bummer for America, because we just happen to be a Socialist paradise, whose elite class seeks only Mo' riches and Mo' domination.

Don't believe me?

Take a look at the major planks of the Communist Manifesto. Any of these sound familiar?

Abolition of the family! Even the most radical get riled up about this shameful intention of the communists.

What is the present family based on? On capitalism, the acquisition of private property. It exists in all of its meaning only for the bourgeoisie, but it finds its complement in the enforced lack of families of the proletarians and public prostitution.

The family of the (41) bourgeois naturally falls by the way-side with this, its complement, and both will vanish when capitalism vanishes...

The document continues:

The following measures could fairly universally be applied for the most-developed countries:

1. Expropriation of land and application of income derived from land for State expenditures.

2. Heavy, progressive taxation.

3. Abolition of all rights of inheritance.

4. Confiscation of the property of emigrants and rebels.

5. Centralization of lending in the hands of the State through a national bank with State capital and exclusive monopoly.

6. Centralization of all means of (49) transport in the hands of the State.

7. Proliferation of nationalized manufacturing, instruments of production, land clearing and improvement of all land holdings according to a common plan.

8. Equal mandatory employment for all, construction of industrial armies, especially for agriculture.

9. The consolidation of agriculture and industry, evolution towards gradual elimination of the distinction between city and rurality.

|482| 10. Public and publicly funded education of all children. Abolition of children's factory labour in its present form. Unification of education with material production etc. (51)

Now in all fairness, the Platonists and the Marxists, and yes, even some of the Feminists, have made statements and proposed policies that are reasonable and proper.

There are some truths that are Universal and can be readily distinguished by both Marxists and Libertarians alike. However, the fact remains that much of Socialism, Marxism, and Feminism was and is an utter failure. Those nations, civilizations, and individuals who follow the tenants of Leftism are doomed, as they are totally disconnected from Universal and Economic law.

And, as we survey the planks of the Communist Party, we have no choice but to conclude that America today IS a Socialist nation. A moderate one, to be sure, but still Socialist.

And, our Socialist Federal Reserve is attempting to stave off economic collapse by absorbing billions in bad loans and securities, at the same time our GSEs (Government Sponsored Enterprises) are taking on billions in troubled mortgages.

And, just in case you were wondering why this is such a bad thing, Mr. Ing tells us that:

With the shadow of the thirties looming, the Fed's orchestration of events since August, from the decision to give Wall Street access to the discount window, to the acceptance of Wall Street's inventory as collateral, to the cronyism of the Plunge Protection Team (PPT) to the $30 billion backstop of unwanted securities to the Bear Stearns' rescue, to the relaxation of rules governing quasi-government bodies such as money losing Fannie Mae and Freddie Mac, all points to a role beyond that of a lender of last resort. In absorbing the liabilities of Wall Street, the Fed is simply piling on debt on more debt. No nation, even the United States, can borrow forever without facing up to economic consequences. And no one is too big to fail.

Just Who Will Bail Out The Fed?

The U.S. dollar is among the sickest currencies in the world, giving up 50 per cent of its value since 2002 because the United States is deep in the financial hole. The gap between spending and revenue grows ever wider. Today, foreigners are not so eager to help. The problem is that America is a debtor country and dependent on foreigners to finance its chronic deficits requiring an inflow of $800 billion from foreign investors each year to finance the country's deficits. Not surprisingly, America's creditors are losing confidence in the country's solvency. Americans spend too much and save too little. America's trade deficit is at seven per cent of GDP and the budgetary deficit - excluding supplement spending for the war - is estimated at $400 billion. The Congressional Budget Office (CBO) estimated the costs of the wars in Iraq and Afghanistan so far at $600 billion and Congress is to approve another $275 billion. The CBO estimates the war might eventually cost between $1 trillion and $2 trillion by 2017. Meantime, consumer spending accounts for more than 70 per cent of the U.S. economy, but household debt is now at 140 per cent of consumers' after-tax income. Debt on debt is not good.

(Edward House and President Woodrow Wilson)


No, it is not. But, this is a consequence of Socialist economic and social policy, which began in earnest in the United States with the rise of Woodrow Wilson and his good chum Colonel Edward M. House, who, incidentally, founded the Council on Foreign Relations.

Let's just say, Dear Reader, that I'm not surprised.

And, unless we get our collective asses in gear, our future, according to Bill Bonner and friends at The Daily Reckoning, looks pretty bleak.

They write:

America has become a huge empire. All empires are extraordinary things…fragile and doomed to failure. When the Soviet Union threw in the towel, America was left without any major competition. Since empires cannot last, and since she had no competitors worthy of the name, the Empire of Debt had to find a way to destroy herself.

In that sense, it was no accident that the financial industry invented subprime debt…and then put it in its own coffers. Nor was it any accident that households spent more than they could afford. Nor that Congress went on the biggest spending spree in history. Nor that George W. Bush took the nation into an unbelievably pointless and expensive war, effectively squandering not only the nation's credit…but also its military advantage.

Meanwhile, Americans' eagerness to spend money they didn't have on things they didn't need caused a huge boom in places they'd never been. Asians built factories, roads and entire cities with money gotten from selling gadgets to Americans. Arabs built ski-slopes in the desert…and constructed towns on manmade islands. And even their former enemies - the Russians - created one of the world's largest piles of U.S. dollar reserves, and saw their own wages rise 6 times in the last eight years. These foreign competitors have been adding to their skills, their savings, and their capital bases - just while the United States has been running its own down.

This drama is far from over. We are only at the beginning of it. The next scenes should be even more interesting. The dollar will lose its status as the world's reserve currency (possibly with episodes of hyper-inflation)…China and Russia will greatly increase military spending (with some dangerous moments, as the US still tries to throw its weight around)…U.S. stocks will work their way down to real values - with P/Es below 10…and the average American household will find itself no better off, financially, than the average family in, say, Latvia or Malaysia. Then, Asian manufacturers will outsource production to an area where wages are low and productivity is high - Arkansas, maybe.

Ouch.

Next time!

Future Shock, Part II!

After that,

The writings of Bax!

Out.