Independent News and Politics

Fears of a Greek default have set off an unfortunate chain reaction in financial markets around the world – and the massive Euro-zone bailout of the debts of troubled states seems to be doing little but ensuring that the bankrupt states are allowed to continue borrowing even more money at low interest rates.  Unfortunately, access to more debt isn’t going to solve the crisis brought on by over-consumption and excessive debt payment obligations – it is only going to delay the reckoning and ensure that the broke states are able to get even deeper in over their head & ability to someday pay back what is owed.

The current phase is starting to look like pure asset deflation coupled with still-high commodity prices.  So long as the quantitative easing policies of central banks promote liquidity, most of the new easy money is going to be tied up on the commercial bank’s asset sheets in one speculative form or another.  The primary strategy appears to be investing in raw materials – driving up the cost of living but strengthening the banks’ books to make them appear a bit more solvent.  The only commodities that have followed the broader deflation trend are wheat, soy, and corn.

Cheap bread, austerity, and a grand circus of reality & contest shows for distraction.  Welcome to the new global order!

Tax revenue collections have dropped by nearly 14% in California this year, despite massive increases on tax rates and fee amounts:

The state collected just over $101 billion in 2009, down $16.4 billion, even though the legislature and governor approved the largest tax increase in state history including hikes in sales, motor vehicle and income taxes.

Fears of a deflationary spiral may not be unfounded or hyperbolic after all.

Federal policy makers have been walking a fine line between allowing the nominal value of assets to deflate while trying to keep the entire economy running on borrowed cash and easy money policies.  If all of these interventions are unable to kick-start “business as usual,” the next temptation for the Federal Reserve may simply be to literally print up the money needed to pay down debts and create new jobs.  Unfortunately, the down side effects of that could include unintended levels of inflation, a drop in international confidence regarding the U.S. economy, and even the potential of widespread civil unrest as wages are unable to keep up with the price of food and other basic necessities.

Bernanke is practically fessing up to the biggest fraud of all time: the fraud of modern money. These colorful pieces of paper aren’t backed by any specific goods or services, and their daily value fluctuates as the financial gatekeepers arbitrarily decide to inflate and contract the available supplies of cash. There really is no limit to the amount of money we can create in a virtually instant period of time, so why keep pretending that there could ever possibly be a shortage in the banking system?

So, this is the tortured logic that leads us to Bernanke’s conclusion: eliminate banking reserves outright.

The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system.

Since the banks can head straight to the Federal Reserve for cheap money any time they need it, and since the system is blatantly rigged to provide them profits in the long run, there really is no need for a financial panic! We can just print more money! Heck, even if we ran out of paper and ink we could still transfer digital credits into the bank’s account and that would be just as valuable as those greenbacks you worked so hard for.

So the next time you’re sitting at work and staring at the clock, as yourself why any of us should have to keep bank reserves to pay off our bills and debts – its all just imaginary money, right?

A conservative judge explains his conversion from drug warrior to social reformer and champion of liberty:

Basically, he nails the problem with the war on drugs by explaining exactly who benefits from the laws and who pays for the negative consequences of our outdated policies.

Prohibition has always failed and always will – it is contrary to the very spirit of American liberity. Until these issues are fixed though, we can expect lots of money flowing in to the gangs and prisons and police departments. Luckily, its a shortage of cash that might have us evaluate the moral wrongs being carried out in the name of zero tolerance and drug-free dreaming.

While I’m sympathetic to those who believe our government is acting beyond its intended functions and wasting the wealth of the American people, it is hard to not laugh a bit at how the Tea Party movement has been jerked and led around by the Republican party establishment that is most guilty of unconstitutional expansions and unnecessary military spending.

Not long after Ron Paul’s supporters came up with the idea for a Tea Party donation event, conservative PR specialists have been trying to find a way to co-opt the growing anger on the right side of things.

Within a few months of the donation Tea Party, a new “Tea Party protest” was being planned for tax day.  Suddenly though, anyone who had participated in the first grass-roots movement would have sensed that something was wrong.  Whereas the first Tea Party event had been organized exclusively by individuals without political connections, the second one was funded by all of the Republican operatives and front groups you might have come to expect.

When it was announced then that Sarah Palin and Tom Tancredo would be headlining the Tea Party convention and that tickets would cost almost $600 a piece, it should have been clear to even the slowest political analysts that this was little more than the old nativist neo-cons trying to regroup following the epic disgrace known as 8 years of Bush.

I don’t know what they talked about there, but I can take a guess.  Tancredo is one of those who seems to think that all evil in America came here from across the Mexican border, and Palin is so out there that we’re not sure she’s thinking about anything at all.  So frankly, I also don’t care what they were talking about at the Tea Party conference, because as far as I’m concerned this is just the new euphemism for neo-con.

But there’s still a downside here … is it possible for a legitimate opposition to form against the government that’s otherwise out of control?  If voter anger can so easily be corralled into a new establishment font group, what hope is there of reform coming from voter movements?

There’s no rally in the stock market to commemorate the victory of Scott Brown in Massachusetts.  Between Obama’s newly found tough rhetoric against “too big to fail” banks and questions about whether or not Bernanke can muster enough votes to be confirmed, investors are feeling a bit shaky about the future value of American equities.

In three days, almost 600 points have vanished from the Dow – nearly a 5% drop.  Of course, a lot of this is just the natural result of continued deleveraging despite federal attempts to inflate housing and stock markets with access to cheap and freshly minted money.

As the Congress reveals itself to be increasingly paralyzed and more states fall into budget crises of their own, expect stock markets to stumble once again.

A lot of people (rightfully) blame the Federal Reserve and its member banks for causing and exacerbating the still unfolding financial crisis, and as a symbol of the Fed Bernanke has come under increasing fire from the grass roots, then media, and now from members of Congress themselves.

In a stunning revelation, it has been announced that Bernanke may not have the number of votes required to confirm his re-nomination by Obama.

Many liberals had blasted Obama for his decision to appoint Bernanke for a second term, and his party members in Congress are taking heed of this lesson in the wake of the unexpected Massachusetts Senate race.

The question then – if not Bernanke, who?

Whether its through stock support through dollar devaluation, or direct injections of public capital into private balance sheets, the top banks and banksters to get us in to this mess are also the ones making loot in America’s worst financial crisis in decades.

Granted, Goldman Sachs wasn’t left holding subprime paper when TSHTF.  They led the way in to that mess but quickly dropped the hot potato on to sucker banks and puppet corporations.  When the dust cleared and only Goldman looked good, the government tripped over itself to hand them cash directly and through AIG.  I’m sure this has nothing to do with the string of Goldman Executives to find themselves at the Treasury Department…

Good news in the stock market is typically bad news for the dollar – at least lately.  As long as the value of a dollar goes down in terms of actual stuff like food, education, and medicine, the nominal value of equities and other assets can rise.

So although you get less stuff for your paycheck, stocks continue to rise.

This, my fellow Americans, is why the rich get richer and the poor get poorer.

If you own stocks of politically backed companies, you literally cannot lose.  If you do not own these stocks and are not receiving annual raises that match the growth of the money supply, you cannot win.  When politicians rush to “save the system,” they’re spending your money to make sure this master and servant economic relationship stays in tact.

Who says the poor instigate class warfare?  Mass revolutions are always a last resort – a reactionary event against increasingly cruel and greedy elites.

All experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed…

• -200 Thursday,
• -100 at Friday’s open,
• Employment is down by a quarter million,
• Dollar is down…

Are you enjoying your economic recovery yet?

I hope so, because another crash in housing is about to get started all over again:

Or are they planning another oh-so-successful bailout for every one of those coming spikes?