Thursday, November 13, 2008

Open Forum

Post your informative links, comments, hold a discussion/debate, etc here.

40 Comments:

At 11/08/2008 7:40 AM, Blogger Justin_n_IL said...

I'm RFLMAO.... "I can't believe it's not earned"..... OH boy, that is hilarious.

Thanks for the laugh!

 
At 11/08/2008 7:44 AM, Blogger Justin_n_IL said...

Just caught the "patented blend to help standing in the polls"... This is 2 funny.

Ok, I'll shut up now....

 
At 11/08/2008 9:02 AM, Anonymous Patrick said...

Harrah's slashes costs amid slowdown

Casino giant reports net loss of $129.7 million for third quarter

http://www.lvrj.com/business/34137664.html

 
At 11/08/2008 11:58 AM, Blogger Justin_n_IL said...

http://www.youtube.com/watch?v=vlEhKmhueVw

BIDEN: And we’ll be faced with equally consequential decisions in the 21st century.

Can a microscopic tag be implanted in a person’s body to track his every movement? There’s actual discussion about that.

You will rule on that — mark my words — before your tenure is over.

Can brain scans be used to determine whether a person’s inclined toward criminality or violent behavior?

You will rule on that.

http://ignoranceisfutile.wordpress.com/2008/09/09/obamas-vp-joe-biden-promised-mandatory-microchip-implant-supreme-court-ruling/

Here is a good read.

"Why I fear Obama like no other"
http://www.uruknet.info/?p=m47769

 
At 11/08/2008 6:11 PM, Blogger Justin_n_IL said...

This is interesting.

http://www.wariscrime.com/2008/11/07/news/how-illuminati-are-trading-prisoners-like-cattle/

 
At 11/08/2008 8:38 PM, Blogger Justin_n_IL said...

This is an interesting perspective.

Part 1
http://www.youtube.com/watch?v=MouUJNG8f2k

2
http://www.youtube.com/watch?v=e-KJCMWcoms

 
At 11/08/2008 8:51 PM, Blogger Justin_n_IL said...

Pix of Zimbabwe.

http://www.boncherry.com/blog/2008/10/26/global-crisis-this-is-the-real-crisis/

 
At 11/08/2008 10:44 PM, Blogger David said...

thanks for that LVRJ URL on Harrah's...I'm glad there is an update on the company's happenings

 
At 11/09/2008 12:29 PM, Blogger Justin_n_IL said...

Change you can believe in!!!

http://cryptogon.com/?p=4905

 
At 11/09/2008 1:00 PM, Blogger Justin_n_IL said...

This just keeps getting better. John Corzine being vetted for Treasury Secretary. John of course is another former Goldman Sachs executive.

http://cryptogon.com/?p=4896

 
At 11/09/2008 7:52 PM, Blogger Justin_n_IL said...

LOL, in his own words.

http://www.youtube.com/watch?v=TkRY46iRN9o

 
At 11/10/2008 7:07 AM, Blogger Justin_n_IL said...

http://current.com/items/89510052_council_on_foreign_relations_president_predicts_coups_genocide_and_terrorism_to_test_obama?xid=46

http://www.thejerusalemgiftshop.com/israelnews/politics/80-political/335-warnings-from-world-leaders-all-within-72-hours-.html

 
At 11/10/2008 10:31 AM, Anonymous jerry said...

I believe the Chris Laird article was interesting. I believe he is correct in much of his assessment of the economy and where it is going. China currently has a 6 percent GDP, and it will drop but not to negative like we really are today. They will suffer huge unemployment numbers. At this time, I cannot get on the wagon that says the dollar will end up bankrupt. Mr. Laird is projecting figures 2-4 years out. That is very unrealistic, at this time. So much can happen in just 11 months. I will suspend judgement until the end of 2009 to make predictions on the dollar and if the US goes into an national bankruptcy mode, which I doubt, at this time. The entire world's currencies will have severe value disturbances, as well. We are the world's biggest economy, as a nation, and, even though we are severely slowing down, our economy will continue to spend on essentials and things.

I believe, and I have written about this, that through a Green and sustainable economy that reduces the budget deficit, and ultimately, the national debt, through public policies and public initiatives, the US can create a new economy for itself that will make it more self-sustaining, and self-reliant. Obama must move on this approach at warp speed.

 
At 11/10/2008 10:50 AM, Anonymous Mrmojorisin515 said...

Jerry,

I still am curious as to what your profession is? Why isn't it plausible that the government will default on its debt? Please explain how a green economy will pave the way to a brighter future. The budget deficit would be lower if the government would just reduce spending, from looking at your blog you are apparently in the tank for the democrats. Which makes it hard to take you seriously because both parties are the problem and until people realize this nothing will be fixed. Read up on the Roman empire jerry, then you will see how it is possible for the dollar to crumble, history has a funny way of repeating

 
At 11/10/2008 11:46 AM, Anonymous Anonymous said...

The reality of the government to cut spending is unreal. With about 30% of the population (estimates I've read) employed by either the Federal government, state government, on welfare, or belonging to a union--even if the government wanted to reduce spending, all those bureaucracies will be fighting tooth and nail to make sure their jobs and incomes aren't tampered with. That being said, I gather that nothing will change in the right direction because quite frankly, and understandably, we're all just trying to survive. Doing the right thing for the country is out the window--doing what's best for self and family is paramount. We're all going down together, unless some of us making smart provisions to ride through this storm.

 
At 11/10/2008 6:32 PM, Anonymous OperationNorthwoods said...

Anon,

An even higher percentage of the population of the USSR worked for the government, but somehow the government managed to cut their jobs when the country went broke. Bankruptcy does wonders in making the impossible possible.

 
At 11/10/2008 6:55 PM, Anonymous Anonymous said...

operationnorthwoods,

Right, but I believe when the USSR went broke and started cutting jobs, it was already too late. I'm not saying that the government and people can't be fiscally responsible--I'm just led to believe that when they do, it'll already be the 11th hour.

 
At 11/10/2008 10:18 PM, Anonymous Patrick said...

US May Lose Its 'AAA' Rating

The United States may be on course to lose its 'AAA' rating due to the large amount of debt it has accumulated, according to Martin Hennecke, senior manager of private clients at Tyche.

"The U.S. might really have to look at a default on the bankruptcy reorganization of the present financial system" and the bankruptcy of the government is not out of the realm of possibility, Hennecke said.

http://www.cnbc.com/id/27641538

 
At 11/11/2008 1:19 PM, Anonymous jerry said...

mrmojoisin, I am flattered that you want to know my background, yet I don't think it is relevant to the debate. I yam what I yam!

You asked, ""Why isn't it plausible that the government will default on its debt? Please explain how a green economy will pave the way to a brighter future. The budget deficit would be lower if the government would just reduce spending."

It is very plausable that the government could go into default mode, but I believe that it is possible that with the right interventions, a brighter future is possible. For example, if the government puts money into infrastructure, alternative energy initiatives, electric car conversions, building hybrid-electric new cars, etc people would be working, tax dollars would be generated, trade deficit would be reduced. Reducing the budget deficit by reducing the size, breadth, and spending of government since many people work for the government, would make things worse. Reducing jobs creates poverty, increases home foreclosures, and causes even more shrinkage of the overall economy. Retail disappears, those jobs dry up, large corporations shrink jobs and bottom line. The nation would, without a doubt, fall into a hardcore depression. It would take a decade to even begin to pull out of.

We are not the Roman Empire, nor the Soviet Union/Russia. Our situation is a bit more unique than those examples. We have different strengths and advantages than those two examples.

I guess, the question is what do you want? What would you like to see happen? What are the strength and weaknesses of your economic vision? We all know that McCain would not have improved the economy with his plan. He supported more Trickle down, which was a big fat failure. So what would you want to see done for America?

 
At 11/11/2008 3:37 PM, Anonymous Virgo said...

Rupert Murdoch Unveils Plans for the Global Dow
Editors of The Wall Street Journal Will Select Global Leaders

MUMBAI (Aug. 4, 2008) — "Dow Jones Indexes, a leading global index provider, will launch The Global Dow, an index whose components are selected by the editors of The Wall Street Journal.

The launch of this new icon was unveiled today by Rupert Murdoch, chairman and chief executive of News Corporation in Mumbai, India. Dow Jones Indexes is a business unit of Dow Jones & Company, a News Corporation company (NYSE: NWS, NWS.A; ASX: NWS, NWSLV).

The Global Dow will track the share prices of existing and future global leaders in every industry. Vigorous companies from emerging economies will be included along with companies from emerging sectors such as alternative energy."


http://www.dowjones.com/Pressroom/PressReleases/Other/US/2008/0804_US_DowJones_124.htm

 
At 11/11/2008 5:04 PM, Blogger Ellen said...

Randy,

A topic that deserves mention is the lawsuit Bloomberg News has filed against the Fed under the Freedom of Information Act to demand transparency under TARP.

I thought transparency was a condition of taking the $1.2 + Trillion dollars of taxpayer money. It's shocking that the Fed, not a public institution, could avoid disclosure to the people.

I welcome your thoughts.

Here's a synopsis in this article from SeekingAlpha.

Best, Ellen

http://seekingalpha.com/article/105282-bloomberg-picks-a-fight-with-the-fed-on-disclosure

"Information provider Bloomberg has started a fight with the Federal Reserve that may turn some stones in the secretive private organization that has never been audited.

Bloomberg had asked the Fed to see documents concerning the collateral the Fed accepts in exchange for freshly digitized credit in its bailouts. The Federal Reserve first insisted on a Freedom Of Information Act (FOIA) request and then said the data required is from the Fed New York which does not fall under the FOIA

In his book "Secrets of the Temple" - the most extensive work about the Fed - William H. Greider highlights the opaque legal status of the Federal Reserve that is neither federal nor has any reserves (besides unlimited fiat currency) but takes the best from both worlds to keep its doors closed to the public. Being the biggest fiat money creator in the world the Fed has never been audited, controls itself and does not even publish a balance sheet that would fulfill the expected norms.

A 9-shot salute goes to nakedcapitalism which was the first blog to break this important story. In a sarcastic lead Yves Smith (or Ed Wright) writes up the most important points:
In case you somehow managed to miss it, our friendly pawnbroker of last resort (central bank) has been taking lots of crap (collateral) in return for loans under its alphabet soup of facilities. As we are learaning in our housing meltdown, collateral may not prove to be worth as much as it was said to be at the time the loan was made. Inquiring minds are curious as to what, exactly the Fed has taken, particularly as the numbers are becoming stratospheric.


Bloomberg has asked nicely for some of this information, and is now being forced to sue under to the Freedom of Information Act, and the Fed intends to fight! This ought to be a scandal, but after the TARP, the electorate is seems resigned to taxpayer money being thrown at floundering financial enterprises with little in the way of checks or prudence. If the Fed indeed was taking conservatively valued collateral as it has always claimed it was, there would be no reason for it to attempt to squash this request. The Fed's argument, as I infer, is the loans were made by the Federal Reserve Bank of New York, which isn't a federal agency and thus not subject to the FOIA.

David Merkel's Aleph Blog was quick to come up with five reasons for the Fed's secrecy, all of them most alarming for believers in a free market system. Headlining "What Do You Have To Hide" he lists the following:
The Fed is breaking its own rules, and lending on collateral that it publicly said that it wouldn't lend against.
They are playing favorites with institutions, and don't want that to be revealed.
The assets in question are technically in compliance with the rules of the Fed, but are worth far less than the amount loaned against them.
Certain banks would be embarrassed by revealing what they own.
It's just a power game, and the Fed thinks it is above the law, particularly during a crisis (that it helped to cause).

The reporters committee for freedom of the press has some technical details on the lawsuit Bloomberg has filed.

Bloomberg News filed a Freedom of Information Act lawsuit against the Federal Reserve system Friday, seeking documents related to the financial services crisis, the news service reported.
The suit, filed in federal court in New York, asks for documents the government says are held by the Federal Reserve Bank of New York. The bank, one of a dozen in the Federal Reserve system, has not complied with FOIA because it has not been considered a government agency.
In contrast, the Federal Reserve Board of Governors in Washington is subject to FOIA. However, the bulk of the documents Bloomberg wants are housed at the New York bank, the Fed told Bloomberg.
According to Bloomberg, the Fed has made loans totalling $1.5 trillion to banks, not including the $700 billion bailout package. Bloomberg is seeking information on the collateral the banks posted for the loans. The news service's FOIA requests have gone unanswered.

Creditwritedowns joins the team of Fed bashers, publishing the Bloomberg story on the topic and peppering it with criticism on the Fed's overly secretive style that should be a thing of the past.

For those of you concerned about the Fed's risky behavior, its ballooning balance sheet, and its acceptance of dodgy collateral, well you may be about to see whether the American democracy can allow this unchecked power to continue without oversight. Bloomberg News has sued the Federal Reserve to force them to reveal what kind of collateral they are accepting in loaning out trillions of dollars to U.S. banks.


The Federal Reserve, a quasi-government body (which strictly speaking is a private corporation in that it is owned by member banks), has been accepting assets of ever more dubious quality in a bid to liquify the U.S. banking system. Moreover, their efforts should be considered highly inflationary and a long-term threat to the value of the U.S. dollar and to the American economy.
The Fed balance sheet is expected to balloon to $3 trillion by the end of the year, up from $900 billion in August -- a rise in the Fed's balance sheet from 6% of GDP to more than 20% of GDP in four months. In Japan, which was known for quantitative easing during its own deflationary crisis, the central bank's balance sheet rose progressively from 9% of GDP to 29% of GDP. But this was over ten years from 1994 to 2004. At the current pace, the Fed might do in six months what it took ten years to do in Japan. Amazing.

Bloomberg had published this story last Friday:

Bloomberg News asked a U.S. court today to force the Federal Reserve to disclose securities the central bank is accepting on behalf of American taxpayers as collateral for $1.5 trillion of loans to banks.
The lawsuit is based on the U.S. Freedom of Information Act, which requires federal agencies to make government documents available to the press and the public, according to the complaint. The suit, filed in New York, doesn't seek money damages.
"The American taxpayer is entitled to know the risks, costs and methodology associated with the unprecedented government bailout of the U.S. financial industry,'' said Matthew Winkler, the editor-in-chief of Bloomberg News, a unit of New York-based Bloomberg LP, in an e-mail.
The Fed has lent $1.5 trillion to banks, including Citigroup Inc. and Goldman Sachs Group Inc., through programs such as its discount window, the Primary Dealer Credit Facility and the Term Securities Lending Facility. Collateral is an asset pledged to a lender in the event that a loan payment isn't made.
The Fed made the loans under 11 programs in response to the biggest financial crisis since the Great Depression. The total doesn't include an additional $700 billion approved by Congress in a bailout package.


Fed's Position
Bloomberg News on May 21 asked the Fed to provide data on the collateral posted between April 4 and May 20. The central bank said on June 19 that it needed until July 3 to search out the documents and determine whether it would make them public.
Bloomberg never received a formal response that would enable it to file an appeal. On Oct. 25, Bloomberg filed another request and has yet to receive a reply.
The Fed staff planned to recommend that Bloomberg's request be denied under an exemption protecting "confidential commercial information,'' according to Alison Thro, the Fed's FOIA Service Center senior counsel. The Fed in Washington has about 30 pages pertaining to the request, Thro said today before the filing of the suit. The bulk of the documents Bloomberg sought are at the Federal Reserve Bank of New York, which she said isn't subject to the freedom of information law.
"This type of information is considered highly sensitive, and it would remain so for some time in the future,'' Thro said.
The Fed didn't give Bloomberg a formal response because "it got caught in the vortex of the things going on here,'' said Michael O'Rourke, another member of the Fed's FOIA staff.
The case is Bloomberg LP v. Federal Reserve, U.S. District Court, Southern District of New York (Manhattan).

While this story is in itself highly interesting as it contradicts chairman Ben Bernanke's earlier vows to lead a more transparent Fed it could be the beginning of the dismantling of the Fed's untouchable aura.

Republican congressman Ron Paul has repeatedly called for an audit of the Fed and the abolition of the USA's third central bank. As the Fed's most important tool is to set the price of money via interest rates and recalling all its blunders it is most interesting that the constituionality of the Fed has never been challenged in court although the constitution says in Article 1, section 10:
No State shall ... coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts....

Story developing...follow this link

Fed Stonewalling on Giving Details About Collateral Accepted for Loans(naked capitalism, 11/7/08)
Fed Reverses Self on Promises of Transparency, Continues to Stonewall on Collateral, Lending Disc... (naked capitalism, 11/10/08)
For the first time since the Great Depression…. (Option ARMageddon, 10/7/08)"

 
At 11/11/2008 8:35 PM, Blogger Randy said...

Ellen,

Thanks for the recent info - good read. I posted up some extracts (same subject) last Friday: Bloomberg News sues the Fed under FOIA

Agree it's an extremely important issue and I hope, but seriously doubt Bloomberg will be successful in their lawsuit. NATIONAL SECURITY will likely be used as their rationale for nondisclosure and the Gvt will probably provide the required backing for this position.

 
At 11/12/2008 5:50 AM, Blogger Justin_n_IL said...

http://www.energybulletin.net/node/47157

 
At 11/12/2008 5:59 AM, Anonymous Mrmojorisin515 said...

jerry,

"We are not the Roman Empire, nor the Soviet Union/Russia. Our situation is a bit more unique than those examples. We have different strengths and advantages than those two examples."

Why? What do you know of the Roman Empire? Really, what do you know? I want to know what you do because it helps me get a better picture of why you think the way you do, no flattery intended.

 
At 11/12/2008 6:02 AM, Blogger Justin_n_IL said...

http://www.marketoracle.co.uk/Article6936.html

 
At 11/12/2008 6:49 AM, Anonymous mrmojorisin515 said...

To Jerry and all others interested,

The Perils of America's Progress
Stephen Bertman
IN A WORLD OF ever expanding empires—the
Egyptian, the Babylonian, the Assyrian,
and the Macedonian—the ancient empire
of Rome was territorially the largest
and temporally the most enduring. From
west to east it stretched over some three
thousand miles, an extent comparable to
the breadth of the continental United
States, and lasted for almost a millennium,
from the revolutionary birth of an
aggressive Roman Republic in 509 B.C. to
the abdication of a teenage emperor to
barbarians in 476 A.D. Though the Eastern
half of the Empire would continue to
be ruled from Byzantium, the collapse of
the Empire's Western half triggered a centuries-
long period of Dark Ages and sent
cultural shock waves through the later
history of Europe. The decline and fall of
the Roman Empire also inspired one of
historiography's grandest literary works,
an epic study by Edward Gibbon, the first
volume of which appeared in 1776, the
very year that signaled the birth-throes of
our own American nation.
Following in Gibbon's footsteps, later
historians have explored the causes for
Rome's spectacular fall even as ancient
STEPHEN BERTMAN, an American citizen, is Professor
Emeritus of Classics at the University of
Windsor in Canada. He is the author of many
books including Handbook to Life in Ancient
Mesopotamia (Oxford University Press, 2005).
eye-witnesses to history like St. Augustine
once speculated on the reasons for its
downward spiral. The most obvious explanation
for Rome's fall is external: a
succession of devastating barbarian invasions.
But less obvious, yet more instructive,
are explanations that look for
causes from within. The internal factors
that have been proposed by scholars over
the years are many and varied, but can be
categorized under five basic headings:
administrative, economic, biological,
moral, and systemic.
The administrative causes include
Rome's failure to provide sound constitutional
guarantees for legitimate and orderly
succession, a pattern of military
coup and peremptory rule by soldieremperors,
the enlistment of barbarians
into military and government service, and
a breakdown in military leadership and
discipline. Numbered among economic
causes are adeclineinthe productivity of
the Empire's labor force, a stagnation in
the overall demand for goods and services,
an unfavorable balance of trade
brought about by the shifting of productivity
from Italy to its outlying provinces,
an oppressive system of taxation that
severely reduced people's spending
power, a debasement of currency designed
to aid the government in meeting
its own expenses, and finally an extravagant
style of consumption by those who
22 Winter 2006
were wealthy and privileged. Among the
proposed biological causes are a reduction
in the birthrate of native Romans
(perhaps caused by lead poisoning), a
decrease in the fertility of Italy's soil (perhaps
exacerbated by climatic change),
and the ravaging effects of epidemic disease.
Added to these are moral factors:
the corruptive influence of autocratic
power (Caligula, Nero, and their ilk), the
corrosive effects of sensualism (private
orgies and seductive spas), the dehumanizing
effects of institutionalized slavery,
the disappearance of former virtues
(chiefly self-reliance and self-sacrifice),
and the enervation and distraction induced
by Christianity's emphasis on
brotherly love and otherworldly hope.
Lastly, there are possible systemic causes:
the Spenglerian cycle of youth, maturity,
old age, and death to which all living
entities—including human institutions—
are subject, and the vulnerability of a
megastructure to catastrophic World-
Trade-Center collapse.
Indeed, under the combined weight of
so many factors, it is a wonder that any
institution could long stand. Perhaps,
rather than speculating on the possible
causes for the Roman Empire's fall, we
should—as Gibbon himself suggested—
marvel instead at how long Rome stood!
Who are we, who measure our own nation's
history by barely more than a couple of
centuries, to fault a civilization that prospered
for ten: five under the Republic and
another five under the Empire?
If, in fact, the Roman system did prevail
for so long, what principles were responsible
for its phenomenal success? The
first of these dynamic principles was the
concept of materialism as a basis for the
good life. Though materialism may be
denigrated as the philosophy of superficial
minds, such criticism is a luxury the
affluent can best afford. To those who
lack sufficient food, clothing, and shelter,
or who are denied the pleasures life could
otherwise provide, materialism justifiably
has powerful appeal. Earlier empires than
Rome's had concentrated wealth in the
hands of the few: the ancient Egyptian
masses, for example, were more familiar
with mud than gold. What the Romans did
was invert the economic pyramid, making
a higher standard of living for the
masses a respectable social goal. Indeed,
more than military force, it was the popular
distribution of wealth combined with
the Empire's material success that persuaded
the peoples of foreign lands to
accept Roman authority in exchange for
a participatory share in global peace and
prosperity.
To achieve their imperialistic ends,
the Romans practiced pragmatism, doing
what actually worked rather than philosophically
speculating on what might be
best. Never filled with Greek-style introspective
self-doubt, the self-assured Romans
confidently projected their sense
of themselves on the world they conquered,
remaking that world and its inhabitants
in their own image. Rather than
committing themselves to the exploration
of man's internal nature, they dedicated
themselves to the mastery of the
external world through the application
of force and the imposition of law. They
believed, as their epic poet Vergil asserted,
that their mission was "to spare
the submissive, and crush in war the
proud" in order to civilize the uncivilized.
Combined with an innate respect for authority
and a capacity for disciplined
subordination, their talent for organization
enabled them to govern an ethnically
and politically diverse and complex
world.
That very complexity led the Romans
to replace the old and cumbersome constitutional
machinery of the Republic with
the streamlined efficiency of one-man
rule, first under Julius Caesar and then,
following his assassination, under his heir
Augustus and the later emperors of Rome.
America's Founding Fathers, who knew
their Roman history well, saw in the des-
Modem Age 23
potic excesses of one-man rule an historic
flaw they were determined to exclude
from their constitutional design for
a new nation. As the nineteenth-century
English historian Lord Acton wisely observed:
"Power tends to corrupt and absolute
power corrupts absolutely." However,
a less well known observation of his,
inspired by Plato, bears even more scrutiny
if we are to understand the fall of
Rome: "Every institution tends to perish
by an excess of its own basic principle."
If that is true, if all institutions are in
fact undone by an excess of those very
principles that first bring them into being,
what were the formative principles
that precipitated Rome's fall? First was
the hunger for power. Originally a collection
of mud and thatch huts overlooking
apre-Forum swamp, prehistoricRomewas
raided by early barbarians and later dominated
by Etruscan kings. From their culturally
advanced Etruscan masters, the
primitive Romans learned two lessons:
the meaning of affluence and the means
to achieve it: imperialistic conquest. Overthrowing
their Etruscan overlords in 509
B.C., the Romans went on to become the
rulers of Italy until by the middle of the
Second Century B.C. they had become the
political and military masters of the Mediterranean.
With each successive conquest,
the Romans felt more secure from
external threats, but each successive
conquest confronted them with new and
potentially hostile neighbors who had to
be defeated if Rome was to remain secure.
The psychological need for control to
compensate for a sense of insecurity conditioned
by their earlier history led them
to precarious heights of global domination
from which they eventually fell, in
part from what historian Paul Kennedy
has termed "imperial overstretch," in part
from the corruptive concentration of
power that ruling such territory required,
and in part from the appetite of barbarians
living at the edges of the Empire who
hungered to partake in the feast.
That appetite, and the actions the barbarians
took to gratify it, was incited by a
second ultimately destructive principle
of Roman civilization: the concept of
materialism as the basis for the good life.
To put it simply, Rome became a victim of
jealousy over its own success. But the
materialistic success Rome long enjoyed
had internal as well as external ramifications.
An emphasis upon sensual gratification
and individualism eroded the principles
of self-sacrifice and communal dedication
which had characterized the early
Republic and had made empire-building
possible. The word Vergil once used to
signify those missing qualities was p/etos,
a word from which our own word "piety"
is derived but which meant far more to the
traditional Roman: a patriotic willingness
to subordinate one's own needs and desires
to the higher purposes of the state.
The spiritual core of traditional Roman
culture was further eroded by the very
growth of Rome's empire, which made its
citizens—once dwellers on a mere Seven
Hills—feel small and insignificant within
the parameters of a worldwide state.
Because Roman religion, always cold
and authoritarian, offered them little psychological
comfort, many turned to increasingly
popular Near Eastern cults that
promised a better life in a world beyond.
One of those cults, Christianity, became
the most popular because it also spoke of
a God who, unlike remote Jupiter, knew
and loved each individual soul in an increasingly
impersonal world. Materialism,
as it turned out, had lacked the necessary
nutrients to satisfy the deepest cravings
of the human soul. As the centuries wore
on, time itself contributed to Rome's decline,
intellectually distancing and spiritually
alienating people from civic virtues
that their forebears had readily comprehended
and held dear. Indeed, as the
size of the empire grew and the number of
its citizens increased, ethnic diversity
challenged even the most basic definition
of what being a Roman meant.
24 Winter 2006
Thus the quest for military dominance
and the drive for materialistic gratification
ultimately led to Rome's defeat.
Since the days of Rome's Golden Age
under Augustus, two thousand years have
passed. Today, though it is not technically
an empire, the United States stands
as the world's preeminent superpower,
both militarily and economically. But how
long will that preeminence last? It would
be naive to imagine America will be exempt
from that universal law of history
that to date has dictated the decline and
fall of every great power, including Imperial
Rome. The only relevant questions
are these: when will that fall take place,
and for what reason or reasons?
The advantage of studying ancient history
is that it is closed-ended and offers
the historian the opportunity to analyze
events long-ago completed. But the disadvantage
is that the passage of time has
eliminated so many of the sources such
an analysis requires in order to be valid.
For the historian of modern times the
situation is reversed: sources are abundant
(indeed, sometimes too abundant),
but perspective can be absent because
the historian is often enmeshed in the
very events he or she is trying to understand.
In effect, it is easy to "predict" the
fall of Rome since we already know when
it happened! It is far harder to predict an
American tomorrow.
Thus it would be facile to point to
America's present national debt or current
trade imbalance or latest unemployment
figures as sure signs of impending
national decline. Economies can turn
around, for the worse or for the better.
After all, America survived a Great Depression.
Nor must we be too quick to
point to today's terrorist hordes as the
modern equivalent of the barbarians of
old. They may well be, but it is too soon to
tell. (The historians of 4006—assuming
there are any—will surely know.) Besides,
as we have already seen, empires are more
truly felled by internal weaknesses than
by forces that are external.
Let us therefore look within, searching—
as Lord Acton would have us do—
for those formative principles that, if carried
to excess, might someday cause the
institution of the United States to perish.
Though our quest could take us in a
number of directions, surely one of the
most direct would be the route to
America's founding document. The Declaration
of Independence. There we read:
"We hold these truths to be self-evident,
that all men are created equal, that they
are endowed by their Creator with certain
unalienable rights, that among these are
Life, Liberty, and the pursuit of Happiness."
By declaring that God meant man
not only to live but also to be free, the
Declaration identified freedom as a fundamental
principle of our nation, a principle
that would be commemorated a
century later in New York harbor by a
Statue of Liberty that—in the words of
poet Emma Lazarus—greeted oppressed
"masses yearning to breathe free."
Freedom, however, is by definition a
condition, not an end in itself, for an
individual can be free to do anything
(including evil) or free to do nothing at
all. Liberty carried to excess becomes
license, and license, if widespread, can
undermine a nation's future. With this
thought in mind, philosopher Viktor
Frankl once proposed that a matching
statue be erected on America's VKes/Coast,
a Statue of Responsibility, because without
an abiding and equal sense of civic
responsibility no freedom-loving nation
like ours can survive.
After Life and Liberty, the Declaration
of Independence cited the pursuit of Happiness.
Yet by what means is happiness to
be pursued, and by what means attained?
Thanks to the abundant natural resources
of America and the talents of its people,
the answer history gave was one the ancient
Romans would have quickly understood:
material progress.
Energized by the Industrial Revolution,
Modem Age 25
America's inventiveness soon fulfilled its
promise, giving its citizens the highest
standard of living of any nation in the
history of the world. But in gratifying
personal desires, prosperity simultaneously
threatened the instinct to sacrifice
for something higher than oneself.
Today, some might cynically argue that
the ultimate loyalty of Americans is not to
God or country but to consumption itself.
Indeed, it is no accident that "the
economy" rather than national character
is currently taken as the truest indicator
of our country's political health. Moreover,
just as Roman emperors used "bread
and circuses" to keep their masses submissive,
today's self-serving leaders can
use the addiction to material comfort for
their own advantage by manipulating the
hopes and fears of the electorate.
The engine of the Industrial Revolution
was technology, and technology
embodied something else the Romans
would have readily grasped: power, the
power to transform the quality of everyday
life even as it enhanced military capabilities.
The nature of technology, however,
is intoxicating, for it can delude us
into thinking we have more control over
our lives than we actually do, while at the
same time it subtly directs our desires
and narrows the range of our options. To
paraphrase Thoreau, we unknowingly
become the tools of our tools.
In the nineteenth and twentieth centuries,
advanced technology was primarily
located in factories, but today it is present
in our homes and on our very persons.
Unlike the technology of an eariier era
that operated at mechanicai speed, contemporary
technology is largely electronicandoperatesatavelocity
approaching
the speed of light. In response to
technology's electronic demands, we now
struggle to survive in an atmosphere of
artificially induced urgency. In consequence,
American culture has become a
"hyperculture,"asociety warped by stress
and pathologically addicted to speed.
And as individual lives spin out of control,
the centrifugal force also tears at the
structure of families. Meanwhile, electronic
media have made Americans the
most entertained culture in history. Yet
as critic Neil Postman cogently argued,
the citizens of the United States may in
fact be "amusing themselves to death" by
allowing seductive images to distract
them from the urgent issues that demand
their undivided civic attention.
Moreover, just as the ancient Romans
were alienated from the founding values
of their nation by the passage of centuries,
so are we diminished by the passing
decades. Like the objects in the rear-view
mirror of a speeding car, the facts of
American history are rapidly becoming
tinier and tinier in our minds. Survey after
survey has revealed how little the graduates
of America's high schools and colleges
know about the history of their
nation and the sacrifices that that history
required, in part because even the
finest schools no longer require courses
in American history and in part because
our culture focuses on the present rather
than the past. In short, due to "the power
of now" we have become victims of cultural
amnesia, the social equivalent of
Alzheimer's disease. Yet just as an individual
needs memories to retain a sense
of personal identity, so does a nation
need them in order to survive. As historian
Bruce Catton wisely observed: "The
great American story is above all other
things a continued story. It did not start
with us and will not end with us." But if we
allow the cord of that continuity to be
broken, our national future will surely be
imperiled.
The internal weaknesses of our nation,
and its susceptibility to collapse
from within, are effectively summed up in
the report of the United States Commission
on National Security/21st Century,
chaired by former U.S. senators Warren
Rudman and Gary Hart. In part, the report
states:
26 Winter 2006
The upshot of the changes ahead is that
Americans are now, and increasingly will
become, less secure than they believe themselves
to be. The reason is that we may not
recognize many of the threats in our future,,,.
They may consist, too, of an unraveling
of the fabric of national identity itself,,,,
Compared to the present, everything wiii be
huried into relative motion,.,. As a consequence,
we may be headed for a considerably
more stressful cognitive environment..,,
Democracy may be hollowed out from the
inside..,. The growing sense of power that
will accrue to many individuais,. ,could corrupt
moral balances and erode moral discipline..,.
It could threaten the balance of
healthy civic habits that have long sustained
democratic communities.
Such words might well have been written
in Latin fifteen or more centuries ago,
and indeed echo the sentiments another
senator, Cicero, expressed during the
dying days of the Roman Republic.
Optimists might inject at this point
that if it took the Roman Empire five centuries
to fall, America still has about three
centuries to go.' But such optimism fails
to take into account the technologically
induced acceleration of history itself
within the context of an electronically
connected world that instantly relays
events and demands instant decisive reaction.
It also fails to take into account
modern technology's awesome destructive
capabilities. The dramatic changes
that once took centuries might require
only years or, perhaps, only seconds.
Remote as it is from our times, the
biography of the ancient world can offer
us instructive lessons that may prove
critical in shaping our own nation's future.
Of these lessons perhaps the most
important is the one cited by cultural
historian Will Durant: "A great civilization
is not conquered from without until
it has destroyed itself within."

 
At 11/12/2008 6:56 AM, Anonymous Mrmojorisin515 said...

sorry that last post went wacky, if it can be deleted that is fine, this one is easier to read.

Thanx




IN A WORLD OF ever expanding empires--the Egyptian, the Babylonian, the Assyrian, and the Macedonian--the ancient empire of Rome was territorially the largest and temporally the most enduring. From west to east it stretched over some three thousand miles, an extent comparable to the breadth of the continental United States, and lasted for almost a millennium, from the revolutionary birth of an aggressive Roman Republic in 509 B.C. to the abdication of a teenage emperor to barbarians in 476 A.D. Though the Eastern half of the Empire would continue to be ruled from Byzantium, the collapse of the Empire's Western half triggered a centuries-long period of Dark Ages and sent cultural shock waves through the later history of Europe. The decline and fall of the Roman Empire also inspired one of historiography's grandest literary works, an epic study by Edward Gibbon, the first volume of which appeared in 1776, the very year that signaled the birth-throes of our own American nation.

Following in Gibbon's footsteps, later historians have explored the causes for Rome's spectacular fall even as ancient eye-witnesses to history like St. Augustine once speculated on the reasons for its downward spiral. The most obvious explanation for Rome's fall is external: a succession of devastating barbarian invasions. But less obvious, yet more instructive, are explanations that look for causes from within. The internal factors that have been proposed by scholars over the years are many and varied, but can be categorized under five basic headings: administrative, economic, biological, moral, and systemic.

The administrative causes include Rome's failure to provide sound constitutional guarantees for legitimate and orderly succession, a pattern of military coup and peremptory rule by soldier-emperors, the enlistment of barbarians into military and government service, and a breakdown in military leadership and discipline. Numbered among economic causes are a decline in the productivity of the Empire's labor force, a stagnation in the overall demand for goods and services, an unfavorable balance of trade brought about by the shifting of productivity from Italy to its outlying provinces, an oppressive system of taxation that severely reduced people's spending power, a debasement of currency designed to aid the government in meeting its own expenses, and finally an extravagant style of consumption by those who were wealthy and privileged. Among the proposed biological causes are a reduction in the birthrate of native Romans (perhaps caused by lead poisoning), a decrease in the fertility of Italy's soil (perhaps exacerbated by climatic change), and the ravaging effects of epidemic disease. Added to these are moral factors: the corruptive influence of autocratic power (Caligula, Nero, and their ilk), the corrosive effects of sensualism (private orgies and seductive spas), the dehumanizing effects of institutionalized slavery, the disappearance of former virtues (chiefly self-reliance and self-sacrifice), and the enervation and distraction induced by Christianity's emphasis on brotherly love and otherworldly hope. Lastly, there are possible systemic causes: the Spenglerian cycle of youth, maturity, old age, and death to which all living entities--including human institutions--are subject, and the vulnerability of a megastructure to catastrophic World-Trade-Center collapse.

Indeed, under the combined weight of so many factors, it is a wonder that any institution could long stand. Perhaps, rather than speculating on the possible causes for the Roman Empire's fall, we should--as Gibbon himself suggested--marvel instead at how long Rome stood! Who are we, who measure our own nation's history by barely more than a couple of centuries, to fault a civilization that prospered for ten: five under the Republic and another five under the Empire?

If, in fact, the Roman system did prevail for so long, what principles were responsible for its phenomenal success? The first of these dynamic principles was the concept of materialism as a basis for the good life. Though materialism may be denigrated as the philosophy of superficial minds, such criticism is a luxury the affluent can best afford. To those who lack sufficient food, clothing, and shelter, or who are denied the pleasures life could otherwise provide, materialism justifiably has powerful appeal. Earlier empires than Rome's had concentrated wealth in the hands of the few: the ancient Egyptian masses, for example, were more familiar with mud than gold. What the Romans did was invert the economic pyramid, making a higher standard of living for the masses a respectable social goal. Indeed, more than military force, it was the popular distribution of wealth combined with the Empire's material success that persuaded the peoples of foreign lands to accept Roman authority in exchange for a participatory share in global peace and prosperity.

To achieve their imperialistic ends, the Romans practiced pragmatism, doing what actually worked rather than philosophically speculating on what might be best. Never filled with Greek-style introspective self-doubt, the self-assured Romans confidently projected their sense of themselves on the world they conquered, remaking that world and its inhabitants in their own image. Rather than committing themselves to the exploration of man's internal nature, they dedicated themselves to the mastery of the external world through the application of force and the imposition of law. They believed, as their epic poet Vergil asserted, that their mission was "to spare the submissive, and crush in war the proud" in order to civilize the uncivilized. Combined with an innate respect for authority and a capacity for disciplined subordination, their talent for organization enabled them to govern an ethnically and politically diverse and complex world.

That very complexity led the Romans to replace the old and cumbersome constitutional machinery of the Republic with the streamlined efficiency of one-man rule, first under Julius Caesar and then, following his assassination, under his heir Augustus and the later emperors of Rome.

America's Founding Fathers, who knew their Roman history well, saw in the despotic excesses of one-man rule an historic flaw they were determined to exclude from their constitutional design for a new nation. As the nineteenth-century English historian Lord Acton wisely observed: "Power tends to corrupt and absolute power corrupts absolutely." However, a less well known observation of his, inspired by Plato, bears even more scrutiny if we are to understand the fall of Rome: "Every institution tends to perish by an excess of its own basic principle."

If that is true, if all institutions are in fact undone by an excess of those very principles that first bring them into being, what were the formative principles that precipitated Rome's fall? First was the hunger for power. Originally a collection of mud and thatch huts overlooking a pre-Forum swamp, prehistoric Rome was raided by early barbarians and later dominated by Etruscan kings. From their culturally advanced Etruscan masters, the primitive Romans learned two lessons: the meaning of affluence and the means to achieve it: imperialistic conquest. Over-throwing their Etruscan overlords in 509 B.C., the Romans went on to become the rulers of Italy until by the middle of the Second Century B.C. they had become the political and military masters of the Mediterranean. With each successive conquest, the Romans felt more secure from external threats, but each successive conquest confronted them with new and potentially hostile neighbors who had to be defeated if Rome was to remain secure. The psychological need for control to compensate for a sense of insecurity conditioned by their earlier history led them to precarious heights of global domination from which they eventually fell, in part from what historian Paul Kennedy has termed "imperial overstretch," in part from the corruptive concentration of power that ruling such territory required, and in part from the appetite of barbarians living at the edges of the Empire who hungered to partake in the feast.

That appetite, and the actions the barbarians took to gratify it, was incited by a second ultimately destructive principle of Roman civilization: the concept of materialism as the basis for the good life. To put it simply, Rome became a victim of jealousy over its own success. But the materialistic success Rome long enjoyed had internal as well as external ramifications. An emphasis upon sensual gratification and individualism eroded the principles of self-sacrifice and communal dedication which had characterized the early Republic and had made empire-building possible. The word Vergil once used to signify those missing qualities was pietas, a word from which our own word "piety" is derived but which meant far more to the traditional Roman: a patriotic willingness to subordinate one's own needs and desires to the higher purposes of the state. The spiritual core of traditional Roman culture was further eroded by the very growth of Rome's empire, which made its citizens--once dwellers on a mere Seven Hills--feel small and insignificant within the parameters of a worldwide state.

Because Roman religion, always cold and authoritarian, offered them little psychological comfort, many turned to increasingly popular Near Eastern cults that promised a better life in a world beyond. One of those cults, Christianity, became the most popular because it also spoke of a God who, unlike remote Jupiter, knew and loved each individual soul in an increasingly impersonal world. Materialism, as it turned out, had lacked the necessary nutrients to satisfy the deepest cravings of the human soul. As the centuries wore on, time itself contributed to Rome's decline, intellectually distancing and spiritually alienating people from civic virtues that their forebears had readily comprehended and held dear. Indeed, as the size of the empire grew and the number of its citizens increased, ethnic diversity challenged even the most basic definition of what being a Roman meant.

Thus the quest for military dominance and the drive for materialistic gratification ultimately led to Rome's defeat.

Since the days of Rome's Golden Age under Augustus, two thousand years have passed. Today, though it is not technically an empire, the United States stands as the world's preeminent superpower, both militarily and economically. But how long will that preeminence last? It would be naive to imagine America will be exempt from that universal law of history that to date has dictated the decline and fall of every great power, including Imperial Rome. The only relevant questions are these: when will that fall take place, and for what reason or reasons?

The advantage of studying ancient history is that it is closed-ended and offers the historian the opportunity to analyze events long-ago completed. But the disadvantage is that the passage of time has eliminated so many of the sources such an analysis requires in order to be valid. For the historian of modern times the situation is reversed: sources are abundant (indeed, sometimes too abundant), but perspective can be absent because the historian is often enmeshed in the very events he or she is trying to understand. In effect, it is easy to "predict" the fall of Rome since we already know when it happened! It is far harder to predict an American tomorrow.

Thus it would be facile to point to America's present national debt or current trade imbalance or latest unemployment figures as sure signs of impending national decline. Economies can turn around, for the worse or for the better. After all, America survived a Great Depression. Nor must we be too quick to point to today's terrorist hordes as the modern equivalent of the barbarians of old. They may well be, but it is too soon to tell. (The historians of 4006--assuming there are any--will surely know.) Besides, as we have already seen, empires are more truly felled by internal weaknesses than by forces that are external.

Let us therefore look within, searching--as Lord Acton would have us do--for those formative principles that, if carried to excess, might someday cause the institution of the United States to perish.

Though our quest could take us in a number of directions, surely one of the most direct would be the route to America's founding document, The Declaration of Independence. There we read: "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are Life, Liberty, and the pursuit of Happiness." By declaring that God meant man not only to live but also to be free, the Declaration identified freedom as a fundamental principle of our nation, a principle that would be commemorated a century later in New York harbor by a Statue of Liberty that--in the words of poet Emma Lazarus--greeted oppressed "masses yearning to breathe free."

Freedom, however, is by definition a condition, not an end in itself, for an individual can be free to do anything (including evil) or free to do nothing at all. Liberty carried to excess becomes license, and license, if widespread, can undermine a nation's future. With this thought in mind, philosopher Viktor Frankl once proposed that a matching statue be erected on America's WestCoast, a Statue of Responsibility, because without an abiding and equal sense of civic responsibility no freedom-loving nation like ours can survive.

After Life and Liberty, the Declaration of Independence cited the pursuit of Happiness. Yet by what means is happiness to be pursued, and by what means attained? Thanks to the abundant natural resources of America and the talents of its people, the answer history gave was one the ancient Romans would have quickly understood: material progress.

Energized by the Industrial Revolution, America's inventiveness soon fulfilled its promise, giving its citizens the highest standard of living of any nation in the history of the world. But in gratifying personal desires, prosperity simultaneously threatened the instinct to sacrifice for something higher than oneself. Today, some might cynically argue that the ultimate loyalty of Americans is not to God or country but to consumption itself. Indeed, it is no accident that "the economy" rather than national character is currently taken as the truest indicator of our country's political health. Moreover, just as Roman emperors used "bread and circuses" to keep their masses submissive, today's self-serving leaders can use the addiction to material comfort for their own advantage by manipulating the hopes and fears of the electorate.

The engine of the Industrial Revolution was technology, and technology embodied something else the Romans would have readily grasped: power, the power to transform the quality of everyday life even as it enhanced military capabilities. The nature of technology, however, is intoxicating, for it can delude us into thinking we have more control over our lives than we actually do, while at the same time it subtly directs our desires and narrows the range of our options. To paraphrase Thoreau, we unknowingly become the tools of our tools.

In the nineteenth and twentieth centuries, advanced technology was primarily located in factories, but today it is present in our homes and on our very persons. Unlike the technology of an earlier era that operated at mechanical speed, contemporary technology is largely electronic and operates at a velocity approaching the speed of light. In response to technology's electronic demands, we now struggle to survive in an atmosphere of artificially induced urgency. In consequence, American culture has become a "hyperculture," a society warped by stress and pathologically addicted to speed. And as individual lives spin out of control, the centrifugal force also tears at the structure of families. Meanwhile, electronic media have made Americans the most entertained culture in history. Yet as critic Neil Postman cogently argued, the citizens of the United States may in fact be "amusing themselves to death" by allowing seductive images to distract them from the urgent issues that demand their undivided civic attention.

Moreover, just as the ancient Romans were alienated from the founding values of their nation by the passage of centuries, so are we diminished by the passing decades. Like the objects in the rear-view mirror of a speeding car, the facts of American history are rapidly becoming tinier and tinier in our minds. Survey after survey has revealed how little the graduates of America's high schools and colleges know about the history of their nation and the sacrifices that that history required, in part because even the finest schools no longer require courses in American history and in part because our culture focuses on the present rather than the past. In short, due to "the power of now" we have become victims of cultural amnesia, the social equivalent of Alzheimer's disease. Yet just as an individual needs memories to retain a sense of personal identity, so does a nation need them in order to survive. As historian Bruce Catton wisely observed: "The great American story is above all other things a continued story. It did not start with us and will not end with us." But if we allow the cord of that continuity to be broken, our national future will surely be imperiled.

The internal weaknesses of our nation, and its susceptibility to collapse from within, are effectively summed up in the report of the United States Commission on National Security/21st Century, chaired by former U.S. senators Warren Rudman and Gary Hart. In part, the report states:

The upshot of the changes ahead is that Americans are now, and
increasingly will become, less secure than they believe themselves to
be. The reason is that we may not recognize many of the threats in our
future.... They may consist, too, of an unraveling of the fabric of
national identity itself.... Compared to the present, everything will
be hurled into relative motion.... As a consequence, we may be headed
for a considerably more stressful cognitive environment.... Democracy
may be hollowed out from the inside.... The growing sense of power
that will accrue to many individuals ... could corrupt moral balances
and erode moral discipline.... It could threaten the balance of
healthy civic habits that have long sustained democratic communities.



Such words might well have been written in Latin fifteen or more centuries ago, and indeed echo the sentiments another senator, Cicero, expressed during the dying days of the Roman Republic.

Optimists might inject at this point that if it took the Roman Empire five centuries to fall, America still has about three centuries to go. (1) But such optimism fails to take into account the technologically induced acceleration of history itself within the context of an electronically connected world that instantly relays events and demands instant decisive reaction. It also fails to take into account modern technology's awesome destructive capabilities. The dramatic changes that once took centuries might require only years or, perhaps, only seconds.

 
At 11/12/2008 7:01 AM, Anonymous jerry said...

The Roman Empire was ruled by emperors. We have none. They were continuously engaged in conquering in order to gain more territory and keep others from conquering them. They assassinated each other to gain control of the Empire. We don't do that. We have elections. No doubt, their war machine took up a greater portion of their GDP then our current engagements in the Middle East, and it appears that their conclusion maybe soon to be defined. Military strongmen don't rule our nation, or control civilian leadership. Influence-yes. Control-no. Roman culture was so badly destroyed, and their lives so disrupted by devastation, that they fled to other places. We are intact. We may see an increase in the human struggle, yet we are still intact.

Obama has a vision of how to address our current problems. And once he takes office, we will be able to evaluate his success or failure. Right now, there is no vision other than to blatantly make the banksters rich and richer before their Commander in Thief goes back to Texas.

 
At 11/12/2008 8:57 AM, Blogger Justin_n_IL said...

Obama is nothing more than a Manchurian cadidate. A new eloquent voice to dupe the masses. PLAIN And SIMPLE.... HE is a joke!!!!!!!!!!!!!!!!!!! Tool of the elite used to calm down the masses. All tings will continue just where Bush was headed.

 
At 11/12/2008 9:24 AM, Anonymous Chetlv said...

All good information here but what I really want to know is what kind of dog are the Obamas getting. It's gotta be a hypoallergenic breed because the 10-year old Malia is allergic to dogs. I guess i'll have to go watch CNN some more. :-)

 
At 11/12/2008 12:40 PM, Anonymous Chetlv said...

Martin Hennecke - US May Lose Its 'AAA' Rating

 
At 11/12/2008 9:51 PM, Anonymous jerry said...

On this blog, I may be a fairly lone voice saying there might be a chance that we could see change that could turn the country away from a depression. I don't disagree that a powerful recession is on its way. I have felt that way since 2000. I was speaking about it, at that time. No one would pay attention or believed me. I would say that by 2006 or 7 it will come. It came. It is here. And more is yet to arrive.

I will suspend judgement until I see the signs that nothing will change. Nothing has happened yet.

Manchurian Candidate? I don't believe that to be the case. Can anyone tell me any nation's leader that does not have a great many people, with power, who want to be heard and heard clearly?

What I see now, with the subversion of the tax laws giving these bank mergers a tax right off, allowing for consolidation of their banking powers, Paulson's unitary executive powers, bail-outs doing nothing but giving banker balance sheets fatter numbers so the executives get nice bonuses and raises is more like what one would see from a Manchurian Candidate managed by the top-tier corporate oligarchs.

If Obama fails to lower the trade deficit, and improve the economy, and more, then I am predicting there will be a major war with China, which might be nuclear. I would say we will see WW3. So, if you have young kids, or young grandkids, you might want to move out of the country and onto higher ground, so to speak.

It is extremely important, if otherwise, to push Obama, and I really mean push, to move the nation, quickly, in the right direction. If not, then ...........

A desperate person (nation) does desperate things.

 
At 11/13/2008 3:51 PM, Anonymous Anonymous said...

Jerry, Justin ~

Have you guys ever read this?

http://www.newswithviews.com/Yates/steven.htm

"The Real Matrix" (7 part essay soon to be a book)

A little long, but an excellent read, especially since you brought up the Manchurian Candidate Justin. And the writer is pretty credible.

-Raul

 
At 11/13/2008 5:19 PM, Anonymous Virgo said...

The G-20’s Secret Debt Solution

by Larry Edelson 11-13-08
Larry Edelson

If you think this weekend’s G-20 meetings in Washington are only about designing short-term fixes to the financial system and regulatory reforms for banks, hedge funds, brokers, mortgage companies and investment banks … think again.

Behind the scenes, a far more fundamental fix is being discussed — the possible revaluation of gold and the birth of an entirely new monetary system.

I’ve been studying this issue in great depth, all my life. And given the speed at which the financial crisis is unfolding, I would be very surprised if what I’m about to tell you now is not on the G-20 table this weekend.

Furthermore, I believe the end result will make my $2,270 price target for gold look conservative, to say the least. You’ll see why in a minute.

First, the G-20’s motive for a new monetary system: It’s driven by and based upon this very simple proposition …

“If we can’t print money fast enough to fend off another deflationary Great Depression, then let’s change the value of the money.”

I call it …
The G-20 may propose devaluing all currencies, including the U.S. dollar and the euro.

“The G-20’s Secret Debt Solution”

It would be a strategy designed to ease the burden of ALL debts — by simultaneously devaluing ALL currencies … and re-inflating ALL asset prices.

That’s what central banks and governments around the world are going to start talking about this weekend — a new financial order that includes new monetary units that helps to wipe clean the world’s debt ledgers.

It won’t be an easy deal to broker, since the U.S. is the world’s largest debtor. But remember: Debts are now going bad all over the world. So everyone would benefit.

Fed Chairman Ben Bernanke … Treasury Secretary Paulson … President Bush … President-elect Obama … former Fed Chairman Paul Volcker … Warren Buffett … and central bankers and politicians all over the world agree a new monetary system is needed.
The G-20 may propose devaluing all currencies, including the U.S. dollar and the euro.

So they’ll start hashing out the details to get the new financial architecture deployed as quickly as possible.

If you think I’m crazy or propagating some kind of conspiracy theory, then consider the historical precedent …

To end the Great Depression in 1933 Franklin Roosevelt devalued the dollar via Executive Order #6102, confiscating gold and raising its price 69.3%, effectively kick starting asset reflation.

Only this time, it won’t be just the U.S. that devalues its currency. The world is too interconnected. Instead, the world’s leading countries will propose a simultaneous and universal currency devaluation.

This time, they will NOT confiscate gold. There would be riots all over the globe if they even mentioned the “C” word.

But they don’t have to confiscate gold. Here’s one scenario …

They cease all gold sales and instead, raise the current official central bank price of gold from its booked value of $42.22 an ounce — to a price that monetizes a large enough portion of the world’s outstanding debts.
Internal Sponsorship

That way, just like in 1933, the debts become a fraction of re-inflated asset prices (led higher by the gold price).

And this time, instead of staying with the dollar as a reserve currency, the G-20 issues three new monetary units of exchange, each with equal reserve status.

The three currencies will essentially be a new dollar, new euro, and a new pan-Asian currency. (The Chinese yuan may survive as a fourth currency, but it will be linked to a basket of the three new currencies.)

The new fiat monetary units would be worth less than the old ones. For instance, it could take 10 new units of money to buy 1 old dollar or euro.

New names would be given to the new currencies to help rid the world of the ghost of a system that failed. Additional regulations and programs would be designed and implemented to ease the transition to a new monetary system.
The IMF would be at the center of the new monetary system.
The IMF would be at the center of the new monetary system.

The International Monetary Fund (IMF) would implement the new financial system in conjunction with central banks and governments around the world.

Keep in mind that the IMF is already set up to handle the transition, and has had contingency plans allowing for it since the institution was formed in 1944.

Included in the design and transition to a new monetary system …

A. A new fixed-rate currency regime. Immediately upon upping the price of gold and introducing the new currencies, a new fixed exchange rate system would be re-introduced. The floating exchange rate system would be tossed into the dust bin along with the old currencies.

This would kill any speculation about further devaluations in the currency markets, and drastically reduce market volatility.

B. To sell the program to savers and protect them from the currency devaluation, compensatory measures would be enacted. For instance, a one-time windfall tax-free deposit could be issued by governments directly to citizens’ accounts, or, to employer-sponsored pensions, to IRAs, or Social Security accounts.

Income taxes may subsequently be raised to pay for the give-away, or a nominal global type of sales tax could be enacted to help pay for the new system and the compensatory measures.

C. Additional programs would be designed to protect lenders and creditors. Lenders stand a much higher chance of getting paid off under the new monetary system — but with a currency whose purchasing power would now be a fraction of what it was when the loans were originated.

So programs would have to be designed to help lenders offset the inflationary costs of their devalued loans, probably via the tax code.

Naturally, all this is a bit more complicated than I’ve spelled out above. But that gives you a big-picture outline of what the plan could look like. And I think major changes like these are going to be set in motion at this weekend’s G-20 meetings in Washington.

Would they work?

Yes. They would help avoid a repeat of the deflationary Great Depression. But don’t expect even a new monetary system to put the U.S. or the global economy back on track toward the high rates of real growth that we’ve seen over the last several years. That’s simply not going to happen. Not for a while.

Instead, I’m talking about a massive asset price reflation, negative real economic growth in the U.S. and Europe — but continued real GDP gains in Asia.

The Big Question: What gold price would be legislated to reflate the U.S. and global economy?

I can’t tell you what gold price the G-20 would ultimately agree to. But here’s what they will be looking at …

* To monetize 100% of the outstanding public and private sector debt in the U.S., the official government price of gold would have to be raised to about $53,000 per ounce.

* To monetize 50%, the price of gold would have to be raised to around $26,500 an ounce.

* To monetize 20% would require a gold price a hair over $10,600 an ounce.

* To monetize just 10%, gold would have to be priced just over $5,300 an ounce.

Those figures are just based on the U.S. debt structure and do not factor in global debts gone bad. But since the U.S. is the world’s largest debtor and the epicenter of the crisis, the G-20 will likely base their final decision mostly on the U.S. debt structure.

So how much debt do I think would be monetized via an executive order that raises the official price of gold? What kind of currency devaluation would I expect as a result?

I would not be surprised to see the G-20 monetize at least 20% of the U.S. debt markets. THAT MEANS …

* Gold would be priced at over $10,000 an ounce.

* Currencies would be devalued by a factor of at least 12 to 1, meaning it would take 12 new dollars or euros to equal 1 old dollar or euro.

The return of the Gold Standard?

“But Larry,” you ask, “how could this be accomplished when we no longer have a gold standard? Further, are you advocating a gold standard?”
If the G-20 monetizes at least 20% of the U.S. debt markets, gold could easily hit $10,000 an ounce.
If the G-20 monetizes at least 20% of the U.S. debt markets, gold could easily hit $10,000 an ounce.

My answers:

First, you don’t need a gold standard to accomplish a devaluation of currencies and revaluation of the monetary system.

By offering to pay over $10,000 an ounce for gold, central banks can effectively accomplish the same end goal — monetizing and reducing the burden of debts, via inflating asset prices in fiat money terms.

Naturally, hoards of gold investors will cash in their gold. The central banks will pile it up. At the same time, other hoards of investors will not sell their gold, even at $10,000 an ounce. But the actual movement of the gold will not matter. It is the psychological impact and the devaluation of paper currencies that matters.

Second, I do NOT advocate a fully convertible gold standard. Never have. There isn’t enough gold in the world to make currencies convertible into gold. It would end up backfiring, restricting the supply of money and credit.

What should you do to prepare for these possibilities?

It’s obvious: Make sure you own some core gold, as much as 25% of your investable funds.

Also, as I’ve noted in past Money and Markets issues, you will want to own key natural resource stocks, and even select blue-chip stocks that will participate in the reflation scheme.

For more details and specific recommendations to follow, be sure to subscribe to my Real Wealth Report.

Best wishes,

Larry

 
At 11/13/2008 8:52 PM, Blogger Randy said...

Excellent article Virgo - Larry is definitely thinking outside the box. A new, plausable perspective that I had not thought about.

Thanks

 
At 11/14/2008 12:09 AM, Anonymous jerry said...

Interesting article. I am skeptical that such a plan would be agreed upon by the G-20. It might seem logical in some ways, but be prepared for a full scale revolution and riots throughout the country. If you think the Watts Riots were bad, this would be worse.

A 12-1 revaluation of the dollar? No way. I would suggest everyone fire bomb proof their lives.

The DOW would drop 2-3000 points in just one day! The stock market would have to be shut down, and every bank closed to keep depositors from running on them.

It just won't sell to the people. Remember, many thought Sarah Palin would make a good president!!!

 
At 11/14/2008 8:47 AM, Anonymous Chetlv said...

Jerry,

They don't have to sell to the people. They would probably let the financial system collapse first, then the sheople will be begging for a new system. A 12:1 revaluation of the dollar is better than no dollar at all.

 
At 11/14/2008 8:48 PM, Anonymous jerry said...

Charlie Rose interviews Steven Pearlstein from the Washington Post on the G-20

http://www.charlierose.com/view/interview/9549

Check out the Rose website and look at those interviews. There is one on oil and energy-30 mins. but terrific.

 
At 11/14/2008 8:57 PM, Anonymous jerry said...

Charlie Rose with Bill Ackman

http://www.charlierose.com/view/interview/9549

 
At 11/15/2008 11:28 AM, Anonymous jerry said...

It is so hard to fathom that China, Russia and other nations would give up their sovereignty, and economic power and control very easily. I don't see ANY solutions anytime soon. They want to punish Bush and the US. Before they give up a thing, they will want to see us squirm and suffer. They are not going to let Bush off the hook. But, what is interesting is that many of these countries are in a real bind. China will see millions losing their jobs as their manufacturing shrinks and they will have to deal with that. Yet, their GDP has two more years of strength.

The cocky body language of Bush was so disgusting. This fool got us in this situation, yet displays an image that he is innocent.

I cannot believe that some of these national leaders would accept a one-world regulator of national banks without a price to be paid.

I am so interested in hearing the press conferences that come out on Sunday. The market will really be listening!

This is the oil link--worth the time to watch:
http://www.charlierose.com/view/interview/9547

 

Post a Comment

Links to this post:

Create a Link

<< Home

me