SigmaSeek

Ron Paul vs. Mitt Romney: Who do you trust?

noreply@blogger.com (Jimmy Lien) — Tue, 18 Oct 2011 23:49:00 +0000

This would be better as an info graphic overlaid with logos of the contributors. Unfortunately I do not have the talent. If you do and would like to contribute, post a comment on the blog.

Jim

Inflation Targeting gone Amok

noreply@blogger.com (Jimmy Lien) — Wed, 14 Sep 2011 11:55:00 +0000

I read the following quote from a facebook post from a friend who majored in Economics:

A slightly higher inflation target promotes the incentive to spend money, rather than hold onto it.

There is absolutely no doubt that the above statement is true. I have two questions in response to the above statement:

1. What is inflation?

Inflation is the expansion of the supply of money AND credit marked to market. Basically its the entire supply of currency available to transact in the economy. Inflation is NOT the rise in prices. Rising prices are a symptom of inflation. In a capitalistic economy prices tend to actually fall over time which would increase the purchasing power of currency. Unfortunately we do not have a capitalistic economy. We have a banker run economy.

2. What causes inflation?

Bankers cause inflation by monetizing unsecured "assets". Treasury debt is unsecured. Underwater residential mortgage backed securities are partially unsecured. SBA loans guaranteed by the Treasury are unsecured. The Federal Reserve is the greatest monetizer of debt since it is accountable to no one and can only be shut down by the US Congress, which ceded its Constitutional authority to regulate the value of its currency. Typically if a bank lends unsecured and the loan defaults, the bank will lose a lot of money. Therefore it will only make unsecured loans to customers with a minuscule probability of default.

Housing prices, commodities, and oil rose dramatically in price during the 2003-2008 boom as a result of unsecured lending, mostly in housing. Price spirals were caused by monetary inflation which were then backed by fraudulent lending to those who could not afford to pay debt service. These price signals suggested that people who had houses could cash out "equity" in their houses to fund further consumption, increasing the supply of credit.

In 2008, the margin call came. The frauds were realized and prices began spiraling down because CREDIT was not available and the unsecured credit evaporated. The reason banks began failing is because they had lent too much without collateral. That is they may have lent money with collateral, however the presumed value of the collateral in reality was reliant upon a fraud perpetrated by the Federal Reserve in order to signal people to spend money they didn't really have.

Monetary inflation is in effect an invisible tax that depreciates the value of your earned money. Monetary inflation is determined by an organization owned by private banks. Price inflation is a result of monetary inflation.

My next question is this: WHO should control the supply of money?

I'll start with who should not. Bankers and Academics should not control the supply of money. They've had their turn and failed miserably. See Historical CPI Since 1800 and focus on what happened to price inflation after the Federal Reserve was started in 1913. Governments also are typically poor managers of the supply of money since they tend to want to emit bills of credit to pay for political projects and wars.

This leaves the market to define what money is. Gold and silver have typically been the form of money chosen by the market. Although many other commodities or products could be used as money. Credit can be issued under gold and silver and in the Historical CPI since 1800 chart under the gold standard, the level of price inflation was effectively zero over time.

E-CON-onmists had no effect on the supply of money. As a result prices were stable, older people didn't lose value on their savings, and banks didn't blow up quite like they did in the Great Depression, Savings & Loan crises, and the recent credit crisis. They still blew up, but there was no risk backstop by the government and a central reserve bank. JP Morgan was basically the reserve bank in the late 1800s. When interbank lending dried up, JP Morgan would either lend or take over banks at incredible rates of return.

Inflation targeting is blatantly unlawful under the Federal Reserve Act which mandates stable prices. It is also immoral since it is a theft of purchasing power with policies set by banker's acting in their best interests. The problem this country is in is due to too much credit. Inflating the supply of credit only exacerbates the problem of less demand because more currency is spent covering debt service rather than for productive purposes. The simple solution to this mess we're in is to end central planning of the economy by bankers and return to a market based currency.

Gold is Money

noreply@blogger.com (Jimmy Lien) — Wed, 14 Sep 2011 01:20:00 +0000

Everything you need to know about money came from the original money center banker:

“Gold is money. Everything else is credit.” -J.P. Morgan, testifying to Congress in 1912.

The Tea Party has been Hijacked

noreply@blogger.com (Jimmy Lien) — Wed, 14 Sep 2011 01:17:00 +0000

The Tea Party began as a grassroots movement for limited government, lower taxes, and support for the rule of law as outlined in the US Constitution. Anyone who tells you otherwise is a fool.

Unfortunately, it has been hijacked for political expediency by charlatans and hacks such as Sarah Palin, Michelle Bachman, and Rick Perry. There is no other explanation for Palin and Bachman other than they are either appealing to dumb people or old men hoping to have an attractive woman president because they both speak illogically. Rick Perry is a political opportunist whose record is full of corporate cronyism and liberal tendencies.

Last night's "Tea Party Express" debate on CNN was a sad display from beginning to end. Wolf Blitzer didn't ask the originator of the Tea Party, Dr. Paul, about his key issues; Ending the Federal Reserve, Ending the Income Tax, Healthcare (he is a doctor for god's sake). This was incredibly frustrating to see the strategy being played out by the corporate media. The strategy was originally to ignore Dr. Paul. Now it appears that the strategy is to attribute Dr. Paul's policies to the other candidates who are advocating (for political expediency) some of the same positions that Dr. Paul has been advocating for over 30 years.

The saddest part of the debate was in the clip below. To see gun-toting, gay-bashing, "god"-loving people like Rick Santorum (google his last name... seriously hilarious) support endless murdering of people in the middle east by failing to see the logic of Dr. Paul's argument that our policies were "blowback" from our meddling in their politics was a disgusting sight to see. It is however not unexpected given the state of our public schools that have no respect for the Constitution (where is Federal education permitted in the Constitution?). Logic is not taught in any public school class until at least upper high school and usually university, and even then it is often an elective.

If Japan bombed us and killed 3,000 Americans, what would we do? Fight back. Isn't it logical that if thousands of Muslims had been killed or maimed by our interventions in their affairs that they would do the same?

I suspect that over time, Dr. Paul's insight, derived from Osama bin Laden himself will gain traction. It may take time, but the realization that the US is causing many of its own security problems will hopefully come to light. Until then, I suggest Dr. Paul create a new "Party" for this next phase of Liberty because someone stole his first party.

9/11 - 10 years later

noreply@blogger.com (Jimmy Lien) — Sun, 11 Sep 2011 15:22:00 +0000

I was a college sophomore on 9/11/2001. I had learned about the incident from some classmates. Of course after class I was glued to the TV the rest of the day and was both saddened and infuriated by the events.

As a young impressionable person, I tended to believe much of the "news" and "facts" spouted by the media. As I've gotten older however, reality, truth, and logic have made me more and more infuriated at our government than the people who committed the murder of over 3,000 people on that fateful day.

The people who planned the 9/11 events were more like revolutionaries than terrorists. I actually believe they have succeeded in their mission which was very much like the mission of Afghani's in their war versus Russia although on a much larger scale. The Afghanis wanted to draw the Russians into a long expensive guerrilla war that would destroy morale and bankrupt the Russian treasury. The Afghanis won and the US has either not learned that lesson or those with an interest in war have bought themselves compliant politicians to continue the war.

The US has been dragged into a multinational "war" on terrorism that has no measuring stick. There can be no end to a war with an undefined "enemy". The war has costed thousands of lives, trillions of dollars, and most importantly the destruction of the law. Under Bush and Obama the Constitution and its protections on the Free Speech, Right to Carry, and Habeas Corpus have been utterly trampled.

People of this country have sacrificed their rights under the Common Law to fight against people who are pissed off that we have meddled in their politics, invaded their countries, toppled their leaders, and killed their brethren. If another country had done what we have done to their countries we would do the same thing. Consider what you would do if the Russians blatantly stole land from Texans and gave it to the North Koreans or helped incite a war between the US, Canada, and Mexico. These ideas are of course ridiculous, but it is exactly what the US has done by meddling in the affairs of the Middle East.

The US was heavily involved in the creation of the Jewish state which has essentially made the majority of Islamic Middle Easterners hate us. The US aided Osama bin Laden in defeating the Afghanis. The US deposed the Shah of Iran and supported the Ayatollah Khomenei who has become part of the "Axis of Evil". The US provided weapons of mass destruction to Sadaam Hussein to fight the Iranians. The US has fomented seeds of hatred for the past fifty years and unfortunately Middle Eastern culture has very long memories.

Purveyors of the status quo believe that the US is not at fault for meddling in the Middle East, inciting war and violence, and helping to support and install ruthless dictators. They probably do this knowingly and willingly unless of course you are listening to Michelle Bachman or Sarah Palin whom are complete idiots. Barack Obama is a smart man who knows political strategy very well so he knows the consequences of the actions, but he knows better how to control media spin and put forth a message that misdirects the truth. Bush was also effective at controlling the neo-conservative base's thoughts.

9/11 was a terrible consequence of injecting US intelligence, military, and taxpayer resources into affecting political outcomes around the world for political benefit. It was indirectly caused by years of oppressing people in the Middle East by our interventionist policy. So yes, I am saying that the murder of over 3,000 innocent people in the Twin Towers, Flight 93, and the Pentagon was the result of many years of deeply flawed and misleading American foreign policy.

The longer US citizens tolerate this, the more freedom we lose, the poorer we become, and the more vulnerable we become to increased hatred toward us. If we continue killing people in Afghanistan, Pakistan, and Iraq, more and more Muslims will become disenchanted with our policies and join the ranks of "radical" Islam. What choice do they have? This will inevitably endanger thousands more Americans at some point in time. The agencies entrusted with finding these people can not track every one. It is an impossible task.

What must we do? Remove ourselves from Middle Eastern politics, pledge not to intervene unless attacked, and apologize for the actions of our past politicians. Muslims are tolerant people if we get off their backs. We must require all levels of our governments to follow the laws of their jurisdictions and importantly the US Constitution and all Common Law. This means right to the fruits of our labor, freedom of speech, freedom from unwarranted search and seizure, and the presumption of innocence. This takes a sea change of enlightenment from the current populace of sheep. It requires the realization that "Hope and Change" and "Saddam has WMDs" were blatant lies and misdirections. We need new leadership who focus on the only common good: freedom.

David Stockman likes Ron Paul

noreply@blogger.com (Jimmy Lien) — Thu, 18 Aug 2011 17:12:00 +0000

This is a great video on Yahoo! Finance.

The real question is whether Dr. Paul will run as a third party candidate if he does not win the Republican nomination. I think the answer to that is yes. He's all in this time around since he's not running for re-election for his house seat. He has nothing to lose other than sleepless nights from the threats to his family that the mainstream candidates will no doubt surface much like they did with Perot. I think he is smart enough to know this is as well.

Ron Paul is in to win and I'm sure he has enough gold lying around to not care that much about the idiots that don't vote for him in the case that he loses. He is going to gain followers no matter what. Either way he has already won.

Chart-based trading behind big market swings - Yahoo! Finance

noreply@blogger.com (Jimmy Lien) — Wed, 10 Aug 2011 22:08:00 +0000

See ignorant article blaming technical analysis for the market drop.

Chart-based trading behind big market swings - Yahoo! Finance

Of course it't not because the government is stupid, European banks are insolvent, Bank of America is insolvent, etc. etc.

London burns

noreply@blogger.com (Jimmy Lien) — Tue, 09 Aug 2011 01:43:00 +0000

So London has been burning for the last several days. Apparently the event that triggered it was a shooting by police of a black male. If that was the case here in the US, every major city would burn at least once a week.

I think what's really happening is people are growing weary of the effects of the effective serfdom that global governments are putting them under. The great recession has persisted despite the bailouts of the biggest fat cat bankers and the lower and middle classes have nothing to show for it.

Governments govern at the consent of their people. It seems that the people are giving their governments a warning from the Mideast to Greece to Spain to London. If the US government doesn't stop pissing on the people I'm afraid that you'll start seeing scenes like this popping up at home. My guess is the government is already prepping for this. They may be assholes but they aren't stupid.

Bill Maher - So close yet still an elitist clown

noreply@blogger.com (Jimmy Lien) — Sat, 06 Aug 2011 15:58:00 +0000

Bill Maher is a liberal/progressive. He supports Democrats and detests Teabaggers. He hates corporatism. These are not bad things. Unfortunately he is another victim of incorrect logic spewing out criticisms of symptoms rather than causes.

The biggest mistake he makes is that assuming Tea Partiers support corporatism. In fact, he is absolutely wrong. Tea Partiers support the end of corporatism and the end of subsidies for EVERYONE including oil companies and farmers. Republicans AND Democrats however are professional corporate whores. Bill mentions that Republicans are whores to oil companies and banks. This is true. However Democrats are whores to health insurers and banks. Bush was a corporate whore to health insurers and drug makers as well with his implementation of the prescription drug benefit. He was a whore of Wall Street and big oil. Obama is a corporate whore to Wall Street (see campaign contributions and his ball licking of Lloyd Blankfein and Jamie Dimon). Obama is a corporate whore to insurance and the drug lobby (see Fascist-Care). Obama is a whore to corporate offshoring (see GE Jeff Immelt ball licking).

The sooner he realizes that both liberals and conservatives are whores to corporatism, the sooner he will realize that he is wrong and his logic is completely fucked. Maybe he has realized this and is just spouting off his Tea Party hatred for ratings (a distinct possibility). That's fine. His business is entertainment.

The fact is that progressivism promotes theft through taxation of production and redistribution from those who have earned to those who want something for "free". By supporting whores like Obama, he is promoting a leechfuck society where corporations effectively tax the middle class to support the lower and upper classes. It's quite a perverted system. That's not to say the Bush and the Neocons do not promote a leechfuck society. They do, although they focus their fascist leanings on the military industrial complex. They both support the credit creating facilities of the Fed.

The Tea Party is actually a grassroots libertarian movement that supports the end of corporatism and a reduction of support for the lower and upper classes in favor of a level playing field. Yes the Tea Party has been hijacked by the Guns, Gays, and God politicos, however my guess is that the majority of the Tea Party grassroots don't give a shit about gay marriage and what god thinks. They do however support gun rights wholeheartedly. How else do you protect yourself from a faceless bureaucracy promoting a fascist system? Individual gun rights are the only protection.

So Bill, I'm sure you are a closet case libertarian, but you have found your niche as a progressivist entertainer and Tea bagger basher. I know you've figured out that Progressivism is not possible without corporatism and you say you detest corporatism. You must be terribly conflicted as an entertainer and logical thinker. You've become the Limbaugh/Hannity of the left. But you're rich so what do you care?

Healthcare Disruption? Not a chance!

noreply@blogger.com (Jimmy Lien) — Sun, 31 Jul 2011 22:27:00 +0000

Modern Healthcare is completely fucked up. No amount of medical record digitization or web services will improve an industry that focuses on covering up symptoms rather than fixing problems. The quote below sums up the problem quite nicely.

There’s a clear understanding that the industry must shift its focus towards outcomes from “do more, bill more” orientation. If ever there was an industry that should understand that it’s more effective to address underlying conditions than treating the symptom, it should be healthcare.

If you look at the decline of health in the modern era, it is mostly due to nutrition. Obesity, heart disease, high cholesterol, high blood pressure & Type II diabetes are examples of problems caused by nutrition. However, most allopathic physicians will prescribe poison... er... medicine to mask the problem and make the symptom go away. In the mean time, the cause of the problem festers and grows, slowly killing the person.

Unfortunately, it's very profitable to the healthcare industry to sell drugs and lobby for socialist healthcare and make gobs of money while providing negative value in the long run. So no matter what happens in terms of technology, if the incentives are completely fucked up, so will be the outcomes. Disruption has no chance unless the goal of the service is to solve the root causes rather than the symptoms of the problem.

US Interest Coverage Ratio

noreply@blogger.com (Jimmy Lien) — Sat, 30 Jul 2011 19:23:00 +0000

The liars in Washington would like you to believe that a default on Treasury debt is imminent. The truth is that the US takes in ~$2.1-2.2 trillion in tax revenues and pays ~$.5 trillion in interest costs. This means that the US has $1.6 trillion in cash flow available to pay other obligations after the legally required interest.

So the key statistics:

Revenue: $2.1 trillion
Interest: $.5 trillion
Cash for Discretionary Spending: $1.6 trillion

Interest Coverage Ratio: 4.2x

This is why treasuries are pricing in ZERO risk of default. The treasury still has plenty of money to pay bond holders. It just doesn't have enough to pay for three wars and socialist healthcare (Social Security, Medicare/Medicaid, Obamacare).

I hope the debt ceiling gets raised

noreply@blogger.com (Jimmy Lien) — Thu, 28 Jul 2011 23:44:00 +0000

... so the value of my precious metals rise.

It seems that this country is on the course to Greece, Spain, Portugal, and Germany. Unfortunately I don't really see a currency that has any sort of stability. I'm guessing other intelligent people don't either. So upon passage of the debt ceiling we will likely see precious metals rise and bonds start to sell off unless the Fed decides to start becoming the primary buyer of debt to keep the facade of a stable currency.

The lying continues...

Fire your Hedge Fund Manager: Bond Markets Would Applaud a U.S. Default

noreply@blogger.com (Jimmy Lien) — Tue, 26 Jul 2011 16:50:00 +0000

Bond Markets Would Applaud a U.S. Default: Hedge Fund Manager | Breakout - Yahoo! Finance

Good lord. No bond holder would like any default. Plus he's in the camp of "no debt ceiling increase = default" which shows just how dumb he is. If you have money with this hedge fund manager you should withdraw and find a smarter one.

I'm going to reiterate that the US has zero chance of debt default in the next 5 years and 5 year treasuries are priced as such.

Bill Maher is an intelligent dolt

noreply@blogger.com (Jimmy Lien) — Mon, 18 Jul 2011 21:50:00 +0000

While I like Bill's stance on Ron Paul, I have a hard time listening to most of the other crap that comes out of his mouth. Unfortunately he's the same thing as Hannity, O'Reilly, or Limbaugh except liberal towing the Democrat party line of indirect theft from the middle class to provide for the lower and upper class. The Republican party tows the line of direct theft from the middle class to provide for the upper class. Neither is good and therefore while Bill is intelligent for liking Ron Paul, he is a dolt for towing a party line of theft from the people it purports to help and redistribution to those it supposedly abhors.

Senate to Stay in Session Until Debt Limit Passes - Bloomberg

noreply@blogger.com (Jimmy Lien) — Mon, 18 Jul 2011 21:50:00 +0000

Senate to Stay in Session Until Debt Limit Passes - Bloomberg

Sick of the lying yet?

The prospects of a US default on its sovereign debt in the near term is zero. The US has more than enough revenue to pay its legal debt obligations. Politicians however lump in non-legal obligations and discretionary spending into the obligations to scare constituents into believing that a default is imminent if the debt ceiling is not raised.

If the debt ceiling is not raised the US will be forced to outlay only what it collects in tax revenues. As a result, the yield on bonds will fall because of the sanity of that policy. However the politicians are threatening the opposite result will occur mostly to suck off the big banks.

My bet is that the debt ceiling will be raised without much in terms of spending cuts, interest rates will zoom higher, the ratings agencies will downgrade the US credit rating, and the probability of increased cash constraints will rise.

Its sad to see such rampant ignorance running our fiscal and monetary affairs. Who is John Galt?

Fix the Fed: Monetary Policy that works (better)

noreply@blogger.com (Jimmy Lien) — Mon, 04 Jul 2011 14:11:00 +0000

Ron Paul likes the gold standard. And he likes it for good reasons. Unfortunately, I think his positions lately on the Fed are doing more to hurt his credibility than to help it and he's squandering his opportunity in his role as a monetary policy subcommittee chair to get at the real problems behind the Fed. Here's why:

1. The Federal Reserve as a corporation owned by private shareholders has obvious conflicts of interest in performing independent monetary policy. Everything that the Fed has done, especially the last several years has not been in the interests of helping out the little guy and improving the economy. Instead, it has acted very predictably in saving many of its shareholders and their interests. ZIRP, QE I, QEII, TARP, FASBA manipulation, et all were all intended to slowly improve the balance sheets of the big banks through manipulation and front-running of the Treasury auctions. Big broker/dealers would buy newly issued treasuries and the Fed would buy these "On-the-run" securities at higher prices and the big broker/dealers would earn a spread to improve their retained earnings. This is why big banks have been much more successful at exiting TARP than smaller regional and community banks.

Now the impact of this policy is pretty easy to see. With money, when one wins through manipulation, another gets screwed. So the obvious loser is the US Government aka taxpayers. Taxpayers have suffered though monetary debasement all to improve the banks that caused the crisis in the first place.

2. A centralized clearing bank is not necessarily a bad thing. Much of the useful function of the Federal Reserve is to act as a clearing house and payments intermediary. This actually provides value, although in the free market this occurs anyways. The Fed is just a government protected monopoly on clearinghouses.

3. Credit money v. Gold money. This is the big debate. Credit money CAN work if there are penalties put in place for non-compliance and they are STRICTLY enforced. When I mean it CAN work is that the money supply will not inflate at the whims of central economic planners. You wouldn't see 2% inflation targets since the goal would be a zero inflation policy. Inflation would also be measured as a money supply issue rather than a consumer price issue that is easily manipulated.

The problem right now and the general problem with government sponsored entities is the lack of an enforcement mechanism. The Federal Reserve blatantly disregards its mandate for stable prices. Its obvious conflict of interest is to maintain the health of its shareholder banks first. Since congress created the Fed, it is congress' job to monitor the actions of the Fed to see if they are following these mandates and if they work. This is where Dr. Paul's 'Audit the Fed' bill comes in. An annual audit should be mandatory to determine if the Fed is in compliance with the powers enumerated by congress and whether its policies are acting towards compliance with its dual mandate.

The mandate issue is also a big problem. The full employment mandate has been used an excuse for the Fed saving European banks and participating in some very complex derivative transactions. The problem with the full employment mandate is that full employment FOLLOWS stable prices. In a volatile price environment (up or down) the price of labor has to be decreased to account for price risk. Business will be slow to hire when input costs are very sensitive. However, when prices are stable, businesses can budget for more full employment and stable input costs.

4. Finally, legal tender laws should be abolished. The Federal Reserve Note is the legal tender of the US government which basically forces everyone else to use it as currency when the constitution says gold and silver should be the money of the states. These legal tender laws lead to a whole host of issues that essentially force people into what would and should be voluntary interaction with the federal government.

So what should the action plan be? Here's a few items that I believe would be important in making the Fed more people friendly than big-bank friendly:

1. Add enforcement provisions to the Federal Reserve act that allow the federal government, the states, or the people to bring criminal charges against Federal Reserve agents that do not act within their enumerated powers.
2. Audit the Fed annually
3. Remove the employment mandate and enforce a ZERO INFLATION POLICY defined as the total supply of marked to market credit in the system.
4. The US government should purchase all equity of the Federal Reserve banks and make it illegal for any private corporation or individual to purchase equity in the central bank. This will remove any conflict of interest that leads to monstrosities like TARP and QE.

Stocklytics has a historical stock price API

noreply@blogger.com (Jimmy Lien) — Sun, 05 Jun 2011 23:31:00 +0000

Very interesting that Stocklytics has a historical stock price API. I've been wanting to program a web based trend following system for a while now and it seems that this will be a tool that can let me do that. Very exciting! Unfortunately I'm slammed with other projects so I might have to wait a bit.

Here's what I would envision:

1. Determine a portfolio of stocks to trade through a web or mobile dashboard
2. Run a Cron job each day get historical prices for each stock from the Stocklytics API
3. Run a Cron job to run your algorithm on the historical prices
4. Run a Cron job to determine if a trade needs to be placed and send orders at a certain time to your broker through the broker's API.

Blowback Defined: Militants Tighten Grip on Yemeni Coastal Town - NYTimes.com

noreply@blogger.com (Jimmy Lien) — Sun, 29 May 2011 17:56:00 +0000

Militants Tighten Grip on Yemeni Coastal Town - NYTimes.com

In yet another example of Blowback, Al Qaeda is now in control of a Yemeni Coastal town. The US has supported the Yemeni dictator for 30 years while he has oppressed his people. Al Qaeda sees him as a pawn of the US and has decided in the wave of middle east unrest to revolt.

This is a true cluster much like Egypt, Libya, Syria, Iraq, Afghanistan, and Iran. The US just needs to get the hell out of Middle East politics because we can't seem to do anything right. The longer we stay there, the more Al Qaeda we create and the larger threat we cause for ourselves at home.

This Memorial Day we need to remember the people who fought and died for THIS republic; not some far away conquest in conflicts for big egos and big corporations.

Rand Paul and the Patriot Act

noreply@blogger.com (Jimmy Lien) — Sat, 28 May 2011 15:28:00 +0000

If you haven't seen the news, Rand Paul filibustered passage of the Patriot Act renewal and pissed off a lot of people like Harry Reid, John "Boner" Boehner, and fellow Kentucky senator and minority leader Mitch McConnell. Rand simply wanted to be able add amendments to this blatantly unconstitutional law (See 4th Amendment).

So it seems to me that every Democratic senator that filibustered the previous renewal in 2005/2006 is a damn liar. We all know that most Republicans are damn liars too but people keep voting for them and get more pissed off. The truth is that there are only very few purveyors of truth and liberty in congress and Rand Paul is one of them.

Obama's War against Seniors and the Poor

noreply@blogger.com (Jimmy Lien) — Sat, 30 Apr 2011 15:55:00 +0000

If you haven't seen silver lately, you have been sleeping while it has doubled over the last 9 months or so.

This is interesting in several ways. Traditionally I'm a trend follower, but I purchased silver as insurance against rampant government stupidity. As a trend follower, this would have been a great trade since the price broke out in late 2010 and has been rising ever since. As an insurance policy, it's also performing well given Obama's war against seniors and the poor by promoting fiscal irresponsibility at the Federal level and allowing the Fed to monetize on the run debt to benefit banksters. Those in low and fixed incomes are being trashed right now by these policies. Sadly, these low and fixed income Americans will likely re-elect the very man that is screwing them over because they were publicly educated. Very Machiavellian.

At some point this insanity will end, either by choice or by force (bond market blowup a la Greece). Until then, stores of value (precious metals) will continue to perform well. I'm really trying to find some reasons to sell my holdings, but can't find any, so here I sit watching the greatest country in history lie, cheat, steal, and defraud its way into complete lawlessness. Pretty sad to watch.

Keynes v. Hayek

noreply@blogger.com (Jimmy Lien) — Thu, 28 Apr 2011 20:37:00 +0000

Round 1

Round 2

Gold: The Great Equalizer

noreply@blogger.com (Jimmy Lien) — Wed, 20 Apr 2011 01:43:00 +0000

I'm not a big fan of sovereign currencies. At this point, banks use sovereign currency exchange as a huge source of fee income. on top of this, most currencies have no intrinsic value and are backed by slowly deteriorating sovereign credit. Plus most countries have legal tender laws that prohibit the use of other valuable commodities/currencies for the purposes of taxation. These legal tender laws create barriers to capital flows and promote the use of depreciating currency as a means of exchange.

A gold standard does not necessarily do much good when there is a sovereign currency. As Bretton Woods proved, a government will deface its currency in spite of a stated exchange rate. Sovereign currencies collapse because governments are inherently financially irresponsible. A gold currency however makes sense since gold is valuable as a store of human effort which is what currency represents anyways. So in a way I'm in favor of a one world currency that would level the playing field and reduce the number of games that sovereigns can play to oppress their own people. Gold is the liberator of individuals from their tyrannical governments and is the Great Equalizer in trade and capital flows.

When a central bank collapses...

noreply@blogger.com (Jimmy Lien) — Sun, 17 Apr 2011 15:35:00 +0000

Jesse's Cafe American had a neat article on the collapse of Belarus' monetary system and more importantly the quote of Ayn Rand regarding paper money which I reproduce below:

Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked, ‘Account overdrawn.'

What is interesting is that the whole process of asset stripping citizens has taken nearly 100 years in this country starting with the creation of the Federal Reserve. At first the Fed was required to provide value for the notes it issued as every note was backed by gold or silver. However, with the collapse of Bretton Woods, and the creation of true fiat dollars, the process accelerated as money was not redeemable for anything of value. Credit on the taxpayer is only worth money if the government does not spend beyond its ability to receive tax revenue. As we can see in the value of paper money versus commodities, the creditworthiness of citizens is becoming less and less valuable.

The only holders of wealth left in this country will be those who hold gold and silver just like every monetary collapse from Weimar to Zimbabwe to Argentina. It seems crazy to think that the originators of outright fascism had put a plan in place 100 years ago that would slowly strip wealth from the country and transfer it into a very smal part of the populace, however the plan is succeeding regardless of the rise of a small libertarian movement.

With little hope coming from the corporate bought politicians in Washington, the probability of a US monetary system default becomes more and more likely. Unfortunately, it is impossible to time the default as we have seen with Greece, Portugal, Ireland, Iceland, Spain, and Belarus. The math however never lies. When anyone, a country, a business, or an individual fails to live within its means and its ability to service its debt, default occurs with serious repercussions. The best option for a country is to repudiate its debt, constitutionally revoke its central bank's charter, and allow for the private minting of currency rather than nationally controlled currency. Gold/Silver credit works just like paper money credit, except when a default occurs, the credit is backed by something that can be liquidated, whereas defaulted paper credit is money that comes from where it originated, thin air.

Budget Deal Reached. Disappointment Ensues.

noreply@blogger.com (Jimmy Lien) — Sat, 09 Apr 2011 15:49:00 +0000

I was looking forward to a government shutdown. People would realize that 800,000 "non-essential" workers are just that: Non Essential.

The $39 Billion deal is a drop in the bucket compared to what really needs to be done considering the run rate of $1.6 trillion in expected deficits for the year. The government credit card will continue to be swiped for the foreseeable future... until it can't. See Greece, Ireland, Spain, & Portugal for examples. Unfortunately, the return on additional government debt to GDP is marginally small or negative at this point. So rampant money printing by the Fed through various schemes like QE1, QE2, and guaranteed debt is unlikely to contribute to the fallacy of "economic growth".

The only budget that remotely makes sense is the one proposed by Rand Paul. It would reach a balanced budget in 5 years by cutting spending (including defense spending) and removing entirely useless government programs such as the Department of Education, HUD (partially responsible for inflated housing prices), and Department of Commerce. All of these could have been left with the states instead of having money sloshed around with a scrape taken by useless federal bureaucrats. Paul Ryan's budget is a pathetic excuse for a budget, making several unrealistic assumptions (i.e. 4% unemployment), and still only balancing the budget in nearly 20 years. 20 years!

Here's a proposal that I could deal with:
1. Close the Department of Education and return control of education to Local governments
2. Close down Fannie Mae & Freddie Mac and end all government interference of the housing market
3. End all student loan guarantees. Peter Schiff explains how Student Loan guarantees inflate the the cost of education for the benefit of big banks.
4. End the financing of undeclared wars in Iraq, Afghanistan & Libya
5. End the EPA. All environmental claims could be resolved through enforcement of property rights.
6. Cut defense spending by 25%... at least. Reduce the number of countries in which the US has military bases by 50% within 5 years. The US military is not the hired mercenary of the world as many countries seem to believe.
7. End the financing of the War on Drugs & focus more on treatment of substance abuse
8. End the Federal Reserve's monopoly on legal money & repeal the 16th amendment that provides the guarantee of income to the Fed.
9. End the FDA. This agency is responsible for deaths of many thousands of people per year due to allowing dangerous poisons into the public through drugs. It also pushes a carb heavy diet (for the benefit of the agricultural lobby) that has increased the incidence of diabetes, obesity, and heart disease over the past 30 years.
10. End the Department of Energy & fold nuclear research into the Department of Energy (as proposed by Rand Paul's budget).
11. End the Department of Homeland Security. This department's tasks could easily fall within the jurisdiction of the CIA & FBI.
12. End all international assistance. Does it make sense that we're borrowing money to give to other countries at all? Charitable organizations can easily perform this task (see Red Cross)
13. Social Security, Medicare & Medicaid reform
14. End & Defund Obamacare. Obamacare benefits only the large healthcare companies (can you say 30 million new customers?) at the expense of the lower and middle class.
15. End the Department of Agriculture. What exactly does this department do anyways?
16. End the NSF. This organization rarely provides the public any useful science.

The only departments that really should or could exist are the DOD, DOT, State Department, & Treasury Department. Everything else is really just a waste of resources. Unfortunately, the largest components of the budget are the hardest to politically tackle: Defense, Social Security, Medicare, Health & Human Services, & the Treasury. These departments will need across the board cuts to ensure that the federal budget is a sane and responsible one that spends within its revenues.

401(k) plans suck!

noreply@blogger.com (Jimmy Lien) — Thu, 24 Feb 2011 00:46:00 +0000

It's true: 401(k) plans suck!

401(k)s are wealth creation vehicles... for the asset managers. 2% annual fees plus 6% real annualized inflation means that you need to make 8%/year just to break even. 401(k)s are a huge government enabled Wall Street scam pulled over all of the middle class.