Market Update: GDP Revised downward today; U.S. growth contracted 2.9% in first quarter. This is the biggest decline in GDP during an economic expansion since 1956. (Marketwatch, 6/25/14) RICK’S COMMENTARY & ARTICLES: Sometimes I just want to scream “Wake Up America!” The 4th of July is right around the corner and should serve as a reminder of how fragile our Republic is. The U.S. economy is only 6 years old! Our economy was completely different in 2007. It is a different world today. You cannot compare our current economy with anything in the past because we’ve never been in this bad of shape. Money is paper, paper is not wealth. Its interfering with the free-market system. We know that the free market works, we’ve known that for many years. Each time the government sticks its nose in it, it upsets the free-market system, throwing it out of balance. Our Federal Reserve is manufacturing paper, printing money as it were, by selling bonds. The Federal Reserve buys the bonds that the treasury issues. Its the same thing as printing money. The general public does not understand this. It is like turning on a printing press. Therefore you have a huge money supply chasing fewer goods. As a consequence youre going to have inflation, possible massive hyperinflation. We’re not there yet but here’s a fact you do not hear in the news: In the past 8 months, inflation as reported by our government has gone from 1% to 2%. That is a huge increase in such a short period of time. That’s what the government is reporting, …we all know it is actually higher. Please see the 2 articles below. They are both excellent. We need to learn from history and go back to what works. I hope I do not offend anyone with the second article; it is not my intention. I think Thomas Sowell is one of the great minds we have today and I read and agree with most of what he says. I am very patriotic and upset over the direction of our government is headed. Please call me if I can be of any help…Rick (*see info on Iraq situation below articles) cid:[email protected] Viewpoint: The Scariest Question in Modern Economics Viewpoint Commentary by Mike Getlin Posted June 23, 2014 by Mike Getlin Here it is: What happens when significant inflation is a simultaneous global phenomenon? Over the last year or so, I’ve spent a lot of time researching and discussing the complacency in global markets. As quantitative easing and other government intervention programs around the world have corrupted natural market cycles, trillions of dollars have been allocated to riskier asset classes. Markets have lost the ability to assess risk and thus have lost the ability to accurately price themselves. Of course they have, because that’s exactly the goal of government stimulus programs. Most investors and analysts know that there is a major shift in asset values that can, should, and will occur at some point in the not-too-distant future. At some point, stocks will correct and bond markets will get slammed by interest rate risk. Some investors will lose, others will win, and we will hear all about it on the news. But that’s not the real risk that has been quietly growing day by day for the last six years. We also know that inflation will come eventually. It always has, and it always will. Inflation is a cyclical, monetary phenomenon that comes either with expansion of the money supply or with significant economic growth. In fact drawing historical parallels to other periods of rampant money creation (Germany, Zimbabwe, Argentina, etc.), there is nothing in the history of economics to tell us that we will not have inflation resulting from the stimulus and money supply expansion that has occurred. In other words, it’s coming, and we all know it. The real question is what will happen when inflation occurs across the globe, simultaneously. If you’ve never read about the Weimar Republic in the early 1920’s, take a moment and familiarize yourself. (en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic) There were many accounts of Germans trying to fill train cars with their near worthless currency to take it out of the country where it could be converted, before it became even more worthless. The idea that you could have to wake up one day and convert all your assets to trainloads of bills, each worth a fraction of a penny in today’s terms, is a scary thought. What’s even scarier is the thought that once you loaded up the train, you’d have nowhere to go. That’s because for the first time in history, we have created a massive, worldwide, simultaneous expansion of the money supply. That means that simply crossing the border with your money wouldn’t do you any good. Of course there would be no trainloads because now we do it all with the click of a mouse. Still, every time a society has experienced hyperinflation in the past, those with significant assets have at least had the option of trying to get their money out of the failing system. This time however could be quite different. If global hyperinflation takes hold, there may be nowhere to go…nowhere with the possible exception of gold and silver. Truth be told, I can’t tell you what precious metals prices are going to do in the next six months. What I can tell you is that I don’t care. It’s the big picture that worries me, and that’s why I accumulate gold. I can’t imagine the lucky few folks living in the Weimar Republic who actually owned good amounts of physical gold cared much what happened to the gold price back in 1919. Had they bought it then, they would have paid somewhere around 170 Marks per ounce. By 1923, it was worth north of 50 billion Marks per ounce. Stepping back and looking at gold prices in this context makes the “trading range” look a little less important. If you’d like to do some more reading on simultaneous currency devaluation, take a look at Jim Rickards’ Currency Wars. (amazon/dp/1591844495/?tag=googhydr-20&hvadid=40066469647&hvpos=1t1&hvexid=&hvnetw=g&hvrand=2217714696024755771& 2nd article… THE IMPERIAL PRESIDENCY A lame duck country? Thomas Sowell sees BHO presiding over the dismantling of constitutional government author-image Thomas Sowell Thomas Sowell is a senior fellow at the Hoover Institution in Stanford, Calif. He is the author of 28 books, including Dismantling America and Basic Economics: A Common Sense Guide to the Economy. Pundits are pointing to President Barack Obama’s recent decline in public opinion polls and saying that he may now become another “lame duck” president, unable to accomplish much during his final term in office. That has happened to other presidents. But it is extremely unlikely to happen to this president. There are reasons why other presidents have become impotent during their last years in office. But those reasons do not apply to Barack Obama. The Constitution of the United States does not give presidents the power to carry out major policy changes without the cooperation of other branches of government. Once the country becomes disenchanted with a president during his second term, Congress has little incentive to cooperate with him – and, once Congress becomes uncooperative, there is little that a president can do on his own. That is, if he respects the Constitution. President Obama has demonstrated, time and again, that he has no respect for the Constitution’s limitations on his power. Despite his oath of office, to see that the laws are faithfully executed, Barack Obama has unilaterally changed welfare reform laws, by eliminating the work requirement passed by Congress during the Clinton administration. He has repeatedly and unilaterally changed or waived provisions of the Obamacare law passed by Congress during his own administration. President Obama has ordered Border Patrol agents not to carry out provisions of the immigration laws that he does not like. We see the results today in the tens of thousands of illegal immigrants entering the country unimpeded. President Obama’s oath of office obviously means no more to him than his oft-repeated promise that “you can keep your own doctor” under Obamacare. Why do we have a Constitution of the United States if a president can ignore it without any consequences? The Constitution cannot protect our rights if we do not protect the Constitution. Freedom is not free, and the Constitution is just some words on paper if we do not do anything to those who violate it. What can ordinary citizens do? Everything! Theirs is the ultimate power of the ballot that can bring down even the most powerful elected official. The most important thing the voters can do is vote against anyone who violates the Constitution. When someone who has violated the Constitution repeatedly gets re-elected, then the voters are accomplices in the erosion of protection for their own freedom. Laws without penalties are just suggestions – and suggestions are a pitiful defense against power. After voters have failed to protect the Constitution, the last-ditch remedy is impeachment. But Barack Obama knows that he is not going to be impeached. Who wants to provoke a constitutional crisis and riots in the streets? And, worst of all, end up with Joe Biden as president of the United States? Some cynics long ago referred to Barack Obama’s choice of mental lightweight Biden to be his vice president as “impeachment insurance.” With neither the Constitution, nor the voters, nor the threat of impeachment to stop him, Barack Obama has clear sailing to use his powers however he chooses. Far from seeing his power diminish in his last years, President Obama can extend his power even beyond the end of his administration by appointing federal judges who share his disregard of the Constitution and can enact his far-left agenda into law from the bench, when it cannot be enacted into law by the Congress. Federal judges with lifetime tenure can make irreversible decisions binding future presidents and future Congresses. If Republicans do not win control of the Senate in this fall’s elections, a Senate controlled by Majority Leader Harry Reid can confirm judges who will have the power to extend Barack Obama’s agenda and complete the dismantling of constitutional government. Barack Obama can, as he said before taking office, fundamentally “change the United States of America.” Far from being a lame duck president, Obama can make this a lame duck democracy.
Posted on: Wed, 25 Jun 2014 17:37:34 +0000