He also is reported to have lamented that “there is too much news on the Internet”, or words to that effect. How anyone in his position could be against the almost unlimited learning and educational possibilities that come from using the Internet. He must clearly have a different agenda, and he does. In my opinion, like the rest of the “Elites”, he would like to dominate our thinking, and our resulting actions. Someone has to be in charge over the masses, and it is them!

By The Daily Bell

Bill Clinton said it a month ago at a luncheon I attended: “There is too much information on the internet. The only way a website gets ahead is by disseminating polarizing information for its own profit. Free speech needs to be more consensus driven. We need to go back to the Big 3 networks.” ... Paraphrase – Dilence Sogwood/DB feedbacker/ 12.22.2011

Dominant Social Theme: Too much information is bad for society.

Free-Market Analysis: Bill Clinton (left) wants to return to the days when three big television networks explained the Way the World Worked.

According to “Dilence Sogwood,” a financial-industry DB feedbacker, Clinton spoke at a luncheon he attended and made these and other provocative points. What Clinton is revealing in these speeches he is giving around the world is that there is a historic struggle going on between free-market thinkers and those, like Clinton himself, who are attempting to maintain and justify the status quo.

We have no direct or corroborating evidence that Dilence Sogwood’s statements are accurate; however, we have a history of his feedback going back nearly a year. In that time, we have never had a sense that he was anything other than a feedbacker who wished to share information about freedom, investing and elite social themes.

For purposes of this article, we will treat them as legitimate “sourced” statements. His feedback on Clinton’s luncheon talk is important in our view because it provides a window into how Clinton and others who work for the Anglosphere elites are grappling with what we call the Internet Reformation.

The statement mentioned in Sogwood’s feedback (above) is especially startling because in making it, Clinton reveals himself as pure utilitarian. He also reveals inadvertently the pervasiveness of the Anglosphere power elite control in the US.

The Big Three media networks (ABC, CBS and NBC) did not exist on their own but were supported by a vast corporate network that included virtually every large company and government agency germane to the 20th century. Clinton is not just calling for a renewed social compact; he is demanding a full-fledged return to the status-quo ante. More on this below.

It is the Internet that is upsetting the power elite’s status quo and making it increasingly difficult for them to realize their long-held dream of total world government. This one-world order is to be run by a handful of self-selected elites.

These intergenerational, familial elites control hundreds of trillions of dollars apparently via central banks around the world. This is part of the world’s current “secret government.” The way the world is run (and is to be run) is via mercantilism; the great families are to continue to control government (and money) behind the scenes.

To realize this strategy is not easy. It cannot simply be done by brute force. Because government is an essential part of world control, the Anglosphere power elite needs to ensure government’s expanding power as well as its credibility. If a credible argument cannot be made for government, then the elites cannot rule.

And so circulating around the globe are charismatic “helpers” like Bill Clinton, funded via book contracts, foundation donations and speaking engagements with all the resources they need. They are in perpetual motion, building up a consensus for the mercantilist system that the elites intend to fully impose. They are the paid helpers – enablers – of the world’s elites.

One could argue, in fact, that Clinton has become the new David Rockefeller, when it comes to the US. Such men are valuable because they are able to muster support, cogently, for the state and the power elite that runs it behind the scenes.

Tony Blair is another one. Once they have proven their worth and skill by winning and maintaining high political office, these individuals are essentially employed by the powers-that-be to spread the elite’s dominant social themes.

The points that Sogwood provides us are in line with those made in many other Clinton speeches. But they are interesting because they are provocative and perhaps “edgier” than the statements that Clinton ordinarily provides at large public forums where he is recorded and filmed. From what we can tell, this was a private luncheon and not reported (at least not extensively) by the media.

What it tells us is that Clinton and other elite associates and enablers don’t have any real idea about how to turn the tide away from the enlightenment that has occurred as a result of a technology that is as fundamental as the Gutenberg Press itself.

The Internet is radically changing the context and belief structures of the time, as we have predicted many times before. How do we know the Internet is in a sense winning the day? In part because the arguments being mustered against the free-market orientation of many in the alternative media are far more convincing than the arguments of the elite’s paid apologists.

It is true, of course, that the elites can try to force the planet’s billions to go along with their schemes, but pure force is most likely a recipe for long-term failure. It is absolutely imperative to build a believable (moral) argument for the system that the elites want to impose.

Clinton and others like him are most important to this effort. They are in a sense the foot-soldiers of global governance. Here is a full summary of the points Clinton made, sent to us from Sogwood on Dec. 8, along with our comments:

• Too much Internet news. It divides people for profit. Must get back to the Big 3 networks.

This is an astonishing sentiment and one that is immensely revealing. It reveals a perspective regarding news and information that is profoundly patrician. What Clinton seems to believe is that the purpose of information and education is not to enlighten but to contribute to social harmony.

The trouble is that someone must still DEFINE the constitution of such harmony. If people don’t have the requisite information, then how are they supposed to do so? The unspoken conclusion is that “people” won’t have to worry about it. Bill Clinton and others will do the job for them.

Which leads to another reasonable question: Where are Clinton and the rest of his elite circle getting THEIR information and their view of the world? Somebody, somewhere, must define what an “undivided” society is and to what views it will subscribe. Clinton’s idea apparently is that he will, and you won’t.

• The free market doesn’t work. Look at all the science that NASA spills out. Look at the success of Brazil (wait, what?). We need public-private partnerships (fascism).

This is an interesting comment because it shows the paucity of examples available to Clinton when he wants to make a point about the dysfunction of the free market. In truth, there are no (or hardly any) free markets in the world today. But free markets are the solution, not the problem; they are the antidote to what the elites have in store.

Clinton points to NASA as a good example of a mammoth bureaucracy that “spills out” science. But there are legitimate questions surrounding every aspect of NASA’s science, from its moon landings to its use of questionable data to support so-called global warming.

The former US president points to Brazil as a success story within the paradigm of a public/private partnership. But Brazil’s economy is central banking driven. The success that Clinton refers to has to do with monetary stimulation driving a boom that will eventually turn into a bust. To use Brazil (or any of the central-banking-run BRICs) as an example of the free market at work is fairly tenuous, in our humble view.

Clinton calls for public/private partnerships but it would seem this is basically just a way of justifying government control (or at least guidance) when it comes to the private sector. In fact, the marketplace does not need “guidance.” It is hard to think of any significant advances that were initiated by government; it is hard to think of any industries that were driven forward successfully by government.

• The Tea Party is the reason the Congress has a 10% approval rating (said as if it were a fact).

The initial Tea Party was an outgrowth of US libertarian Congressman Ron Paul’s ability to reach more and more people via the Internet with his free-market, anti-military empire arguments. While the Tea Party has in a sense been taken over by mainstream, elite-oriented politicians, this has not affected the underlying paradigm at work.

It is true that the Tea Party has probably contributed to the low esteem in which Congress is currently held. But this a ramification of education and reality, not the result of some sort of propagandistic trick. We would argue the Internet has merely revealed the fundaments of so-called democracy throughout the West, and the results are predictable.

• We need bold leadership in Europe to end this crisis. The problem is populism. Leaders of rich countries have to transfer wealth, and leaders of poor countries have to transfer sovereignty.

This is some statement! It is truly a recipe for government control of every part of one’s life. Greece is to give up freedom; the Germans are to give up money. In this way, the EU itself is to be saved and the empire further entrenched.

Whether Clinton’s proscription will work in the era of the Internet is questionable, however. It is certainly not a solution to anything except the elite’s problem of how to generate regional building blocks from nation-states on the way to world government.

• Bush was as much a big government guy as he [Clinton] was. (Presented as if we all buy into the left-right paradigm).

It is true that President George W. Bush was a “big government guy.” The Internet has helped make it very clear to people that political parties throughout the West are simply two or three fingers of the same fist.

What is more interesting is that, in making such a statement, Clinton may be seen as a touch defensive over “big government.” Perhaps he was simply trying to make the point that all solutions essentially lead back to large government and its (ruinous) methodologies. He was, in other words, trying to stress the inevitability of the current system.

We have looked at other Clinton speeches online. He is obsessed with making the point that communitarianism (“it takes a village”) is the way that people relate best to each other. He may be correct but we would argue that the sort of communitarianism that he is discussing works best in groups of 150 or fewer people.

What Clinton and other elite surrogates are doing is trying to build “villages” of hundreds of millions – and then billions – of people. It is a ludicrous argument; what works for relative handfuls of people has no utility in such fantastic populations.

Nevertheless, Clinton will keep trying. You can see how they take these small “c” verities and attempt to expand them grandiosely here, “Do Mandela’s Elders Violate Human Rights?” and here “World’s ‘Elders’ Claim All Is Well in Ivory Coast.”

Our thanks to Dogwood for the summary of Clinton’s private remarks. What they seem to show most clearly is how seriously the power elite take the “struggle of ideas” and how little intellectual firepower it can muster in their defense.

Conclusion: This should be encouraging to anyone who has used the Internet to educate himself or herself about the advantages of freedom and the true prosperity that can only be discovered via free markets and the human action they allow and support. (my emphasis)

By the Daily Bell

By permission The Daily Bell

www.thedailybell.com

Stop the Second Bailout Package!: EU Should Admit Greece is Bankrupt – Der Spiegel   “Greece is bankrupt and will need a 100 percent debt cut to get back on its feet. The bailout package about to be agreed by the euro finance ministers will help Greece’s creditors more than the country itself. EU leaders should channel the aid into rebuilding the economy rather than rewarding financial speculators for their high-risk deals.”

Obama’s Anti-Jobs, Anti-Growth Budget – Pittsburgh Tribune Review    “Just at the federal level, not counting local and state taxes, this double taxation on dividends and capital gains, combined with Obama’s proposed tax increases, means the federal government would be receiving a larger share of the income from investments than those who did the investing.”

Over-Regulated America: The Home of Laissez-Faire Is Being Suffocated by Excessive and Badly Written Regulation – Economist   “America needs a smarter approach to regulation. First, all important rules should be subjected to cost-benefit analysis by an independent watchdog. The results should be made public before the rule is enacted. All big regulations should also come with sunset clauses, so that they expire after, say, ten years unless Congress explicitly re-authorises them.”

Greek Rescue Leaves Europe Default Risk Alive – Bloomberg   “Europe is still struggling to avoid the threat of default as investors warned Greece will soon risk violating the terms of its second bailout in three years.”

By Addison Wiggin for The Daily Reckoning

“Worried that the Federal Reserve and the U.S. dollar are on the brink of collapse,” says a report at CNNMoney, “lawmakers from 13 states… are seeking approval from their state governments to either issue their own alternative currency or explore it as an option.”

“In the event of hyperinflation,” warns Glen Bradley, who has sponsored one such proposal in North Carolina “depression, or other economic calamity related to the breakdown of the Federal Reserve System… the state’s governmental finances and private economy will be thrown into chaos.”

And with that we find ourselves in peculiar territory this morning.

We’re on a train to D.C. to meet with fellow conspirators — gentlemen from the ‘left’ and the ‘right’ — who share in the belief gold must be reintroduced to the global monetary system. It’s become an unintentional hobby of sorts.

The meeting is classified at the moment, so we’ll reserve comments for another time.

But our current mission is only part of what’s making us uneasy.

We begin today by briefly exploring what our line of work is all about. Scientists who’ve studied probabilities and plotted them on a chart typically find a bell-curve distribution — in which the most likely events bunch up in the middle of the curve.

But a funny thing happens out at the ends of the curve, where the rare events are registered.

“Scientists have found small bumps and bulges,” explains Bill Bonner. “Things that were not expected to happen very often actually happened more than they thought.”

“’Hundred-year floods,’ for example, happened every 88 years. ‘One in a million’ shots hit their mark every 700,000 or so. Statisticians refer to these odd bulges on the extremities of bell-shaped curves as ‘fat tails.’ Instead of tailing off as they are supposed to, the rare events seem to swell up where you don’t expect them.”

We are in the business of anticipating fat-tail events — while the “mainstream media” sit in the middle of the bell curve. Click the graph to enlarge and you’ll get the idea:

The problem is that since 2008, “fat-tail events” — like the collapse of the U.S. dollar and the dismembering of the Federal Reserve system — have become harder for us to stake out.

We were once derided as “doom and gloomers.”

Now doom and gloom has become downright fashionable. Heck, we see the National Geographic Channel debuted a show last night visiting survivalists in their bunkers… and here we are carrying on with business as usual in the “belly of the beast.”

With all that in mind, we daresay that declaring the mother of all financial bubbles might be passe. Don’t get us wrong: It’s still inevitable the bubble will pop.

But today we throw in the towel and make a concession: The monetary mandarins will successfully inflate the bubble a few months longer. And the peace we expect to break out once they’re defrocked of their power and prestige will have to wait for another day.

“The Federal Reserve Open Market Committee (FOMC) has made it official,” writes Daily Reckoning regular Charles Kadlec at Forbes: “After its latest two-day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years.”

And that’s if everything goes according to the plan… based on the Fed’s now-formal target of 2% annual inflation.

Likewise, the Federal Reserve’s latest figures on consumer credit jumped in December — to an annualized 9.3% rate, on top of November’s 9.9%.

We’ve seen nothing like it in 10 years — not since the Fed poured gasoline on the fire first ignited by the tech bust in late 2001 made it possible for automakers to offer 0% financing.

Yes, student loans are a big part of the growth, as they’ve been for many months now. But auto loans are up big, and even credit card use is growing again.

The Wall Street Journal talks to a bank president in Colorado who says loan volume is up because more people now qualify and they’re willing to take on more debt.

The paper also profiled a couple in Pennsylvania financing a new SUV. “We had looked at our budget, and it was something we knew we were comfortable affording,” said Heather Davidson. They’re buying a 2012 Nissan Armada for $57,000.

Presumably they got every bell and whistle available, since the manufacturer’s suggested retail for the base model Armada is $40,275. But hey, why not splurge and trick the thing out? It’s easy payments of $650 a month for the next 72 months, the paper says.

Six years? Oy… (my emphasis)

By Addison Wiggin for The Daily Reckoning

http://dailyreckoning.com

Surging Gas Prices Threaten to Derail Economic Recovery – LA Times   “Just as the recovery is finally looking real, surging fuel prices are once again looming as a major threat to the financial health of U.S. consumers and the broader economy.”

Fear of Contagion, This is the End of the Road – King World News   Today legendary value investor, Jean-Marie Eveillard told King World News that fear of a contagion is building and we are at the end of the road.  Eveillard, who oversees $50 billion at First Eagle Funds, had this to say about the situation, “Well, what’s happening is that the Greeks are trying to convince the Germans that the German taxpayer should subsidize the Greeks, and the Germans are reluctant to oblige.  At the same time, in Europe nobody wants to see a country, even a country as small as Greece, leave the eurozone because there is a fear that there will be contagion.”

Widow Martha Pays More Than Warren Buffett and His Secretary Combined – Forbes   “Martha’s proposal (Why not adjust capital gains for inflation?) would eliminate taxation on income that does not exist. You can only be taxed if your gain exceeds inflation. But investors are neglected stepchildren in the game of indexation. Union wage contracts routinely include cost of living adjustments. Social security recipients and federal employees receive annual living-cost hikes. The IRS adjusts the standard deduction for inflation, and some want to index the minimum wage.”

The U.N. Threat to Internet Freedom – Wall Street Journal   “On Feb. 27, a diplomatic process will begin in Geneva that could result in a new treaty giving the United Nations unprecedented powers over the Internet. Dozens of countries, including Russia and China, are pushing hard to reach this goal by year’s end. As Russian Prime Minister Vladimir Putin said last June, his goal and that of his allies is to establish “international control over the Internet” through the International Telecommunication Union (ITU), a treaty-based organization under U.N. auspices.”    This is really scary!

By Alan Caruba

By Friday, February 10th, an estimated 500 Europeans had died from the freezing weather gripping the continent. This is the price they and British citizens are paying for embracing the global warming hoax, spending billions for wind power when they should have been building coal-fired and other sources of energy to heat their homes and businesses.

As the British daily, The Telegraph, reported on Friday, “Serbia has started implementing power cuts in a desperate bid to stave off the collapse of its national grid as the country suffers the effects of days of freezing temperatures.”

I and others have been warning for years that the Earth has been cooling since 1998 and that the planet is on the cusp of a new ice age because the average length of an interglacial period of warmth between such ages is now coming to an end after the passage of some 11,500 years.

All aspects of global warming legislation and spending programs must be utterly reversed if we are not going to see huge losses of life and the disruption of entire economies.

The Ottawa Citizen published an Agence France Presse article on Friday reporting that “Thick ice closed vast swaths of the Danube on Thursday, crippling shipping on Europe’s busiest waterway, as the death toll from bitter cold across the continent rose…as it has every day for nearly two weeks.” The report noted that “Navigation was impossible or restricted in Serbia, Croatia, Bulgaria, Romania, Hungary and Austria, as ice covered the river or formed dangerous floes in shipping lanes.”

No shipping means no delivery of coal and oil and no shipping of food and other necessities. Europe is freezing over as the United States has been experiencing an unusually mild winter thus far. That, too, is likely to yield to the increased cooling of the planet and then, maybe, Americans will realize the threat to their lives that the closing of coal-fired plants, instigated by the Environmental Protection Agency, really means.

In England, the Mail, reported on Sunday, February 12th, that large numbers of its elderly citizens are being “frozen to death as fuel bills soar: hypothermia cases among the elderly double in five years.” England, now gripped by foolish green notions of renewable energy, has covered itself with wind turbines, despoiling its countryside and coasts while proving unreliable and incapable of meeting its energy needs.

Figures showed that “1,876 patients were treated in hospital for hypothermia in 2010-2011, up from 950 in 2006-2007” reported the Mail. “Three-quarters of victims were pensioners, with cases soaring among the over-60s more than any other age group.”

In Europe, other news organizations reported that “Many of the dead were homeless people, who literally froze to death as the temperatures dropped to minus 50 degrees in some parts of the continent. Their bodies were found in the streets buried under snow, in rivers, and in doorways. Dozens of people were also killed in weather-related accidents.”

Writing in a Turkish newspaper, the Hurriyet Daily News, Sophie Quintin Adali, an analyst for a project of the Atlas Economic Research Foundation, said, “As if the debt crisis weren’t bad enough news, the climate freeze sweeping across Europe is wreaking havoc by severely disrupting travel, business and people’s lives. Local authorities, indeed whole countries, are caught poorly prepared.” Turkey is experiencing record snowfall and low temperatures.

“The lack of readiness should come as no surprise because for decades the sensationalist message of global warming has dominated the public area,” said Ms. Adali.

“Politicians and decades of political environmentalism have a lot to answer for,” said Ms. Adali. “The man-made climate theory…is still supported by a mighty European Union bureaucracy and a green network addicted to public funds.” Even now, the Green Climate Fund “through which millions of taxpayer’s money will still be disbursed” is threatening the lives and the economy of people worldwide.

The current freeze is not just affecting Europe, but reaching across the Mediterranean to North African nations. And at some point America will feel it too.

We have not built a single new nuclear plant in America since 1978. EPA rules are forcing the closure of coal-fired plants throughout the nation. The national grid for the distribution of electricity is in need of upgrades.

The nation’s policies are controlled by the most environmentally insane administration in its history, wasting billions on so-called green energy. Its new budget raises taxes and proposes a trillion-dollar deficit without any significant effort to cut the spending that has left this and future generations in debt while the price of gas soars to new heights.

America and the rest of the world have been horribly deceived by the United Nations Intergovernmental Climate Change Panel that continues to drive the global warming hoax. The lying scientists who got on the global warming gravy train, the politicians that embraced it, and the media that misled millions are all culpable, all responsible.

They should be driven from office, defunded, and chased through the streets like villagers in pursuit of Frankenstein.

People are freezing to death in their homes and in the streets. What will it take to drive a stake into the heart of the global warming monster? (my emphasis)

By Alan Caruba for Facts Not Fantasy

By permission Alan Caruba

Alan Caruba writes a daily post at http://factsnotfantasy.blogspot.com

© Alan Caruba, 2011

EDITOR’S COMMENT: This article by Max Slavo reportedly discusses the plans being made for a real, actual default by Greece on March 23^rd. Frankly, it is not surprising that such planning is actually taking place. But, what is very disturbing is that a copy of this document is in the possession of at least two Wall Street firms, so that they can potentially take advantage of any unfolding situation by having the equivalent of “insider information.” Wait! Come to think of it that is not actually surprising either, given Europe’s and the U.S. constant support and continued bailout of our banks. As discussed, we don’t really know, if this situation will come to pass, but, as always, we want to keep you aware of the various possibilities.

By Max Slavo

That a default in Europe is coming has never been the question. For the astute observer the only thing at issue is how and when it will happen.  While the mainstream financial media and government officials have tried to spin this story as one that involves only Greek debt, the fact of the matter is that this isn’t isolated to a single country. Italy, Portugal, Ireland and most other European countries are in exactly the same boat.

Despite all of the propaganda and machinations from leading financial powers like the United States, Germany, and France, it’s should be clear that there is no viable solution to the debt debacle facing Europe. As such, we should understand that a situation similar to what led to the Great Depression of the 1930′s is now unfolding once again. The ability of entire nations to pay off their debt is now in question, and given the sheer size of the numbers we’re talking about, any reasonable person could agree that there is simply no plausible resolution that will make all parties whole again.

This has been playing out in Greece for nearly three years, and we may very well be just weeks away from the dreaded moment when it finally becomes official. An exclusive report detailing internal bank documents from two major Wall Street players says that we may have much less time than we think as insiders prepare for a financial doomsday next month:

Via The Slog:

A written document giving firm dates and detailed actions for a planned Greek default has been in the possession of two top Wall Street bank currency trading bosses since the second week in January. The Slog has separate but corroborative sources affirming the existence of the document, and a conviction among senior bank staff that – at least at the time – the plan represented “a timetable, not a contingency”. The plan gives a firm date of March 23rd for default to be announced after the close of business.

Senior bankers on Wall Street have been given detailed documentation setting out a timetable to Greek default, including firm dates and technical ‘orders’ about last use of the euro as a currency there. The revelation arrived at Slogger’s Roost last Monday, since when I have been trying to obtain corroboration. This arrived in the early hours of today (Thursday). One of the banks is Barclays Capital (Barcap) run by controversial figure Bob Diamond. The other must remain anonymous for the time being, in order to protect sources.

The document asserts that Greece will officially be declared in default by all the ratings agencies after the close of business on Friday march 23rd. At the weekend all Greek bank accounts will be frozen, with emergency measures detailed to prevent the flight of capital. Included in the paperwork is a list of very limited exceptions to the ‘no withdrawals’ order. All major banks ‘are instructed  not to deal with euro exchange  as of open of business in Greece on Monday 25th march. All Greek markets will close for one day ‘at least’.

As yet, I have been unable to establish the source of the documents. But one of my informants admitted, “I have strongly suggested to Greek business friends and clients that they sell up fast, do a sale and leaseback on property, empty bank accounts, and change to a hard currency.”

In testimony before Congress earlier this year Federal Reserve Chairman Ben Bernanke warned that a “disorderly” default would create a “huge amount of financial volatility globally that would have a very substantial impact not only on our financial system, but on our economy.” The aforementioned report indicates that Mr. Bernanke and his counterparts around the world are fully aware of how bad the situation in Europe really is, and they are trying to avoid a disorderly default through the implementation of an orderly contingency plan.

This report also indicates that key players and insiders know exactly what’s about to happen and they are unloading positions in financial instruments that stand to collapse once the Greek default is official, leaving the general public holding the bag.

Europe, as we suggested in Predictions of a Mad Tin Foiler, is going down, and once that happens the next phase of this crisis is going to take hold. We’ll likely see massive outflows of capital from Europe to the United States, which would have an almost immediate and adverse impact on dollar denominated assets including US stocks, commodities, and precious metals.

If and when this event happens – because dates set forth by the powers that be are always subject to change – it will be a tell-tale sign that a similar collapse in confidence of the US dollar and US debt instruments will soon follow.

While the sources for the above report are as of yet unconfirmed, and no copies of it have been made available, if true we  will likely see bits and pieces emerge over coming weeks.

It is and has always been our intention to make our readers aware of developments that could negatively impact our physical and financial well being. As we’ve indicated previously, it is our belief that the first signs of any major man-made event will emerge in non-mainstream alternative news sources.

This may be one of those signs.

There have been false alarms in the past, and we won’t deny that this may be one of them. But we’re of the view that when a smoke alarm goes off, we evacuate first and substantiate it once we’re out of harm’s way. The alternative is that you end up trapped in a burning building. (my emphasis)

By Max Slavo for SHTF Plan

By permission Max Slavo

www.shtfplan.com

US Officials Believe Iran Sanctions Will Fail, Making Military Action Likely – Guardian   “Officials in key parts of the Obama administration are increasingly convinced that sanctions will not deter Tehran from pursuing its nuclear programme, and believe that the US will be left with no option but to launch an attack on Iran or watch Israel do so.”

Euro Area Leaders Consider Greek Exit at Their Own Peril – Bloomberg   “Leaders of the euro area’s wealthier nations are increasingly raising a provocative question: Might the common currency now be strong enough to end the bailout agony and let Greece go?  The short answer is no. In fact, the euro area is probably more vulnerable to a Greek disaster than ever.”

Inflation Sees Biggest Rise in Four Months on Fuel Prices – Reuters   “Gasoline prices jumped 0.9 percent in January, pushing overall consumer prices up at their fastest clip in four months and offering a reminder of the risks energy costs could pose to the economic recovery.”

For Boomers, It’s a New Era of ‘Work Til You Drop’ - AP/Yahoo   “The paradigm has truly shifted. Now when you’re looking for a job you’re competing in a world where the competition isn’t just the guy down the street, but the guy sitting in a cafe in Hong Kong or Mumbai,”

By John Tamny

In an interview years ago, Whit Stillman, arguably the greatest modern director of films sadly never seen by most Americans, was asked about purchasing an apartment in New York City. Though the memory here is hazy, Stillman channeled the vision of the prudent over the decades; that he would wait for a decline in prices before putting in his bid for a Manhattan apartment.

To Stillman perhaps, and presumably millions of other Americans who chose to be responsible during the recessionary rush to housing earlier in the new millennium, the political class has implicitly told them to drop dead. Though home ownership was always vastly overrated, and is particularly problematic in a world of fast-moving capital, those who were wise amid the latest government induced mania will be forced to pay for the mistakes of the profligate.

Think about this: though Fannie Mae and Freddie Mac are blatantly unconstitutional entities on their very best day, and though their stated existence is oxymoronically said to make housing more affordable for the masses, it’s at least true that their alleged purpose along with myriad other government housing subsidies is to make housing accessible. If so, why then would the same government tragically eager to make housing a positive right for everyone block a natural correction of home prices lower such that the responsible might more easily be able to purchase a piece of the dream?

Instead, the federal government has chosen to side with the wasteful, unprincipled and debauched who borrowed what they couldn’t pay back, all at the expense of the good and moral. You can’t make things like this up, and sadly this is not a dream. The federal government has sanctified promiscuous activity with the money of others through a $25 billion settlement foisted on banks that “will provide financial relief to an estimated one million at risk borrowers.” The message: go heavily into debt, claim some lender abused you, then wait for the government (meaning all of us whose tax dollars support Leviathan) to compassionately save you.

The economic argument behind this most shameful of settlements predictably defies basic logic. Though economies work best when prices reflect market realities, housing to the political class is sacred such that a true correction whereby those who overextended themselves vacate their houses on the way to a market bottom won’t be allowed to happen.

The broad economy will of course suffer this governmental error. For one, an investment in housing, quite unlike capital committed to technology or medicine, will not cure cancer or make us more efficient. A true bottom that releases investment capital from this dead money sector would on its own prove an economic positive.

Second, as evidenced by the inability of certain homeowners to make their mortgage payments, they’re likely in many instances to live in depressed parts of the United States. Not only would putting their houses back on the market happily move the cost of housing down (that’s the government’s stated goal after all), it would also release these individuals from the ball-and-chain of quazi ownership such that they’re free to pursue the best economic opportunities around the country irrespective of locale.

Third, if mortgage holders are to get relief, then someone, somewhere is by definition getting ripped off. Savers are society’s ultimate benefactors for savings paying the freight for our economic advancement, but here savers will suffer a haircut so that the ghastly errors of borrowers can be excused. The message to savers is to not bother delaying consumption so that future innovators can access capital; instead, spend with abandon with an eye on borrowing excessively knowing full well that the government (again, meaning us) will underwrite your mistakes too.

Particularly offensive within this sad exercise is the notion that we must backstop the borrowing mistakes of the housing greedy because their mortgages are “underwater.” Specifically, due to a shift in market sentiment that has made the mortgages for some more expensive than the house they’re in, we’re expected to cushion that blow. The next time investors in the stock market buy shares on the margin that plummet in value, will we cover those errors too?

As for the banks that will hand over $25 billion to the Feds, it bears asking how they like those bailouts that foretold the settlement. Bailouts are never free, not for the taxpayers who pay for them, nor for the businesses that falsely benefit from them. Politicians always return for their pound of flesh.

After that, we might ask the taxpayers who financed those bailouts how they’re enjoying handing over yet another $25 billion to the Feds. Indeed, we shouldn’t delude ourselves with the laughable notion that banks will pay for this most vaunted of settlements. More realistically, the banks, given their preferred status within Washington which means they’re showered with all manner of subsidies, to some degree owe their existence to the government, which is once again us. And having saved the banks with our money, they’re now asking for more of our money back to doubtless pay for other programs that will tautologically weigh on future growth.

Voicing his implicit support for the settlement, Fed Chairman Bernanke drooled last week something along the lines of “the economy can’t get moving again absent a healthier housing market.” A master of the art of always being wrong, Bernanke predictably got it backwards. Housing’s health in a free market is an effect of strong economic growth, not a driver. In that certain sense, the best driver of future growth would be a true housing correction that would bring down home prices such that home buyers would have extra savings to commit to growth initiatives in other parts of the economy. Regarding the absurd Keynesian presumption that rising home prices increase borrowing that is spent in the private economy, for someone to borrow someone else must be saving, thus negating something that was never stimulative to begin with.

To simplify what is very sad, last week the Feds forced a settlement on the taxpayer that will excuse the mistakes of witless borrowers lent to by equally witless banks. Our masters in the government class have elevated profligacy over thrift, and as we’re the resources behind this most clueless of governments, they’re doing it on our dime. Drop dead, you naively prudent Americans. (my emphasis)

By John Tamny for Real Clear Markets

By permission John Tamny

www.realclearmarkets.com

John Tamny is editor of RealClearMarkets and Forbes Opinions, a senior economic adviser to H.C. Wainwright Economics, and a senior economic adviser to Toreador Research and Trading (www.trtadvisors.com).

SEC Surrender Continues With Bear Bankers Deal – Bloomberg   MUST READ to see what is wrong with SEC’s lax enforcement of Wall Street!

Money-Printing Has Reached Its Limits – CNBC    “There is only so much QE can do to assist economic recovery, and in both the US and the UK it does appear to have reached its limits already.”

China Cuts Reserve-Ratio for Growth as Inflation Deters Interest-Rate Move – Bloomberg   “China is seen making more cuts to banks’ reserve requirements to fuel lending and sustain economic growth as the housing market cools and Europe’s sovereign-debt crisis weighs on exports.”

The Way Greeks Live Now – NY Times   “Everyone talks incessantly about the economy — about Merkel and Sarkozy and the E.U., about the tightly knit elite that has run Greece for so long and about their neighbors’ troubles and their own — but somehow everyday life rumbles on, in a collective trance, shot through with gallows humor.”

In the past, insurance companies and pension funds have been keen to advertise the benefit of compounding arithmetic for savings. Over the last 30 or 40 years the rate has been lifted by inflation, but to understand the cost inflation brings you have to consider the whole savings cycle: not just the accumulation stage, but also annuity values in retirement. Furthermore, the historical experience of a typical working life should be compared with a theoretical sound-money alternative.

Let us assume a man works for 40 years, during which time he invests a fixed amount annually. This is invested mostly in bonds for a return that gives him a lump sum on retirement. The marketing folk stop at that point, but we shall go on. This lump sum is applied to an annuity to give a fixed income for the retiree’s life expectancy. Let us also assume that $1,000 is invested annually, and we shall use the average return on the 10-year US Treasury bond as our yardstick. The result is shown in the table below under the heading of Paper Money.

The nominal value of our pension-pot on retirement is an attractive $224,150, but during its accumulation price inflation has averaged 4.44%, so its inflation-adjusted value is only $74,056, implying that the difference ($150,094) is a hidden inflation tax, leaving our saver with only one-third of his savings in real terms.

Assuming the lump sum is then turned into an annuity at a continuing bond yield of 7.18% for a retirement of 25 years, this inflation-adjusted figure gives an annual income of $6,458, and if inflation continues to average the historic rate, the final payment will only be worth $2,075 in inflation-adjusted terms. Note how the purchasing power of the annuity falls over time while our retiree’s health and care expenses can be expected to increase when he can least afford them.

The reason for taking inflation out of the equation is so we can compare the inflationary past with a sound-money alternative. This calculation is dramatically different under the reasonable assumptions in the table’s last column: an average bond yield of 2.5% and price deflation of 1% annually. The deflation-adjusted outcome is significantly better than the paper-money example. Furthermore, the purchasing power of the annuity increases, in tune with the health and care needs of an aging retiree.

Our example is simplistic: bond yields have varied hugely since 1971, and we have ignored management fees and taxes. We have not considered bond yields that are exceptionally low today, so annuities taken out now will yield considerably less than our example shows.

The bottom line is the saver is impoverished by inflation to a greater extent than generally realised. The state has benefited from the transfer of wealth from its citizens’ savings, the result of monetary inflation, but at considerable future cost. The state is left with the welfare, health and care costs for an aging population unable to support itself and with an increasing life expectancy.

The cost of looking after growing numbers of impoverished retirees will become apparent in coming years, increasing government deficits more rapidly than expected. What we don’t know is when the markets will reflect the enormity of these future obligations. (my emphasis)

By Alasdair Macleod for Gold Money

By permission Alasdair Macleod and Gold Money

www.goldmoney.com and www.financeandeconomics.org