Wednesday, January 30, 2013

The truth about recent gun violence

Obama is going all out to get his camel nose under the gun tent.  IMO it's more about power and control and perception and distraction than about saving lives.  26 people recently got gunned down in a school.  That's horribly sad.  But it was done by a criminal, not law abiding, 2nd ammendment loving citizens.  The very next day, a crazy man in China killed nearly the same number with a knife.  And just recenly ~235 burned to death in a bar fire in Brazil.  But banning knives in China and banning bars in Brazil will no more stop future deaths than banning guns of any type for any reason in the USA.  Keep in mind that only 1 person is criminally responsible for the school children and teachers getting shot while in Brazil 4 people are deemed criminals in the Brazil death.

The point I'm trying to make is that you can't legislate insanity or stupidity.  All you can do is allow people to protect themselves from it in the best way they see fit.  What does this have to do with guns?  Well, look at Syria where blood is flowing like water.  Scores and scores of bodies have been found, handcuffed at the wrist with zip ties, bullet hole in the head.  In this case, the government is likely the murderer, a group of people insane with power.  This, and this alone is what assault weapons in the hands of ordinary citizens is meant to address.  How many people would have been saved if it was known up front they could not just be herded up as enemies of the state (really of the con men who are in charge) and killed, culled like livestock.

Now take a step back and think about why all the fighting is happening in Egypt and Syria.  When did it start?  That's right, in lock step with the global credit bust.  Yep, when the credit ran out, the marginal players got affected the first and the worst.  Robert Prechter knew in advance that this would happen and you will see me echoing his words in the early pages of this blog.  When the credit based money runs out, government has to break its Ponzi promises to people who in turn get mad and want change.  But government would rather not change.   So the people riot and at some point the government starts murdering them in order to retain control.

So you see, the real threat related to government controls on American citizens owning weapons is that the US government is also running a massive debt Ponzi and it too will default on its promises.  It knows that this will make people mad.  If the people are well armed then government cannot just come in and mow them down like is happening in the middle east.  Government wants to retain the right for itself to stay in power after the people clearly want it gone.

This is what the gun grab is really about.  Obama has personally ordered the deaths of many innocent men, women and children with drone attacks in Pakistan and Afghanistan.  You think he loses any sleep - even 1 minute sound sleep over that?  REALLY???  You really think he gives two dirty squirts for anyone but himself?  Hell no.  He's using the death of those kids and the shooting of Giffords as political tools to sway the weak minded.  I say, balderdash!  Obama is going to have a civil war of his own if he's not careful.  Not that I want it, just paraphrasing what Prechter said was a possibility as a result of the coming credit bust when he wrote that work of genius, "Conquer The Crash" which was originally published in 2002, long before the credit bubble was even known to be a bubble by most people.

Bottom line: all of this enhanced violence of late is more about a change in social mood than the need for more law and restrictions.  All the new laws do is set the US government up to be a more effective war criminal against the American people sometime in the future.

Monday, January 28, 2013

Markets still very scary looking

I'm traveling out of the country so very I've done few posts lately.  But tonight I'm looking at two pretty scary charts that I will share.  The first is the VIX, also known as the fear chart (or inverse complacency chart).  As you can see, it is now at the same level as precrash April 2007 even though the world economic system teters on the brink of collapse and there are wars and rumors of wars the world over.  Perhaps people have put God-like faith in Bernanke (or shall I just refer to him as Mammon from now on?).  Who knows why anyone would trust this con man?  Probably because it's their job to run a retirement fund, etc. and so they are just doing their job.

But I have seen this kind of VIX setup over and over again and it is not a sign of straight thinking by longs.  If they are comfortable of being in the markets because of Bernanke's support, imagine how quickly it could all go to $hit if (when) he finally has to make a decision between bankrupting the Federal Reserve bank (a privately owned bank by the way...) and letting massive deflation hit the world and the US like a ton of bricks...

The other chart that concerns me is the junk bond index (ticker: JNK). As you can see it is forming an ending diagonal that looks like it could easily result in a double top. I call this formation "owl ears" because when the right hand side collapses it looks like a silhouette of an owl. This is just a really scary setup for collapse.

The JNK ETF is considered by some to be an indication of complacency but I think it is an indication of greed.  Fund managers have been promising 7-9% returns to their retirees, insurance policy holders, etc. in a world where 3% is damned hard to come by.  So they are forced into higher risk, crap assets which is why they are called "junk bonds".  Folks, if you have someone else managing your money, especially if it is a state run fund of some sort, some of your retirement cash is in junk bonds.  How much you will never know until they go bankrupt.

The reason people pile into worthless Ponzi "assets" like this is simple: Bernanke is holding treasuries near zero percent at a time when people are counting on income.  So they go looking for it whereever they can find it.  People have been taught to foolishly believe that it is possible for their money to "work" for them while they sit around.  In truth they are gambling and they just don't understand the math because Wall St. has sold hem on a Ponzi scheme.  One day, everyone will run for the door at once thinking that they will be faster than the next guy.  Not everyone can be the fastest.  In fact, most must mathematically get creamed.  That's just the way a Ponzi works, like it or not.

Monday, January 7, 2013

Gary North on the Global Debt Ponzi

Since I began writing about the state of global Ponzinomics in 2007 I have written a good number of articles and emails like the one to be found at the link below from Gary north.  But Gary has a way with words that I don’t and so I strongly recommend reading his take on the situation.  I can understand skepticism when you hear “Ponzi scheme” from someone like me, but Gary North has been a truth telling economist for many decades.  His views should carry weight with any reasonable person IMO.

Please keep in mind these following truths about all Ponzi schemes that ever happened:

  • The Ponzi scheme is a type of pyramid scheme which itself is a form of confidence game (con job).  It cannot work if people don’t have confidence in it.  The very fact that one is present means there is great confidence in it at all levels. 

  • The confidence stems not from mathematical analysis but rather from herd think.  The herd wants to hear good news.  The heard wants to hear sugar coated happy talk.  It doesn’t matter if the facts don’t add up because anyone who upsets the collective calm is met with hostility, incredulity or indifference.

  •  The main aspect of faith behind a Ponzi is that it seems to have worked so far.  Thus, it must work forever.  Ponzi trees must grow to the sky.  This is a built in way of how most people’s brains are genetically wired.  The Ponzi scheme simply takes advantage of human nature by promising good things that cannot be delivered.

  • There are always a few people who see them for what they are and who say something but the herd is unable to suspend disbelief in the system long enough to weigh the facts.  The Madoff case is famously documented with several hi quality (accounting firms) whistle blowers who went to the SEC about Madoff.  But their complaints were “investigated” and no wrongdoing was found even though the evidence of fraud would easily have been uncovered by a simple audit.  The SEC didn’t want to know.  They didn’t want to upset the apple cart.  They didn’t want to be the messenger.

  •  Ponzis (or Pyramids) pay outgoing members from money collected from incoming members.  In order for this to work forever, the number of incoming greater fools must constantly increase.  Thus Ponzis break down when something happens to slow or stop new suckers from entering the scheme.  It generally happens because people either get wise to the scam or there simply are not enough people who are still outside the scam that can be brought in.  In other words, when everyone is already fully invested in the Ponzi, it must collapse as a result of its own success and popularity. 

The baby boomers provided a lot of new bodies for the global Debt Ponzi.  But now that boomers are leaving the workforce and taking money out of the system instead of putting money into it, the Federal Reserve has been making up the difference by piling bad debt onto its balance sheet.  Those “assets” now total 2.9 trillion and rising.  The fed is getting very nervous yet they know that pulling back stimulus will now open the deflationary floodgates and the Ponzi will deflate.  So they will do what they can until the breaking point and then they will try to stop.  This will cause panic at which point the government will take over the money supply as they recently did in Japan.  That will be the sign of the end for the dollar.  Government will destroy the currency in order to buy votes.

You will know the Global debt Ponzi is in free fall collapse when the government steps in and makes it impossible, under threat of laws (which means ultimately, threat of physical force) to exit the Ponzi.
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