This may be an eye opener for you

The following topic might seem to be a bit off my beaten track initially but really it is dead center.  Stick with me to the end and you might be amazed by what you see.

All of us like to think we are in control of ourselves.  We want others to think we are in control and we want to believe that others around us are in control of themselves.  We also want to believe that society in general has an order and a predictability that we we understand.  Our mental well being actually depends on our believing this.  So when someone comes up with something that suggests we are not in control, the idea is quickly (and generally adamantly) rejected.  Generally these suggestions come from societal outcasts and are presented in ways that are hard to believe regardless of the actual veracity of their statements.  Take the topic of rapid hypnosis and mind control.  You might think that hypnosis is mostly fake and that mass mind control is the stuff of conspiracy theorist novels.  However, the truth is that people are biological machines which run a form of software and as such they can be analyzed and picked apart using well understood scientific processes.  If someone does that to computer software then the software can be corrupted and repurposed.  We call that a virus.  Similarly, if the brain and the psyche are sufficiently understood they can be manipulated and controlled.  I hope to provide compelling evidence of this over the remainder of this email so read on.

Now, just for a second, suspend the growing disbelief that is welling up inside your mind and consider, just for a second, the power one would have if he could control only a small portion of the population to some degree.  If the art of mind control were well understood enough to just affect the most susceptible 5 or 10% of the people on the planet, think about what could be done with that power.  It could be the swing vote to elect the politician (or puppet) that you want in place.  It could cause people to buy your products even if they really don't need or want them.  It could raise the level of civil discontent or it could calm a herd that has good reason for discontent.  It could cause people to take out loans on houses that they know they can't afford.  It could even cause you to believe that something which is totally worthless indeed has value.

Keep that in mind as you watch these videos.  They are all done by a Brit named Derren Brown who makes his living by understanding how the mind works and by using it to manipulate the way people think.  I'll save you the trouble of checking him out on Snopes - this guy is for real and his exploits are well documented.  If you want to check out his wiki later on you can find it here: http://en.wikipedia.org/wiki/Derren_Brown

In this first video, Brown approaches a man on the street and uses several psychological devices against him in order to confuse and distract him into handing over his keys, his wallet and in fact the entire contents of his pockets.  Not once, but twice:

http://www.youtube.com/watch?v=f-TURhK90_8&NR=1&feature=fvwp

OK, now that you have watched, what do you think?  Was it all a set up?  Can this really happen?  Perhaps Mr. Brown is just very good at picking dim witted susceptible people out of a crowd.  As you were watching it was probably pretty clear that Brown is fast talking, fast moving, always keeping his mark off balance.  But as you can see in the blow by blow description in the following video, many of the techniques that Brown used to accomplish his scam have names.  In other words, people are studying these things, mastering them.  It is becoming science:

http://www.youtube.com/watch?v=ybmOlQRuaYM&feature=related

Now, if you weren't too impressed by the last video, hopefully the next video is going to make things a bit clearer for you.  In it Mr. Brown goes around NYC with a wallet full of blank slips of paper which he uses to buy things in shops.  Watch as he is handing over the blank bills with perfectly timed verbal repetition of "It's OK, take it".  "Take it, it's fine".  "So I did".  He is planting subliminal suggestions into the minds of his marks.  They don't know it is happening - their minds accept this input automatically.  In the absence of con men, this automatic subliminal thought can actually be a valuable quality to possess.  It provides rapid insight into things without having to actually think about them.  It's a form of sensory input and the people who study these things to the point of understanding see it as a weakness shared by all humans.

http://www.youtube.com/watch?v=3Vz_YTNLn6w

Now that you have watched the video, was everyone he scammed just weak minded?  The fish salesman seemed to be a fairly street wise vendor, no?  You really can't be a gullible idiot in NYC and survive in business for 20 years like that guy said he had done.  And what about the jewelry salesman?  Was he just a weak minded moron too?  He let a $4500 ring walk out the door like it was nothing.  The hot dog salesman was not properly distracted for whatever reason and he caught onto the scam, calling Mr. Brown an "asshole".  In other words, he knew it was no mistake even though Brown quickly followed up the attempted crime with proper payment (a very common tactic we see all over the business world today).  Mr. Brown is well dressed (which is part of the intimidation tactic used in the scam) and he remained calm and polite even though he was completely busted (also a common technique used by the scammers).  The hotdog salesman was dressed in casual clothing and did not sound well educated.  If the hotdog vendor started screaming at the top of his lungs that Brown was a con man who tried to rip him off, would anyone believe it or would they just look sideways at the hotdog guy like he was crazy or on drugs?  And if the hot dog vendor had pressed his point too far, would he not end up in jail with Mr. Brown pressing charges, talking to the authorities and shaking his head at how crazy people can be?

The following video is another awesome example of mind control and the reason I think it is worth watching is that it cannot easily be proclaimed a set up.  When Brown was conning the people above, some people might just say "it was all staged" and "the jewelry store guy was a plant", etc.  In other words, they want to maintain their belief system so badly that they make up reasons why the unexpected behavior which lies outside of our programmed belief system can't be true.  But in this video, Brown takes a wallet and stuffs it with money so that the cash is clearly visible.  Then he places it on a busy street corner in London.  Now we all know that if a wallet were seen on the sidewalk in a big city it would be gone in a matter of seconds.  But Mr. Brown knows how the human mind works and so he confidently leaves the wallet on the ground in plain sight using his ridiculously simple and effective technique to ensure that it is not taken.  He comes back several hours later and there it still sits.

http://www.youtube.com/watch?v=bxYCh_p2Mjs&feature=related

Note that this mind control trick worked on everyone who passed that corner over that time period.  In other words, mind control can be effective on everyone who is not aware that it is happening, not just fools or the weak minded.  Some people acted like they didn't see it at all and indeed they may not have.  But others clearly eyeballed the wallet and decided that the yellow circle had mystical power or something so the wallet should be left alone.

OK, all of the above still might seem a bit contrived and so I submit to you a final video for your consideration.  In it, two advertising professionals are called in to come up with a theme for a client's new chain of stores.  Mr. Brown has already drawn up on paper what he wants the guys to come up with and he leaves it in the room with them hidden in an envelope so that we know he did not draw it after the fact.  He leaves them alone for awhile to work on this creative activity.  Later he comes back to hear their ideas and of course we find out that they closely match what Brown had already drawn and put in the envelope.  Somehow, Brown manipulated these guys into achieving a result that was just what he had wanted them to come up with.  It all seems a little spooky but at the very end of the video Mr. Brown shows us how he did it.  In essence, he had access to their subconscious which they did not know was happening. 

http://www.youtube.com/watch?v=ZyQjr1YL0zg&NR

What is so thought provoking about this video is that the marks were made to believe that the ideas they came up with were the result of their own highly creative and interactive process.  Also, the programming inputs they received came from a variety of sources and many of these inputs/suggestions were only visible for a short glimpse as the marks were being driven to the place where they were to do the work.  A person in their position would never (and I mean not ever) believe that all of that had been specifically and purposefully implanted subconsciously.  Had Brown said without proof that he had used mind control techniques to get them to do his will and to think the thoughts he wanted them to think they would have rolled their eyes and no amount of explanation would have awakened them to the truth.   Had Brown not been present to explain things, anyone else suggesting that it had actually been done to them would have been called a conspiracy theory nut job and laughed out of town.

Mr. Brown uses his skills and training for entertainment purposes but if he can achieve the above results so easily, do you really think he is the only one practicing this?  Governments have massive sums of money to spend on anything they want to and so they have no problem investigating any crazy idea in the 0.000005% chance that there might be something to it.  One well documented example of this is the costly research that has been done by all world governments over the years into paranormal activities like remote seeing, etc.  They spent millions on these whacky things even though they did not receive much pay back so how much do you think has been spent on something like mind control which has clearly demonstrable and repeatable results?  And once such a powerful set of tools has been discovered and perfected, do you really believe that governments would hesitate to employ it on their populations "for our own good"?

Perhaps most importantly, does mass mind control still sound to you like a ridiculous, impossible conspiracy theory?  If so then take the blue pill quickly because the rabbit hole runs very deep.

Suspend disbelief whenever it makes sense to do so!

Pelosi shows she is completely out of touch with economics

“Pelosi: Unemployment Checks Fastest Way to Create Jobs”

http://www.foxnews.com/politics/2010/07/01/pelosi-unemployment-checks-best-way-create-jobs/

You can’t make this stuff up.  It is something that I would expect a stand up comic to say in order to elicit belly laughs.  Pelosi says that if you just keep sending unemployed people benefit checks that it will not only “create jobs” but it is the fastest way to do so.  Of course this is typical Keynesian thinking but at some point I expect that people will no longer accept it as fact.  Sending out unemployment benefits simply transfers wealth from workers and savers to nonproducers and spenders.  Bottom line is that government does not create sustainable jobs.  Instead, government creates parasitic jobs.  Some government overhead is unavoidable but we are now at the point where government is a big part of the economy which is to say that the economy is infested with parasites.  If we learn just one thing from this unfolding economic debacle it should be that government should have no role in the economy whatsoever.  Federal government exists because its structure is outlined in the constitution.  That document tells us what federal government is for and what its limitations are.  Of course we are ignoring many of those rules and have been for decades which is exactly why we are in this mess.  The transgressions always start small but once the camel’s nose gets under the tent it is not long before the whole camel is in there with you.  Right now there are as many if not more camels in the tent than people IMO.

More from Davidowitz

Get past Davidowitz’ coarse delivery (in fact, get used to it because the days of fake political correctness and sugar coating on everything are, thankfully, ending quickly) and hear the message:

http://finance.yahoo.com/tech-ticker/howard-davidowitz-u.s.-economy-%22is-a-complete-disaster%22-514505.html?tickers=xhb,tlt,%5Edji,%5Egspc,xrt,TBT,UUP

Everything Davidowitz says is true but I disagree with his implication that Obama is the big cause.  Obama is indeed doing all of the wrong things and I have bashed him many times for it but so did Bush 2, Clinton, Bush 1 before him.  ALL of them did everything they could to kick the can down the road and they did so knowingly in order to buy votes.  Nobody wanted to tell the truth because they knew the people couldn’t handle the truth.  In fact all presidents going back to Nixon and perhaps even before that were part and parcel of the Ponzi.  Was it not Milton Friedman who, as a result of Nixon removing us from the gold standard said, “We’re all Keynesians now”?  http://en.wikipedia.org/wiki/We_are_all_Keynesians_now

Of course what he really meant was that we are all addicted to expansion of the money supply (either by taking on debt or by just printing more dollars) and that if we stop doing things to kick the can down the road that a massive economic collapse would have to be endured in order to pay for all those years of kicking the can down the road and not doing the right thing in real time.  He really meant that from the time of gold de-linking going forward, the economy was a Keynesian con job.

And what about Bush 2 shamelessly telling every renter to go “buy” a home:

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

News flash: dum-dum Bush was not smart enough to know that selling houses to people who could not pay was the only remaining strategy to keep the Ponzi spinning as long as possible.  Remember: housing is the largest asset class in the country by far which is why Greenspan told us not to expect a bottom until the bottom had been put in housing.  Bush’s puppeteers put all of this “home ownership society” propaganda together for him in order to maximize profits for the Ponzi operators.  It is absolutely not the place of government to do this but it sounded like something for nothing so the people ate it up.

Obama is taking a whipping like this only because he arrived after the Ponzi peaked and he is in office as the collapse is picking up steam.  Yes, he could have done things a lot differently and the results would have been better in aggregate for the country over time.  But to think that anyone, even Ron Paul, was going to be able to deflate the biggest credit Ponzi the history of man without a lot of pain is to believe in the tooth fairy.  It is to believe that you can just drink as much alcohol and drugs as you like and never get a hangover or experience withdrawal pains.  I’m not trying to relieve Obama of blame here because, unlike Bush, Obama IS smart enough to know that he is trying to prop up a Ponzi.  I just think blaming Obama for everything leads us into the dead end “dem vs GOP” emotional argument that was set up from the very start to obfuscate what is really going on.

The Economist magazine calls government debt a "Ponzi Scheme"

Wow.  I wondered how long it would take, but one of the most respected magazines in the financial world has finally come to agree with my long standing assessment of government debt:

“Rising government debt is a Ponzi scheme that requires an ever-growing population to assume the burden—unless some deus ex machina, such as a technological breakthrough, can boost growth.”

There it is folks, in black and white.  The shorter paraphrased version I would suggest is:

“Rising government debt is a Ponzi scheme that requires an ever-growing population to assume the burden—unless some unexpected and unlikely magic happens.”

I will officially retire my tin foil hat because calling government debt a Ponzi is now apparently the accepted norm given how mainstream The Economist magazine is today.  If that is the case then it follows easily that our debt fueled economy, including the stock markets and our housing markets are also Ponzi schemes because debt based government spending is propping up all of these.

The article also likens credit to the consumption of alcohol which is a drug.  Drug addiction is another economic analogy that I have often used mainly to point out that drug dependent people will have withdrawal pains if they can’t get more of their drug.  Deflation is withdrawal pain for the addiction to Keynesian credit gone wild. 

Mish adds his own 2 cents which is again something I have written time and again:

“Keynesian fiscal stimulus is nothing but a Ponzi scheme and all Ponzi schemes come to an end.”

http://globaleconomicanalysis.blogspot.com/2010/06/economist-rising-government-debt-is.html

Suspend disbelief and take some time to think about what is likely to happen if the Ponzi finally collapses.  It might be good to start by reviewing what happened to participants in the Madoff Ponzi.  Nobody can predict the future with 100% certainty but historically what happens is that at some point the herd will just wake up and, over a relatively short period of time, everyone will figure out that the whole thing is a con job.  They will run for the exits so as not to be the last one out and the last one out will be left holding an empty bag.

Confucius say "Don't look for red herrings"

There is so much noise and propaganda in the press today that most people are simply overwhelmed and thus they don’t know what to believe.  They don’t have the helpful filters of history and Austrian economics to help them squelch the noise.  Take the situation where Bernanke and Geithner have been trying to vilify the Chinese people for several years now.  Basically, our financial leaders are upset that Chinese rank and file are unwilling to go into deep debt in order to consume American made goods  Instead, the Chinese choose to save for a rainy day.  Geithner and Bernanke have called this “the paradox of thrift”.  They know that without increased debt based spending the global debt Ponzi will collapse.  Thus, anyone that doesn’t engage in reckless spending activity is an enemy of the scam.  The other attack on China is that they have been keeping their exchange rate too low.  While that may be true, the implication has been that if the Chinese let the Yuan appreciate a bit against the dollar, American products will become more affordable for the Chinese people who would then be spending stronger dollars. 

By saying these things Geithner and Bernanke prove that the best con men mix a little truth with a lot of BS.  They imply that a 20% or even 30% appreciation of the Yuan will have some big positive effect on American jobs and on the global economy.  But the Chinese leaders are correctly pushing back on these math-less statements by our leaders because they know 20 or 30% won’t make any difference.  Even 200% or 300% won’t do the trick.  Chinese factory workers make $300/month.  Even if they made 10x more (the equivalent of 3k per month or 36k per year) it would hardly be enough to buy American made goods.  So now the Chinese leaders are calling these currency manipulation assertions by US leadership “red herrings”.  In other words, our leaders are being accused of trying to distract the people from the truth of the matter.

http://finance.yahoo.com/news/China-Flexible-yuan-wont-apf-1572600088.html?x=0&sec=topStories&pos=main&asset=&ccode=

Call me crazy but I’m going to have to agree with China on this one.

Japan warns of risk of Greek-like crisis

First off, what is the real crisis in Greece?  In short, it’s that their debt Ponzi has gone bust.  3 months ago they used to be able to float 3 month bonds for 3%.  Recently investors were demanding nearly 20% because they lost confidence in the con game.   Greece can’t pay out that kind of return on short term debt without wiping out all the businesses and workers.  That’s why they needed a bail out.

So now the Japanese PM is saying “our finances could collapse if trust in national bonds is lost and growing national debt is left alone”.

http://finance.yahoo.com/news/Japan-PM-warns-of-Greecelike-apf-4204817830.html?x=0&sec=topStories&pos=1&asset=&ccode=

For those that haven’t been following things, Japan is in debt to the tune of about 220% of its GDP.  This is far worse than Greece and more than 2x as bad as America.  Typically when a 3^rd world country goes 130+% of GDP into debt then it begins to fall into default.  Japan is the world’s 2^nd biggest economy and a manufacturing powerhouse so investors are still buying its debt but how long is that going to last given that Japan’s exports are weakening?  The article states that “Japan is on firmer financial footing than Greece because most of its debt is held domestically”.  I guess that means that Japanese people are so patriotic that they are willing to let their retirements collapse just as they begin to need them?  That is lunacy.  At some point Japanese people will flee the collapsing debt and Japanese government debt will be rendered nearly worthless just like Greece.  The main difference is that Japan is far too big to bail out.

If you read the article you will also note that the author writes about raising taxes into a declining and aging population in order to pay service on the debt.  Suuuuuure they will.  How can you tax less people and get more revenue?  How can you tax people who are going into retirement and get more revenue?  It just doesn’t work like that.  Government needs to get smaller but the debt it has taken on ensures that it cannot get smaller without defaulting.  Japan is no better than Greece and America is only a little better than Japan.

You want to see the dollar skyrocket?  If the Yen starts to plummet on fears of Japanese government default then the Yen will behave just like the Euro has: it will plummet as everyone sells it to buy “safer” dollars. If the dollar gets stronger the stock market is going to plummet.  All of the pieces are in place for the markets to tumble to new lows IMO.

Bernanke talks about gold

At the real risk of being exceedingly redundant I will start off by reminding what Mr. J.P. Morgan said about gold which was that. “Gold is money, and nothing else is”.   In the following article, Bernanke admits that gold is not behaving like a commodity.  Other commodities, including silver – a metal that is part commodity and part historical money - are not reaching new all time highs while gold continues to poke higher.

http://globaleconomicanalysis.blogspot.com/2010/06/bernanke-says-gold-acting-differently.html

The US dollar is strengthening because people are fleeing risk assets of all kinds – real estate, stocks, bonds, etc. They are going to cash to ride out the turbulence.  Gold is also rising because people are beginning to remember that it is historically the only real money.  As Mish says at the end of his article, even gold could get swept down in a real deflationary crash but such a dip would represent a buying opportunity, not cause to flee.  IMO the mechanics of a potential gold price dip are twofold:

1)       Gold is a store of wealth.  If nobody has any stored wealth then gold has little purpose.  If times get really hard then people pull from their savings to get by and that includes selling their gold if gold is where their savings are stored. 

2)       The gold market is infested with counterfeit gold/promises of gold/paper gold.  Many people think they have bought gold by buying the GLD exchange traded fund (ETF) or by buying gold certificates from banks, etc.  But in a real crisis all of these promises could evaporate and the people who thought they owned gold could be left holding an empty bag.  If this happens then the media will likely paint physical gold with the same risk laden brush as paper gold.  Many people would be left with the impression that all gold is risky.  This has happened many times before in many different ways.  For example, capitalism has been under fire during this crash even though we have not been practicing true capitalism for many years.  Instead we have had crony capitalism where the elite get to print money from thin air to invest while the rest of us have to work for it.  Also, if we lose, we lose whereas if they lose we still lose.  This is not capitalism; this is not a meritocracy.  Real capitalism can only occur when nobody has special economic privilege which is to say, when there is no “rubber band” money supply enabled by fractional reserve banking.  

Keep an eye on the price of silver.  It has historically served as a good canary in the deflation/inflation coal mine.  If silver is in a downward trend then the economy is most likely in deflation overall.  I like to use triggers and so do many other people.  The current market thinking is that as long as silver cannot create new highs (i.e. more than $20.50 spot), there is no way that the deflation is over and that the ensuing massive inflation has begun.  If silver begins to break out to new highs then worries about hyperinflation are on the rise and holding dollars becomes a risky position.  People have to really internalize the fact that paper money and electronic money have zero intrinsic value.  It will only trade for what some greater fool will give you for it.  At some point in the life of every fiat currency the people decide it is worth very little or in fact nothing at all.  That’s what hyperinflation really is – an awakening by the people to the fact that something they have trusted for so many years is in fact a vaporous lie which can evaporate literally over a matter of weeks under the correct circumstances.  Once the confidence in the trust Ponzi is gone, so is the value of shares in the Ponzi.