Sunday, October 10, 2010

Bankers May be Hoist with their Own Petard

Ellen Brown, my beloved angel of mercy to the indebted, herald and, hopefully, harbinger of doom to the banking industry, explains the bankers' current woes in, "Homeowners’ Rebellion: Could 62 Million Homes Be Foreclosure-Proof?". This spells D-I-S-A-S-T-E-R for the boys in pin-striped suits, and I say it couldn't happen to a nicer bunch of guys.

"Over 62 million mortgages are now held in the name of MERS, an electronic recording system devised by and for the convenience of the mortgage industry. A California bankruptcy court, following landmark cases in other jurisdictions, recently held that this electronic shortcut makes it impossible for banks to establish their ownership of property titles — and therefore to foreclose on mortgaged properties. The logical result could be 62 million homes that are foreclosure-proof."

Speculation in Mortgage-Backed Securities (MBS), which were bundles of mortgages, was the main cause of the financial crash of 2008. MBSs changed hands frequently, and the companies who profited from mortgage payments were often not the same parties that negotiated the loans. The Mortgage Electronic Registration System (MERS), a company that serves as the mortgagee of record for many lenders, allowed properties to change hands without the necessity of recording each transfer.

MERS was convenient for the mortgage industry, but lawyers are now questioning the legality of its operations, and courts are beginning to rule that its operations were illegal with respect to mortgage ownership. The test of its legality is taking place in the current home foreclosure industry. To foreclose on real property, the plaintiff must be able to establish the chain of title. But MERS has acknowledged, and recent cases have held, that MERS is a mere “nominee”, not the true owner. Recent court opinions stress that this is not just a technicality; it is a substantive failure, a failure that is fatal to the plaintiff’s ability to foreclose.

The latest of these court decisions ocurred in California on May 20, 2010, in the case, In re Walker, Case no. 10-21656-E–11. The court ruled that MERS could not foreclose because it was a mere nominee; and that as a result, plaintiff Citibank (C) could not collect on its claim. The judge ruled:

"Since no evidence of MERS’ ownership of the underlying note has been offered, and other courts have concluded that MERS does not own the underlying notes, this court is convinced that MERS had no interest it could transfer to Citibank. Since MERS did not own the underlying note, it could not transfer the beneficial interest of the Deed of Trust to another. Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law."

Lawyers elsewhere are becoming energized by such rulings. In an ongoing Nevada class action, Lopez vs. Executive Trustee Services, et al., the plaintiffs' lawyer alleges:

"Before MERS, it would not have been possible for mortgages with no market value ... to be sold at a profit or collateralized and sold as mortgage-backed securities. Before MERS, it would not have been possible for the Defendant banks and AIG (AIG) to conceal from government regulators the extent of risk of financial losses those entities faced from the predatory origination of residential loans and the fraudulent re-sale and securitization of those otherwise non-marketable loans. Before MERS, the actual beneficiary of every Deed of Trust on every parcel in the United States and the State of Nevada could be readily ascertained by merely reviewing the public records at the local recorder’s office where documents reflecting any ownership interest in real property are kept...

After MERS, the servicing rights were transferred after the origination of the loan to an entity so large that communication with the servicer became difficult if not impossible... The servicer was interested in only one thing – making a profit from the foreclosure of the borrower’s residence – so that the entire predatory cycle of fraudulent origination, resale, and securitization of yet another predatory loan could occur again. This is the legacy of MERS, and the entire scheme was predicated upon the fraudulent designation of MERS as the "beneficiary" under millions of deeds of trust in Nevada and other states."

For today, at least, I take back every nasty, lawyer joke I've ever told. For more information, read:;jsessionid=25F530EF82FA3C4CD242627CD300347F?diaryId=2794

Tuesday, August 3, 2010

Two Economies = Class Warfare

Our problem, basically, is that we have a very distorted economy in the sense that there has been a significant recovery in a limited area of the economy amongst high-income individuals who have just had $800 billion added to their 401(k)s and are spending it and are carrying what consumption there is. Large banks, who are doing much better, and large corporations are in excellent shape. The rest of the economy, small business, small banks, and a very large part of the labor force is mired in tragic, long-term unemployment. The tension between the two is pulling the economy apart. The average of those two is what we are looking at (when we examine national economic statistics), but they are fundamentally two separate types of economy.

It's funny (or not) how often I've said much the same thing, along with facts and arguments to back them up, and had to endure pained looks and tired sighs from friends and family alike. “He's starting in on the economy and politics again. Run for it!” Who's gonna believe a fifty-something public school math teacher?

But, in walks the eighty-something, Yoda-like, former Fed Chairman, who is famous for having once said, 'I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said', and against all odds, he says something particularly clear. And all of a sudden, it's news you can believe in!

Yes, Greenspan actually said that first paragraph not me. Ooh, how does it feel to learn those were not my words, but the words of the “Maestro” himself? That is the feeling that comes when you realize that much of what you consider to be you using your own judgment is merely Pavlovian Conditioning.

Believe it or not, it was true before the Maestro said it. You just weren't thinking for yourself.

Saturday, May 15, 2010

Why "Playing the Market" Might be More Like Playing Roulette Than You Think

If phrases such as "free markets" and "level playing field" resonate with you, you might want to dig a little into deeper into the hows, whys, and what-fors of the big stock exchanges. It seems that while a whole generation of offspring of "The Greatest Generation" were growing up, a few were intent on turning those exchanges into the equivalent of Las Vegas slots or roulette, a guaranteed losing proposition for most "investors" (chumps).

In the early days of the Wall Street trend to involve Main Street in investing in stocks (playing the market), access to the market was not the simple matter it is today. The easy money was made by brokers (salesmen) of all stripes for facilitating individual stock trade transactions. Over time, brokers morphed into "advisors" (salesmen) whose advice was designed to channel investors (chumps) money into products with the highest sales commissions. While the advent of computerized trading did lower transaction costs, flash trading and front running allowed the firms with the best computers and programmers to skim a steady percentage of all transactions without a visible charge on the customer's bill.

Flashing trading and front running are not the same, but they both have essentially the same effect. They give the big financial players the edge of being able to look at your cards before they place their bets. Even more alarming, according to some who know the capabilities of these high speed trading programs programs, they are capable of doing more than skimming a few pennies from each of millions of transactions. Supposedly, the big players can manipulate individual stocks and whole markets up and down or engineer sharp crashes and reversals.

That last point is worth elaborating upon. Suppose you are the type who is naturally skeptical of claims that Wall Street is capable of using its high speed trading programs to manipulate the broad stock market averages, and you begin to tune out at the mere mention of the "Plunge Prevention Team". Consider this, by various accounts high speed trading makes up 50-75% of ALL trading on the major exchanges. Does that suggest it is at least, possible?

Now, let's examine a number of possible explanations for the recent minutes-long 1,000 point plunge in the DOW. Mainstream media immediately seized upon the notion that a "fat fingered" trade was responsible, meaning that at least in concept if not in exact detail, someone might have erroneously entered a sell order of a billion of something instead of a million. That idea has been discounted lately, no such fat fingered trade being found. A few large stock sell orders, a large E-mini futures trade, and an anomaly in the Japanese currency market have been identified, but apparently all of these were parts of legitimate trading or hedging activities.

So, a fat fingered trade did not trigger the plunge. Other explanations offered are that current high speed computer trading algorithms are so prevalent and so twitchy that a few large legitimate trades can crash the market in minutes, or a few large high speed computer traders are so influential that they can plan and execute a market take-down whenever they want. Right now, the buzz seems to be all about the first explanation, and discussion revolves around ways to implement additional market "safeguards" to prevent this from happening again, as if the plunge was similar to a car accident, and what the stock market exchanges really need are more "seat belts" and "air bags".

Here's where this gets good, or at least I think so. What's the difference between a few well placed trades crashing the market because high speed trading makes the market twitchy and a few large high speed traders being able to crash the market? Isn't the glaringly obvious plain fact really this, that Mr. Market has just demonstrated beyond a shadow of a doubt that high speed computer trading is responsible for an unprecedented high speed plunge and recovery? If high speed trading CAN do this, even if this incident occurred by accident, hasn't the capability to do this by design just been proven? And, if it CAN be done, do you really think no large high speed trader, such as Goldman would dare do it? Haven't the Goldman leadership already proven they have balls the size of planets?

OK, OK, you just cannot bring yourself to believe the broad market averages are being manipulated. The 1,000 point plunge is and always will be simply an "accident" or an "anomaly" in your mind, an "accident" of some kind. What would be the cause of the worst possible stock market accident you can imagine? Suppose the $700 trillion derivatives market "blows-up" suddenly, whatever that means. I think it means a large move in currency or bond markets causes a number of BIG derivative contract defaults, and because there isn't enough money in the world for counter-parties to pay off in such an event, a series of cascading defaults would occur.

Do you really think you can trade more intelligently and nimbly than Goldman Sachs high speed trading programs and get out of the way of such a disaster before Goldman does? That idea triggered a memory in my engineer's mind, that instead of trying to calibrate a model of a dynamic system by direct calculation, it can be far easier and more accurate to simply shock it and record how it reacts. Did Goldman or some other big trader simply ping the system by pulling or delaying thousands of buy orders across the board and initiating that 1,000 point drop in order to calibrate their trading programs? If so, could the timing have possibly been any better, when Congress was meeting concerning the Goldman Sachs investigation and Fed audit bill? Could this have been both a test of the market and a threat to Congress?

Read the claims and judge for yourself whether they are credible or not. If they are, do you really wish to play poker with players who can peek at your cards or determine in advance the cards you will be dealt? If so, you might do well to go to Las Vegas instead. At least there you will score free drinks while throwing away your money.

Wall Street and the World of Flash Stock Trades, by Ned Potter, July 29, 2009

Front Running, Wikipedia

Computerized Front Running: Another Goldman-Dominated Fraud, by Ellen Brown, April 21, 2010

Computers, Not Human Error, Likely Caused Market Meltdown, CNBC, May 07, 2010

Surge of Computer Selling After Apparent Glitch Sends Stocks Plunging, by Nelson Schwartz and Louise Story, May 6, 2010

Stock Market Time Bomb?, by Arnaud deBorchgrave, May 10, 2010

High Frequency Terrorism: How the Big Banks and Federal Reserve Maintained Their Death Grip Over the United States, by David DeGraw & Max Keiser, May 11, 2010

The May 6 Stock Market Crash Revisited, by Pam Martens, May 12, 2010

Saturday, May 8, 2010

Was I Dreaming, or Did the Dow Drop a Grand When I Blinked on Thursday?

Again, it's been a while since I've posted. This endless bear market rally with near-zero volatility and low volume has been mesmerizing. Yet, I've maintained a skeptical attitude and about five months ago began buying puts on the S&P500 at 1100. It's taken much longer than expected but perhaps the action this past week is saying the accounting-rule-change-driven relief rally top is finally history.

The 998 point intra-day drop in the Dow over a few minutes, Thursday, is already beginning to fade from public memory ("...move on folks, nuthin' to see, nuthin' to see. Don't try connecting the dots. Nuthin' to with Greece, debt, or anything fundamental. Just a wee omputer-trading glitch.").

Instead of focusing on that singular event, I'm posting another big picture piece on the excessively indebted US and world economic systems. It might appear that I post nothing but bad news, but keep in mind that you receive little but good news from the mainstream media, and my intent is to present information that properly rounds out the picture.

The biggest economic problems in the world today are: debt, debt, and debt. Understand that, and you can begin to understand something of “modern” economics. However, to fully understand the terrible state of the economy today, you also need to understand how the source of practically all money is debt, in the form of bank credit, and the simple facts that we are all made prisoners of this monetary system by the legal tender law and the non-existence of alternative money.

It is not my intent to explain the mechanics of that system here. Suffice it to say that as long as you operate within the system, you being robbed directly by inflation and also by taxation on illusory inflation-profits, and the markets you try to “invest” in to protect your savings and generate real profits over and above inflation are being manipulated and gamed by the big financial players. Even your federal, state, and local governments are being manipulated and gamed by these same players.

The end game comes when the public and governments can absorb no more credit. The mathematics of repayment of principle plus interest then dictate that there shall be outright individual, business, and government failures. This is not even a zero sum game. The mathematics dictates that there shall not just be relative winners and losers, but there shall be failures, bankruptcies, and abject poverty.

These results are not an absolutely necessary part of the human condition but they are absolutely a result of the present less-than-zero-sum monetary system. What would you think of parents having four children and telling them there is enough food for all, but they plan to starve one child to death just to make life a bit more competitive? It's an admittedly gross and imperfect analogy but it's something like that.

Let's survey the past two and a half months to see how this 400-year-old mature monetary system is working out. If at the end of your reading, you still think that you can “play the markets” in stocks or bonds, without understanding banking, credit, and debt, well, good luck. You will need an abundance of it.

The Sovereign Debt Disaster, by Egon von Greyerz, February 23, 2010
Buffet's Partner Says America is Finished, February 23, 2010
Sultans of Swap: Explaining $605 Trillion in Derivatives, by Gordon T. Long, February 24, 2010
Nearly 25% of All Mortgages Are Underwater, by Les Christie, February 24, 2010
Sovereign Debt Follies, “It Has Taught Us Nothing”, by Bob Hoye, February 25, 2010
Bernanke Delivers Blunt Warning on US Debt, by Patrice Hill, February 25, 2010
Massive Bank Failures Due, by Charlotte Cuthbertson, February 25, 2010
California is a Greater Risk than Greece, Warns JP Morgan Chief, by James Quinn, February 26, 2010
A Quick Tour of Hyper Inflation and Its Consequences for America, by John Silveira, March 1, 2010
The Real Cause of Hyperinflation, by Jordan Roy-Byrne, CMT, March 2, 2010
Indonesian Mob Wants Blood After Treasury Secretary Spends a Fortune Bailing Out Banks, by Gus Lubin, March 3, 2010
Signs of the Tmes, by Bob Hoye, March 4, 2010
Unemployment, by Howard S. Katz, March 8, 2010
Why California is Doomed, by Charles Hugh Smith, March 9, 2010
Tedbits 2010 Outlook. When Hope Turns to Fear, Part IV, by Ty Andros, March 12, 2010
Eurozone Could Risk 'Sovereign Debt Explosion', by Ambrose Evans-Pritchard, March 12, 2010
The Complete Guide to Toxic Mortgages and the Housing Situation of California, March 13, 2010
Unemployment (continued), by Howard S. Katz, March 15, 2010
The Spectre of Financial Armageddon – Health Care and Federal Debt in the United States, by Michael E. Chernew, Phd, Katherine Braiker, Phd, and John Hsu, MD, MBA, MSCE, March 17, 2010
The Ruins of Detroit, The Off-Shored Economy, by Paul Craig Roberts, March 17, 2010
Watch the Bond Market, Not Bank Lending or Velocity, Jordan Roy-Byrne, March 19, 2010
In the Shadow of the Castle, by David Galland, March 19, 2010
Healthcare Bill to Cause U.S. Hyperinflation by 2015, March 20, 2010
The Most Important Chart of the Century, by Nathan Martin, March 20, 2010
Debtor Nation, by James Turk, March 22, 2010
U.S. States May be the Next Dominoes to Topple, by Boyd Ermin, March 23, 2010
Tedbits 2010 Outlook, When Hope Turns to Fear, Part V, by Ty Andros, March 26, 2010
It is a pressure cooker waiting to explode! Similar “Recovery” rally as in 1929/1930, March 28, 2010
The Municipal Market, by Rick Bookstaber, April 4, 2010
Sovereign Debt Crisis at “Boiling Point”, Warns Bank for International Settlements, by Ambrose Evans-Pritchard, April 8, 2010
Extend and Pretend: Manufacturing a Minsky Melt-Up!, by Gordon T. Long, April 12, 2010
Extend and Pretend, by John P. Hussman, Phd, April 12, 2010
Yes, 47% of Households Owe No Taxes. Look Closer. By David Leonhardt, April 13, 2010
12 Reasons Why Millions Of Americans Are Incredibly Angry About The State Of The U.S. Economy, by Michael Snyder, April 13, 2010
Extend and Pretend: An Accounting Driven Recovery, by Gordon T Long, April 14, 2010
The Global Economic Crisis: Riots, Rebellion, and Revolution. When Empire Hits Home. By Andrew Gavin Marshall, April 14, 2010
Princely Finance and Taxation (Our Annual Tax Number), by Bob Hoye, Institutional Advisors, Apr 15, 2010
Invisible Leverage, by Howard Hill, April 20, 2010
Second Wave of Financial Crisis, by Jim Bianco, April 21, 2010
Collapse of the Standard of Living in the USA. Studies Reveal Declining Living Standards and Increasing Anger, by Hiram Lee, April 24, 2010
The Feds Hollowing Out of U.S. Banks, Daniel Amerman, CFA, April 29, 2010
John Williams: A Hyper-Inflationary Great Depression Is Coming, April 30, 2010
Greenspan Wanted Housing Bubble Dissent Kept Secret, May 3, 2010
The Mother of All Bubbles. Huge National Debts Could Push Euro Zone into Bankruptcy. May 3, 2010
Violating the No Ponzi Condition, by John P. Hussman, Phd, May 3, 2010
Scary Chart, May 4, 2010
The Canary is Dead, by Greg Hunter, May 7, 2010

Sunday, March 7, 2010

Debt, Credit, Inflation, Deflation, the Banks, the Dollar, and Markets - The Big Ugly Picture

It's been a while since I've posted. Maybe you thought I went back to sleep but no, I've just been reading and following the markets. When I read, I'm very still and sometimes appear to be dozing, but that is an illusion soon dispelled after a tap on the shoulder sparks me into a flurry of clever sayings, such as, "What the xxxx! What do you mean by sneaking up on me like that? What time is it? Xxxx, I think I'm supposed to be somewhere," and such.

Where was I? Oh, yeah. I've been meaning for some time to post a significant big picture piece on the monetary system, including the problems of: debt, credit, inflation, deflation, who's behind our financial problems (no secret there - it's the banks), and what it implies about the dollar and markets - dangerous times ahead. That covers a lot of ground, but thankfully there are writers willing to address bad news, even if very few are to be found within the mainstream media.

The articles that follow, especially the first two and the fourth, are very broad brush and cover much of the aforementioned ground. In the week ahead, I'll try to update this piece with commentary about each article and maybe add an article or two more. Even with their arrangement in simple chronological order, their titles provide a fairly clear indication of the big picture.

Inflation / Deflation, Credit Bubble, and the Fed, undated

Economic Black Hole: 20 Reasons Why The U.S. Economy Is Dying And Is Simply Not Going To Recover, undated

The Feds Were Quick To Bail Out Their Friends At The Big Banks But Are Letting All The Small Banks Die Like Dogs undated

20 Reasons Global Debt Time Bomb Explodes Soon - Which trigger will ignite the Great Depression II?, by Paul B. Farrell, February 2, 2010

Rosenberg: Forget The "Flat" Pending Home Sales Number, Here's The Real Disaster, by Vince Veneziani, February 3, 2010

How to invest for a global-debt-bomb explosion - Prepare for an Apocalyptic Anarchy Ending Wall Street's Toxic Capitalism, by Paul B. Farrell February 9, 2010

Depression 2010 - Western Fiat-Money Finished?, Wednesday, February 10, 2010

Sovereign Alchemy Will Fail, February 11th, 2010 by Egon von Greyerz

Two Possible Paths With the Same Endpoint, February 12, 2010

US Debt Will Keep Growing Even With Recovery - US Debt Will Soon be Unsustainable Without Higher Taxes and Spending Cuts, Even With Recovery, by Tom Raum, February 14, 2010

Disillusioned Bayh advocates electoral “shock” to broken system, February 16, 2010

State and Federal Borrowing Is Crowding Out Everyone Else, Feb 22, 2010

Bullish a Year Ago, Robert Prechter Now Sees "the Biggest Bubble in History", by Aaron Task, February 24, 2010

Will the US Devalue the Dollar?, by Darryl Robert Schoon, Mar 3, 2010

Sunday, February 14, 2010

How are Markets, the Economy, and Your Dollars Doing?

On January 24th, Clive Maund warned of a potentially "Black Monday" type drop looming in the S&500 Index after the failure of its abortive run up to 115. More interesting perhaps, depending on how much cash you hold, was his second chart showing the S&P500 denominated in Euros instead of dollars. For those unaccustomed to thinking in terms of foreign currencies, a chart of US stock prices denominated in Euros will have the same shape as a chart denominated in US dollars, provided that the dollar/Euro exchange rate does not change. But, if the dollar falls in price versus the Euro, the dollar will buy fewer Euros, meaning a US stock will also buy fewer Euros, and a US stock prices chart denominated in Euros will have smaller rises and larger drops in comparison with a chart denominated in dollars. Accordingly, as the S&P500 recovered from its recent March low, its gain seemed remarkable in terms of US dollars. Over the same time, however, the US dollar was falling against the Euro, making the gain not so remarkable after all when viewed in terms of Euros.

Note, the entire rise shown in the first chart is reflected in the last 1/12th of the second chart, from March, 2009 to date. Not as impressive as a stock chart denominated in dollars. But, there is a nice little run-up at the very end of the chart from 7 to 8 on the y-axis. The very recent sharp reversal and run-up in the dollar against the Euro during as the S&P500 fell sharply from 115 would seem to explain that.

Clive's third and fourth charts show Goldman Sachs and JPMorgan falling sharply at the same time as the S&P500 on high volume.

On February 1, Clive repeated his warning in a longer piece with updated S&P500 and Goldman Sachs charts and more charts, including the: $Gold Index, $HUI Index, USD Index, $Copper Index, and $WTIC (Light Crude Oil) Index charts. Markets could be on the verge of repeating last year's crash or worse.

On February 15th, Clive posted a "Gold Market Update" on the 321Gold Website (one of my favorites). The articles Clive publishes publicly come out a few days after he publishes them for his paid subscribers. This article was originally dated February 13th. His latest opinion is that the recent corrective phase in gold is over, and we are on the verge of another big run-up in gold. He might be right, however, I would still advise caution. Clive tends to get over-optimistic and over-enthusiastic about gold sometimes. Also, he is a practitioner of "technical-analysis", the method of divining the future from the stock chart itself. While the stock chart itself can provide useful information about timing short-term and sometimes intermediate-term buys and sells, it cannot reliably predict more than that. If the Dow, S&P500, and NASDAQ head south, they will drag precious metals stocks and the metals prices themselves with them, no matter what the precious metals technical analysis says. One way to play this is to buy several gold and silver stocks, and hedge them all by also buying SPY (S&P500) put options.

On February 7th, Bob Chapman touched on a wide variety of issues pertinent to Gold, Silver, the Econonmy, and More, including: the upcoming second wave of mortgage defaults, the real unemployment rate, foreign buying of US Treasuries and Agency bonds, a hint that the Government is planning for some kind of forced retirement plan where citizens would be required to exchange some part of their retirement savings for a Government guaranteed annuity, the role Paul Volcker might play in helping return the financial sector to some semblance of former normalcy, financial industry front running, the increases in the national and Federal Reserve debts, and on the "bright side", mention of an uptick in mortgage applications and a slowdown in job losses.

Recently, Daniel Amerman, addressed the issue of inflation versus deflation in this article, "Containing Inflation Via Unlimited Money Creation: The Fed's Strategy". Currently and for quite some time, two camps have been debating this issue of whether the current monetary system will suffer a deflationary depression or a hyperinflationary depression.

In a deflationary depression, debt is repaid or defaulted upon resulting in wave after wave of bank failures and a contracting money supply but the currency does not fail; the dollar becomes more valuable. In a hyperinflationary depression, expansion of the money supply and leads to runaway inflation and failure of the currency, because the dollar eventually loses all value.

The reason people are arguing about which way the monetary system and economy will go - deflation or inflation - is that the Government and the Fed have propped up the financial sector by exchanging Government and Fed debt instruments for bad assets belonging to the big banks, Government Sponsored Enterprises (GSEs - think Fannie Mae, Freddie Mac, etc) and Wall Street firms. On paper, these exchanges led to large increases in the money supply leading many people to think that high inflation is right around the corner. At the same time, banks have been reluctant to lend, and borrowers have been reluctant to borrow and spend, meaning the new money has not found its way into the general economy in a big way ... yet. While this money sits in the coffers of the big banks, businesses and people are trying to pay off existing debt, that extinguishes money, and is deflationary. So, at the same time inflationary forces are at work, deflationary forces are also at work and opinions vary as to which forces will predominate and when.

Daniel explains how the Fed and Ben Bernanke are handling their part in this story. In short, Ben Bernanke thinks he has a strategy that will allow him to control the vasts sums of money created by the Fed, prevent its escape into the general economy, and thereby prevent hyperinflation. Daniel explains the risks of Ben's plan and begs to differ. In my opinion, this is an area where I don't think the future is ordained yet, and future decisions that will be made by the Fed and our Government might well determine the outcome. I think the best plan is to hedge your bets no matter which way you think the dollar is going, but you should read the article to understand the economic and political issues better.

While obviously not a total secret, the opening of this article, Secret Summit of Top Bankers, by George Lekakis and Fleur Leyden from the Herald Sun, February 06, 2010, pretty much explains its importance:

"The world's top central bankers began arriving in Australia yesterday as renewed fears about the strength of the global economic recovery gripped world share markets. Representatives from 24 central banks and monetary authorities including the US Federal Reserve and European Central Bank landed in Sydney to meet tomorrow at a secret location, the Herald Sun reports. Organised by the Bank for International Settlements last year, the two-day talks are shrouded in secrecy with high-level security believed to have been invoked by law enforcement agencies. The event will be dominated by Asian delegations and is expected to include governors of the Peoples Bank of China, the Bank of Japan and the Reserve Bank of India. The arrival of the high-powered gathering coincided with a fresh meltdown on world sharemarkets, sparked by renewed concerns about global growth and sovereign debt."

The significance of this meeting in light of recent news, the apparent topping behavior of stock markets, and the recent sharp drops should be obvious. The banking elite are very concerned about how to manage the looming crisis should markets take a another dive like they did last year. If all was well in the financial world, a meeting such as this would not be taking place.

My favorite quote concerning "secret meetings" like this goes, "If you are trying to find a cure for cancer, you do it with the lights on." In other words, if you are truly engaged in activities that will benefit all of society, wouldn't you want everyone to be aware of your good deeds? Call me a cynic, but in my opinion the central banking elite are meeting to figure out how to save their bacon, not mine or yours.

Friday, February 5, 2010

What's Wrong with What's Wrong Articles

West Coast Wasteland, by Sasha Abramsky, January 21, 2010, is a very good article on what’s wrong with California … except, there’s something wrong with it. Sasha does an excellent job covering the devastating the effects of the "Great Recession" on the Golden State, and in Standing Up for Change, she very responsibly points out the major populist efforts afoot attempting to make California’s problems right. No, my problem is not with what she wrote; I read both articles with interest.

It is just that the first article is typical of a multitude of articles currently being published on every entity experiencing financial problems, describing the effects of what the: Federal Government did wrong, on what Bear Stearns did wrong, Lehman Brothers, AIG, Merril Lynch, Washington Mutual, Fannie Mae, Freddie Mac, General Motors, all the major banks, the Fed, nearly every State and local government in the country, individual investors, homebuyers, European banks and governments, Japan, China, Russia, Dubai, etc. The list of people, groups, and organizations with financial problems is endless. It's almost like the days after 9/11. Oh my God, look at that, and that, and that. And, not enough how and why.

Truth is, well before the financial crisis of 2007/2008, it was understood that California had problems. So did many other states. But, it is hard to make changes while the “good times” roll. Stock markets were rising. Credit was available to states, corporations, and individuals. A rising tide of expanding credit lifts all boats. No one wanted to listen to prophets warning of danger ahead. Then along came the financial train wreck that brought the long party of the 80’s, 90’s, and 00’s to an end, with massive damage to balance sheets across the board: banks, corporations, federal, state, and local governments, individuals, etc.

Did California break the financial system, or did the financial system break California and just about everything that depends on steady money flows, all at once? Is it really possible that every person, every business organization, every level of government screwed up simultaneously and nearly destroyed the world financial system and world economy? Or, was there an actual epicenter to this crisis from which the problems emanated?

Sasha wrote, “There's not only no will to modify the residential property tax constraints imposed by Prop 13; the majority also opposes a "split roll" property tax that would allow for commercial properties to be taxed at a higher rate." Sure, any number of individual issues contributed the State's specific problems, but is California in trouble because of the likes of Prop 13, or was Prop 13 a reaction against the real problem that caused the current financial and economic crisis? Sadly, it is unlikely that Sasha or more than a very few writers at this time can connect the dots between this mundane observation about property taxes and the financial problems afflicting “developed” nations worldwide.

Simply said, Proposition 13 was a reaction against relentless tax increases on homeowners caused by inflation, caused by the very same Fed, major banks, and Wall Street types responsible for the current financial crisis. If excessive credit were not relentlessly expanding the money supply, and the banking industry were not so thoroughly deregulated, there would have been no stock market bubble, housing bubble, no subprime crisis, no derivatives blowups, toxic assets, outrageous increase in the national debt, etc. California homeowners finally said, no more unlimited property taxes based on inflation beyond our control. But, they had no control over much else the state and national governments did, or the Fed, the major banks, Wall Street, and the rest of the crew responsible for relentless inflation.

No, there is no excusing the State Government of California’s poor financial condition. It’s consistently ranked near the top if not the top of all U.S. States in financial trouble. It was already making plenty of its own mistakes before the financial crisis hit, but there is a difference between walking near the edge of a cliff and being pushed off. California Government is definitely not wearing the white hat, but it is not wearing the black hat either. Call it dark grey. The folks wearing the black hats are: the Fed, the banks, Wall Street, and our very own Federal Government, with the monetary system at epicenter of the financial earthquake.

I have dear relative who took issue with my claim that the cause of the crisis was and is not well known. She said, "Why, everyone I know saw it coming." But, she is very smart, well educated, well read, perceptive and hangs with similar people. She's not typical, while I teach high school, and I can say with confidence that the number of teachers and students who even suspect the source of our problems, let alone understand it, is one in a hundred. We need more people writing about it. We need more people involved in the national populist movement to reform the national monetary system.

Thursday, January 28, 2010

Hold Onto Your (Retirement) Wallet

Soon, the Government will be reaching for it. In "Prepare Now to Escape Obama’s Retirement Trap," January 21, 2010, Ron Holland warns:

"The largest source of liquid private wealth remaining in the United States are the $15 trillion in private retirement funds and the ultimate ownership, control and future of these funds have already been compromised and exchanged for the favorable tax treatment of private retirement plans. Congress writes the laws, so they can tax, penalize, hold your funds hostage and although they’d never use the word, “confiscate” your assets at their discretion.

The retirement trap ... is only a proposal at the present time and since it may well begin in the latter years of the Obama Administration ... I’m calling it the “Obama Retirement Trap”. But make no mistake, the government need for current revenue and their frenzied search for a short-term fix to fund a backstop of liquidity to buy future government debt obligations when no credible investors will buy them is an unspoken quest of both political parties. The establishments of both political parties will do anything to stay in power and this will include raiding and pillaging your retirement funds.

The prototype for their plan was devised in 1991 by Alicia H. Munnell, then Director of Research for the Federal Reserve Bank of Boston. She presented the idea in a paper entitled “Current Taxation of Qualified Pension Plans: Has the Time Come?”

Later she was promoted to Assistant Treasury Secretary, and along with Robert Reich, Henry Cisneros and Hillary Clinton, she began to plot a raid on retirement funds. One element of the scheme was to create a Mandatory Pension System and fund it with a one-time 15% tax on retirement assets and a recurring 15% tax on retirement plan income.

The latest leftist plan first appeared in 2007 at the Economic Policy Institute: Agenda for Shared Prosperity. In 2008, she became the new Director of the Schwartz Center for Economic Policy Analysis at the New School for Social Research. In her book, “When I’m 64: The Plot Against Pensions and the Plan to Save Them”, she hypes her retirement solution for millions who do not have adequate retirement savings and her solution is to confiscate most of the retirement assets of successful Americans.

A plan this radical can’t just be slipped through Congress. It can only ride into law on a first-class national crisis. Have you noticed that somehow the politicians are always able to find one when they need one. According to the author, there could be several possible triggers:

Loss of Triple-A Status for U.S. Treasury Bonds
(most likely)
Terrorist Attack or Military Disaster

Another Economic Meltdown

A Run on Treasury Debt by Foreign Investors

[Assuming the most likely scenario] At some time during the next decade, a global run on treasury debt and the dollar will also likely take the American stock market down past lows not seen since the financial meltdown crisis in 2008 and 2009. The 50% to 75% stock market pullback during the actual bankruptcy of the Washington debt and paper dollar will send shock waves through retirees and current plan participants as their private retirement plan balances plummet.

At this time, Washington will come to the rescue and guarantee all private retirement plan market values back to pre-crisis levels. The gullible American public will overwhelmingly support this effort by switching their dwindling funds into the Guaranteed Retirement Annuity managed by the government. For the first few years, Washington will probably label those few of us who warn that that Americans have lost their retirement benefits as extremists, Ron Paul paranoids and Tea Party advocates.

Then it will become crystal clear to all Americans that their retirement benefits have been given away for a promise by an evil group of plunderers who have never in their history kept a promise, a guarantee or their word on anything. The greatest theft of wealth in the history of the world will have taken place and only those few who heeded an early warning will still have their retirement benefits and security.

I still remember when many years ago, the Government first proposed "Individual Retirement Accounts", my father saying, "My concern is that someday the Government will decide it needs that money and take it." Seems now like he might turn out to be quite the prophet.

Tuesday, January 26, 2010

Et tu, Supreme Court?

In case you thought there was a part of Government not bought and paid for like, say Treasury, Congress, or the Presidency, along comes another slap in the face to wake you up. In The New York Times, January 21, 2010, “Justices, 5-4, Reject Corporate Spending Limit”, Adam Liptak reported that the Supreme Court overruled two important precedents about the First Amendment rights of corporations:

“… a bitterly divided Supreme Court on Thursday ruled that the government may not ban political spending by corporations in candidate elections.
The 5-to-4 decision was a vindication, the majority said, of the First Amendment’s most basic free speech principle — that the government has no business regulating political speech. The dissenters said that allowing corporate money to flood the political marketplace would corrupt democracy.

The justices in the majority brushed aside warnings about what might follow from their ruling in favor of a formal but fervent embrace of a broad interpretation of free speech rights.

“If the First Amendment has any force,” Justice Anthony M. Kennedy wrote for the majority, which included the four members of the court’s conservative wing, “it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech.””

Other sources suggest the ruling opens the door to unlimited spending by foreign and multinational corporations as well in US elections. So much for YOUR voice in America.

I’m sorry, but I fail to see how a corporation is a citizen or association of citizens. A corporation is a legal entity, not a person, and it is certainly not an association of citizens in the sense of a social or special interest club, where people participate on a relatively equal footing, and the voice of the association is representative of its members.

A corporation has more in common with the Army than it has with association of citizens, because the average corporate employee has no more say in the activities of the corporation than does a private in the army. While the Sierra Club, Greenpeace, the NRA, or your local golf club would never dare advocate against the interests of its own members, a corporation very well might advocate for laws against unions for example, against its own employees in other words. What could be more unfair than taking profits made by the labor of its own employees and using it to lobby Government against their interests?

No, this Government is taking sides in class warfare at every turn, the top against everyone below, first the bailouts of Wall Street and the banks, now this. It’s ugly to witness.

Monday, January 25, 2010

Wake up Rip Van Winkle

Some of us did, but most people didn't see the March, 2008, general stock markets crash and subsequent "Great Recession" coming. For those who, like Rip Van Winkle, have been sleeping for the past twenty years, because everything seemed to be so fine and dandy, but now the world seems like a far scarier place, you might want to get caught up on what happened during your long nap.

If so, the recent writings of Stewart Dougherty are a good place to start. A Tufts University graduate Magna Cum Laude, with a double major in English and History, he started a successful company after college and sold it to attend Harvard Business School. Made a Fellow of the business school, he was invited by Harvard to write business case studies. The studies he wrote were published in several languages, and taught in business schools around the world. He earned an M.B.A. from Harvard Business School in 1982.

Founder of a strategic consulting firm that served companies in the telecommunications and financial services industries, he was subsequently hired by client MCI Communications Corporation, and became Vice President of International Strategic Planning. Part of a team that proposed to integrate British Telecommunications and MCI, he witnessed Worldcom upset the deal, and acquire MCI Communications. He had grave concerns about Worldcom's viability, and directly after MCI's acquisition by Worldcom, he returned to his private consulting practice, where he has worked since. He is a Life Member of the Greater Philadelphia Chamber of Commerce.

Worldcom with $107 billion in assets subsequently imploded in July, 2002, in the United States' largest bankrupcty at the time, dwarfing the prior bankrupcty of Enron with $63 billion in assets. I remember because the V.P. of Salomon Smith Barney at the time had strongly recommended both stocks to me shortly before each went bankrupt. Such events stuck in my mind, not to mention my craw, and did much to diminish the exceedingly small store of confidence I had in U.S. financial institutions after the Nasdaq market crash of March, 2000.

You see, I'm no genius. The Nasdaq crash of March, 2000, was the beating that woke me up. Consistently mislead by brokers, the U.S. Government, and mainstream financial information sources, it was not until after my own personal financial rape, I began reading what appeared to be die-hard skeptics of everything I had assumed to true about business and economics and began to form an understanding of how economics works in the real world.

Rather than being a passive instrument, like a plastic chip in a penny-ante poker game, I found that the US dollar had undergone radical transformations, while serving as the key weapon in a deadly serious class war, the aristocracy of wealth versus everyone else. Via the dollar: The Fed, major banks, Wall Street, corporations, and major media manipulate and control the government and public education and determine what passes as "economics"; in it there are no such things as: free enterprise, free markets, and real savings. Have not been for a long time.

That, however, is a much longer story than one mere blog entry can hope to address, but if you just want the highlights since the day the March, 2009, market crash slapped the sleep out of your eyes, here goes:

The Theft of a Nation
by Stewart Dougherty, Apr 10, 2009

Six Syllables to a Savage Truth
by Stewart Dougherty, July 14, 2009

Fort Knox, Fort Hocks or Fort Shocks: Three United States Gold Scenarios
by Stewart Dougherty, 23 July 2009

The Metastasis of Moral Hazard and its Effect on Gold
by Stewart Dougherty, 26 August 2009

America's Impending Master Class Dictatorship
by Stewart Dougherty, January 22, 2010

That ought to get your mind centered again, even if it leaves you fighting mad. But, you should be mad. Anger can be a motivator, to learn more, to spread the word, to vote. There was a time, long ago, when Americans were not very interested in sports. Politics was their passion. Maybe, you should turn off the TV, take up a new (old) sport, and get serious about it. Or, just roll-over and let the same folks who stole your money take what's left of your life.

Saturday, January 23, 2010

Who is Buying Stocks???

Charles Biderman explains his bewilderment at the US stock markets strange rise since the lows of the March 2009 crash, on Bloomberg TV, January 19, 2010. Volume has been low, gains during normal hours have been low, and most of the gains are attributed to futures trading after hours. No one seems to know who is buying. Some suspect the Fed has been propping up the markets.

Is this: capitalism, free enterprise, free markets, or none of the above? George Orwell rolls over in his grave. No one notices.

Watch the video here.

Monday, January 18, 2010

Asleeper Has Awakened

Before the NASDAQ crash, I was asleep.

The dot-com bubble burst on March 10, 2000, when the NASDAQ peaked at 5,048.62, more than double its value of a year before. Other stock markets around the world crashed simultaneously, including commodities, but in the US, the stock market punished the worst was the tech-stock-heavy NASDAQ. Hiring freezes, layoffs, and consolidations followed in several industries, especially in the dot-com sector.

Several communication companies, burdened with debt from expansion, sold their assets for cash or filed for bankruptcy. Worldcom, the largest of the failed companies, used illegal accounting practices to overstate its profits by billions of dollars. The company's stock crashed when these irregularities were revealed. Within days, it filed the second largest corporate bankruptcy in U.S. history.

Many dot-coms ran out of start-up or investment capital and were acquired or liquidated. Several companies and their executives were accused or convicted of fraud, and the SEC fined Citigroup, Merril Lynch, and others millions of dollars for misleading investors.

The dot-com bubble crash wiped out $5 trillion in market value of technology companies from March 2000 to October 2002. Among the $5 trillion was about 40% of my retirement investments. I was lucky. Many lost much more.

The NASDAQ crash woke me up. I researched major market crashes, including the Great Depression, to find out what happens in the aftermath, to find out how I might get my money back. What I found was fascinating, and I'll get to that, but it also raised questioned about why markets crashed simultaneously to begin with. Being an ex-mechanical engineer with a systems engineering point of view, that was strong evidence of failure by design. I found that the reason the markets crash is the result of a monetary phenomena peculiar to our monetary system.

The problem is that some 98% of all our money is issued by banks in the form of credit, and due to the unique powers given to banks by law to create credit, there is no real limit on the issuance of credit and hence no real limit on the amount of money that banks can create. Also, the mathematics of principal plus interest favor the increasing of credit by banks until the limit of the ability of debtors to repay is reached, at which time the financial expansion stops, markets crash, and bankruptcies become epidemic. The financial money-generation system cycles between credit expansion and boom times and credit freeze, market crashes, business and individual bankruptcies.

The bigger the expansion of credit and the boom times, the bigger the crash, and contrary to popular belief, there have been more than one great depression. Our type of banking-monetary system started some 400 years ago in Europe. We in the U.S. inherited it, sort of. More like it was deliberately introduced in as quiet a back-door style as possible. In 400 years, there have actually been five great depressions, the 1930s Great Depression being the latest incarnation. The media always capitalize the "G" and the "D" to create the impression it was a one-off event, a fluke, something that will never happen again. Our current "Great Recession" may indeed be the sixth great depression, but our Government works hard to counter that impression by manipulating economic statistics. If a tree falls in a forest, and Government figures say it didn't, you are supposed to believe it didn't make any noise.

Getting back to the question of how to recoup my NASDAQ losses, I found that the best and safest investments in the aftermath of a major market crash are the precious metals. They cannot go bankrupt, default, or otherwise fail like paper assets such as stocks and bonds. Also, Government and central bank responses to market crashes are invariably the same, to work overtime to try to expand credit again. If successful, this leads to another boom and rapid initial inflation, increasing the price of precious metals. Commodities go up too but they can be more volatile. "Priming the pump" with credit and keeping credit expansion going are the keys to how recessions are turned around and prevented from becoming great depressions. They are also the ways the wealthy elite who own the banking system keep us all in debt and servitude.

If Government and central bank efforts to expand credit fail, a financial crisis can persist. If the failure to expand credit is spectacularly ineffective, the overall money supply can actually contract, leading to the dreaded debt-deflation spiral, as loan defaults increase faster than credit can be expanded, plus a general fear of debt and bankruptcy replaces greed-driven speculative investment. Another way of saying this is you can make credit available but you cannot make people borrow, and even if they borrow, you cannot make them spend. If all people do with discretionary income is pay down debt, the economy continues to slow down, debts get paid off, the money supply contracts, and velocity of money falls. This is how Great Recessions turn into great depressions. Great depressions are associated with large price drops in almost every asset category, with no safe investment position except being debt-free, holding cash.

Long credit expansions are typified by steady credit expansion and price inflation. The response to a recession is always typified by an attempt at even greater credit expansion, usually by lowering interest rates, monetary inflation and less price inflation. Responses to severe financial crises are typified by vigorous, greatly increased efforts to expand credit, which may or may not result in general price rises; it all depends on whether the banks can be made to lend, lenders to borrow, and borrowers to spend.

The latter problem is also sometimes called "pushing on a string". If the credit string is pushed, and enough people are willing to pull on the on the other end of it, a recession can be turned around, the economy will pick up, and inflation will resume but not be too bad. If the credit string is pushed, but no one wants to pull the other end, credit will not expand, and a recession can turn into a Great Depression. At that point, to avert the depression, extreme measures may be taken to prevent the money supply from dropping. Such measures, including "money-printing" aka "quantitive easing", can result in an unstable financial and economic condition wherein uncontrolled expansion of the money supply occurs, people lose faith in the money, the circulation rate (velocity) of money spikes very quickly, and "hyperinflation" occurs.

This does not, however, always happen. Sometimes, the money just flows into a few assets classes, causing market "bubbles" as investors chase gains. Or the money can just sit in a constipated banking system where there is reluctance to lend, debtors are reluctant to borrow, or there is borrowing but there is reluctance to spend. The latter situation is the justification for Keynesian-Rooseveltian proposals that the Government must then become the "spender of last resort". If these latter patterns emerge, it is possible for the money supply to just keep going down due to mathematical relations between debt, income, and money supply, and the result can be an unstoppable 1930s style Great Depression.

In science and engineering, when a process reaches a point of instability where a small input can cause two or more very different system behavioral outcomes, we call that a "bifurcation point". In the aftermath of a market crash, in our current economic system, it seems that a bifurcation point occurs followed by several possibilities, depending on the extent of the previous credit expansion and severity of the underlying debt problems. In order of increasing extent of the previous credit expansion and underlying debt problems, the bifurcation points seem to be:

  • (#1) Credit expansion, renewed inflation, market recovery, gold/silver rise initially in the aftermath
  • (#2) Credit expansion, renewed inflation, continued high unemployment, multiple rotating asset bubbles, carry trades, and choppy markets (stagflation), gold/silver rise initially in the aftermath
  • (#3) Extreme efforts to expand credit fail, and a second bifurcation point occurs:
  • (#3a) Sudden monetary inflation, ie, hyperinflation, currency failure, aka a "hyperinflationary depression", is a possibility, and gold/silver are king/queen.
  • (#3b) uncontrolled monetary deflation, deflation of all asset classes except cash, counter-party failures, mass defaults on contractual commitments (all paper assets), mass bankruptcies, especially banks, extremely high unemployment, real GDP contraction, also known as a "great depression", are all possibilities, and cash is king.

Most people think that if precious metals increase in price in a successful resolution of a recession (Cases #1 and #2 above), they will decrease along with most assets in an unsuccessful resolution leading to a great depression, or at least they will decrease in Case #3(b), yet history suggests that is not exactly what happens. What seems to happen is that precious metals definitely do increase in price when a recession is successfully resolved (#1 and #2) as people anticipate higher than normal inflation. Where Case #3 is a possibility, however, precious metals hold their value or increase when it appears a recession might not be resolved successfully and investors seek safety, an asset that cannot fail (cannot go bankrupt or default), and they ponder the chances of hyperinflation. If Case #3a plays out, investment in precious metals will prove to be a very smart move. If Case #3b begins to emerge, and the system progresses into a great depression, markets and assets will suffer additional crashes, and precious metals drop too, usually in sympathy with stocks and commodities, but precious metals drop less than other assets, being perceived themselves as a form of cash, making them the next best thing to cash, and when the market crashes reach bottom, the precious metals will recover quickly as investors anticipate rapid inflation.

Now matter how Case #3 plays out, investment in precious metals then is either the best investment by far (#3a) or second best to cash (#3b). From the perspective of investment in cash, that is simply holding cash, that would be the worst approach (#3a), or the best (#3b). Risk management then says, because of Case #3(a), you must invest something in precious metals when facing the possibility of a great depression, and at least part of it must be in the physical metal in personal possession.

The time when precious metals underperform most of all other assets is when a long, slow credit expansion with low interest rates occurs. Such conditions are favorable to business and trade. Many ventures enjoy real organic growth, profitability, and pay dividends under such conditions. Gold does not grow like a business, it is simply a safe store of value, so it underperforms as an asset at such times.

This economics I learned after taking my NASDAQ beat down enabled me to recover most of what I lost from 2000-2002 by investing in precious metals. It also helped me side-step the stock market crashes in 2008. Another clue to the puzzle was interest rates; they are a lever of control by the banking system over credit expansion/contraction, but to keep it simple, I kept interest rates out of the discussion so far. In the rules below, however, I mention the interest rate because they give clues as to the direction of markets and asset prices.

My lessons learned may be summarized as:
1) Stock markets, the economy, the housing market, etc, they are all about the monetary system, banks, credit, and interest rates.
2) In stable economic times, when interest rates go up, credit expansion slows, bonds drop and the stock market usually drops.
3) In stable economic times, when interest rates go down, credit expansion speeds up, bonds go up, and the stock market usually goes up.
4) Precious metals don't always respond predictably to short term moves in the interest rate. They go up when credit expands faster than real economic growth and when stocks are at risk of failing and bonds are at risk of default, in other words, they go up in times of predictable faster-than-normal inflation and great economic uncertainty.
5) When market performance seems too good to be true, it is. But, it can seem too good to be true for longer than expected. Pay attention to Lesson 1. It's hard to tell when the market is being manipulated.
6) Markets fall faster than they rise. Never take your eye off the banks, the money supply, the value of the dollar, the price of precious metals, and interest rates.
7) In the aftermath of a recessionary market crash, buy precious metals and solid but beaten down stocks.
8) In the midst of great uncertainty before what appears to be a looming great depression, be in precious metals and in cash. In the aftermath of each severe market crash, allocate more to precious metals. As market recovery rallies begin to stall out, allocate more to cash.
9) In times of peace, certainty, and a slow steady credit expansion with reasonable positive real interest rates, get out of precious metals and into stocks and other growth oriented investments.
10) None of this is true all the time. Investing, even just trying to maintain the value of your savings is always a gamble. Sometimes you win, and sometimes you lose.

Overall, saving and investing is a losing battle for most people. The game is simply rigged in favor of banks, other financial institutions, and large corporations due to the structure of our monetary and banking system. My hope in this blog is help people recover some of their disadvantage, hang on to more of their savings, and do better on choosing and timing their investments.

At the same time, I will try to choose and comment on the best articles that explain what is happening politically and economically that threatens the life, liberty, and property of ordinary people. Hopefully, understanding will lead to more sensible involvement by the public in political and economic matters.