Sunday, October 12, 2008

The Party is Just Beginning - The Party is Over Artist: SharonD

Financial Sense

by Randolph Buss

Here are few recent remarks from elected officials in the US government:
  • US House of Rep. Speaker Nancy Pelosi : "It's not a bailout, it's a buy-in"
  • W. Bush : "We have a sound economy"
  • Hank Paulson : "Our underlying financial system is solid"
  • Hank Paulson : "The US Dollar is strong"

As an ambitious student of history in all its twisted and convoluted probity, or lack thereof, a thought from my Berlin (a rather appropriate location) office below. The point being, the SPIN is no longer working - the Emperor, or better said, the Empire, has no clothes. He is now laid bare for all to see - now the financial spin doctors are about to foist even more upon us - just wait.
The Big Lie is a propaganda technique. It was defined by Adolf Hitler in his 1925 autobiography Mein Kampf (My Struggle) as a lie so "colossal" that no one would believe that someone "could have the impudence to distort the truth so infamously".

"If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State."

And here was a response from Joseph Goebbels to Churchill and Co. - also very interesting.

"One should not, as a rule, reveal one's secrets, since one does not know if and when one may need them again. The essential English leadership secret does not depend on particular intelligence. Rather, it depends on a remarkably stupid thick-headedness. The English follow the principle that when one lies, one should lie big, and stick to it. They keep up their lies, even at the risk of looking ridiculous."

Like I have said in the past : Repeat the government's mantra over and over again until you believe it : Strong Dollar, Sound Economy, All is Well, Jobs will not be Lost, Economic Fundamentals are Good.

Read the rest:


by Peter Schiff

Despite the myriad of proposals that are coming from Washington and other world capitals, we must understand that this crisis cannot be cured by governments. In the United States, credit is gone because savings are gone. Our shallow pool of savings has been depleted through bad loans, and we can no longer entice foreigners to lend us their available savings. Given that we are already too loaded up on existing debt they we cannot realistically repay, who can blame them for not wanting to lend us more?

As a result, the free market is trying to put an end to our spending spree. Without savings or home equity to fall back on, Americans struggling with rising prices are finally being forced to cut back. This has terrified our leaders and is causing them to dismantle the remaining structure of our free enterprise-based economic system.

The intention of all these daily federal interventions is to keep the credit spigots open so Americans can go even deeper into debt to buy more stuff they can't actually afford. This should be clear enough to anyone who listens to what our leaders are actually saying. When speaking about the need for an even larger fiscal stimulus package, Barney Frank, chairman of the House Financial Services Committee, said, "We have to prop up consumption." He has it backwards. The government has been propping up consumption for far too long, and the best thing they can do now is remove the props so spending can be replaced by savings.

The sad reality is that we borrowed and spent our way into this crisis, and we are not going to borrow and spend our way out of it. Legitimate credit can only be supplied if there are genuine savings to finance it. Savings can't be magically concocted into existence by a printing press, but can only be created by consumers who spend less than they earn. Efforts to fool the market will not work and will ultimately lead to a monetary disaster and runaway inflation.

Were the government to allow market forces to work, Americans would now have to pay cash for their consumption. That would mean no instant credit for new cars, plasma TVs, appliances, consumer electronics, clothing, furniture, etc. Unless buyers actually had the cash in their checking accounts these purchases would have to be deferred. From an economic perspective this is precisely what the doctor ordered. But for an economy based 72 percent on consumer spending, the medicine will go down hard.

Read the rest:

Both posts by way of: Strike the Root

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