A comment by Daily Bell reader Adam on the modus operandi of the elites:

“1. Create false moral philosophy legitimizing “government”

2. Seize control of money and replace with non-money. Seize control of law and replace with legalese.

3. Create legal tender ‘laws’ where non-money is required for payment of taxes

4. Make an argument with reference to false moral philosophy (already been popularly agreed to) that taxes are voluntary and provide for public goods (when in fact ALL goods, public and private, have already been fully-funded/pre-‘paid’ with cost-free non-money when non-money replaced money thus preventing people from being able to ‘pay’ with substance and thus also limiting their ability to enter into lawful (as contrasted with legal) contracts). Spend collected non-money to gain real things.

5. Encourage non-money to inflate to cause speculative booms in real things

6. Wait until interest-bearing non-money debt reaches serviceable limit

7. Foreclose on non-money debts gaining real things in return

8. Repeat. Expand the franchise. Own the entire globe.

9. Be brazen, fear no recriminations, given popular acquiescence to point 1 above.

10. IMPORTANT: Don’t allow Al Gore to invent the internet”

Reader Barry responded to my previous post, “The Great Depression, American Style,” (which tried to give another another view of the current economic downturn), by sending me a link to a piece by Jim Quinn, called “The Great Deleveraging Lie,” which suggests – as my piece does -that people really aren’t cutting back to the bone and paying down debt. Quinn writes the libertarian blog, The Burning Platform

“During the Great Depression of the 1930’s Total Credit Market Debt as a % of GDP peaked at 260% of GDP. As of today, it stands at 360% of GDP.The Federal Government is adding $4 billion per day to the National Debt. GDP is stagnant and will likely not grow for the next year. The storyline about corporate America being flush with cash is another lie. Corporations have ADDED $482 billion of debt since 2007. Corporate America has the largest amount of debt on their books in history at $7.2 trillion.

Now we get to the Big Lie about frugal consumers paying off debts, cutting up those credit cards, and eating Raman noodles 5 nights per week. Household and non-profit debt, which includes mortgages, credit card debt, auto loans, home equity loans, and student loans peaked at $13.8 trillion in 2008. After two years of supposed deleveraging, frugality and mass austerity, the balance is $13.5 trillion. Consumers have buckled down and have paid off 2.2% of their debts, it seems. Not exactly going cold turkey, but it is a start.

But wait. Consumer debt outstanding is $300 billion lower. If you hadn’t noticed, the banks in the United States have been taking a few losses on their loans over the last couple years. A simple search of the Federal Reserve website reveals that banks have charged off 5.66% of all their loans in the last two years. The charge-off rate in the 2nd quarter of 2010 was 6.66%. To verify for yourself go to the Federal Reserve website.

So, let’s get down to the nitty-gritty. If consumer debt was $13.8 trillion at the end of 2008 and the banks have since written off 5.66% of that debt, total write-offs were $800 billion. If total consumer debt now sits at $13.5 trillion, then consumers have actually taken on $500 billion of additional debt since the end of 2008. The consumer hasn’t cut back at all. They are still spending and borrowing. It is beyond my comprehension that no one on CNBC or in the other mainstream media can do simple math to figure out that the deleveraging story is just a Big Lie.

The truth is that the debt has simply been shifted from criminal Wall Street Banks to the American taxpayer. These consumer debts were created in a private transaction between individuals and these banks. When the loans went bad, the consumers should have lost their home, car, etc., and their credit rating should have been ruined, keeping them out of the credit market for a number of years. If the banks that made these bad loans made too many, they should have failed and had their assets liquidated in bankruptcy. Instead, the Federal Government has inserted the American taxpayer into the equation by using our tax dollars to prop up insolvent Wall Street banks and allowing screw-ups who took on too much debt to live in houses over two years without making a mortgage payment.”

Update:

A far better critique of D’Souza than the Ryan Chittum piece (from the rogue-hedge-fund-subsidized Columbia Journalism Review )  is this one at The American Thinker by Jack Cashill.

Unlike Chittum, Cashill has actually done some digging on Obama himself. He’s the author of the excellent literary deconstruction of Obama’s poem, “Pop.”

ORIGINAL POST (links, afterword, and update added on Sept. 23)

An insightful if controversial* piece by conservative commentator Dinesh D’Souza.  I don’t always agree with D’Souza and find some of his arguments more than a little thoughtless, even glib, at times. But he’s an always evolving and interesting thinker on many issues.

[*That’s the usual criticism from the left. For the usual criticism from the right, see here]

In any case, conservatives like to trot him out to say controversial things about race, especially as it pertains to African-Americans, no doubt on the bizarre grounds that a really dark guy couldn’t be seen as racist.

Of course, that’s not true, and the usual liberal suspects who might have listened to a white man expound on similar subjects without openly calling him a racist (Daniel Patrick Moynihan, for one), are only too happy to shed the veneer of tolerance they wear as arbiters of racial sensitivity and vent their own racial anger at an easy target – a black conservative….and an immigrant from the “cess-pool” of the third-world at that. The effrontery is too much for them and they are quick to put him in his place.

Alas, D’Souza is a sharp guy and no matter what they do, he doesn’t go back into the box.  Anyway, someone who gets the intellectual establishment so riled up can’t be all bad.

Thus Ryan Chittum at the Columbia Journalism Review:

“But D’Souza has some real nerve here: Obama is a native-born American and D’Souza is not. When he says “Here is a man who spent his formative years—the first 17 years of his life—off the American mainland,” he could be referring to himself. According to wikipedia, anyway, he was born in India in 1961 and never came to the States until 1978. That adds up to about “the first 17 years of his life—off the American mainland.” Somehow the first-seventeen years thing raises questions about Obama’s Americanness but not about D’Souza’s qualifications to question somebody’s degree of native-born Americanness.”

Let’s see. There is no constitutional requirement of citizenship (Correction:  natural born citizenship) for anyone who wants to vent an opinion in a magazine. There is one for the President of the United States (and de facto boss of the “free world-anglosphere-western establishment-zionist empire..whatever..).

Tell me, how do you get to be a WSJ editor reporter and CJR pundit without being able to make that distinction?

Here are two excerpts from D’Souza’s recent piece at Forbes:

“Anticolonialism is the doctrine that rich countries of the West got rich by invading, occupying and looting poor countries of Asia, Africa and South America. As one of Obama’s acknowledged intellectual influences, Frantz Fanon, wrote in The Wretched of the Earth, “The well-being and progress of Europe have been built up with the sweat and the dead bodies of Negroes, Arabs, Indians and the yellow races.”

Anticolonialists hold that even when countries secure political independence they remain economically dependent on their former captors. This dependence is called neocolonialism, a term defined by the African statesman Kwame Nkrumah (1909–72) in his book Neocolonialism: The Last Stage of Imperialism. Nkrumah, Ghana’s first president, writes that poor countries may be nominally free, but they continue to be manipulated from abroad by powerful corporate and plutocratic elites. These forces of neocolonialism oppress not only Third World people but also citizens in their own countries. Obviously the solution is to overthrow the oppressors. This was the anticolonial ideology of Barack Obama Sr. and many in his generation, including many of my own relatives in India.”

and

“From the anticolonial perspective, American imperialism is on a rampage. For a while, U.S. power was checked by the Soviet Union, but since the end of the Cold War America has been the sole superpower. Moreover, 9/11 provided the occasion for America to invade and occupy two countries, Iraq and Afghanistan, and also to seek political and economic domination in the same way the French and the British empires once did. So in the anticolonial view, America is now the rogue elephant that subjugates and tramples the people of the world.

It may seem incredible to suggest that the anticolonial ideology of Barack Obama Sr. is espoused by his son, the President of the United States. That is what I am saying. From a very young age and through his formative years Obama learned to see America as a force for global domination and destruction. He came to view America’s military as an instrument of neocolonial occupation. He adopted his father’s position that capitalism and free markets are code words for economic plunder. Obama grew to perceive the rich as an oppressive class, a kind of neocolonial power within America. In his worldview, profits are a measure of how effectively you have ripped off the rest of society, and America’s power in the world is a measure of how selfishly it consumes the globe’s resources and how ruthlessly it bullies and dominates the rest of the planet.

For Obama, the solutions are simple. He must work to wring the neocolonialism out of America and the West. And here is where our anticolonial understanding of Obama really takes off, because it provides a vital key to explaining not only his major policy actions but also the little details that no other theory can adequately account for.”

My Comment

D’Souza is being blasted for being “racist” for noting that Obama Senior’s anticolonialism informs his son’s. I fail to see what’s racist about this.  You might think the evidence isn’t sufficient or the argument is sloppy, but racist? In fact, I felt far more sympathetic toward Obama after reading it. And D’Souza himself admits he founds Obama’s relation to his Kenyan father touching.

In fact, what’s wrong with the D’Souza piece is not its analysis of Obama’s thinking. D’Souza is correct in diagnosing Obama’s view of America as coming out of the anti-colonial movement.

The problem is that Obama’s diagnosis of American state capitalism is not true of capitalism, per se. Obama (and presumably others who hold anti-imperial views) seem to confuse the neocolonialism of state-driven capitalism with free market capitalism itself.

What’s also wrong is that the remedy Obama proposes for this amalgamation of state and economy is a still greater dose of statism.

So D’Souza gets some details right, but, in fact, his big picture is just as wrong as Obama’s.

That is to say, Obama’s putative refusal to see anything but imperialism in American capitalism is incorrect. But D’Souza’s apparent inability to find any imperialism at all in the current system is equally mistaken.

And thus, in so far as they both mistake the conflation of state and business for free markets, D’Souza and Obama are on exactly the same page.

Apparently, that’s also the page that Steve Forbes is on. As well as the Columbia Journalism Review.

As always with the mainstream media, what’s missing from the debate is more important than the debate.

I tell you I don’t get it.

Where is this great depression? Yes, I know the statistics. Yes, I know unemployment is up…house prices are down…blah-blah-blah….

But that’s what happens when house prices are too high. They go down. And when the price of labor is too high, then it has to come down too.

I know this sounds heartless, but it’s not. I have nothing but a bleeding heart for suffering folks. I’ve seen them. Not all of them are starving on the streets of Calcutta. One was an old lady, middle-class, shut away in a tiny room in a senior citizen’s home with her threadbare nylon nighties and a photo of her English teacher son who’d come by to see her three years before. Her smile was always extra bright and cheerful. Come again, she told me the Christmas I stopped by with my dog, and she hobbled carefully to the door to see me out.  She didn’t know me from Eve. But I hadn’t seen my own mother for about the same length of time and it was a kind of guilt visit. Many months later she threw herself out of the window of her tight little studio and broke into two on the compound wall. I know, because I was getting out of my car when it happened. I thought it was some kind of large bird until the pieces bounced on the ground.

So yes, people suffer.

But right now, I’m not seeing suffering. Not where I live, anyway.

I’ll tell you what I’m seeing.

Yesterday, I needed someone to fix a bath tub that wouldn’t drain. I called around.  I got answering machines. The first call back came two hours later. If people needed to work so bad, you’d think I’d have been flooded with calls. And when they called, you’d think they’d have time free for a simple drain job that needed a plunger and some elbow grease.  No.  They were all busy doing something else or didn’t do small jobs or didn’t come out to the city or didn’t work for less than $100 minimum.

In twenty-five years of working, I’ve never had the luxury of telling my boss that I needed hundred bucks to roll out of bed. I told them there’d be more work, regular work, bigger jobs if they’d only show up. No dice. The cheapest guy charged $50. That is, if it was a simple job. If it took a bit longer, it would be a $100. Meanwhile, the guy whom I usually use wasn’t even around. He was too busy taking his son to school and getting high after that. Where did he have the money to get drunk on a regular basis? Don’t ask me. I drink water. Can’t afford any bad habits these days.

It was the same in Florida, when I was there. Had a guy come over to sell me a software program.  He was unemployed he told me. On disability. I couldn’t help squinting and looking him over. Whatever disability he had hadn’t got in the way of his appetite. He was a cool 300 pounder. I asked him what the matter was. A bad back he said. But when he walked over to pop the program into the machine, his walk was perfectly good.

I know about bad backs. My dad was laid up with a bad back once. For two days. A slipped disk. He was in agony. Couldn’t move an inch. Needed to be fed in bed. He still walks with a slight stoop. Never took a day off before or after.  Still, I’m a soft touch. I showed the guy some exercises he could do.  And a simple diet. I worked it out on paper, how many calories, how many pounds.  It was the weight that was killing him, not his back.

He had only a very cheap health insurance policy he told me.  I haven’t carried insurance for the last several years, so I told him, you don’t need it, I showed him the sites I used to self-medicate. He was interested and wanted to learn more.

It was all the fault of the bankers, he said, the way things were. I agreed. They’d moved all the jobs to China and ruined the job market. The government ought to do something about it.

I asked him how he managed. He said he’d had to cut back.  He could only eat out twice a week and even then it was at a cheap diner. He couldn’t afford more than 20 bucks for each eat out. I said that was plenty. I was getting pretty heartless by then.

He lived with his girlfriend in her house that she owned.  She was retired but ran her own business on the side. Between the two of them, even with his disability, they had about 2500 bucks coming in every month. In Florida, you can rent an apartment for 500 bucks, a decent house for 750. That’s 1750 left over. They had no kids.

I said, can’t you start your own business on the side? He was a trucker. I asked if he’d been laid off. He said no, he quit. They weren’t paying good any more. They wanted to give him 15 bucks an hour and the benefits weren’t much.  But starting a business was too hard because of all the regulations. It was 5000 for the license if you wanted to pick people up from the airport and drive them back into town. I said what about being a courier.  Take stuff back and forth for businesses. He said, it’s an idea. I said good luck, stay in touch.

After that, I walked across to the post office to pick up some stamps. On the way, I noticed a thrift store with some nice plastic organizers. I’m a sucker for plastic organizers so I went in. You could buy a whole furniture set for under 100 bucks. Cooking vessels for 50 cents a piece. A shirt in perfectly good condition was a buck fifty.

There was a Salvation Army round the corner from the store.  They were collecting cans of food to give away.

I drove to the local Walmart. Eggs were still around a buck. After searching a bit, I could find a loaf of bread for 89 cents. Flour was still cheap. There were deals everywhere, some good, some great.

Most of the people shopping there weren’t middle-class.  No yuppies, for sure. They were definitely lower middle-class or “poor.” You could tell they were “poor” because they were overweight..or,  if they were thin, they were overdressed. The poor women I saw all seemed to have on shiny new clothes. Lots of sequined string tops, bright flip-flops. Their finger nails had different shapes and their shopping carts were bursting with brands. Not cheap stuff either. Meat, cheese. No cabbage and potatoes or rice and beans. That was on my shopping list, not theirs.

Cell phones were all over the place and people chatted on them as they wheeled their carts out to their cars.

The chat – accompanied by gull-like shrieks – didn’t have much to do with the economy or hard times or starving. It was – girl, you gotta see this movie….hey joey, you gonna stop by after the game?…

That’s the great depression in America.\

Afterword:

I am posting some comments I got as soon as I wrote this rather mild criticism of the exaggerations surrounding the ongoing “depression.” The comments were sent to an earlier post about BP, but were rather obviously a response to this post, because there was nothing in the BP post to provoke anyone. I assume he’s someone – probably unemployed himself-  who doesn’t like my characterization of the “poor” I’ve run into so far.

Since he actually has a net connection and can type, he must be one of the more literate among his peers, although I can’t say I like his style. Maybe he could get a gig at Rolling Stone. They seem to like that gonzo business.

So much for the sainted working class. This specimen is probably being fed and housed at tax-payer expense. Your tax-dollars pay for his internet connection and anonymizer. I must say, there are times I think the environmentalists are perfectly correct about the human species. I know arthropods with more dignity than this. But he does prove my point about the working class. It’s been corrupted by subsidies.

We’re ruled by two pathologized classes – one at the top….and one at the bottom.

Anyway, here’s my response:

Dear Mr. “N*****”,

Assuming that is your name rather than a nom-de-plume of questionable taste, I would suggest you address your objections – such as they are – to the appropriate post, which I’m assuming is “The Great Depression, American Style”.

I assume that is what has provoked your ire.
I normally don’t allow obscenities but on the assumption that this is the maximum of your expressive capacity, I’ve made an exception in your case.

Based on your rather colorful self-description, i would advise seeing a doctor asap.

*****************************************************************************************

Comments can be seen at this post:

BP Oil Spill: Ten Horrifying Facts

“In a deflationary environment, the last thing you want is to own any financial asset. If you stay out of stocks, real estate, gold and other commodities, which will all come down together, then you can preserve your purchasing power [in cash] for the next great buying opportunity.”

—  Robert Prechter (via DR)

Am I losing my mind or did Prechter just say that real estate and stocks were financial assets and cash wasn’t?

Huh?

Update:

At Economic Policy Journal Robert Wenzel notes how gold is now being pushed by the establishment.

ORIGINAL POST:

I’m hearing analysis from every side about the dollar and gold. But it’s all in fundamental or technical terms.

Yet to my way of thinking, neither of these is running the show. It’s politics and political machinations that are calling the shots. In technical terms, gold is overbought. In fundamental terms, many respected gold analysts have suggested it’s risen beyond it’s fundamental value by some 25%.

Inflationists, of course, are triumphant. Gold is looking forward to currency depreciation. The dollar is toast.

Well, the dollar IS toast, the way things are shaping up.

But it’s a great mistake in my opinion to think that’s what’s moved gold prices up so strongly this fall.

That’s taken concerted intervention, in the form of a  media blitz from the MSM touting gold.  As for the alternative media, you can hardly sit through a talk radio show without having it interrupted by a coin dealer of some kind.  Any morning, your fax machine is sure to be cluttered up with promos from a new mining company in Nevada.

In my opinion, Bernanke’s pronouncement that the Fed would be willing to intervene with more QE isn’t so much an economic action, as a political action. What kind of politics?

Rewind to September 17, when Tim Geithner went before Congress and said:

“It is the judgement of the IMF that in view of the very limited movement in the Chinese currency, the rapid pace of productivity and income growth in China relative to its trading partners, the size of its current accounts surplus and the substantial level of ongoing intervention in exchange markets, that the Chinese currency is significantly undervalued.

We share that assessment and we are concerned as are many of China’s trading partners that the pace of appreciation has been too slow and the extent of appreciation too limited. It is a simple principle of fairness that American firms competing in China’s market should have the same rights enjoyed by Chinese firms in the American market. We should be able to compete on a level playing field in China just as Chinese firms compete on a level playing field in the United States.”

Geithner was firing a warning shot in the ongoing currency wars, a subject we’ve blogged about before. The gold price is ammunition in that war.

At least, that’s the way we see it here….

“When the mob governs, man is ruled by ignorance; when the church governs, he is ruled by superstition; and when the state governs, he is ruled by fear. Before men can live together in harmony and understanding, ignorance must be transmuted into wisdom, superstition into an illuminated faith, and fear into love“

—    Manley P. Hall

At Le Monde Diplomatique, New Zealand journalist Nicky Hager, who uncovered the Echelon surveillance system (on which I’ve blogged previously), reports on his more recent find, a massive Israeli signals interceptor at Urim, located in the Negev desert (if you want to look it up on a map, the coordinates are 31°18’34″N, long. 34°32’35″E, lat.)

It spies on friend and foe alike, he reports.

Salient points in this extremely important report:

*Urim is only 30 KM from Beersheba prison, where the activists from the Gaza flotilla were briefly held. Urim base is only 2 KM from the Urim kibbutz.

*Urim’s rows of satellite dishes have the capacity to detect the movements and communications of ships on the sea and thus would have monitored the flotilla before it was boarded.

*Urim is the Israeli counterpart of the satellite interception system, Echelon, a joint effort of the US, UK, Canada, Australia, and New Zealand (the Anglosphere), set up in 1996.

*Urim has expanded from intercepting communications between countries (Intelsat) to communications at sea (Immarsat) to regional communications.

*Urim filters out words and phone numbers of significance and passes them to signal intelligence HQ, Unit 8200 at  Herzliya to the north of Tel Aviv, from where it’s relayed to the Mossad and other intel agencies. Unit 8200 is the equivalent of  the NSA (US) and the GCHQ (UK).

Hager writes:

“Unit 8200 and its counterparts – the British Government Communications Headquarters (GCHQ) and the American National Security Agency (NSA) – are less famous than their foreign intelligence and special operations agencies (MI6, the CIA and Mossad). Yet the signals agencies are far bigger.

The Urim base targets many nations, friend and foe. A former analyst at Unit 8200, a military service conscript, said she worked full time translating intercepted calls and emails from English and French into Hebrew. It was “interesting” work, studying routine communications to find the nuggets. Her section listened mostly to “diplomatic traffic and other off-shore [international] signals”. They also searched public internet sites.

The Urim base, said our sources, is the centre of a spying network that taps undersea cables (notably Mediterranean cables linking Israel to Europe via Sicily) and has covert listening posts in Israeli embassy buildings abroad. Unit 8200, which is officially part of the Israeli army, also has secret monitoring units within the Palestinian territories and uses Gulfstream jets fitted out as signals intelligence aircraft.

Excluding television satellites, most satellites, in an arc stretching from the Indian Ocean to the Atlantic, are probable targets: European, Arab, Russian and Asian, as well as the Intelsat and Inmarsat satellites. Images of the base show 30 listening antennas, making Urim one of the largest signals intelligence bases in the world. The only comparable-sized station is a US facility at Menwith Hill in Yorkshire, UK.

Other stations have been known about since the 1980s. There is a large NSA base near the German city of Bad Aibling, and another US base on the Indian Ocean island of Diego Garcia, just northwest of an airbase with a runway full of B-52 bombers. The main UK base, at Morwenstow, Cornwall, can be spotted through its 20 listening antennas above the cliffs. France has its own network, known as Frenchelon, under the General Directorate for External Security (DGSE), which includes several bases in France and its overseas territories.

But unlike these, Israel’s spy facility at Urim remained invisible for decades.”

Read the rest at Le Monde Diplomatique.

A disturbing story from Business Insider on the 25 countries that will be hit the hardest by a food crisis. At No. 25 is Venezuela. At no. 1 is Bangladesh.  India and China are in the bottom fifth of that group. Also in the group are Nigeria, Pakistan, Sri Lanka, Angola, Morocco…..and, surprise, Hong Kong.

BI seems to have jumped onto the apocalyptic bandwagon, with recent articles touting gold as a “non-money” speculation and a “Top 12” list of  places in which to hide, should the world go up in flames…

These same countries have been around for a while now.

So what is the media up to here? Preparing us…or, more likely, fueling speculation in commodities and foods?