Author Archives: Lila

Davy Crockett On Government Giving

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Colonel David Crockett tells this story of himself:

“Several years ago I was one evening standing on the steps of the Capitol with some other members of Congress, when our attention was attracted by a great light over in Georgetown. It was evidently a large fire. We jumped into a hack and drove over as fast as we could. In spite of all that could be done, many houses were burned and many families made homeless, and, besides, some of them had lost all but the clothes they had on. The weather was very cold, and when I saw so many women and children suffering, I felt that something ought to be done for them. The next morning a bill was introduced appropriating $20,000 for their relief. We put aside all other business and rushed it through as soon as it could be done.”

“The next summer……… I saw a man in a field plowing and coming toward the road. I gauged my gait so that we should meet as he came to the fence. As he came up, I spoke to the man. He replied politely, but as I thought, rather coldly.”

“I began: ‘Well, friend, I am one of those unfortunate beings called candidates, and-‘

‘Yes, I know you; you are Colonel Crockett. I have seen you once before, and voted for your the last time your were elected. I suppose you are out electioneering now, but you had better not waste your time or mine. I shall not vote for you again.’

I begged him to tell me what was the matter.”

“Well, Colonel, it is hardly worth while to waste time or words upon it. I do not see how it can be mended, but you gave a vote last winter which shows that either you have not capacity to understand the Constitution, or that you are wanting in the honesty and firmness to be guided by it. In either case you are not the man to represent me…….”

“I admit the truth of all you say, but there must be some mistake about it, for I do not remember that I gave any vote last winter upon any constitutional question.”

“No, Colonel, there’s no mistake. Though I live here in the backwoods and seldom go from home, I take the papers from Washington and read very carefully all the proceedings of Congress. My papers say that last winter you voted for a bill to appropriate $20,000 to some sufferers by a fire in Georgetown. Is that true?”

“Well, my friend; I may as well own up. You have got me there. But certainly nobody will complain that a great and rich country like ours should give the insignificant sum of $20,000 to relieve its suffering women and children, particularly with a full and overflowing treasury, and I am sure, if you had been there, you would have done just as I did.”

“It is not the amount, Colonel, that I complain of; it is the principle. In the first place, the government ought to have in the Treasury no more than enough for its legitimate purposes. But that has nothing to do with the question. The power of collecting and disbursing money at pleasure is the most dangerous power that can be entrusted to man, particularly under our system of collecting revenue by a tariff, which reaches every man in the country, no matter how poor he may be, and the poorer his is the more he pays in proportion to his means. What is worse, it presses upon him without his knowledge where the weight centers, for there is not a man in the United States who can ever guess how much he pays to the government. So you see, that while you are contributing to relieve one, you are drawing it from thousands who are even worse off than he. If you had the right to give anything, the amount was simply a matter of discretion with you, and you had as much right to give $20,000,000 as $20,000. If you have the right to give to one, you have the right to give to all; and, as the Constitution neither defines charity nor stipulates the amount, you are at liberty to give to any and everything which you may believe, or profess to believe is a charity, and to any amount you may think proper. You will very easily perceive what a wide door this would open for fraud and corruption and favoritism, on the one hand, and for robbing the people on the other. No, Colonel, Congress has no right to give charity. Individual members may give as much of their own money as they please, but they have no right to touch a dollar of the public money for that purpose…..”

Chapter 12, “The Freedom Philosophy” (1988) by The Foundation for Economic Education (Crockett’s story is taken from “The Life of Colonel David Crockett, compiled by Edward S. Ellis (Philadelphia; Porter; Coates, 1884, via Freely Thinking.com

Seymour Hersh – A History of Complicity in State Propaganda?

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“On September 25, 1997, ABC used its news magazine program 20/20 to take an unusual journalistic step. In the first segment of the program, Peter Jennings took pains to discredit documents that had been about to be used by its own contracted reporter for an upcoming show scheduled for broadcast. The contracted reporter was Seymour Hersh. The documents purported to show a secret deal involving Marilyn Monroe, Sam Giancana, and President John F. Kennedy. They were to be the cornerstone of Hersh’s upcoming Little, Brown book, The Dark Side of Camelot. In fact, published reports indicate that it was these documents that caused the publisher to increase Hersh’s advance and provoke three networks to compete for a television special to hype the book. It is not surprising to any informed observer that the documents imploded. What is a bit surprising is that Hersh and ABC could have been so naive for so long. And it is ironic that ABC should use 20/20 to expose a phenomenon that it itself fueled twelve years ago.

What happened on September 25th was the most tangible manifestation of three distinct yet overlapping journalistic threads that have been furrowing into our culture since the Church Committee disbanded in 1976. Hersh’s book would have been the apotheosis of all three threads converged into one book. In the strictest sense, the convergent movements did not actually begin after Frank Church’s investigation ended. But it was at that point that what had been a right-wing, eccentric, easily dismissed undercurrent, picked up a second wind—so much so that today it is not an eccentric undercurrent at all. It is accepted by a large amount of people. And, most surprisingly, some of its purveyors are even accepted within the confines of the research community.

The three threads are these: 1) That the Kennedys ordered Castro’s assassination, despite the verdict of the Church Committee on the CIA’s assassination plots. As I noted last issue, the committee report could find no evidence indicating that JFK and RFK authorized the plots on Fidel Castro, Rafael Trujillo of the Dominican Republic, or Ngo Dinh Diem of South Vietnam. 2) That the Kennedys were really “bad boys,” in some ways as bad as Chicago mobsters or the “gentleman killers” of the CIA. Although neither JFK nor RFK was lionized by the main centers of the media while they were alive, because of their early murders, many books and articles were written afterward that presented them in a sympathetic light, usually as liberal icons. This was tolerated by the media establishment as sentimental sop until the revelations of both Watergate and the Church Committee. This “good guy” image then needed to be altered since both those crises seemed to reveal that the Kennedys were actually different than what came before them (Eisenhower and the Dulles brothers) and what came after (Nixon). Thus began a series of anti-Kennedy biographies. 3) That Marilyn Monroe’s death was somehow ordained by her “involvement” with the Kennedy “bad boys.” Again, this was at first a rather peculiar cottage industry. But around the time of Watergate and the Church Committee it was given a lift, and going back to a 1964 paradigm, it combined elements of the first two movements into a Gothic (some would say grotesque) right-wing propaganda tract which is both humorous and depressing in its slanderous implications, and almost frightening in its political and cultural overtones. Egged on by advocates of Judith Exner (e.g. Liz Smith and Tony Summers), this political and cultural time bomb landed in Sy Hersh’s and ABC’s lap. When it blew up, all parties went into a damage control mode, pointing their fingers at each other. As we examine the sorry history of all three industries, we shall see that there is plenty of blame (and shame) to be shared. And not just in 1997….”

James di Eugenio on possible media (in this case, Seymour Hersh) complicity in promoting propaganda on JFK.

Comment

In Language of Empire  (2005) I came to a similar conclusion about Hersh, but given his status and the fact that I was an outsider and novice in comparison to such a veteran and well respected figure, I contented myself with this observation. (my editor cut out a lengthy chapter on media ownership, and the word length requirements also posed insuperable problems to exploring this angle properly):

” Or were the torture photos leaked intentionally in a calculated damage-control effort as some have suggested? There is a documented history of ties between the CIA and the major media – from CBS  to Newsweek and the New York Times. Reaching far back to the Cold War, this record makes it impossible to discount the possibility of a damage-control campaign.” (The Torture Trompe L’Oeil, p. 162)

My footnote to this passage includes the following references, which I add here for the benefit of anyone who wants to look up more information:

“The CIA and the Media: How America’s Most Powerful News Media Worked Hand in Glove with the Central  Intelligence Agency and Why the Church Committee Covered It Up,” Rolling Stone, October 20, 1977.

“America’s Secret Power: the CIA in a Democratic Society,” Loch K. Johnson (New York: Oxford University Press, 1989)

“CIA in America,” Counter Spy, Spring 1980

“The CIA’s use of the Press: A ‘mighty Wurlitzer,'” Columbia Journalism Review, Sept/Oct 1974, p. 9-18.

[There are many more leads in my book. 25 pages out of 225 pages, that is, more than 10% of the book is devoted to footnotes].

The place where the CIA, torture, and propaganda meet is of course the place where all three emanate from – Wall Street.

Kennedy On Going Past Politics

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“Let us not seek the Republican answer or the Democratic answer, but the right answer. Let us not seek to fix the blame for the past. Let us accept our own responsibility for the future.”

–  John F. Kennedy

Comment

Fixing the blame for the past is sometimes necessary, though. If you don’t know what you did wrong, how will you know which path to take in the future? And which ideas worked and which didn’t? How will you tell the shepherds trying to save the flock from the wolves intent on devouring it?

Blame is necessary. So is judgment. What isn’t necessary is condemnation and hatred.

Global Games: World Bank Boosts the Buck

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“The dollar will remain the world’s dominant reserve currency and a strong U.S. currency is critical to lifting the world out of economic and financial crisis, World Bank President Robert Zoellick said on Tuesday.

Speaking at a newsmaker event at Reuters’ London office, Zoellick announced a $50 billion program to reverse a sharp drop in trade in the global crisis and urged G20 leaders to back the effort.

But he played down the chances of a dethroning of the dollar as the world’s leading currency.”

More at Reuters.

Trader Psychology: Freezing from Fear

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Today, I’m trying to recall the worst episode of fear I’ve experienced trading.

It was in August, 2004. I blame a certain newsletter for it. The writer had built up a frightening picture of how the US economy entirely depended on the Japanese PM’s good will for it to continue.  I forget exactly why. But the short of it  was that one day the old man would roll out of bed and decide to pull the plug on us, the writer said. He painted an apocalyptic picture of the day. Unemployment lines, factories shuttered, houses boarded up, foreclosures, stock markets crashing, the dollar worthless, oil prices so high no one could drive any more….

When the market plunged that fall, I thought the moment had come. Everything was down – my pension, some etf’s, long-term positions, short-term plays. I had put a lot into some tech stocks (Juniper, Nvidia, Foundry, Nortel – yes, those – remember? –  all of them), because I thought they were due to go back up. And in the beginning of that year they started out promisingly. But then an upswing… that didn’t turned into a downswing… that did. 

And kept on swinging down, lower and lower. I stopped looking at my positions. I was sea-sick every morning. Literally.

Which was stupid because there were several times the swings went up and I could have sold out for a smaller loss than I feared.

I didn’t. I was simply unable to face what was happening. The market wasn’t going back up. It was going lower. And I didn’t want to see that. I couldn’t bear feeling that bad. By not looking at the numbers, I didn’t have to feel the loss, so I didn’t. I procrastinated. I wanted to wake up one morning and see the numbers up in black as though they’d never been down.  And I wanted to sell at a profit. A plus, however small.

I waited so I could exit without any loss. Wanting the perfect exit, I missed all the good ones. Then even the decent ones. When I exited finally, in August, it was at what turned out to be the very bottom. After that, there was a three-year uptrend.

But I wasn’t on it.

I was in shock for months after seeing the ticker plunge for the last time and jumping out. In shock from having sold everything – the bad, the not-so-bad and the hardly-bad-at-all.  I didn’t want any more of it. I didn’t want to have my stomach churning every morning. I didn’t want the the false hopes of paper profits that disappeared before you took them and the constant drain of paper losses that drew blood because you couldn’t hold on any more.

I thought about how hard I’d worked to save the money. It wasn’t ‘easy come’ at all. But it was easy go, alright.  I thought about how I’d scrimped on food, weighing things for a difference in a few cents, skipping a meal to save a few dollars. I thought about how I’d done without things I needed so I could pay back my debts. How I’d been hard, not just on myself but on my family.

I’d curl up on my bed, a kind of silent whimpering inside me. I cursed myself and blamed myself for being greedy… for being in the market at all. How could I be so stupid.  Trading was for cleverer people than me. It was for people who had money to throw around, not for people who’d always had to be careful.  But inside I knew it wasn’t greed at all. I’d never been a greedy person. Fear was my problem. And habit. The habit of not ever thinking about something so tedious as money.

If the bank had paid even 1% more than inflation I’d have left my money in it and forgotten I had it. But it wasn’t. And it hadn’t for a long time.

So it was fear, not greed. Fear that I’d never be able to keep up with things costing more and more. Fear of always struggling and getting less and less. Money in a savings account was like a continuous leak, a bleed you couldn’t staunch. Houses had tripled where I lived. I might just as well not have worked for the past three years. I told myself, I should’ve been a bum. I ought to have gone into flipping them myself, like the people next door.  I didn’t. I thought it was wrong to. And now who was the fool? Just trying to make enough to keep up, I’d lost everything I’d made in three years. And all the interest from the ten years before.

A loss that large isn’t something you cry about. It stays somewhere in the background of your mind like the distant shrieking of a gull or the beating of waves in a seaside town.  You’re never really far from it.  It’s something that’s always going to be there, from now on.  Like a scar from an accident. In one moment you become someone else. Some one else who’ll always have this rip across your face, this twisted leg, the odd droop to your mouth. You forget how it used to be before the accident.

That first big loss is like that. The feeling you had before it goes forever.

The feeling of being whole. Of doing well. After that, there’s a kind of a gash. A sense of being on the wrong side of things.  Of being a loser. A kind of raggedness.

For a year I couldn’t press a sell or buy order on my screen without second-guessing it dozens of times. It took me two years before I could buy anything without wanting to jump out immediately…..

Only after a long while I began to understand, really understand, that trading isn’t about money. Even money isn’t about money.

It’s about emotions.  And success at trading is about understanding your emotions and being able to handle them.

You don’t overcome them but you know what they are. And what they’re making you do.

There’s no place for self-deception if you want to stop losing money trading.

How The Thrifty Were Fleeced

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“It was the intention of John Maynard Keynes to return to the age before Noah Webster.  He wanted to go back to the Middle Ages when lending at interest was prohibited.  At that time, people did not save.  No capital was accumulated.  Without capital, when a new machine was invented (which was rare), it sat in its inventor’s workshop because there was not enough capital in the world to build many copies of the machine and put it to work in factories producing wealth for people.  In a word, the legalization of interest caused the factory system, which vastly increased wealth in the (northern) U.S. and Britain (including Commonwealth countries).  The bottom line of Keynesian economics was to do away with all of this and return to the Middle Ages. 

 

          Keynes provided an economic rationalization for paper money.  He stumbled across two Americans, William Trufant Foster and Waddill Catchings.  These were crackpots who had written a defense of paper money called, The Road to Plenty, in which they argued that the road to plenty for a society was to print money.

 

          Keynes was clever enough to perceive that Foster and Catchings were being rejected by the general public because they were conservatives.  Keynes plagiarized their theory and dressed it up as liberal and progressive.  This is why Keynesianism is called “the new economics” and why it is full of mathematical mumbo-jumbo (which appears absurd to any mathematician and has the sole purpose to intimidate people).

 

          Under Keynes’ influence, the U.S. started printing money in 1933  Since that time the U.S. money supply has multiplied by a factor of 80 (from $20 billion to $1.6 trillion) while the population multiplied by 2.3.  (Per capita money supply multiplied by 35.).

 

          But the point is that, if a person tried to save money in the U.S.A after 1933. in the manner that was done in the period 1788-1933, he found that, as his money accumulated from the interest, it lost its value from the depreciation of the currency.  Using the official government CPI, the saver (in safe instruments) gained no real value between 1933 and 2009.  His buying power was just the same.  In effect, Keynes was successful.  He did not stop the payment of interest.  But he did stop the payment of real interest.

 

          What does this mean for you and your economic plans?  It is very simple.  In general, you cannot retire.  If you save your money and invest it safely, as was normal in the 19th and early 20th centuries, you do not accumulate real interest.  The currency depreciates just as rapidly as your interest accumulates, and you are back in the Middle Ages when it was forbidden to pay interest and no one retired.

 

          However, Keynes slipped up in two areas: stocks and real estate.  If you own stocks, then the stock pays a dividend.  This roughly corresponds to the interest on a savings account.  It is a return on capital.  And the price of the stock goes up as the value of the currency goes down.  This makes up for the depreciation of the currency.  It is the same with real estate.  If you buy apartments or commercial property, in both of which the tenant pays rent, you are receiving a return on capital.  And the rise in the price of the real estate offsets the depreciation of the currency.  (Speculative real estate, such as raw land, does not apply here.)

 

          There is one serious problem with both of these investments.  They are very speculative.  The stock market rose by a factor of 18 times from 1982 to 2007.  But from 1966 to 1982, it fell by over 70%.  These swings are speculative and tricky.  But you cannot retire unless you play them because Keynes has taken away the traditional American (and British) method of safe investment……

 

 – One Handed Economist.

 

Comment

 

I was wondering why the name Waddill Catchings sounded familiar. Now I remember. He was involved in one of the most famous Ponzi schemes of all times, one at the center of the Great Crash of 1929. Mr. Catchings was part of the launch of the Goldman Sachs Trading Corporation (GSTC). Yes (sigh) Goldman was a part of that mess too…..

 

 

Commercial Shorts And the Market for Metals..

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“The CFTC also publishes a Bank Participation Report [2] on a monthly basis. This report gives the long and short positions of Banks who hold positions in commodities grouped as foreign and domestic. They also state how many banks make up the domestic bank holding and the foreign bank holding. In silver there are only two US Banks involved and in Gold there are three.

 

The position of the banks is also included in the “Commercial” category of the COT. So once per month we can see what share of the commercial trading in gold and silver is performed by these US Banks.

 

To observe what influence anyone is having on the market we have to determine what “Net Position” they hold. If you were to buy 100 contracts long of silver and sell 100 contracts short at the same time, your influence on the market price will be nil. If however you buy 10 contracts long and you sell short 100 contracts your effect on the market price is a function of the net short position of 100-10=90 contracts.

 

The commercials collectively are nearly always net short. Their effect on the price is a function of the commercial net short position which is the total commercial short position minus the total commercial long position. To determine how influential the positions of the US bank participation are in the market we need to compute what percentage the net short of the banks represents compared to the total commercial net short position.”

 

Adrian Douglas in “Pirates of the Comex”

 

Comment:

 

 As the article indicates, the commercials have a huge influence on gold and silver prices. Investors may be buying but if the commercials are short, that is going to cap the prices.  That’s one reason why I am not (yet) long gold and have only a small silver position.  And I’m not nimble  or confident enough to short something that’s in a long-term bull market.

 

(By the way, my trader comments are only asides. I am not a professional trader of any kind., and only manage my own money because bank accounts don’t pay enough to cover inflation and brokers – in my experience –  are mostly good for leaving you broke. As I’ve said elsewhere,  I’m an ex-school teacher and academic, who would much  rather have nothing to do with finance, if I could. But I can’t.)

 

Trader Wars

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“There are plenty such victims available. “Farmers and schoolteachers and plumbers are taking responsibility for their own investments,” says John Yost, whose San Francisco firm, Black Rocket, created the famous TV commercial for Discover Brokerage about the tow truck driver who bought his own private island from his stock-trading profits. “If you really care about your health, you have to be more involved in learning about medical care,” says Yost. “If you really care about your financial health, you have to be more involved in investing your own money.”

Harvey Houtkin, the CEO of All-Tech Direct, a pioneering daytrading firm, has long argued that the more people there are who actively trade for themselves, the more liquidity and competition the market has. He believes that the new, high-volume daytrading scene is producing so much volume that the traditional exchanges will soon be obsolete. “Why do you think the New York Stock Exchange and Nasdaq want to go public?” asks Houtkin. “To bail out on the public. You’ll be able to enter orders through an electronic mechanism, so what does the New York Stock Exchange do? ‘Hmm, well, there’s a lot of suckers out there; we’ll go public.'”

But while advocates of the Internet stock market see the growth of amateur electronic trading as a popular triumph, a stream of greedy and ill-informed newcomers shoring up the bottom layer of the pyramid is also helpful. Anthony laughs with scornful delight at the notion of a fair and massively popular stock market. He views the competition among brokerage firms, market makers, and the new electronic trading system merely as a staged showbiz feud, and he pictures the Nasdaq market as an evil partnership: The online brokerages lure new herds of sheep into the game and collect the admission fees while the market makers do the shearing. “Right now,” Anthony says, “people just get wild hairs up their ass, and all of a sudden a whole sector will move and there is no rhyme or reason to it. Take online banking. Net banks are at 20 or 30 bucks and then they shoot up to 200 because everybody is talking about how people will do more banking online, and over a four-month period they drop back down to 20 bucks. The more volatile the market, the more risk associated with it, and undoubtedly the more losers. You have the public versus the professional, and the public is going to lose in the end.”

Joey Anuff and Gary Wolf, Adventures of a Day Trader (excerpted in Wired magazine, 2000)   citing convicted fraudster-turned-FBI informant, Anthony Elgindy, on the rigged market.

The Psy-War At Home…

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“Award winning reporter and likely Mossad propagandist Seymour Hersh tells us that we must resort to the tactics the Jordanian security service used to catch the notorious Palestinian terrorist Abu Nidal. “The Jordanians did not move directly against suspected Abu Nidal followers but seized close family members instead, mothers and brothers,” Hersh notes. Then he quotes an anonymous CIA officer as saying, “Jordan is the one nation that totally succeeded in penetrating a group,” because it was able “to get their families under control.”

So much for family values.

Hersh disingenuously adds that these tactics defy CIA procedures, but suggests it’s a better alternative than “sitting around making diversity quilts.”

Well, this is exactly the type of psychological warfare you can expect to be subjected to on a daily basis from here on out. As noted in the Marine Corps Gazette, “Psychological operations may become the dominant operational and strategic weapon in the form of media/information intervention. Logic bombs and computer viruses, including latent viruses, may be used to disrupt civilian as well as military operations. Fourth generation adversaries will be adept at manipulating the media to alter domestic and world opinion to the point where skillful use of psychological operations will sometimes preclude the commitment of combat forces.”

“Television news may become a more powerful operational weapon than armored divisions.”

Let me say it one last time: in the name of anti-terrorism, all of the nation’s pent-up anger and frustration over Vietnam, and a host of other, mostly Clinton-related issues, is poised to be unleashed on an enemy that lurks inside our borders.

And that enemy is you….”

Investigator and reporter, Douglas Valentine, author of the best book on the Phoenix Counter-Insurgency program, writing back in 2001.