Shenandoah

By John Galt

January 3, 2010

As we reflect on an era of utter amazement with the nonsense that has spewed forth since the creation of the .com bubble to the .realty bubble and now the .gov bubble, the past decade reeks of desperation and meddling, two things which make for neither a strong economic base nor promising future. The Bubblemedia (CNBC, FBN, Bloomberg) continue to  do all they can to convince the now somewhat financially obliterated sheeple to drain whatever remaining holdings they have and reinvest into the new bull market but the instability created by a decade of lying, theft, Ponzi schemes and a government, both Republican controlled and Democrat, willing to violate the rule of law and Constitutionally guaranteed contract law leaves little reason for anyone to trust the markets or our politicians with what little monies are still in the retirement accounts of the American investor.

The flight to safety started with the collapse of the tech bubble accelerated during the decade and then under the foolish policies of Sir Alan Greenspan’s easy money program the savings of millions of retirees were destroyed in the easy money frenzy which created the real estate fiasco we are now enduring. To add to investor’s and saver’s confidence what do we do next? Well good old Hammerin’ Hank Paulson the Secretary of the Treasury in 2008 proclaims that if we don’t give him a blank check for $700 billion that cats would sleep with dogs, Red Dawn would go from a movie to reality and that children and cockroaches would fight over bits of food on the floor. The ever responsible (snicker) Legislative branch turned down this blank check proposition and one page memo turned legislation from the Treasury Department and of course we all remember what happened next:

So after the threat of martial law and everything else did not work, then Hank dialed his private line to 1-800-GOLD-MAN and they gave the Dow the Goldman Sachs massage. After that brutal sell off and complete and total panic hitting as the already shattered 401K’s now became as viable as Zimbabwe dollars, the Congress agreed to slop everything their piggish snouts could grab on to the bill and passed the TARP program to get the Treasury to start buying all the garbage Mortgage Backed Securities and bail out the banksters.

Whew, relief, right?

Uh, no.

No sooner than Paulson going out and creating a jobs program for millionaires by giving them control over hundreds of millions of taxpayer dollars in the TARP program, he turns around and does what? On November 12, 2008 he changed the program from one of taking bad assets off the books of the nation’s banks, probably because $700 billion was about 1/100th of what he needed to do it right and decided instead to turn the United States Government into a partner with Bubblevision, the Bubbleconomists, the Bubblefed and created the Bubblegovernment. The government began buying shares in banks which of course evolved into buying auto companies which of course evolved into buying into insurance companies, REITs, auto finance, credit card companies, etc. and then decided to give anyone who could contribute more than $100,000 to any political party a bank charter so they could belly up to the taxpayer trough and steal money to invest in their arbitrage laden trading systems so if they gambled and lost the taxpayers eat the mistakes and not the banks.

Great plan. We just destroyed American Capitalism in order to preserve the jobs of a bunch of incompetent jerks who destroyed the savings and retirements for millions of Americans, either via open Ponzi schemes (Madoff, etc.) or using the largest one of them all located inside the Federal Reserve banking system. American Capitalism as we grew up, knew it and loved died in the decade of the 2000′s and that is a mark on history that can and will never be denied. We are now an integrated quasi-socialist system where the rules are changed to accommodate the political class or their cronies, where foreign nations who own our debt determine the future of our foreign and in some cases domestic policy, and the ideas of working, saving and retiring are now foreign concepts for the majority of the American middle class as we continue to force the idea of an internationalized economic system on to the citizens of this country instead of exporting the idea of true laissez-faire American entrepreneurial upon the rest of the world.

Then we had President Bush’s insane commentary of:

“I’ve abandoned free-market principles to save the free-market system,” Bush told CNN television, saying he had made the decision “to make sure the economy doesn’t collapse.”

That statement is indicative of just how far we have fallen as a nation. The nanny state, a centralized planned and controlled economy has fallen across the borders of America much like a Chinese Iron Curtain where the inhabitants are now enslaved to making debt service payments to our overseas masters and those that have political access or egress can control the ebb and flow of the bread crumbs remaining within the economy. This is not capitalism in any way, shape or form.

Face it gang, this decade begins as the era of American socialism and I do not care what one lard ass “economist” on CNBC or otherwise says, a total collapse and rebuilding would have been far more beneficial to our future than an integrated government hybrid socialist system where centralized planning fails as it inevitably always does.

The best way to illustrate the futility of the past decade is to say it in pictures so let’s start with the decade long graph of the most popular DJIA:

As you can see from the chart above, this was not a great decade for the Dow if you were in the buy and hold mode of thinking. Add into the equation the fact that many companies are no longer participating, like GM, C, etc. and you see why the DJIA is not a good representation. To give you a better picture of just how horrid the equities markets have been, here are some charts that make you realize that the good times had better start rolling soon or we’ll be stuck in the 1998-99 market range for a long, long time to come:

Ouch. So much for buy and hold for the majority of the markets or index funds. Maybe this is the time to check on what good old Nouriel Roubini now calls a “Barbarous Bubble” to see if it did any better during the past decade:

Funny. The bubble has been lasting as long as the Federal Reserve decided to sacrifice the United States dollar for political convenience since last 2002. Coincidence? Nah, Nouriel’s right, it’s just a speculative bubble (not).  By the way Nouriel, if you want to see how the bubble has done against your beloved equity markets that you began pumping so you can get invites to all the parties with the hot Bubblevision Bimblettes, here’s your reference point for the past decade:

That’s right, that’s gold vs. the S&P 500. Gee, I wonder who made money on those investments from 1999 forward.

Silver did not do nearly as well as gold in the past decade but I anticipate it will catch up in the early part of this decade as the Fed has to monetize or face a total collapse in the 2010-2012 time period:

For comparison, let’s look at some selected equities just because of their newsworthy value over the last decade and see how they did, not adjusted for inflation, just to see some highs and lows:

Needless to say it is not fair of me to just select Ford, GM and Yellow-Roadway but it gives you some idea of how the mighty have fallen. There are some good news companies though that went international and did everything they could to avoid the American implosion with IBM being the best example during the past decade:

When adjusted for inflation it is not such a hot chart but of all the equities if you traded in and out of it over the decade timing it correctly, you made a nice dime or two on this stock.

Finally, the 1-3-6 rule I’ve been pushing posting and writing about for almost a year as viewed over the past decade:

It doesn’t take rocket science to figure out that the record low yields we are witnessing over the past year plus are an indication of continuing instability and distrust of and within our financial system, if not an outright “no confidence” vote for our political leadership also. If we do not see the short term T-bills start to move up in yield to their historic norms, then the big lie that “money is coming off the sideline” will be exposed as people begin to realize that the economy is not all that it seems.

Last but not least, a chart that should point out to everyone just what is next and how severe this situation is in an ongoing matter. I’m not going to bore you with Markit ABX indices, although they are dreadful, CDS spreads, bank financials, etc. It can all be summed up nicely here:

There’s the future and when you look again at the Credit Suisse mortgage reset charts you begin to realize that despite the efforts of government interference and meddling into capitalism, something they are poorly equipped and educated to deal with in their narrow minded foolish Keynesian mindset, you understand that the disaster which started with the speculative bubbles created by Greenspan’s easy money policies in the .com era and expanded ten fold in the real estate bubble are now facing the final, most destructive situation in our nation’s history:

The Government bubble.

Unless we begin to withdraw the United States government and its socialistic policy ideas and meddling from our economic system, we can officially declare the concept of American Capitalism dead and buried and prepare for a hyperinflationary fiscally sponsored economic expansion with over 60% of our society dependent on or working for the government for their survival.

God Help Us as I think I know how this turns out and it was not a happy ending.

by John Galt

January 3, 2010

Pax Americana

The peace that never was. Despite popular belief that our victory after the collapse of the Soviet Union in the early 1990′s would create a permanent peace based on a theory of expanding American corporate interests, economic designs and ideals that were so watered down with political correctness it would make one vomit, the United States refused due to the sensitivities of those educated in the “classical” liberal perspective and thus we have now entered into a new decade of instability with incompetence and arrogance now split on that long winding road.

I’m not going to try to explain the “why” of all the failed policies of 90 years of Wahhabi tolerance and submission to radical radicalism (aka, radical Islam, Communism, etc.) has created a new hardship for America which the Marxist crowd, corporatist apologists, nor politically correct peace lovers would ever in a million years understand. When you wish to act like an empire, act like an empire yet America, because of its inner conflicts, could never accept the role despite the desires of the Marxist faithful starting with Wilson and Roosevelt (Teddy and Franklin Delano) plus until World War II our desire to adhere to the strict interpretations of the Constitution which made us strong enough to resist temptation by following that proverbial rule of law.

Fast forward to the year 2000 and the end of the peep show administration and beginning of the new circus under George W. Bush. The Clinton administration had basically accepted the concept of cheap, easy monetary policy from Alan Greenspan and the idea of financing expansion on the backs of Chinese investment in our bond markets while at the same time, creating a new secondary superpower in the world not just to replace the U.S.S.R. but  to assist the U.S. with the maintenance of peaceful coexistence under the guise of financial co-dependency. Thus why the events early in Bush’s administration in April of 2001 and the mystery picture in the prior posting on this subject can now be explained to those that forgot.

Remember the Orion P-3 that the Chinese Communists tagged with a fighter, quite deliberately I might add, off of the coast of China in 2001? Here’s one of the BBC stories, just to refresh your memory:

China holds US spy plane crew

Everyone called this a non-event in what was known at that time as the conventional, soon to be known as the mainstream media. That error in analysis would not glow so brightly until recent years and with the attacks on 9-11 where the failure of the United States to stand tall to the Chinese Communist government was correctly read as an indication as to how far the apple had rotted and just how severely the interior fortitude of our political, not military I emphasize, but political leadership had deteriorated.  The unwillingness to publicly embarrass and confront the ChiComs set the tone for the past decade and Bush’s failure opened the door just as Clinton did, for the attacks on Americans worldwide, be it economically or via the use of terrorism.

9-11 Changes Everything; Briefly

The attacks on the United States by Al-Queda terrorists created a brief but false sense of optimism that we would no longer be the world’s politically correct soon to be socialist doormat. The nation unified under the first impression of strong leadership under President George W. Bush but that was soon frittered away as a wasted opportunity to act rapidly was drowned under the red tape of bureaucratic incompetence within the State Department and Pentagon.  The “just” war as many on both sides of the American political aisle called it, was an invasion of Afghanistan, a costly and illogical prospect which would accomplish nothing if any historians would have any input of consequence within the policy making arena. The problem is that political class and “world community” would not accept the complete and utter destruction of that nation using the means necessary so the prospects of another Vietnamization option was presented by Rumsfeld & Co. to ‘surgically’ remove the Taliban and attempt to capture Osama Bin Laden.

Sadly, the CIA, and many post-game analysts warned that a massive invasion force, be it 30,000, 50,000 or 100,000 would be ineffective against this enemy. Michael Scheuer warned about this in his book, Imperial Hubris (available at Amazon.com) as did many others who warned that the “war on terror” President Bush declared would have to be fought with a combination of overwhelming force and backhanded no rules applied covert operations. Yet we did not learn from history nor the Soviet Union.

This short-sighted approach might well have been seen as “humane” by our allies of the soft surrender monkey mentality in the newborn European Union, but the remainder of the world read the failure correctly, an indication of weakness. That weakness extended beyond this era and continued through 2003-2005 which made our nation even weaker, thanks to what I like to call the final sellout of our souls.

2003-2007 End of the Pax Americana: The Great Fire Sale Begins

A shining moment? Uh, no.

Was it cool? Yes. Was it fun to watch? Yes. Hell Putin all but out Bushed Bush on the cool factor as far as leaders go except that I guess we’ll never hear any stories about Bush ripping the beating heart out of a bear and creating a new medicine to save cancer ridden children like Putin did. Okay, so I exaggerated. The Putin story was not true as far as anyone knows in the former Bush administration or mainstream media. But the idea that all flash and no cash became popular during the era after the poorly planned Iraqi invasion. Our soldiers could have easily achieved an overwhelming victory but instead of allowing the military to execute a full blown plan to win a military victory AND decisive military occupation to eliminate all underground opposition, the administration succumbed to the idea of budget warfare which in the end cost our soldiers and national deficits far more than was necessary.

Men and women died in foreign theaters not because of Bush lying about WMD’s, hell, everyone thought the Iraqis had them. Our brave soldiers died because we failed as a nation to commit to the concept of overwhelming force to achieve victory and that is why the 2003-2007 era was so critical for the geopolitical shifts which happened. The U.S. essentially said to any Sheikdom that if you need a mercenary force, we’ll plop down several companies or a battalion and call you a “strategic ally” even though whores like the U.A.E. and Saudis aided terrorist forces or nations via financial laundering operations or indirect support for smugglers via their ports.  We have and continue to rent our military out to achieve an un-winnable victory within the mouth of the beast because there is no commitment politically or from the population to win. For that we should be ashamed.

For the world, it marked the end of American geopolitical dominance and the death of the post World War II Pax Americana as it was called throughout the Cold War against the Soviets. We agreed to protect nations who sold us raw materials (oil, metals, etc.) or purchased our bonds to support our lifestyle and in exchange allowed our soldiers to be used like pieces on a Risk game board.

Sleep Tight Sweet Prince

While the war was going “okay” and the financial markets stabilized under the “giveaway” policies of Alan Greenspan during the 2003-2007 period a new reality was dawning on the rest of the world after the Taliban and Al-Queda in Afghanistan were not absolutely annihilated and the Iraq dictatorship given a chance to put Baghdad Bob on every street corner essentially mocking every U.S. Soldier as they drove by him.  The nations who still adhered to the strict Marxist disciplines of the likes of Stalin and Brezhnev were discovering that the United States disregarded the threat of Communist expansionism and would not directly interfere with their expansionist plans.

This inspired the tin-pot banana republic dictators like Castro and Chavez to our south and the anti-capitalist movements from Sri Lanka to Mauritania to stir up trouble on a regional basis. Without the long feared overhanging threat to eliminate their policies or create an opposition movement, the troublemakers of the world be they Socialist Nationalists like those in Bolivia and Peru or terrorist groups, they elected to act and act they did. The disruptions in the flow of raw materials and the economic balance was minor in the big picture of things but they helped to set in motion a realization by our allies that not only were we undependable but perhaps impotent.

The entire time the American people were lulled into a sense of false security, told to sleep tight and not worry as the world would never destabilize as long as we were around.

2008-2009: The Strategery Made of Jello

The Bush administration continued to function with the surge in Iraq that finally broke the back, albeit the end results will not be known until this decade, but the lack of a concentrated effort in Afghanistan and a policy of benign neglect in Africa, Southeast Asia and Latin America has allowed our enemies both of the communist ilk and Islamofacist alliances to expand into other nations while our politically correct leadership wonders how this is happening in front of their eyes. As the economic collapse, began picking up speed in 2008, the consequences of not keeping our eye  on the ball became vividly aware as the Russians threatened the natural gas supplies into Europe on several occasions,  Al-Queda began expanding operations across North Africa, and Iran began spreading mischief from Mexico to Bolivia with Hezbollah working as their agents of expansion in the region. The few who dared to cover the stories were dismissed as crackpots or worry warts while the Russians and Chinese began to realize the full potential of a collapse of the American era as the only Superpower dominating world affairs.

The ‘strategery’ employed was to fight wars on the cheap, spread our forces too thin and sadly to not give them the free hand to eliminate our enemies using any methods deemed necessary by the commanders in the field.  The huge gaps between D.C. and the field became apparent with the election of Barrack Hussein Obama and the open conflict over the Afghanistan policy within the administration and General McChrystal. The delays now have created an environment for a winter deployment with the terrorists having a chance to resupply inside of Pakistan, an unwilling ally in this war which is about as stable as American foreign policy over the past five years.

As America moves forward into the new decade under a leader who thinks that the world loves him because he’s willing to apologize for America defending her interests and submitting the citizens of our nation to the concept of world governance without due process or fair representation, the challenges now for the world in a post Pax Americana era are more challenging than since the Cuban Missile Crisis. The United States is no longer viewed with reverence in every corner of the world nor feared as it once was; nations which abandon principles and fail to execute wars to completion are not due that level or respect.  The dangerous times we are entering now will merge the prospects of foreign support for domestic discontent with the enemies of our nation running parallel yet not allied policies of attacking our interests overseas and probably domestically also.  Gerald Celente of The Trends Research Institute has been focusing on and predicting a possible terrorist attack inside the United States with his recent public appearances on Fox News and other programs. The question we will have to dissect after such an event will be if it is a domestically inspired attack, an Islamofacist supported attack with overseas involvement, or the worst case scenario a domestic attack of a non-Jihadist group supported by overseas powers wishing to disrupt the United States economy as the potential for the so-called recovery begins to strengthen.  I think we could see attacks by both groups, the non-Jihadists and the AQ/Hezbollah types within our borders and this time, as in the Ft. Hood terrorist attack, it will be brushed aside as a non-event by the politically correct administration and his ilk while highlighting the threat of an attack from the non-Jihadists as evidence of the dangers of the “Patriot” and “Tea Party” movements which promote hate in their eyes.

Domestic issues will merge with foreign issues as never before with the coming second wave of the financial collapse and the inability of our leaders to cope with it in any coherent manner. It will also keep our military as a sideshow or afterthought, fighting in overseas locations with nebulous long term strategic goals and tactical issues managed by politically correct globalist bureaucrats more concerned with appearances than results. Hence the death of Pax Americana can only be viewed as this past decade’s largest story to go uncovered, and the most dangerous story for the decade that has just begun. Instability at every level of our society will spread to many others and the first nation to test the new administration and lack of foresight is just across the Rio Grande. Mexico will be the test bed for our failed policies domestically and internationally in the first half of the new decade and for those that say it does not matter, ask the residents of Juarez which suffered more deaths in 2009 than (2,657) than all of the Palestinians killed in the West Bank and Gaza for the same time period (1,382).

Prepare for a new era where the Greater East Asia Co-Prosperity Sphere will be recreated, this time under the dominant force in the world, this time under the auspices of the Chinese Communists instead of Japanese Imperial government.  Welcome to a possible third place finish America, as the world moves forward while we regress into a Euro-Socialist shell.

By John Galt

January 3, 2010

There is a great story in this morning’s Sarasota Herald-Tribune about a vet who has been dealing with the Veteran’s Administration for years now trying to process a $12,000 claim. If anyone thinks this is going to be easy, well here’s an excerpt for you to ponder:

Alfano underwent an emergency procedure for the condition at a private hospital in New York on Dec. 30, 1997. She embarked on the claims process a year later. The issue appeared to have been resolved in December 2007, when the Board of Veterans’ Appeals ruled Alfano was entitled to reimbursement for her out-of-pocket medical expenses. It ordered the VA to give her case “expeditious treatment.”

But in November, the VA wrote a response to the puzzled office of Sen. Bill Nelson, stating that it needed additional documentation from Alfano. “Upon receipt of the requested information,” the letter added, “a complete clinical review will be conducted for consideration of payment.”

And they are harassing her for more documents that she has already submitted. Enjoy what you voted for boys and girls because those who thought hope and change was going to be the greatest thing in the world need look no further than or talking to a veteran who will tell you all about the V.A. system nightmares.

Original article with link:

Fighting the VA for $12,000

Rimsky-Korsakov – Scheherazade (1/5)

Rimsky-Korsakov – Scheherazade (2/5)

Rimsky-Korsakov – Scheherazade (3/5)

Rimsky-Korsakov – Scheherazade (4/5)

Rimsky-Korsakov – Scheherazade (5/5)

And this….

And this….

And this….

I could add more, but why bore my audience with classic rock all night long…..two long articles to appear tomorrow, one short funny treatise thanks to Rick Santelli on Monday morning, and more Monday night after what could be an incredible day for the U.S. financial system.

Johann Strauss II. – Geschichten aus dem Wienerwald (Walzer, op.325)

Johann Strauss II. – The Emperor Waltz

Winterhalter and Johann Strauss-Liebeslieder op. 114