If you can keep your head while all about you are losing theirs...

- I am officially back on the "scared and paranoid" side of life, and while it is not "good to be home", it is, at least familiar, and there is a certain comfort in that, as at least I know where all the pistols and cookies are stashed around here. But then again, my homecoming is only because I was temporarily in a distant, disturbed place, where even shadows spook me out, and where my nights were spent entirely without sleep, night after night, because my brain no longer waited for me to fall asleep before I started having nightmares about the economy, and I am here to tell you that that is unnerving, to say the least.

My problem seems to be that nothing makes any sense anymore. A story in The Post says essentially the same thing when the author notes "In the past few weeks, the world's financial markets have acted in a confused, counter-intuitive, bipolar fashion." Doug Noland entitled his Credit Bubble Bulletin this week "Conundrums." Mike Hoy writes "I have never seen as many red flags being raised at one time as what I see right now." It's everywhere!

I mean, inflation is up, but bond yields are down, which is the exact opposite of what you would expect. In fact, the yield on the 10-year T-note is barely over 4%! Foreign demand for US debt is down, yet prices for debt go up, the exact opposite of what you would expect. Inflation is up, yet gold is down, again the exact opposite of what you would expect. Demand for oil is up, yet prices are coming down, the exact opposite of what you would expect. The economy is slowing, yet stocks are soaring, the exact opposite of what you would expect. It just goes on, day after day, item after item, which explains why I am cowering in the hall closet, gobbling tranquilizers and whimpering "It doesn't make sense! It doesn't make sense!"

The Mighty Mogambo speaks...

"Underlying most arguments against the free market is a lack of belief in freedom itself."
-- Milton Friedman

POST SUMPTIN', DAMMIT!!!

OK,...Ok...

We have been busy...

Our newest grandson was born May 25th, under serious circumstances....

He is fine...the mother (our youngest) is fine...

We ran up to North Carolina to be there...for their support...and ours...

More posting to come...

...and don't you bet against it either...


"Who are the militia? Are they not ourselves? Is it feared, then, that we shall turn our arms each man against his own bosom. Congress have no power to disarm the militia. Their swords, and every other terrible implement of the soldier, are the birthright of an American...[T]he unlimited power of the sword is not in the hands of either the federal or state governments, but, where I trust in God it will ever remain, in the hands of the people."
--Tenche Coxe, The Pennsylvania Gazette, Feb. 20, 1788.

The Empire Strikes Back...

"The U.S. Empire is a very different thing from the U.S. republic. Americans still think of their country and their government in 19th century terms. Here at The Daily Reckoning, too, we had a hard time getting used to the idea. We had a sentimental attachment to the old republic of Jefferson, Fillmore and Harding. Like getting over a love affair, it took time before we were ready for a new fling. But now, after a suitable interval, we've come to appreciate the curves and caprices of the new empire.

Not that it makes Americans safer or wealthier. Not at all; it does just the opposite. But it is so full of bluff, vanity and absurdity that it is far more amusing. Even before we had our morning coffee, we read the paper and found ourselves in shock, awe and stitches.

The headline story in today's International Herald Tribune tells us that America is fed up with Chinese currency "manipulation." How are the Chinese manipulating the yuan? By pegging it to the imperial currency! Oh...that is clever...wily...diabolical, isn't it, dear reader? The Chinese are maintaining their 10-year-old policy of pegging the yuan to the dollar. Doing so, they get around the imperial power's method of collecting tribute. The United States counts on a steady devaluation of its money. It buys from overseas and pays in dollars. Then, in effect, it prints up more dollars to replace those it has shipped overseas. The resulting "inflation" of the currency...reflected in the increase in prices of oil, gold and other internationally traded goods...is a form of imperial tribute. It's America's way of making the empire pay. As the dollar goes down, the trillions of dollars held in foreign accounts become less valuable.

But the Chinese refuse to play along. As the dollar goes down, so does their yuan. Instead of raising prices on Chinese goods and lowering the value of Chinese dollar holdings relative to its own currency, everything remains even. The Chinese aren't paying their tribute.

Americans are indignant. A Senate committee says it will rewrite the law of the land to make what the Chinese are doing qualify as currency "manipulation." Bush administration officials say they will give the Chinese a deadline to shape up."

More here...

Awww...I feel so bad for the American Fedral Empire...Boo Hoo.....

Was it Serenity's fault???

The days of picking flowers and chasing your friends has suddenly come to an end. Your innocence stripped in one careless moment from strangers with guns who came shooting from the sky. You see the grown ups running everywhere... you see your mom, she's scared and laying on the floor covering the baby. You are scared too. You overhear a grown up say the men outside shot and killed someone.... its hard to hear, the babies are screaming... all your friends are crying. Their moms are trying to tell them its going to be okay, but you see the fear in their faces and you know that means its NOT ok. Terrified you crawl further over and you hear someone say his name. But you are so young, you don't understand what it all means.... how can grandpa be dead? You had just kissed him good morning before breakfast. This is a nightmare come to life. You look into your moms eyes and ask... why is this happening??? Why are the strangers killing everyone? Why are they telling everyone we are bad people? What did we do mommy... did we do something wrong... was this my fault?
Was it Serenity's fault?
Was it....any... of our faults?
Mommy.......grandpa will never hold me again... will he.


I'm scared...

Suddenly...

"As you can see, I am standing closely, but not too close, to the electrified barbed wire fence surrounding the United States Capitol building. The fence was erected three weeks ago, following the declaration of martial law in the nations capital. There are no indications that either the fence, or martial law, will be taken down any time soon. If you will follow our camera panning the Washington D.C. skyline, you will see something quite remarkable in these difficult times. Besides the clear blue sky, mercifully brought in by the first significant cold front of the season, you will see no pillars of smoke. Billowing smoke plumes have been darkening the D.C. skyline and our collective consciousness for the past twenty nine consecutive days until this evening. Unfortunately, my colleagues are not repeating this same story in New York, Philadelphia, Atlanta, Chicago, Los Angeles, and many other major U.S. cities. Maybe the cooler temperatures have calmed tempers, but there is no question that the rains last night put out many of the building, block, and car fires that the overworked district firefighters didn't yet reach, or that the National Guard did not forcibly prevent with mass arrests. Fortunately for the people in the nation's capital, they did not suffer anywhere near the death toll as the other cities I mentioned."

.....................

"It seems like an eternity ago, but it was only six weeks ago that this latest phase of the economic disaster befalling America took a violent turn. Remember if you will where it all started, in the New York City grocery store refused to accept cash in US dollars for purchases over $20, only European and Japanese currencies, or gold or silver coins. Of course, with milk at $15 per gallon, the irate costumers could not buy much with their money. People who had been locked out of their offices, forcibly evicted from homes that were once theirs, were then unable to feed their families or themselves. It seems obvious now, but that's when the first of many food riots erupted in this country. Who would have thought that America would come to this? Desperation on a mass scale? Not long after, mob scenes appeared at banks in New York, then the north east, and then all across the country. Panic stricken people were desperately trying to withdraw their dollars to either spend them for food, gas, and other necessities, or convert them to stable foreign currencies or precious metals. Indeed, these days it seems any foreign currency is more stable than the once globally accepted United States dollar. Oddly enough, US silver dimes, quarters, and half dollars that have been out of circulation for more than 40 years are now more commonly seen in store cash registers than dollar bills."

More here...

End government ponzi/welfare schemes masquarading as insurance...

"Social Security in any form is morally irredeemable. We should be debating, not how to save Social Security, but how to end it--how to phase it out so as to best protect both the rights of those who have paid into it, and those who are forced to pay for it today. This will be a painful task. But it will make possible a world in which Americans enjoy far greater freedom to secure their own futures." -- Alex Epstein of the Ayn Rand Institute

Cherie and I have been out of town...but, we are back NOW!!!

• In 1794, when Congress appropriated $15,000 for relief of French refugees who fled from insurrection in San Domingo to Baltimore and Philadelphia, James Madison stood on the floor of the House to object saying, "I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents."
  -- James Madison, 4 Annals of congress 179 (1794)