WC Varones

Don't lend your hand to raise no flag atop no ship of fools

Groundhog Day

One of my favorite modern-day social commentator artists is WilliamBanzai7, who posts his creations at Zero Hedge.

Today's post:
BANZAI7 NEWS, Jackass Island USA--Once again the world famous hedge hog Punxatawdry Ben came out of his Jackass Island printing bunker and failed to see the shadow banks. According to Punxatawdry Ben's trainer Lloyd Blankenfein, this can be interpreted to mean that cash strapped Wall Street bankstas and fat cats can happily look forward to many more ink filled printing rounds of quantitative schtupping in 2012.

"The ground hog is like most other prophets; it delivers its prediction and then disappears."--Bill Vaughn

"Punxatawdry Ben is the bellwether of false profits; he prints predictably and then the ink disappears."--WilliamBanzai7





The great thing about this Internet that Al Gore invented is there's pr0n for every interest -- even monetary policy fetishists like yours truly.

CBO Numbers Out

Everything is staggering, like normal, and Denninger provides his usual colorful commentary focusing on Medicare here. I only have one bone to pick with him though, and I think it's important.

That's not going to happen, because it can't. That number would represent approximately 1/2 of today's Federal Budget, incidentally.

I believe Tickerguy meant Federal spending because as far as I'm aware our Congress has failed to pass a budget in years. Just a reminder that these servants of the Kleptocracy are not only moral failures, they can't even do their f'in jobs.

There's a sucker born every minute

...and there were millions of college kids voting for Hopey McChange four years ago. How's that working out for their now unemployed, stoned-on-the-couch asses? Not so well:
Back before he was president, admitted drug user Barack Obama was known to question the sagacity of the drug war. Now that he's occupying the Oval Office, Obama regularly laughs off the subject of legalizing marijuana when it comes up. Which might be kind of funny if his Justice Department wasn't busy cracking down on medical marijuana dispensaries with a ferocity that easily surpasses anything evinced by the Bush or Clinton admins.

Dude got robbed

Gold keeps doing what it does best as Fed promises three more years of easy money

On Wednesday, the central planners at the Federal Reserve announced that they will continue distorting the markets by manipulating interest rates to near-zero at least through 2014.

Gold took off like a rocket, rising more than $50 intraday.



Stocks, the object of Ben Bernanke's obsession, didn't keep up, rising only one percent and then fading the next day.




There is a stunning amount of ignorance and misinformation about gold among the public, the financial press, and economists. Remember when banker Richard Wiggins trashed gold at $1200 in Barron's? And witness the ignorance in the comments here, including from economist Barkley Rosser, about gold being in a bubble in 2010 at $1200. Personal finance guru Dave Ramsey, who is otherwise generally outstanding, has been telling people to dump gold for years, including here in October 2009 with gold at $1000.

Many people think of gold as an inflation hedge, and can't understand why gold goes up while the CPI is flat.     The truth is that gold is a hedge against currency debasement, which is a very different thing than consumer inflation.  The CPI remains contained for two reasons: 1) depressed demand and 2) biased index construction.

After a multi-decade borrowing and spending orgy, consumers are tapped out and are trying to repair their balance sheets. So even as the Fed prints money, consumers don't spend enough to create significant inflation. And while there is inflation in the things consumers need (food, gas, utilities), it is masked by the price drops in discretionary items like flat screens and cheap Chinese crap. Additionally, the BLS makes "quality" (cars now have airbags and ABS brakes, so we're going to pretend prices didn't increase as much) and "substitution" (steak is so expensive that nobody eats it anymore, so we'll take it out of the index and replace it with hamburger) adjustments that systematically reduce reported CPI inflation.

So if CPI inflation doesn't explain the increase in gold prices, what does?

Two things: the national debt and the Federal Reserve balance sheet.     Here's a history of gold along with U.S. debt as measured by the IMF's Gross Government Debt.  Pretty compelling, huh?



We are now in our fourth year of trillion-dollar deficits, and the debt/GDP ratio just passed 100%.  The dollar is falling against gold because that debt can't possibly be paid off, or even the interest serviced, in today's dollars.  Interest and maturing debt are paid by issuing more debt!  And the cowardly Congressional Republicans have folded on the debt ceiling and the budget continuing resolution and agreed to keep spending even more than we did under Reid/Pelosi/Obama.  Unless you think Congress is going to reverse course and start running budget surpluses, that white line is headed higher.  I'll leave it to you to judge what that implies for the gold line.

As for the Federal Reserve's effect on gold, here's a chart of the Federal Reserve balance sheet (essentially the amount of money it has printed out of thin air) along with gold prices.



The Fed's Wednesday declaration of free money for three years is not an explicit promise of further balance sheet expansion, but it's an indication that that is the direction that the Fed is leaning.  And with the Treasury still running trillion-dollar deficits, somebody's got to buy all that new debt.  The Fed is likely to continue being the Treasury's handmaiden, especially if foreign buyers continue backing away.  Remember the old days where everyone was talking about the Fed "exit strategy?"  You haven't heard that phrase lately, have you?  Funny how that is.

I've said it before and I'll say it again: the dollar is a convenient medium of exchange but it is absolutely NOT a store of value.  Any financial adviser who doesn't recommend gold as an essential part of a balanced portfolio is recklessly irresponsible.

B-Daddy takes one for the team

I couldn't bear to listen to another State of the Union from that crony capitalist looter.

Fortunately, B-Daddy did, and gives us the Cliff's Notes here.


Remember what the dormouse said...

Feed your head!

Scientists discover how psychedelic mushrooms work.
Within a minute after subjects got an infusion of psilocybin, researchers said, scanners that plot blood flow within the brain detected a sudden drop in activity in the medial prefrontal cortex and the posterior cingulate cortex, two areas of the brain that appear to be key in "grounding" us in reality. These areas also are key nodes of the brain's newly identified Default Mode Network, which springs to life when our minds wander.

Thus untethered, the brain's sensory regions are free to soar. Subjects reported unusual changes in their visual experiences, including geometric patterns, distortions of space and size, and dreamlike perceptions. They reported that their thoughts and imaginations wandered, their perceptions of time were changed, and sounds they heard brought on vivid images -- a mingling of sights, sounds and thoughts such as those experienced by people with synaesthesia. And researchers noted that the more suppressed the observed activity in a subject's posterior cingulate cortex and medial prefrontal cortex, the more potent the sensory distortions the subject reported.

Hockey Goalies are Cool

Tim Thomas didn't join his Boston Bruins teammates to meet Premier Obama at the White House yesterday. He released this statement:
"I believe the Federal government has grown out of control, threatening the Rights, Liberties, and Property of the People.

This is being done at the Executive, Legislative, and Judicial level. This is in direct opposition to the Constitution and the Founding Fathers vision for the Federal government.

Because I believe this, today I exercised my right as a Free Citizen, and did not visit the White House. This was not about politics or party, as in my opinion both parties are responsible for the situation we are in as a country. This was about a choice I had to make as an INDIVIDUAL.

This is the only public statement I will be making on this topic. TT"

The Silicon T-bill

Bernie Madoff's consistent returns earned him the nickname "the Jewish T-bill." While 10% - 12% annual returns were too good to be true, the market does offer some nice, consistent yields now and then.

Back on Thanksgiving 2008, we pointed out that you could buy a very well-known semiconductor stock with a rock-solid balance sheet with a dividend yield of 4.5%, paying more than long-term Treasuries.  That stock is now up 91% since then, and the dividend has increased three times and is now 50% higher.  If you'd bought then, you'd be earning 6.75% on your cost in addition to nearly doubling your principal.  Even at the current price, the stock still yields more than 30-year Treasuries, and dividends look set to continue increasing while Treasury coupons remain fixed at anemic levels. (Note: the balance sheet is no longer as rock-solid due to an acquisition and the opportunistic issuance of a modest amount of long-term debt at attractive yields to fund stock buybacks.)

While the hyperinflation we feared back then has yet to materialize, the U.S. fiscal and monetary situation has continued to deteriorate.  We recently crossed 100% debt/GDP (even excluding off-balance-sheet liabilities like Medicare, Fannie/Freddie, and state and local pension obligations).  To put that in perspective, here is a historical chart.


The only other time in history we had these debt levels was at the end of World War II, where we'd sent millions of people and machines halfway around the world to fight global fascism. How did we get out of it then? Two ways: 1) immediately stopping the deficit, and 2) serious inflation. As soon as WWII ended, the US cut the deficit to zero and actually ran surpluses in the late 1940's and early 1950's.


In contrast, four years after the financial crisis, we are still running trillion-dollar deficits, and both Obama and the cowardly Congressional Republicans plan to run deficits at least in the high hundreds of billions as far as the eye can see.



As for inflation, did your high school history teacher tell you about the inflation the US used to erode the value of the debt?

Year Inflation
1946 8.43%
1947 14.65%
1948 7.74%

That's a cumulative devaluation of 34% in three years!  Patriotic investors who had bought war bonds yielding low single digits had their faces ripped off.

It took large doses of both fiscal austerity and inflation to get us out of 100% debt/GDP in the 1940s.  Given that neither political party is proposing even modest fiscal responsibility now, eventual inflation is the closest thing to a sure bet I can imagine.

As we said back in 2008:
Do you buy the Treasury bond that will be destroyed with inflation, or do you buy the chip stock whose products, assets, and dividends will rise with inflation? We at the W.C. Varones Blog would buy the chip stock all day long.
WWII war bond buyers lost money to help their country fight fascism.  Are you willing to lose money to prop up the Obama regime?

Internet: 1, Congressional Rats: 0

Ed. note: I wrote this last night. Normally I'd just cross-promote with a link but WCV suggested I repost in full here for your reading pleasure. Enjoy. WCV, I know how you feel about the excessive swearing on your site but A) you told me to do this and B) if anything warrants cussing people out, it's this. Remember, kids, the Internet never forgets. - JDA

Hey, listen to me and listen good. NEVER FORGET. Never forget the assholes in Washington who wanted to build a Great Wall of America across the Internet. Never forget the proposed Cybersecurity Act of 2009. NEVER EVER WHATEVER YOU DO, don't you dare forget. That's all I ask.

Ding dong, the witch is dead (for now):


After getting panned on the Web, Hollywood’s blockbuster anti-piracy bill imploded like a box-office bomb this week — and Washington realized the Internet’s “series of tubes” now may have more clout than the vaunted motion picture and music industries.

By the time Senate Majority Leader Harry Reid (D-Nev.) called a time of death on the PROTECT IP Act on Friday, it already had been trampled by a stampede of one-time supporters anxious to distance themselves from the political threat of a Web-driven uprising against the bill. Lying alongside it: The House’s Stop Online Piracy Act.

Here is a convenient list of 60 companies that supported SOPA (remember these names, people):

List of Supporters: H.R. 3261, the Stop Online Piracy Act
60 Plus Association
ABC
Alliance for Safe Online Pharmacies (ASOP)
American Bankers Association (ABA)
American Federation of Musicians (AFM)
American Federation of Television and Radio Artists (AFTRA)
American Society of Composers, Authors and Publishers (ASCAP)
Americans for Tax Reform
Artists and Allied Crafts of the United States
Association of American Publishers (AAP)
Association of State Criminal Investigative Agencies
Association of Talent Agents (ATA)
Beachbody, LLC
BMI
BMG Chrysalis
Building and Construction Trades Department
Capitol Records Nashville
CBS
Cengage Learning
Christian Music Trade Association
Church Music Publishers’ Association
Coalition Against Online Video Piracy (CAOVP)
Comcast/NBCUniversal
Concerned Women for America (CWA)
Congressional Fire Services Institute
Copyhype
Copyright Alliance
Coty, Inc.
Council of Better Business Bureaus (CBBB)
Council of State Governments
Country Music Association
Country Music Television
Creative America
Deluxe
Directors Guild of America (DGA)
Disney Publishing Worldwide, Inc.
Elsevier
EMI Christian Music Group
EMI Music Publishing
Entertainment Software Association (ESA)
ESPN
Estée Lauder Companies
Fraternal Order of Police (FOP)
Gospel Music Association
Graphic Artists Guild
Hachette Book Group
HarperCollins Publishers Worldwide, Inc.
Hyperion
Independent Film & Television Alliance (IFTA)
International Alliance of Theatrical and Stage Employees (IATSE)
International AntiCounterfeiting Coalition (IACC)
International Brotherhood of Electrical Workers (IBEW)
International Brotherhood of Teamsters (IBT)
International Trademark Association (INTA)
International Union of Police Associations
L’Oreal
Lost Highway Records
Macmillan
Major County Sheriffs
Major League Baseball
Majority City Chiefs
Marvel Entertainment, LLC
MasterCard Worldwide
MCA Records
McGraw-Hill Education
Mercury Nashville
Minor League Baseball (MiLB)
Minority Media & Telecom Council (MMTC)
Motion Picture Association of America (MPAA)
Moving Picture Technicians
MPA – The Association of Magazine Media
National Association of Manufacturers (NAM)
National Association of Prosecutor Coordinators
National Association of State Chief Information Officers
National Cable & Telecommunications Association (NCTA)
National Center for Victims of Crime
National Crime Justice Association
National District Attorneys Association
National Domestic Preparedness Coalition
National Football League
National Governors Association, Economic Development and Commerce Committee
National League of Cities
National Narcotics Offers’ Associations’ Coalition
National Sheriffs’ Association (NSA)
National Songwriters Association
National Troopers Coalition
News Corporation
Pearson Education
Penguin Group (USA), Inc.
Pharmaceutical Research and Manufacturers of America (PhRMA)
Pfizer, Inc.
Provident Music Group
Random House
Raulet Property Partners
Republic Nashville
Revlon
Scholastic, Inc.
Screen Actors Guild (SAG)
Showdog Universal Music
Sony/ATV Music Publishing
Sony Music Entertainment
Sony Music Nashville
State International Development Organization (SIDO)
The National Association of Theatre Owners (NATO)
The Perseus Books Groups
The United States Conference of Mayors
Tiffany & Co.
Time Warner
True Religion Brand Jeans
Ultimate Fighting Championship (UFC)
UMG Publishing Group Nashville
United States Chamber of Commerce
United States Olympic Committee
United States Tennis Association
Universal Music
Universal Music Publishing Group
Viacom
Visa Inc.
W.W. Norton & Company
Wallace Bajjali Development Partners, L.P.
Warner Music Group
Warner Music Nashville
Wolters Kluewer Health
Word Entertainment

Of course, the dickheads lobbying to gain control over the Internet at large would rather they weren't called "supporters," and demanded a correction and explanation from the Judiciary Committee. “The listing of the law firms was a mistake made at the staff level of the committee,” the committee said in a statement to POLITICO. “Once we were made aware of the mistake, we immediately removed the list of supporters from the website and revised the document. Our staff has been in contact with several of the firms and made them aware of our efforts to remedy the mistake.”

As of last time I checked, the Judiciary Committee had an updated list of SOPA "supporters" free of these law firms' names. Sorry, my name didn't show up as a supporter, how exactly did these firms end up there if they didn't - in one way or another - support SOPA? Nice work, you Judiciary Committee morons, you revealed the scam!

Reps. Lamar Smith (R-Tex.), John Conyers (D-Mich.), Bob Goodlatte (R-Va.), and Howard Berman (D-Calif.) should ALL be out of a job come November, period.

Especially Lamar Smith, who is a moronic copyright thief in his own right.

Vice tracked down a pre-SOPA view of Smith's website and discovered that the asshole was using a non-credited, STOLEN image lifted from photographer DJ Schulte:


Here's the original (credit, obviously, goes to DJ Schulte, who has licensed his work under a Creative Commons license, so all Lamar's dumbass team had to do was throw the dude a credit - WAS IT THAT FUCKING HARD, LAMAR?):


The cowardly pricks have retreated for now thanks to the overwhelming response by the Internet. Not any one of us or some of us or certain ones of us, just "the Internet." There will be no taking credit (there will be giving it, however, because what assholes like Lamar don't get is that we, as the Internet, do shit like that for each other), there will be no celebrating. It isn't over.

I'm a threat for writing this. You are a threat for reading it. The Internet is a threat for breaking through the bureaucratic bullshit and offering FREE knowledge to every American. Not Sallie Mae loans and failed hood colleges but real knowledge; and the fruit of the Tree of Life has taught us that the (capital G) government has but one goal: self preservation. It is not the Government's job to do anything for you, it is its job to keep you suppressed enough to continue feeding it and stupid enough not to figure out what its real job is.

The Internet is a direct threat to the Government's single mandate. It has nothing to do with copyright violators or even the chickenshit movie companies delusional enough to think movie downloading is eating into its profits when it's really SHITTY ASS MOVIES. It's that we are all a threat for disseminating this information amongst ourselves freely, openly, politely and often, 24 hours a day. No longer are we tethered to the Government-controlled media (remember when CNN used to show news?), and are instead allowed to roam free and share as much information as we like to anyone who wants it. It isn't always correct, a lot of it is opinion and some (OK, a lot) is LOLcats but it is a constant conversation the world is having with itself and that scares the shit out of the Government. Not just ours, everywhere.

I hope we, the Internet, have effectively made our point. We will not stand for it. We know what the Government is trying and we aren't going to sit here quietly and allow them to do it. This is not China, it's the United States of America (in case anyone forgot). I'm sorry a bunch of assholes we pay to represent us in Washington think it's OK to fuck us like this and we're too stupid to notice but we're not going to take it.

Get it yet? They will be back. And we'll be ready.

Here is some recommended reading: Green Czar Resigns, Creepy White House Internet Tactics Still Creepy

Obama Supporter-Like Quotes

I've heard most of these for reals:

People don't want to be part of democracies; they want to be part of religions. The Democrat and Republican parties are super religions but they are becoming destroyers of democracy.

HT: Daily Bail

Greenspan's Body Count:

UPDATE: Post removed at request of victim's family.
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