"Thanksgiving used to be Thanksgiving, and it was its own holiday, NOT 'Christmas, Part One'.
" ~Lewis Black

Curmugeon's   Archive.

Cancel That Funeral
Who Supports Whom?
One Foot in the Grave
Magical Money  

Posterity's Debt To Me
The Battle for Honest Money
From Riches to Rags
Fiddler's Broken Wrist
Jack-lantern Wealth
Chance of Gold Confiscation

Poobahs of Positivism

Blood In the Streets
America Descending
Just Plain Stealing  ?
A thing to fear
Heavenly Sex
What Fools, We Mortals
Unvarnished Truth
Hucksterism Gone Wild
Religious Violence


November 22, 2017

    Fifty-four years have passed since President John Kennedy was shot.  We remember it with considerable clarity because we were in a broadcast studio filling in for an announcer who had banged his head against the heavy counterweight of a microphone boom in an adjacent studio and went home to recuperate. 

     It was the lunch hour.  A news department intern heard the incessant clanging of the Associated Press printer and went to see what was happening.  For the next several minutes she raced back and forth from the machine across the lobby to our cubicle with short one or two sentence dispatches torn from the printer.  "Dateline Dallas:  KENNEDY SHOT! "   Sketchy as it was we immediately abandoned regular programming of recorded music and commercials and prayed the network would soon be on line with details.

     The network had been caught off guard just as we were, but within about ten minutes began reporting whatever information they had, which was about as sketchy as the material we got from the AP printer. 

      Very quickly the network had correspondents on the telephone from Dallas and the story of the gunshots, the race to the hospital ER, and the sad news of the death of the president stunned the nation. 

       It was a very tensive time to be a broadcaster.

The gold confiscation possibility.
   We're well aware news media are so wrapped up in reporting past sexual harassement accusations against prominent males there's little time for mundane topics like the future of money and the deluge of debt that's hoisting warning signs all over the landscape.  Only today on NPR we heard a commentator suggest it was time to dig more deeply into allegations of rumored sex mischief by President Trump.  It's suprising the late Senator Strom Thurmond's name has escaped notice among the current outbreak of complaints. We recall one of his former staffers, a female, telling us that it was common practice to avoid going alone into the photo-copy room  for fear of attracting the assistance of their employer, said to be  a "hands on" boss.

   But noodling along in the background of today's National Enquirer-like headlines are the nagging questions of what's to become of the world's fiat currenciess, most of which seemed doomed to eventual death by infation. A few nervous souls hold some of their assets in the form of gold or silver on the grounds these precious metals will retain purchasing power over the long haul while the debt-based currencies purchasing power evaporate.

   "No, no!" say the sound money critics.  "The government will abscond with your gold!" They usually cite the U.S. 1933 law requiring people to turn in their gold bullion, coins, and gold certificates to the U.S. Treasury in exchange for $20.67 in cash or credit for each troy ounce.

    Today we discovered a rather well-done YouTube commentary on the subject.  Although the narrative refers often to "gold confiscation" it makes clear that the 1933 event was not a classical confiscation because owners were compensated for every ounce they turned in. 

    The video also accurate explains that it is unlikely the U.S. will call in private gold because it has the power to strip  people of wealth through a continuing program of money inflation.

    Here's the link to the video.  GOLD "CONFISCATION" 

More on sound money. . . . 

    A reader recently reminded us of a well-known quotation from the late J.P. Morgan.  "Gold is money; everything else is credit."

     Seems like an oversimplification and certainly implausible for the 21st century.  But if you have a gold coin containing one troy ounce of pure gold at the bottom of your sock drawer you hold an object that doesn't derive its value from someone else's indebtedness, nor does anyone else have a claim on that coin.  At the present time it's worth about $1,300.00 and can be traded for food, clothing, and shelter almost anywhere in the world.

     It's hard to wrap one's mind around the idea that a U.S. paper dollar is only an IOU, or that ownership of Treasury note or bond is also a pledge of future payment at face value in dollars that are worth far less than at the date of purchase.  Physical gold, on the other hand, is wealth...not a promise. 

      Gold (and silver) were legal tender in Mr. Morgan's day.  We can only guess at what he'd say about today's system of fiat currency.  It undoubtedly would be uncomplimentary.

       Morgan was also skeptical of the public's interest in such details.    "The public reads the headlines and that is all," he remarked.  "The public reads the headlines and listens to the demagogues and that's the stuff public opinion is made of."

        Today the public has little choice.  Media specialize in headlines and sensationalism and little time on such matters as unpayable government and public debt.   Perhaps we should address  this question:  Is it  media's job to  entertain  and propagandize, or lay out facts more dispassionately and let the public draw its own conclusions? 

    Ben Garrison surveys the fractured plight of the USA from his chilly perch in Montana.  See his 'toon and commentary HERE.

     The mind reels at the divisiveness that has shattered the U.S. Battles rage over everything from race to religion...from politics to wealth...and plenty of other topics, too.  Ben suggests a  glue consisting of a return to The Constitution, maintenance of the English language, and establishment of a common culture might put the nation together again. 

       We'd love to see a return to the small-government federal mandates of the Constitution, but there is no general desire to do that.  Likewise, promoting English as the "national language" is a unifying idea but even common labels are now printed in Spanish as well as English.  As for the adoption of a common culture or even improving the level of debate on political matters seems out of the question.  How, for instance, does one convince the Socialist Far Left that there's anything to be said for free-market capitalism?

        One of the biggest barriers to getting the Ship of State back on an even keel is the fact that most of the mainstream information media lean to the political left. 

Zimbabwe and Venezuela are classic cases of money gone sour.
<    "By holding assets outside of the system you can work to protect your wealth from such measures as those seen in Zimbabwe and Venezuela. Gold is one of the best examples. When held in a physical, allocated and segregated manner the owners cannot be prevented from accessing it whenever they so wish. Nor can it be devalued at will or suddenly made illegal to trade. It is a borderless currency that acts without the control of governments looking to further their own wealth or political beliefs. ZERO HEDGE

     Some readers may want to quibble with this statement on the grounds that Franklin Roosevelt pulled gold out of circulation in 1933.  Overlooked is the fact that the U.S. dollar was officially 1/20th of a troy ounce of gold in that long ago day.  Gold was money

            Today, President Trump and the U.S. Congress would be powerless to "call in the gold."  They have no legal right to order anybody to turn in their gold to the U.S. Treasury .  Moreover, the government cannot set the dollar price of gold. 

             Also overlooked is the fact the government in 1933 did not TAKE the people's gold.  It paid for every ounce at the mint rate of $20.67.  A few insisted in payment in silver coin, most settled for paper currency, or their bank accounts were credited with the face value of the gold deposit.  IT IS QUITE
UNLIKELY THAT THE GOVERNMENT WOULD OFFER GOLD OWNERS $1,275.00 PER OUNCE. . .today's approximate market price. 

             The government has no more claim to private gold than it does one's wrist watch. 

  A Most Outlandish Thing.
    "I think it was a mistake for the U.S. to have come together with the Constitution of 1789. The Articles of Confederation should have stayed in existence, with a few modifications. The Constitutional Convention of 1789 was actually a coup. A successful, non-violent coup. Most people didn’t really care because the government was such a trivial factor in their lives in those days." Doug Casey (Part 2)

As people grow older they tend to either keep their mouths shut or speak whatever is on their minds. Doug Casey, now in his 70s, describes himself as an anarcho-capitalist who was influenced some years ago by Ayn Rand.  Casual readers will consider him a nut case.  Others may find some interesting nuggets among his blunt comments.

   Many historians agree with him that the Constitutional Convention of 1789 was a coup.  The original intent was to tweak the Articles of Confederation to make them conform to the needs of the fledgling nation, but they were tossed aside at the Philadelphia meeting that began in May, 1787. 

    Some scholars argue that the dismantling of the Constitution began with the U.S. Supreme Court ruling on the legality of the famous Civil War "Greenbacks" in 1870.  It's evident the monetary system has deteriorated ever since.

   We snitched this chart from The Daily Reckoning.  It traces interest rates across a long span of time. 

  Note the blue line.  It reached a low in 1895, 1930 and is presently at its lowest in 5,000 years.
    Low interest rates are a boon to borrowers, but as many a senior citizen will agree they raise hell with savings.  Put a few bucks in a bank paying some fraction of 1 percent, or even a full percent or a bit more, and inflation washes the dollar value away.  Say the rate of inflation is a mere 2 percent and a depositor is getting 1 percent on his/her funds.  A dollar deposited loses 1 percent in a year's time. 
    No wonder the American personal savings rate is so low. 


    "The present American national spectacle is bloodless," writes Conrad Black, "and no one seems to be inhaling anything improper, but it is a disgrace. The Trump-haters are damaging only themselves by keeping this buffoonery going, and they can’t do it much longer, whatever the dispositions of Mr. Mueller and others who live off it. Donald Trump might succeed or not as a president, but his only offense so far has been winning the election." HOUND SICCED ON TRUMP.

     It's not difficult to agree with Mr. Black that the present American national spectacle is a disgrace. And he does not even mention the present abusive sex escapades that are surfacing from the past to embarrass prominent figures in show biz and politics.

      Veteran columnist Peggy Noonan writes today in the Wall St. Journal that both the Democrat and Republican parties are in disarray. Not only is the GOP hopelessly divided on key issues, but the Democrat party is torn between the Sanders/Warren socialist sector and the old Clinton wing.  In our view it's time to muster a strong un-divided third political party to wade into the 2020 elections. We would inclined toward something along libertarian lines, although the old Libertarian Party has too many factions in it to present a united package. 

      It's stunning to see the wild swings in the dollar price of Starbucks coffee around the world.  In New York city a Starbucks tall latte sells for $3.40.  In Cairo, Egypt the same cup sells for $1.53.  On the other hand, one must fork over $5.70 in Zurich, Switzerland. 
       Heading to London?  Budget $2.84 for your Starbucks latte. 

        These price comparisons are obtained by converting the local monetary unit to U.S. dollars.  Obviously, the serious coffee drinker will get far more for his/her buck in Cairo...or Johannesburg, South Africa, where that tall latte sells for $1.79. 

         We recall paying 5˘ for a delicious cup of coffee at a diner near our workplace in 1947.  Either something has gone wrong with the dollar or the taste of coffee at Starbucks has been so greatly improved that people will pay a huge premium to get it.

      Hate charts?  Welcome to the club. But since most of us think Social Security is designed to last forever and "will always be there" to take the danger out of old age, this particular graphic is helpful is illustrating how rapidly Social Security cost is growing. 

  The layout in 1995 was about $500 billion (in 2017 dollars) and has now doubled.

  "Not to worry," runs the popular mantra. "The Social Security Trust Fund has plenty of money to cover costs for the next fifteen years or more."

  Yes and no. The money in the Trust Fund has been spent on other things by Congress and replaced with "securities"...mostly U.S. bonds, which are IOUs. Baby Boomers are coming onto the rolls at the rate of some 10,000 per day and either FICA taxes will have to be raised on current workers or the official retirement age will have to raised to age 69 or 70.  Or both.
  How to deal with this fiscal headwind may be one of the hot topics of the 2020 presidential election.

"Bitcoin is a digital illusion and is currently acting more like a stock or bond than a currency or money."

     Earlier this week the postman brought us a 21 page mailing piece from a bitcoin promoter who points out that only one in every 28,000 people owns one bitcoin. The writer goes on to assert that  the biggest mistake  is not to own any bitcoin.

    The piece is cleverly written and has strong appeal to people's natural greedy streak.  Who wouldn't want to buy a bitcoin for $1,000.00 and see its value skyrocket to $500,000.00? One fan says, "...there is a higher than 50 percent chance that a bitcoin is worth more than $1 million!"

   Bitcoin, ethereum, and several other cryptocurrencies are riding high on the wings of illusion.  The cryptocurrency has no more substance than the U.S. dollar, which is also fiat currency but is declared to be Legal Tender  by the government.  Most dollars, like bitcoin and the other "cryptos" exist only as digital records. 

       By the way, it was a bit of a shock today to learn that  $300 million  in cryptocurrency was accidentally stolen and lost forever.
 A user mistakenly took control of hundreds of wallets containing the cryptocurrency ethereum, destroying them in a panic while trying to give them back. Read the sad news here.

      The quest for sound money is a big challenge.  Dollars are debt based IOUs and cryptocurrencies are a digitized illusion in computers.  Neither can be counted on as a reliable store of wealth.
       We'll continue the quest for answers in the weeks ahead.  

 "Neither a borrower nor a lender be,
For loan oft loses both itself and friend.” - Wm. Shakespeare (Hamlet)
    "Credit card and other revolving debt has increased by 20% since the beginning of 2015. The Deep State narrative would describe this phenomena as a huge positive (more interest and fees for the criminal Wall Street cabal) because it proves average Americans are optimistic about the future. Consumer confidence has never been higher. Right?

     "Average Americans are not leveraging themselves up to their eyeballs because they are ecstatic about their future prospects. They are charging basic living expenses, like real estate taxes, rent, tuition, medical costs, insurance premiums, food, utilities, and gasoline. They are attempting to maintain the lifestyles they’ve been told they should have by propagandists and their Madison Avenue Bernaysians by going deeper into debt at the low rate of 15% or more."  ~Jim Quinn

     Living beyond our means is the American way.  We get that. But the Jim Quinns of this world are warning that constantly borrowing money against the future does not usually lead to happy-ever-after-ness.

     What could possibly go wrong?  If the federal government can spend huge amounts of money it doesn't have, year after year, why shouldn't we?  Live the good life now and pay for it later, and all that....

      But in the long haul debt bubbles occur and when they burst it's painful. It's a lesson of history that's widely ignored. 

        The federal public debt is  said to be just over $20 trillion.  No one truly believes it will ever be paid.  Mainstream economists say it really doesn't matter as long as the interest on the debt can be met without too much strain. 

         Now comes a remarkably candid economist who aims to blast several myths about government debt.  First of all, he says the government debt is closer to $150 trillion when all the unfunded liabilities are calculated.  His name is Antony Davis.  See his interesting numbers-laden lecture HERE.