“Our first and fundamental maxim should be never to entangle ourselves in the broils of Europe….”
~Thomas Jefferson

Curmudgeon's      Archive. 

Posterity's Debt To Me
Coping with Deflation
Heavenly Sex

FDR & History
Chicken Littles   
Ac-cent  the   Positive

What Fools, We Mortals
Unvarnished Truth
End-of-everything Blues
My Immigrant Relative
The Eloquent Pogo
Hucksterism Gone Wild
Unmanageable Religion

Columbia  Weather

















































































































May 4, 2016

   An unexpected turn of events. . .The Missus broke her leg yesterday and life has suddenly become a tad more complicated.  This blog will be put on the back burner for a day or two  until we re-organize

There's an alternative, but it'll never catch on with the voting majority.

   "Liberals generally want to increase the minimum wage, provide every working mother with free day care, institute a national health care system, increase poor women’s access to abortion, provide free contraception devices to any woman that wants them, expand Medicaid, remove 'under God' from the Pledge of Allegiance, provide every child with a free college education, increase funding for mass transit, pass stricter gun control laws, make “the rich” pay their “fair share,” increase the number of groups protected under anti-discrimination laws, grant special rights to LGBT    

   "Conservatives generally want to simplify the tax code, reduce government waste and fraud, amend the Constitution with a balanced budget amendment, restore prayer and Bible reading in public schools, repost the Ten Commandments in public schools, increase funding for abstinence education, force all school children to recite the Pledge of Allegiance, reform welfare, reform immigration, slow the rate of increase of certain federal programs while calling it a cut, make flag burning a crime, provide low-income children with educational vouchers to attend the school of their choice, prevent people from using marijuana for medical purposes, strictly enforce drug laws, increase defense spending, and maintain the warfare state.

   "Oh, and both groups want to 'save” Social Security and Medicare for our seniors.' "  ~Lawrence M. Vance

    Mr. Vance's summary may be over-simplified, but both the GOP and the Democrat parties are generally pledged to maintaining a growing federal government despite any campaign promises to the contrary.

  There's a little buzz circulating about the establishment of a third party in order to save the country from Hillary Clinton and Donald Trump.  It probably will not get off the ground.  Third parties rarely do.  The voting majority is inclined toward cradle to grave assistance from government and will vote for it consistently even if it requires running constant budget deficits.  

   There's no epoch in history in living consistently beyond one's means led to anything but bankruptcy.

                                                                                                                                                                                                                                                                      President Obama says the economy is doing very well.  If this be so, asks Betsy McCaughey, why are so many people doing themselves in?

   "The Obama economy is stalled. It grew at a measly 0.7% annualized rate in the first quarter of this year. That’s compared with the 3.5% rate the U.S. enjoyed for most of the twentieth century. That’s the growth needed to sustain employment and optimism.

     'Hillary Clinton could care less about out-of-work people taking their own lives. She’s pledging to close down the coal industry and block fracking of natural gas. More pain for coal country or for portions of upstate New York that are sitting on natural gas treasure. Self-inflicted deaths in the Syracuse area are up about 40% in the past five years, and rates in depressed western New York are double New York City’s rate, all attributable to economic distress. Upstate New Yorkers are literally dying for jobs."  SOARING SUICIDES

   When the economy is booming along at an annual growth rate of 3.5 percent or more optimism tends to fill the air.  When it's dragging along pessimism grips people who face fewer job prospects and a boatload of debt.  There's a lot of hopelessness in pockets of the population.  A growing number are throwing in the towel and checking out of life's travails.  Some are taking the quick route. Others are taking the slow motion route with alcohol and other drugs, 

    The old adage "Money can't buy happiness" is true to a large extent, but it seems to make hopelessness a bit more bearable.  But how does one accumulate money when so many people can't find jobs that pay enough to make ends meet?

we have elections without substance between candidates without a difference. Hillary is just Jeb Bush in a dress, Biden a universally applicable cipher, Cruz a compliant applicant for membership in the club. Since the parties collude in avoiding issues that people care about, the contest becomes a popularity contest of the sort found in middle school. Whoever wins, the Insiders win. 

Of course Trump also is a billionaire,but he is a turncoat, a class traitor, the Benedict Arnold of billionaires. He addresses the issues that the Insiders want to remain unaddressed. He is indeed dangerous. He threatens the endless (immensely profitable) wars, the endless (immensely profitable) shipping of American jobs to China, the endless (immensely profitable) importation of cheap Mexican labor. He threatens the sacred rice bowls. 

It is why he must be stopped.

   Price inflation will either burst out of the gate, or it won't.  The dead weight of unpayable debt will eventually lead to its doom.

    We recently re-read a little tract written nearly forty years ago by Dr. Carl Weigand, then economics Professor Emeritus of Southern Illinois University.  We had the pleasure of meeting him in the late 1970s. He had been a German teenager during the famous hyperinflation of the early 1920's that led to the destruction of the currency in November, 1923.  Prior to the Great War the German mark exchanged at the rate of 4 marks to 1 U.S. dollar.  By the autumn of 1923 the exchange rate was 4.2 trillion marks to the dollar.  (!)

     Weigand had moved to the U.S. as a young man and was working in Wall Street when the great crash occurred in October, 1929.  He had a front seat for some of the explosive monetary developments of the twentieth century and was closely monitoring the scenario even in his retirement.

      In 1977 he wrote, "The country is faced with grave problems.  Years of inflationary boom may be followed by years of relative decline, which may seriously affect the character of American society, free enterprise, and personal freedom.  But the country has the potential economic, social, and moral resources to overcome the threatening crisis.  It all depends on whether the leaders have the necessary wisdom and courage to lead, and the people have the will and the stamina to make the necessary sacrifices.  The future of America is ultimately not an economic but a moral issue."

       In one sense Dr. Weigand's wise words of long ago still hold true  The USA has the resources to overcome crisis.  But in this sixteenth year of the twenty-first century it's reasonable to ask if the people, and - particularly the voting majority - are tough enough to tighten their belts and face the issues that must be met if an economic collapse is to be avoided.  Scariest of all is the chore of choosing political leaders possessing wisdom and courage. 

Von Greyerz on the money muddle.

    "The Bank of Japan will in 2017 own a staggering 50% of all Japanese government bonds and that will increase to 60% in 2018. How can this country ever believe that their economy will survive? They are printing unlimited amounts of worthless paper and it is having no beneficial effect on the economy. I have said it before and I will say it again, that the Japanese economy will sink into the Pacific in the most gigantic bankruptcy."  Egon von Greyerz Mr. von Geyerz paints a gloomy future for theworld's finances.  Fair warning;  He's a gold bug.

       We're puzzled, though, that nations hoard gold while while claiming it's a barbaric relic and has no place in the affairs of money management.

        The U.S. government has 8.133 metric tons of gold stashed away.  Germany has 2.381 metric tons,  The International Monetary Fund (IMF) holds 2.184 metric tons.  Why do they hoard it?

Crazy Man versus Criminal

   Writing in the April 23rd Wall Street Journal, commentator Peggy Noonan says "My country is in trouble."

   She's particularly distraught about the strange twists and turns of the presidential nominating process.  "Some things have changed that shouldn't have changed," says she, and "Because the great choice for a nation of 320 million may come down to Crazy Man vs. Criminal."  Meaning, of course, Donald Trump and Hillary Clinton. 

   Noonan is probably upset because she sees the nation drifting rapidly away from old-style conservatism of the style she so eloquently described in Ronald Reagan's hey day.  

   As Brazil is demonstrating right now too much government social control leads to financial disaster.  People are taught they deserve to live the good life at the expense of the productive classes. That mindset pervades the U.S. and is growing.  Milton Friedman's advice, "There is no such thing as a free lunch" has been forgotten.  It has been replaced, partially through decades of "free lunches" at public schools with the idea everyone deserves food, clothing, shelter, medical care, formal education, and more.  A ballooning government tries to oblige but inevitably runs into the biggest problem of all.  Lack of money.

   Solving the "money problem" might lead to a renewal of the old American spirit, the loss which Noonan laments. 

                           We have all been taught to revere and support our elderly - but as old people outlive their financial resources and rely more heavily on the young to support them the financial demands on the young eventually become unsustainable.  AARP where are you?

                            Our staff curmudgeon wrote this:  "I'm uncomfortable with the idea my children, grandchildren, and five great-grandchildren owe me a living.  Come the autumn of 2016 I'll vote for the politician who dares to say 'It's immoral to saddle posterity with so much debt just because we're unwilling to pay our own way.  It's time to stop inflating...balance the budget...and live within our means.'  

                        "His campaign would fail, of course.  Voters aren't much attracted to traits such as responsible  statesmanship in their politicians.  The candidate who promises to keep spending money he doesn't have and sending the bill to posterity will win.  For now."   POSTERITY'S DEBT TO ME.

Andy Jackson became the face of the present $20.00 bill beginning in 1928,
Harriet Tubman will take his place in 2020.
   The U.S. Treasury Department plans to kick President Andrew Jackson off the popular $20.00 Federal Reserve note and replace him with portrait of Harriet Tubman, the ex-slave firebrand who was an abolitionist/humanitarian. Secretary of the Treasury Jack Lew says the transition to the new bill should take place by 2020 unless he can persuade the Federal Reserve to speed things up.

  The original plan called for Alexander Hamilton to be be dumped from the $10.00 note but the plan was scuttled after pressure from the fans of the Broadway musical hit "Hamilton."  

  One word of caution: Although there is not a hint of mischief planned after the change there are plenty of cases in the historical record in which nations flushed hoarded cash out from their hiding places by declaring the old currency no longer a legal tender after a certain date. Israel did this some years ago when it switched from the Israeli pound to the shekel.  No such things has ever happened in the U.S. but when a nation makes dramatic changes to its paper currency it pays to examine the details of the plan.

Trump is right.  The country's broke.

   In a recent interview Peter Schiff said: "America owes more money than all of the other debtor nations combined. Trump is right about that, we are broke, we’re flat broke, and we’re living off this credit bubble and we can’t prick it."  BROKE

    How can a mighty nation like the United States of America be "broke"?  Especially since more than 8,000 metric tons of gold are stashed in the government's hideaways at Fort Knox and the Federal Reserve facilities in New York City?  

       Unfortunately, all that gold is not officially connected to the fiat currency that passes for money these days.  This raises the question, of course, of why the federal government and the Fed hoard so much gold in the first place.  (Let's save THAT topic 'til later.)

        The point Schiff makes is debt bubbles are floating over almost everybody and every thing.  Consider, for example, the official public debt of nearly $20 trillion.  If a nation is in hock for such a massive sum with no plan whatever to pay it off....or even DOWN substantially....it's clear that trouble is brewing.  Even rich Saudi Arabia is borrowing a few billion dollars to make ends meet.  The deflation in crude oil prices made a serious dent in its cash flow,

          Debt bubbles can be deadly.  Even the nation's first Treasurer, Alexander Hamilton, who endorsed the idea of a nation taking on debt when necessary, never envisioned a operating on competing fiat currencies and gargantuan debt.  

           Speaking of Hamilton:  His portrait has been on the $10.00 bill since 1928.  His portrait was slated to be removed, but Treasury Secretary Jack Lew has just announcd that Hamilton will remain and Andrew Jackson will depart the $20,00 bill and a prominent (deceased) American woman will replace him.  Also, consideration of suspending manufacture of the pesky one-cent coin is being considered.  

    Dr. Gary North wanders through history highlighting the role of "money" in good times and bad.  His essay is a bit wordy, but might prompt a few readers to consider how the possession of money influences their lives.  One question that needs answering is "What IS money?"    North points out that money isn't much use unless it can be traded for necessaries like food, clothing, shelter, etc,  Money, itself, is useless if it can't be traded for goods and services.  One can't EAT coins or currency. . .or, for that matter, plastic cards or records of currency in bank computers.  

Step Right Up and Place Your Bets!

   "The very worst thing the state can do is meddle with and falsify financial market prices. Sooner or later cheap debt, repressed volatility, stock market 'puts' and artificially inflated asset prices drain the genius of markets out of capitalism. What remains in the financial system is raw speculation for the purpose of rent gathering and leverage for the purpose of supercharged gambling." House of Denial    "Raw speculation?"  "Supercharged gambling?"  Who would portray financial markets in such a way?

         Where did the expression "playing the stock market" come from?  Don't people buy stocks betting  their prices will rise?  

   Remember March 1, 2009? Economists were stumbling all over themselves trying to explain the mire into which the U.S. financial sector was sinking and the need for the Federal Reserve to open the money gates to stimulate the spongy economy.  It was a simple formula.  The Fed would hold interest rates in a low range which would stimulate borrowing. Its goal was to maintain a price inflation rate of 2 percent and higher.  If the Fed couldn't inflate the economy might (gasp!) sink to deflation.

   On that day our alter ego, the staff curmudgeon, penned a short piece: COPING WITH DEFLATION

   "And what of the bank failures?  There have been sixteen in the first two months of 2009.  The FDIC is already feeling a pinch and is increasing the premiums member banks must pay to replenish the fund..  Depositors' accounts are insured up to $250,000.00 each.  However, the FDIC only has the funds to cover a fraction of the total demand deposits in American banks, although in the case of a run on the banks it can tap directly into the U.S. Treasury.  Also, it is not unlikely a surge in demand for cash would result in cash rationing.  There is not nearly enough paper currency or coin to meet demand if depositors suddenly decide they prefer their mattress to the bank vault. 

   "The most worrisome thing about this major economic correction, in my view, is the damage it can do to the social order.  The U.S. population in 1932, when FDR was elected, was 125 million people.  In 2008, when Barack Obama got the nod, it was 143 percent greater, 304 million.  Should the masses become angered in their scramble for their share of the pie we can expect to see ourselves put the Constitution on the shelf and install a dictator.  This is the usual way a democracy that stumbles badly ends its days."   (3-1-'09)

A Citadel cadet wants to wear a hijab.

ITEM:  'The Citadel is considering a request from an admitted student that she be allowed to wear a hijab in keeping with her Muslim faith, a move that would be an unprecedented exception to the school’s longstanding uniform requirements. If the request for the traditional Muslim hair covering is granted, it apparently would be the first exception made to the Citadel’s uniform, which all cadets at the storied public military college in South Carolina are required to wear at nearly all times. The Citadel is considering a request from an admitted student that she be allowed to wear a hijab in keeping with her Muslim faith, a move that would be an unprecedented exception to the school’s longstanding uniform requirements. If the request for the traditional Muslim hair covering is granted, it apparently would be the first exception made to the Citadel’s uniform, which all cadets at the storied public military college in South Carolina are required to wear at nearly all times."  Citadel Considers Exemption.

        We always thought the idea behind wearing uniforms was uniformity.  If the Citadel allows this attire exception  on the grounds of religious dress requirements it'll open the door for cadets of a variety of other religions to step forward with requests for changes to the rules. 

   A brand-new five-euro coin, which has a blue plastic ring in the middle, will make life harder for counterfeiters, according to the Bavarian finance ministry. 

    The coin was introduced this week.

    The new coin is worth $5.60 in U.S. currency.    €5 Coin

      There seems to be no plan afoot at the U.S. Treasury department to replace the $5.00 bill with a coin, or even the $1.00 bill.  However, Treasury Secretary Jack Lew has said there are plans to redesign the $10.00 and $20.00 notes, replacing the current portraits with those of notable females.  Present law requires only portraits of dead persons be considered for U.S. currency.

 Money Muddle Begs for Attention.
Is the dollar wealth, or the PROMISE of wealth? 

   "We don’t oppose opening up some [currency] questions with the Chinese, but the negotiations that we would make a priority are those between the next president and the next United States Congress. The House and growing numbers of Senators have woken up to the need for monetary reform, and are eying fiat money as the root cause our economy’s underperformance — on growth and jobs. How can we make progress with the Chinese communists if we can’t fix our own dollar?"  NY SUN < While news media prattle on about access to public restrooms and the machinations of the nominating process of the Republican and Democratic political parties, we choose to keep our eye on the severe wobble that has occurred among the world's monetary systems. 

      The NY Sun editorialists clearly see monetary reform is overdue.  At some point in the near future it's likely the question of restoring a sound money system will grab the headlines.