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March 2nd, 2015

  Weather and uncertainty may have something to do with it.

(Reuters) - U.S. consumer spending fell for a second straight month in January.  The Commerce Department said on Monday consumer spending slipped 0.2 percent after falling 0.3 percent in December.

   Consumers are expected to be on a constant shopping spree in order to keep the U.S. econbomy on an arbitrary expansionist track.  But they can't do that when they're waist deep in snow, faced with high levels of debt to work off, and worried about the soariung costs of medical insurance and sickness care.

    The bottom line:  If consumers take a breather from spending money they don't have on things they may not need a lot of debt-ridden businesses will be forced to close up shop.
The "patriotic" thing to do is shop 'til you drop.  The sensible thing consumers should do is live as nearly within their means as possible. 

Forty-three percent of Americans think Saddam Hussein was personally involved in 9/11.

Sixty-four percent cannot name the three branches of the federal government.

Fourteen percent are illiterate.

Twenty-six percent think the sun goes around the earth.

   Oh, dear!  This is enough to make your run-of-the-mill curmudgeon rush to the keyboard to dash off a biting commentary on the sad state of general intelligence in the USA.  To an exceptionally practiced curmudgeon like Fred Reed it's a good excuse to call for a way to keep these dummies away from the voting booths. 

   "For voting in federal elections, we should employ a literacy test to disenfranchise the majority of the population, to the infinite betterment of the country. This wise move should be accompanied by an increase in the voting age to twenty-five."  The 145 Solution

      Before we call for Fred to be hung by the neck before sundown for the act of calumny and other sins we should hear him out.  As appalled as good people might be at the notion of not letting anyone with a driver's license or other official ID  into the voting booths there is plenty of evidence this exercise in mass democracy may not lead to happy results.  As Fred puts it, "Allowing the dim and untutored to vote simply provides the bright and unscrupulous with gullible vote-fodder. It does not prevent but makes possible the exploitation ."

"Gullible vote fodder."  Has a distasteful sound.  


   Why did "Doc Martin" grow a mustache?

    For his role as Sir Arthur Conan Doyle.

    The popular British actor Martin Clunes assumed the role of Doyle when the  famous author became a real-life Sherlock Holmes in 1906 to help exonerate a wrongly jailed man.  A bundle of evidence Doyle used in the case is reported to have recently gone on sale for £40,000.

       There seems to be a never-ending fascination with anything remotely connected to the world's famous detective.  Books and videos about Sherlock Holmes still vie for our attention - and they get plenty of it.  Some Holmes fans gather at regular intervals to hear lectures and entertainment centered on the adventures of the famous resident of 221B Baker Street in London.   Some fans weave  original tales  about his exploits in an attempt to "prove" an imaginative point. 

       We, ourselves, wrote an essay concerning Holmes's'influence on the invention of modern radio.  We presented the concept to a meeting of the Hansom Wheels in Columbia, SC some time ago.  Anyone interested in the activities of this diverse group of Sherlock Holmes devotees hould check out its web site....HANSOM WHEELSRead the organization's newsletter, the Pink 'Un.  Membership in the group requires little more than showing up and paying a meal tab. 

A smattering of economic philosophy for the weekend.

    "For an organization that has a message that supposedly is able to transform the world, the American Right has certainly proven to be completely incapable of recruiting and training cadres of true believers who are willing to go out and spread the message."

     Well, Dr. Gary North really gets into it, raising the fundamental question about conservatives inability to convince the voting majority that a smaller, leaner, more efficient governement is more beneficial to society than the current debt-ridden monstrosity.   One of North's graphic exhibits reveals the towering public debt as exceeding 100 percent of the nation 's Gross Domestic Product.  Even the most devout liberal economist will admit such a seriously distorted ratio cannot last forever. 

   This is boring stuff, to be sure - but the sense the economies of the world are badly out of sync is running higher than usual.  Almost everyhwhere  some form of the socialist idea is dominant  and North wonders why a message of liberty, freedom, and responsibility has little effect. He has a plan. TRAINING A CADRE

Most financial assets exist only in the bowels of computers.
There's not nearly enough cash to meet a sudden heavy  demand.

    "If you look at M2 money supply — which measures coins and notes in circulation as well as bank deposits and money market accounts — America’s money stock amounted to $11.7 trillion as of last month.

    "But there was just $1.3 trillion of physical currency in circulation — about only half of which is in the US. (Nobody knows for sure.)"  THE DAY THE ATMS RUN OUT. . .

  Greeks may be pulling their euros out of banks in fear the governmenbt will revive the drachma, but there's little reason for a run on the banks in the USA.  Still, it may be helpful to notice that actual coin and currency is barely 1/10th of the official money supply and nearly half of the physical Federal Reserv notes circulate overseas. Thanks to digitized "money"  we have learned to get along in  what  is fast becoming a cashless  society.

    If ever a catastrophe interrupts the commputers the demand for cash will soar and there is not nearly enough to go around. Hence, warnings from scribes like Bill Bonner. 

        "Gold prices will rise or the amount of debt in the world will seriously contract. Bet on rising gold prices."

Gary Christenson sees heavy inflation in our future!

   Gary, from the look of things we believe the jury is still out on this.  But we agree  the outcome will affect every one of us whether or not we pay any attention to the matter.

   Logic, reason, and the history of world experience with fiat currency persuades most commentators to predict a hard blast of high inflation (hyperinflation, even) because of runaway creation of currency based on nothing more than spiraling debt.  Establishment economists say that this could easily happen in small nations with tinpot dictators,  but the mighty US system is above all that.  Besides, the US dollar is the main trading currency of the entire world.

   Price inflation in the US has been running almost non-stop since 1940 and, as we noticed decades ago, no monetary inflation in the history of humankind has ever not stopped. ...usually creating a calamity for ordinary people.  When and how our present dance with devilish money inflation will end we can't say.  We have no idea - - but it's safe to say a Day of Reckoning looms in the future.

   The present price of gold, a long running measure of the value of money, is pointing toward deflation.  That's the terrible phenomenon in which currency gains in purchasing power and prices (including wages) plunge.  The scarcity of dollars makes paying debt very difficult for people and nations incapable of laying their hands on enough of it to meet their obligations.  ~JW

    Christenson thinks the price of gold is going to rise, sharply.  That is, he expects another blast of heavy price inflation.  Maybe.  If he's right the time to buy some is right now at $1,200.00 an ounce.  If he's wrong and deflation takes the price of gold to $800.00 or lower, his timing is not so hot.
Here are his commentsGold and Debt

 While the world was watching the Academy Awards ceremony, the people of Mosul were watching a different show. They were horrified to see ISIS members burn the Mosul public library. Among the many thousands of books it housed, more than 8,000 rare old books and manuscripts were burned.  BOOK BURNING  

  "The Islamic State is no mere collection of psychopaths. It is a religious group with carefully considered beliefs, among them that it is a key agent of the coming apocalypse. Here’s what that means for its strategy—and for how to stop it."

This remark by Graeme Wood is caused a bit of a stir on the Internet.  It sheds light on the question, raised by President Obama, about whether ISIS is conducting a religious war.  Says Wood, "Nearly all the Islamic State’s decisions adhere to what it calls, on its billboards, license plates, and coins, 'the Prophetic methodology.' "  What ISIS Really Wants.

     Finaly, a clip from the editorial pages of Monday's Wall Street Journal.  An excerpt from "Islamic State's Global Ambitions" by Jessica Lewis McFate and Harleen Gambir:
The ISIS cancer has metastasized , as the al Qaeda cancer did before it.  The two are now competing to see which can kill more people faster.  It is past time to recognize the scale, scope, and magnitude of the enemies America and its allies face and develop clearly stated global, regional, and local strategies to fight them." 

   McFate is former U.S. Army intelligence officer.  Gambir is a counter-terrorist analyst.

A Confusion of Dollars.
   The total face value of these six objects is $6.00.   If you brought them all into a bank for deposit you would be credited with only six dollars, although some of the coins would be worth more to coin collectors.

   The five coins were manufactured by the Treasury Department at the U.S. Mint.  The paper note was printed at the Bureau of Engraving of printing and is an IOU distributed through the Federal Reserve System.

    The coins at the top (l-r) are an Eisenhower dollar, a Susan B. Anthony dollar, a Sacajawea dollar, and a Presidential Series dollar.  They are all are base metal coins and none of them are in general circulation.

     The dollar coin at the bottom of the photo is the only dollar containing precious metal...almost $20.00 worth of silver.  The government will not accept the silver dollar at anything more that $1.00 if offered for payment of taxes, yet it demands that its value be calculated at the market value of silver if received as compensation by a taxpayer.  This conflict of logic and reason is widely ignored by the judicial system.

      The United States dollar once had a precise physical dimension.  Now, it does not - which adds to the utter confusion about money.

"The real problem with Obama is that the citizens of the global superpower twice elected him to office. Yet one way to look at the current 'leader of the free world' is this: If he were working for the other side, what exactly would he be doing differently?" 
~Mark Steyn

Steyn and many other scribes are annoyed by President Obama's contorted opinion about the relationship of the Islamic State and religion.  Obama is anxious to make the world believe these radical jihadists are merely "violent extremists' who sully the good name of Muslims. Unfortunately, IS leaders are constantly repeating their affirmation  of Allah and their aim to spread their fundamentalist brand of Islam upon as much of the world as it can.  Even to the casual eye this is a religious conflict, an attempt by Muslim extremists to impose a theocracy upon as many people as they can conquer. 
    Why Obama doesn't grasp the situation, we don't know.  We also can't understand why strong Muslim leaders from the Islamic mainstream aren't speaking out publicly against the Islamic State.
bsp; Mr. Stockman seems to be appearing all over the Internet with his persistent prediction of pending financial doom. His credentials go back to the Reagan White House where his advice almost always irritated political liberals. 

  He is the antithesis of economist Paul Krugman. Reader's who subscribe to Krugman's view that an economy runs better when the governbment is firmly in charge of its management will disagree with most of Stockman's views.
The Clock is Ticking .