What I Think Tank

Posts Tagged ‘Ron Paul

Here We Go Again! Recession 2.0 = A New Great Depression

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A couple of years ago the recession struck and everyone were paralyzed. When I say “everyone”, I of course only mean the mainstream nitwits. There were enough of those who warned about the imminent collapse. It was coming, and sure as hell it did.

It didn’t, of course, end there. The same people who warned us first time around also warned that if central authorities would continue what they were doing, we were sure to face something much worse very soon. Of course the wise overlords in Washington didn’t listen, and the FED has been forking out those dollars like never before. Needless to say, it hasn’t been working, and the day the world would realize this were coming at any time.

Well, ladies and gentlemen, that time might be right ahead of us as we speak. People with the Austrian School and people who identify with it are in strong opposition to mainstream economists and the FED, saying the response after the recession was the wrong one, and that we are not at all recovering from the financial crisis. All the measures by Washington merely dulled the pain temporarily, and the phoney recovery will plummet to earth in the near future.

It seems like that near future may very well be very near, indeed. As explained by Goldsilver.com, associated with The Wealth Cycle Principle and Mike Maloney, the decline in the banking sector was setting the stage for the recession. It was an early warning sign that a crash was ahead. Those with a broad and correct understanding of economics saw this pattern fall together with what they see as a system built to fail and warned that we were facing an economic crisis.

Today’s economy is overwhelmingly driven by borrowed money.  Whether it is a home mortgage, car loan or simply a nice dinner put on a credit card, in a credit based economy (like we absolutely have today) this bank credit is what makes the economic wheels turn.  If the banks aren’t doing well enough to loan aggressively, not as many loans are made and the economy slows.  So the banking sector is a very important part of our economy to keep a close eye on.

Apparently, the banking sector is showing the same warning signals as it did many months before the last recession.

Even though the stock market has had a nice bounce, the bank stocks are not keeping up with this stock bounce. Compare the charts above again and notice the bank versus S&P 500 chart has bounced along sideways since summer of 09 and have not confirmed the S&P 500 bounce.  Unless the banks join the party quickly we should be in for another very serious round of stock declines or a crash.

Looking back on the article I wrote on President Obama and the coming ’12 election, I was wondering if the central authorities in Washington would be able to push the coming depression enough ahead of them to secure a victory. Well, the next year will be a very exciting one. Will the markets crash before election day or not? What will the FED do with these glooming warning signals? They were rumored to end QE2 over summer, but how is that even likely when things are starting to take a turn for the worse?

When politicians give us a second recession, one facepalm is not enough.

The false recovery was just that; False. It was doomed from the start, but those who thought “we have to do something” and others who currently think “we have this under control” are all missing the very obvious point: You cannot shape the future by your will alone. You lack the tools to know what’s right at all times. Government can only spend stolen money, and the FED can only print new ones. They know nothing about creating businesses; keeping productivity; meet market demands or dealing with constant government regulations.  What is the ultimate outcome by both these actions? They waste resources and place the burden on those who will inherit the system a few years down the line – ultimately the people, under the pretense of helping them. They can only steal resources, destroy savings and weaken the dollar, all of which are detrimental to economic recovery and the prosperity of the ordinary men and women in America.

What do I think? I think the FED will continue with a QE3 and 4, and it seems like others agree. Gloom and doom is ahead, and there will be more stimulus packages. Will the New New Deal perhaps even nationalize banks and private institutions, as proposed by everyone’s best friend, Paul Krugman? Certainly, if President Obama were to win the next election, I’d say the answer may very well be “yes”. The recession never ended. The depression is upon us. You would do well in securing those silver coins while you still can. If not only securing you current savings, it might even earn you a good deal of money as precious metals shoot towards the sky as everything else fall apart. And it might make life a lot easier too, cause I’ve heard it’s bothersome to fill the backpack with paper money when going to the store to buy a piece of bread. Especially when the price has risen to two backpacks since yesterday. You might want the silver coin at that time; the silver coin that says “1 dollar”, but will end up being worth more than a billion of them if hyperinflation kicks in. Ask some people in Zimbabwe. They can probably testify to that.

Yes, there are exciting times ahead. Exciting, but frightening too. The coming presidential election just got that much more important. Do me a favor, Americans: please vote Ron Paul, will you? Thanks.

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And So the Race Starts Picking Up Heat

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Republicans are slowly lining up trying take jabs at President Obama lately,  shaping themselves into probable candidates for the upcoming primary elections. A couple of weeks ago, the CPAC straw poll released their numbers on possible contenders, revealing Congressman Ron Paul as the definite winner a second year in a row. It’s quite evident that the Congressman is likely to be cheered on by supporters to take part of the race, regardless of his plans to do so or not.

But it is the person coming in second in the CPAC 2011 straw poll, Mitt Romney, who is the first to kick off the field of potential candidates before the upcoming primaries. From an awkward campaign in 2008, Mitt Romney seems to have revised his platform before a new election season starts, sharping his pencils on attacking what for the first time in decades will be an election almost exclusively based on the topic of the economy. It will surely be the only topic worth talking about for the next two years. The wars in the middle east will not matter, the immigration issue will not matter, American relationships with China, Russia and Europe will not matter. Domestic fiscal policy is where all the debate will all be at, and Mitt Romney has realized this as well. The former businessman and Governor of Massachusetts is already starting to front himself as the only viable candidate to take on President Obama, performing the rhetoric of ethos to a tee.

Governor Mitt Romney of MA

Former Governor of Massachusetts, Mitt Romney (Image from Wikipedia).

But is ethos a good measurement for a trustworthy and strong candidate? Generally, voters tend to like a character that is able to talk himself/herself up as the right person to the task, while still being able to appeal to the emotions of voters. But that says nothing about how much you can trust a politician, or how certain you can be that he or she will do what they said during their campaign. A trustworthy politician is the one who appeal to the logic and reason in voters, and has the track record to back that up. Mitt Romney showed none of these traits in his 2008 bid, and neither has he done so while warming up this year. I’ve seen that many people on forums and Facebook groups seem to like his aggressive take on President Obama and the economy, and while it can be said to be promising, can we really trust his words? Is he truly the right man for the job?

Sure, Romney may sound good right now before he is confronted on the issues, but even if he were to answer satisfactory on everything the media would throw at him, I don’t think he will stay true to his words one single bit. There’s nothing in his character that puts him apart from any other ordinary politician, and that’s just the way it is with flip-flopping self-hyping politicians. G. W. Bush had a lot of great things to say back in ’99-’00 too, but he ended up screwing people over and changing his policies immediately after getting into office. President Obama, like all presidents before him (except Bush’s second bid for the presidency) promised to bring change to Washington, but he has arguably brought nothing but more of the same. With this in mind, how can you trust a person that for some reason has been working for the past 2 years with an intent to seem more electable? What has Romney to show for that makes him a trustworthy candidate that offers a real alternative to what is already there? Nothing. It’s a charade.

People everywhere need to start electing trustworthy politicians – those who walk the walk. And for Republicans, this does not mean Sarah Palin, Herman Cain, Mitt Romney, Newt Gingrich, or most of the other would-be-candidates that people throw around at this point. They are all sheep in wolf clothing. You might think I have that backwards, but no, that’s exactly what I mean. America doesn’t need another pretend-wolf president that will simply follow the norms of the sheeple in Washington. America should seek a lonesome wolf – one who walks the walk, stands firm on his principles, has worked to spread the message of freedom to people for years, and has the track record to back up his will to do what is necessary, and not get consumed by the usual political games of Washington. You all know who I’m talking about.

Will President Obama Serve A Second Term?

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Official presidential portrait of Barack Obama...

Two term President Barack Obama?

Political debates and forecasts are as heated and “in the air” as never before, and one question surfacing is whether or not President Obama will be elected for a second term in 2012. It’s an interesting question both in terms of political strategy and economic policy, regarding the troubles and toils America is faced with, not to mention the distress among people animating itself in Tea Party rallies and anti-establishment candidates rising up before this 2010 election.

At the first glance, many would probably think President Obama wouldn’t be elected for another term, simply because so many people are worried about the economy and future, and also because we’ve yet to see things turn around for the better. Then again, President Obama is still quite popular, although his popularity in America has surely withered some since he came to power. Gallup recently reported that for the first time in his presidency there are more people who regard him unfavorably than favorably, but he is still on par with many presidents before him, like Ronald Reagan and Bill Clinton, who were both quite popular two term presidents. Obama as a person is also likable, tolerant and well spoken – much like the two others mentioned, and such charisma can go a long way.

But unlike all other elections for the past three decades, there is one issue that may trumph everything else put together the next time around: the economy. Unlike how this issue has been debated during the recent years, the coming debate will not only revolve around creating jobs or trying to get us out of a recession; the debate this time will be about the causes of economic downturns, the role of government in said economic downturns, how government and the Federal Reserve destroy more than they create, and how government burdens coming generations with a devalued dollar, huge and misguided government programs and gross deficit spending. On this issue there is one future uncertainty that can wreck all of President Obama’s chances for reelection, or may very well save his political tooshie: Will he and the Federal Reserve Chairman, Ben Bernanke, be able push the coming depression enough ahead of them to avoid having to face judgement before the next election?

The reason everything depends on this fact is that despite what the White House and many Ivy League economists would have you believe, the economy simply isn’t recovering and hasn’t seen any true growth for possibly the past 10 years. The actions of the federal government echoes those in the 1930s; actions that exacerbated the problems and created a depression lasting for much longer than necessary. The view that government cause economic turmoil and exacerbate the problems is supported by those who warned about and forecasted the Great Depression of the 1930s and those who warned about and forecasted the Recession of 2008 by explaining exactly what would happen if government would act in the way it indeed ended up doing. Now as then, we have seen a federal government help inflating an economic bubble and help fueling the fire by increasing the money supply and intervening in markets, and we have seen a federal government attempting to keep the bubble from bursting as it must, or re-inflate it if it does, expanding the reach of government power and burdening the citizens and the private sector with more taxes and weakened purchasing power. One key difference, however, is that America in 2010 has the biggest deficit of any nation on the planet throughout history. This was not a worry people had to take into consideration after the second world war when America emerged to become the greatest creditor nation in the world. To put it differently: The private sector is sucked completely dry this time around, unlike in the 40s and 50s when they had plenty of juice to serve.

If the answer is ‘yes, they will be able to push the depression enough ahead of them to let President Obama campaign on being the savior, rather than a clown’, then you can expect the following words to be the core of President Obama’s strategy in the coming campaign:

We just went through the worst economic downturn since the 1930s, but we were able to avoid another depression. We’re still recovering, but I tell you this: had it not been for the quick, decisive and necessary actions by government, it would have been much worse. That is why it’s important for us to not disrupt the recovery at this point. We must stay our course and do what is necessary, because we will face disasters much worse if we lose our focus now.

Author’s comment: I have a feeling I will be able to quote myself on this in 2 years time, and if I’m not already worrying enough, this makes me truly worry about how life will be in 6 years. It took only 6 years to lay Europe completely to waste 70 years ago, after all. Humanity may not have learned from history when it comes to economic issues, but you better well hope that humanity have learned enough from history to not start another world war over it.

It’s not hard to imagine that he will be able to win in 2012 based on this. Of course, President Obama, with the help of Chairman Bernanke’s printing press, is only delaying the inevitable. But if President Obama serves another term and continues his current policies, we will be faced with troubles much worse than what we see now, something not he nor his possible successor will ever be able to explain away, which may by 2016 unfortunately result in the possibility of civil unrest and a large portion of the population with complete distrust in the political system. It’s important to note, though, that the possible civil unrest may not necessarily be aimed at the President in particular. Echoing the tendencies of the Tea Party rallies, you are more likely to see it aimed at Washington in general, but fueled by economic distress rather than any political disagreement. It will not matter who they are and what party they belong to; if they have been in Washington for some time they will be blamed for all the horrors. They can only hope, for their twisted political sake, that people will forget instead.

However, if the answer is ‘no, we will clearly see the storm coming over us before the next election, the depression has become a fact rather than a possibility, and economic distress will sweep the country into fiscal responsibility’, we will likely not see President Obama serving a second term, depending on the Republicans being able to nominate a true fiscal conservative that will stay true to his words. Throughout history Americans have always tended to change their leaders when faced with economic turmoil. Americans have also always elected the candidate campaigning peace and diplomacy when exhausted by continuous wars. This time we are faced with both extremes at the same time, much more so than any other time since the second world war. The sad part is that we this time around do not have a party that advocates peace and thus cannot advocate real fiscal responsibility.

Democrats have never truly advocated that America should stop their military interventions around the globe. Bill Clinton frequently deployed the military on glorified missions to police the world, and President Obama never kept his promise of leaving Iraq, even advocating for an expansion of the war in Afghanistan throughout his whole campaign and to this date. Republicans on the other hand have constantly been advocating military expenditures since the days of the Cold War (Reagan’s Peace Through Strength), and have long been advocating military intervention, especially since 9/11 (Bush’s War On Terror). Not willing to build down the military imperialistic character of the United States, Republicans face a hard task in promoting the necessary fiscal responsibility to tackle the deficit and let the country climb out of an economic depression. Some are calling for the possibility of a third party candidate rising to the occasion, but taking into consideration the numerous laws biased in the support of the current two-party-system, we are not likely to see a third party candidate do anything more significant than stealing just enough votes from one candidate that the other will get ahead, if we were to face a close election.

What do I think? For non-interventionist small government advocates there has never been a better chance in recent history to spread their message of peace and economic freedom, but gathering the people around one candidate that can sway the minds of Americans will be the true task at hand, and it will be crucial for their goal of economic recovery to elect a president with the integrity to stay clear of political corruption and avoid falling for the temptation of turning on the voters when in office, like so many presidents have done in the past; a president that has the courage to clean out the administration and bureaucracies of established “big government values” that will disrupt any attempts of restraining the federal government by building down Washington and pull back the interventionist powers of the executive branch.

At present time there is still only a single politician in America that fits this description, and by 2012 his name is sure to be on everyone’s tongue, but only time will tell if politicians, voters and the political system in general will have the courage to bite the dust and wholeheartedly support him, and if his vitality and mind will stay as young and vibrant through a possible campaign and presidency as it is today, considering his age. I will let time be the judge of this.

Written by Morten Rolland

October 24, 2010 at 7:33 am