The Political Turning Point
People do not quite appreciate the real core problem in politics. Listening to the extreme biased political hacks of TV creates the illusion that there are really two parties. The truth is actually so far from that it is hard to grasp the full extent of political crisis that lies ahead. The famous political commentator Will Rogers once joked: “I am not a member of any organized political party, I am a Democrat.”
Indeed, at the time when Rogers made that comment, the huge divide within the pre-New Deal Democrats of his day was an open sore for all to see. The Democrats were a coalition, not a single-minded party as TV hosts like the Ed Show portray, for in truth, not all democrats are left-wing socialists as the Ed show assumes. In fact, such propaganda may actually be directed at trying to get anyone who claims to be a Democrat into one state of mind behind a Marxist agenda.
Democrats have always been a coalition rather than a single unified party. Of course, this fragmentation is also starting to emerge within the Republican Party, yet this is the first time we are witnessing this trend. The Tea Party is frustrated with unyielding Washington gridlock on virtually every major issue and honestly, if you put John Boehner in charge as dictator for one week, there is nothing within the political system he would actually change. He likes the way Washington works and the power of government. He is a politician’s politician – not a representative of the people.
However, the divide with the Democratic Party that has always existed because it was a coalition of diverse groups that came together to fight Republicans of Herbert Hoover’s day were hell-bent on one central issue. They believed in activist government, not Laissez-faire. That was the only unifying voice. After all, it was Lincoln and the Republicans who defeated the Southern Democrats who were pro-slavery.
So how did Democrats emerge as the party to represent minorities when they were the party that suppressed them? This is the magic of cross-dressing politicians. They can change whatever their wear in the blink of an eye to pretend they are the very solution to the distinct problems they create. The real amazing aspect, the people seem to be dumb enough to buy it every time no matter which part puts out the nonsense. It was Bill Clinton who repealed Glass Steagall and gave the banks free rein. It was a Democrat to created it (FDR) and a Democrat who repealed it (Clinton).
What is starting to be exposed in the glow of Obama’s State or the Union is more than an exercise in non-democratic authoritarian rule. The Democrats are starting to now look past the current administration. They all invited guests to show that Obamacare worked. Obama had the guts to put a wounded soldier next to his wife when he so casually commits American soldiers to war to save a pipeline for Saudi Arabia. The approval rating in the after-glow was less than in 2013, and the polls at this point in the game show the Republicans could retake the Senate in November. This has lit the fires of Marxism that have been kept under wraps since Bill Clinton adopted a centrist democratic position to win their come-back.
Democrats are now starting to look toward the future, and there is considerable major disagreement as to the direction. Many want to expose their true nature adopting the full “populist” Marxism view of go get the rich and take what they have and hand it to the poor. They are fed-up with the Bill Clinton-style centrist agenda and are talking behind the curtain on an all out assault embracing the unabashed left-wing populism that is being personified by Senator Elizabeth Warren of Massachusetts and New York Mayor Bill de Blasio. Forget that the last time such policies were even tried in NYC, they had to be bailed out for the city was on the verge of bankruptcy.
This is what is going on behind the curtain. The Democrats are starting to show their coalition divide and the Republican’s are still trying to figure out what is the definition of a coalition. The political future is starting to fragment. Within this trend, look to 2016 as a watershed of major political change.
Cycles & Obama’s Tax-Free Bonds
COMMENT:
Mr. Armstrong,
I just wanted to say thank you. I’m basically a nobody except to my 5 children and wife (that’s all that matters to me anyway). I have limited market experience. The majority of experience I have is in business systems analysis, so making sense out of the global market was almost undoable on my own.
I’ve been in protection mode with my savings. I don’t want the market to eat me alive, and it was doing just that.
It has been your blog posts that have turned my thinking around in regards to where I put my money and when. I’ve been reading your posts for over a year now. The strange thing is that cycles of every kind have fascinated me, I had just never thought to apply them to the market. Strange isn’t it? Your posts have elegantly pointed out what the market cycles are and why. This is something I can not get from any other source but you.
You have made a great effort, and a great sacrifice to keep people like me educated about the real nature of the cyclical market.
Your intelligence, wisdom, and experience is appreciated in ways I don’t really have words for….. other than to say a heart-felt thank you.
The best to you and yours,
G
REPLY: Thank you very much. This is truly the objective. If we can ever reach a majority that at least respects how nature functions, then half the battle will be won. Lady Margaret Thatcher, whose speech at out conference you can listen to on this site, was a believer in cycles. She commented that governments only think in trends – linearly. As long as government THINKS in such a manner, it will assume it can manipulate society to reverse any direction it desires. The problem simply remains, no one has ever been able to do so since the dawn of time.
Communism, designed to create the perfect world, resulted in the death of tens of millions of people. No such Utopian idea has every killed so many people. Even today, this idea that it is always the rich against the poor, put out their by government to deflect blame from themselves, plagues society for to get the “rich” means government needs more power. Passports were invented by the Romans to restrict the movement of people in order to guarantee they paid their taxes before they could travel anywhere. Freedom ALWAYSvanishes in the face of government greed – the rich do not possess guns and tanks.
It is not that I believe we can create world peace or some other Utopian ideal. Nor do I expect that the majority will ever believe or understand cycles. There are two primary goals. First, we eventually learn from our mistakes if we are not morons and reach the point recognizing that if we keep sticking our finger in the light socket, we will not get a different result (Einstein’s definition of insanity). Second, if we can run government respecting there are cycles and we stop this wretched attempt of trying to smooth out the business cycle to create the perfect world, we would at least reduce the tension and swings (volatility) within the economy.
If we understand that ALL energy flows from one place to another and its movement is cyclical, it is a start to reaching perhaps a better world. As it stands currently, this is like we assume the world is flat and close out any other possibility. We will execute anyone who dares to take an opposite position as Bruno was burned alive for daring to say that the sun did not revolve around the earth. Once we open our eyes to this is the divine design of the universe that is right before our eyes beginning with the cycle of life and the four seasons, then just maybe we will learn from the past and stop repeating this insanity over and over again. We never consult history, we always proceed with every crisis never bothering to even ask – Was this tried before? What was the result? You cannot get any more brain-dead than that.
Obama is acting more like a dictator than an elected official. He is using the Executive Order to raise the minimum wage and to create tax-free bonds because the Fed bought back long bonds under QE and now cannot resell them. They fear they cannot sell bonds to China and need to regain their sovereignty so they can act irresponsibly and not have to answer to anyone. To accomplish that, they need to sell bonds to the average person and are making them tax-free to do so. This is not Obama’s idea. He is way too ignorant to even comprehend economically what this means. His strings are being pulled very tightly from behind the curtain. We are following the Japan model whereby their debt is the worst in the world, but it is domestically held and the USA now sees that as the solution.
This is all about retaining power and it is why Margaret Thatcher believed in cycles. She respected that understanding how the world really worked was essential to running it. If you do not understand cycles, then you think you can control the economy with your power and they do everything possible to maintain that illusion while respecting they cannot actually control anything, which is why they pass laws and penalties.
The answer is always the shell game and that is precisely what Obama did last night. You pretend to be caring while you are only furthering your agenda. You need the diversion. Tell them look at this, and you do that. This is the classic game played by street charlatans.
One day the curtain will expose the true nature of government. Until that is reformed, they will do everything possible to retain power. This is the nature of government. It is always an illusion. Listen to the extreme talk shows. The Ed Show is just propaganda. There is never a single word out of his mouth that is ever objective. Likewise, there are his opposites on Fox News. Neither have anything worthwhile to offer society and both are equally dangerous for the bullshit they spout out causes wars.
The bankers are not interested in power, they want perpetual profits. They have paid the bills of the politicians to be able to do as they like. However, with every failure, they turned to government to be bailed out, proving they too are NOT in control of anything. They are not even wise investors. Why bother worrying about risk when you can buy your way out of jail?
This last time, however, the bill was too great (2007-2009) and they are now rapidly becoming the target. This is the second reason behind Obama’s tax-free bonds. Sell them to the public and you eliminate the power of the bankers. In the middle of their own greed, the bankers simply went too far and assumed it was a linear game with every loss, the bailout would just rise. They were NEVER professional real traders – just game riggers and the mainstream press is just in their pocket and have done far more damage to society than they care to ever admit.
The selling of new tax-free debt long-term regains sovereignty and eliminates the need for primary dealers who blackmail government. This is the game changer. It is starting to recognize that there is a debt crisis, yet do not reform the system, only further its advance. That is why we will still crash and burn.
Global Market Watch Jan 28th, 2014
Turkey Raises Overnight Rates to 12%
The central bank of Turkey raised its OVERNIGHT LENDING RATE TO 12.00% - this is up from 7.75%. This is indicative of the other side of the coin with high rates. A central bank can raise rates, as we traditionally see during a boom or in China these days, in hopes of stopping the speculation. Markets and economies never peak at the same level of interest rates because the real answer is the rate minus expectations. In other words, if you think whatever the investment is will double by next year, you will pay even 50% interest rates. It is the difference that counts and that is why there is no magic bullet associated with a specific level of interest rates.
What we are witnessing here in Turkey is the flip side. When confidence collapses in a country or its government, rates rise based upon the fears of risk. This is what is taking place in Turkey. It is not economic boom – but the fear of collapse. Rates will rise exponentially. If confidence collapses entirely, then you get the hyperinflation when the government collapses and there is zero confidence in buying any debt from some new type of government..
Angry Birds & NSA
The more revelations that come from the NSA demonstrates that what they are doing has absolutely nothing to do with terrorism. It turns out that the NSA & British Intelligence are constructing profiles on everyone right down to their sexual orientation. They are tapping into games like Angry Birds that has been a worldwide sensation. Of course there is now the alternative popping up – Angry Ukrainians.
These are sick people at the NSA and British Intelligence for what they are up to is the same nonsense that J. Edgar Hoover (1895–1972) was doing years ago – collecting data on everyone who might one day be his enemy for he personally sat in judgment over everyone. Of course we are all aware of the sick conduct of J. Edgar himself. After all, he blackmailed his way into retaining that position of power from being its first director in 1935 until his death in 1972. No one in American history has EVER held such power for life. Nobody would dare do anything against J. Edgar for he had files of absolutely everyone to maintain his power.
Given the personal conduct of J. Edgar, one must wonder if it takes one weirdo to suspect another. Mapping out people’s sexual preferences is not the sort of stuff that leads to hijacking airplanes. We all know the stories about J. Edgar after he passed on. One can only wonder why these people are spying on children mapping their sexual preferences for what purpose? I suppose Dianne Feinstein and Obama support this type of conduct as well.
Obama to Raise Minimum Wage by Executive Order
The entire issue of raising the minimum wage is so distorted and the press just jumps all over it and plays it like the rich v the poor. Obama will announce that he will sign an executive order increasing the minimum wage from $7.25 to $10.10 for new federal contracts. But what people fail to grasp is the minimum wage applies to really unskilled labor and was the entry point for kids getting part-time jobs.
The minimum wage is not the issue. What Obama is not talking about is how the Federal Government has been laying people off in the military to avoid pensions and even the Post Office is hiring part-time to avoid having to pay pensions. The minimum wage is not the typical wage earned by people supporting families.
So what is the REAL message? Raise the minimum wage but eliminate benefits & pensions? That seems to be the real direction we are headed into. Obama is doing this by Executive Order because he lacks the support even in his own party. If this were applied in the private sector, you are looking at a near 40% increase in wages. This filters through to a 40% rise in costs and you cannot simply help people earn more without it also costing consumers more. Who else will get a 40% wage increase in one year?
It would seem to be that we need real reform. Stop holding back people’s tax refund checks and stop borrowing from the average person without paying interest. That is what payroll tax is doing. We borrow from the poor, pay them no interest, and then pay interest to the bankers for not lending money 0.25% on “EXCESS RESERVES”.
If we eliminate payroll taxes, the standard of living would rise and young people just might be able to get married and start families again. But about 60% of college graduates cannot find employment in their field and are doing service jobs to get by while hounded for student loans. They begin their imaginary careers loaded up with debt that prevents them from getting ahead.
\There are serious reforms that need to be looked at. Installing a 40% increase in minimum wages for government employees that will cost more taxes is not the way to move forward.