Consumer Confidence & Money Velocity

Consumer confidence is an unquantifiable variable.. you cannot fix it with edicts, or pompous imperial decrees. It is closely tied to money velocity. When CC is high, so is money velocity. When CC is low, velocity is too. They almost mirror each other.

During the bubble leading up to 2009, consumer confidence was high, even though many other indicators spelled trouble.  Note this chart on money velocity:



You can see the velocity starting to slow in 2006-7. That was a bad indicator, but no one sounded the alarm, as the media are whores to the politicians & bankers, who use these wild swings in the economy to fleece the working man. They killed home ownership in one fell swoop, & took trillions from the people. Oh, sure, the banks lost some capital with the 'toxic loans', but the politicians bailed them out with OUR money!! But the people who lost equity lost it all. No one bailed them out. The govt not only failed in its basic duty to protect the citizens, they were complicit with the plunderers, robbing the citizens of trillions in savings & equity.

What about the 'toxic' loans? These were imperial edicts, by dubya & barney franks, the social engineers in charge of giving everyone a home. Indifferent to the consequences, they mandated banks to loan to anyone, oblivious to the bubble they were creating, & they shrugged off the millions of people thrown into bankruptcy. The poor people did not change. They shrugged it off & went back to govt housing. No losses to them. The banks were bailed out.. they got guarantees for the loans, even though it cost the taxpayers billions, & plunged us into a deep recession that we are still not out of.

The only losers were the working taxpayers. ..those who had some equity in their homes, or who 'invested' in other things with their equity. So a massive swing of real wealth began, taking from the working man, & 'redistributing' it to the bankers, the ruling elite, & their enablers: low information voters.

All we can expect is more of the same, as long as these same looters control the currency & fiscal policy. They will use it to fleece the working man, using Law as an instrument of plunder. I don't know how to give any financial advice in the current market.. the only thing that can fix this is revolution.. wholesale eviction of the looters in charge, with perhaps some guillotines tossed in for good measure. Then, there should be a concerted effort to provide a stable currency.. unemotional, unmoved by pity or charity.  A currency should be amoral.. & be based on indifferent numbers & values. You cannot base a currency on compassion.. or at least, basing it on emotional appeals is a recipe for destruction, which is the least compassionate option.

You cannot manipulate money velocity, else the social engineers would do it. Limiting supply can limit velocity, but that is not the problem. We have plenty of supply, but no CREATIVE demand.. that is, demand created by production, which needs investment, labor, & intelligent innovation. The liberal 'demand' for money is superficial.. it wants the results of money.. tangible wealth, without the investment of capital & labor. They print money to buy stuff, but don't make or create any of the stuff. Stuff comes from overseas, or through govt theft. There is no velocity in this scheme, as the demand for goods is not based on growing wealth in the nation, but money shuffling from a fiat currency. Money is shuffled in artificially by fiat, but it leaches out of the nation, & has little movement within the nation.

Saying velocity CAUSES economic maladies is like saying your high temperature caused the flu. The economy is sick.. too much govt regulation, too much dependency, not enough production.. these are the CAUSAL factors. Velocity, job participation, housing, etc, are all symptoms of a sick economy, given to us by our sick representatives, with a sick world view that makes them think they can control these things by imperial decree.


Obama believes in the progressive/socialist fantasy that he can merely issue an edict, & the economy will respond. He has no clue about market factors, production, & the origin of wealth.

Natural Law: A religious issue?

Natural Law is independent of religious belief. Many skeptics, deists, & even atheists believe in Natural Law. There is no conflict, & even Jefferson acknowledged that in the DOI:

'When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them'

You can call it God. You can call it Nature. You can call it whatever you want, but it is the immutable, UNALIENABLE rights of man, inherent to his existence, equal & independent of all other men. It says your life, your property, & your liberties are natural rights.. native to your existence, & not subject to the whims of others.

The enlightenment thinkers concluded that the CENTRAL role of any collective organization.. the MAIN duty of govt is to secure these rights. AND, if any form of govt becomes destructive of these ends, it is further the people's right to alter & abolish said govt.

This is basic stuff. It is the foundation that America was built upon. You can destroy this foundation, or argue that man has no such rights, or try to trample his rights by violating Natural Law, but it will not last, & you will find yourself on the side of the oppressor, crushing human freedom instead of defending it. You are merely embracing the monarchists role of 1776.

Power is another factor. Power can be used to defend & protect Natural Law & the people, or it can be used to dominate & oppress. In the rare times where power is used to defend human freedom, times of liberty, opportunity, prosperity, & enlightened growth took place.

“Everything that is really great and inspiring is created by the individual who can labor in freedom.” ~Albert Einstein

The progressive left argues to deny & ignore natural law, & replace it with authoritarian despotism.. a ruling elite who issue mandates to those beneath them. You would undo what has taken us millennia to achieve, with no thought to the consequences. You do not believe in the equality of man, but the superiority of an evolved 'elite'.. a super human (or super race) who should have the rule over the lessor evolved inferiors. You have become a nazi.

Natural Law is timeless. It is the same whether it is 3000 bc, or ad 1700, or ad 2100. Elitist oppression is also timeless, whether from monarchs, military despots, or superior evolved beings who all claim the privilege to rule. You may succeed in fooling some of the people, with years of propaganda & indoctrination as to your superior state, & your privilege to control & manipulate others, but many of us see this as the same old, tired oppression of yesteryear.. it is so pre 17th century.. i thought we were past that.

..talk about someone who wants to live in the past. You are not advocating more freedom for humanity, but a step backwards, where elitist controllers seize power over the working man, to exploit him & fleece him of his labors. You promote the very thing we have struggled for centuries to overcome. This is NOT a religious question. This is a HUMAN issue. Will we advance in our humanity, defend the natural rights of mankind, or descend back to the dark ages?

Wake up, you deluded progressive leftists!! You have been indoctrinated with an anti-human ideology that is leading you & everyone else to bondage. Your hatred for christianity & God blind you to the UNIVERSAL TRUTH & benefit of Natural Law. But you will not be rewarded for your complicity in this subversion, if America fails. You are just another pawn for the elite to manipulate. Oh, you may live, while the champions of freedom are killed, but at what cost? Will you sell out all of humanity for some delusional lie? Despotism will NOT be an improvement for our lot.  As humans, we have been there before. Choose freedom.

You will NOT win, anyway. The genie is out of the bottle. We have tasted freedom, & will NOT return to bondage & oppression. You will have to kill too many people, & you will discover that they will not go quietly into the night, but will fight fiercely for their freedoms. You will awaken the slumbering giant of America, & it will roll over you like a juggernaut.

Death of the Family

 The nuclear family is the most basic building block for society, & is the thread that weaves the social fabric, to mix some metaphors. No culture can withstand the destruction of the family, though many despots & crackpots have tried, over the centuries, to replace the family with some collectivist institution.  The decline of the traditional family is an obvious statistic, but its significance is often lost on the culture.

Destroy the family, you destroy the country. ~ Vladimir Ilyich Lenin

Give me four years to teach the children and the seed I have sown will never be uprooted. ~Vladimir Ilyich Lenin

The State must declare the child to be the most precious treasure of the people. As long as the government is perceived as working for the benefit of the children, the people will happily endure almost any curtailment of liberty and almost any deprivation. — Adolf Hitler

I know and you know that Chicago is my kind of town. And Chicago is my kind of village. ...And we have learned that to raise a happy, healthy and hopeful child, it takes a family, it takes teachers, it takes clergy, it takes business people, it takes community leaders, it takes those who protect our health and safety, it takes all of us. Yes, it takes a village. And it takes a president. ~Hillary Clinton

Abolition of the family! Even the most radical flare up at this infamous proposal of the Communists. On what foundation is the present family, the bourgeois family, based? On capital, on private gain. In its completely developed form, this family exists only among the bourgeoisie. But this state of things finds its complement in the practical absence of the family among the proletarians, and in public prostitution. The bourgeois family will vanish as a matter of course when its complement vanishes, and both will vanish with the vanishing of capital. Do you charge us with wanting to stop the exploitation of children by their parents? To this crime we plead guilty. ~Karl Marx, 'The Communist Manifesto'

You see attempts to replace the traditional family structure, even in recent history. Hitler's Youth, Mao's Red Guard, & Stalin's Komsomol, Young Pioneers, and Little Octobrists. The goal was indoctrination.. social engineering, to mold a compliant & subservient cadre of servants to the supreme state.

  

I see these as symptoms, tactics and tools to destroy the traditional family structure. They have been steadily increasing & govt policy has been pushing us toward these anti-family values:
a. The emasculation of Fatherhood.
b. The eradication of discipline in the family structure.
c. The rampant growth of crime.
d. The corruption of justice into gaming the system, & building state dependency by turning citizens into wards of the state.
e. The proliferation of pharmaceuticals to control people, rather than accountability & personal responsibility.
f. The construction of the fantasy global 'village' to raise children, as subjects of the state. Collectivist view of man.
g. The 'feminizing' of men. Metrosexual & pajama boy liberals elevated as the Male Ideal.
h. The explosion of homosexuality. Gays are made, not born, & progressive ideology has used the confusion of puberty to drive young people to embrace homosexuality. 
i. The demonizing of the Alpha Male. Strong, natural leaders of the social structure are shamed & ridiculed, replaced with PC metrosexual role models.
j. The individual destroying, family breaking act of abortion, pushed upon naive young women, to their detriment & all of society.
k. The destruction of moral absolutes, replaced with relativism & situation ethics.
l. The equating of traditional family with 'exploitation of children', as Marx does in his 'Manifesto'.

A healthy society needs well adjusted men. It needs well adjusted women, too, but the progressive war has been primarily on men. Radical feminists, the anti family squad of progressive ideology, have been systematically attacking & emasculating the alpha male for decades. They wish to build compliant, passive men, who are comfortable lounging in their pajamas watching chick flicks. But no society can survive without fierce warriors & clear thinking, confident leaders to defend the culture from enemies, foreign or domestic.

This chart shows the growth of dependency, but also the surrender of men for their duty to provide & protect, replaced by the progressive village, which only produces town drunks & village idiots. 



This is ALL men, but some minorities have been even harder hit. The welfare state has systematically emasculated the black man for decades now, & the traditional black family is nearing extinction.

The consequences for this will be detrimental to us as a culture.
1. We will be weaker, militarily, as our armed forces will be run & managed by pajama boys.
2. The nuclear family, the fabric of all human societies, is replace by collectivist bureaucrats.
3. Dependency is accelerated, as single women look to the state to raise their children, rather than the traditional family structure.
4. All these things lead to financial & social collapse, as a society cannot function outside of fiscal & social reality. Fantasy dreams of utopia cannot & will not replace the hard realities of life.

Currency, Banking, & Corruption

All the perplexities, confusion and distress in America arise not from defects in their Constitution or Confederation, nor from want of honor or virtue, so much as downright ignorance of the nature of coin, credit, and circulation. ~John Adams

Fractional Reserve Banking is sometimes seen as the same as Fiat currency. It is not. Basically, fractional reserve banking is a method of growing the currency. IF loans are made on productive ventures, the money 'created' is real & has value. But if the loans are just created by fiat.. with NO collateral, they dilute the real value of the wealth.

One of the problems of fiat currency, is it makes reserve requirements irrelevant. What is the purpose of a bank holding reserves to cover its liabilities, if they can just get more cash from the central bank?

Reserves are what a bank has in real assets, to cover their loans. Most fiat nations don't even have reserve requirements, because they can just print up more anytime they need it. But as a sentimental nod to past hard currencies, the US currently has a 3% reserve requirement for most banks.

Here are some examples.
Traditional fractional reserve banking:
Bank A has $1m in assets.
'A' loans Farmer $1m for land improvements, seeds, & equipment, with the future years crops as collateral.
'A' loans Storekeeper $1m to build a storefront & to buy inventory, with future earnings as collateral.
'A' loans Widgetmaker $1m to build a factory, raw materials, & hire workers to make widgets, based on future sales as collateral.
'A' loans Homeowner $1m to build a house for himself, paying contractors & material suppliers, based on the future value of the house as collateral.

In this scenario, bank A loaned out $4m, when they only had $1m in assets. The other $3m was 'created' by the central bank, that bank A borrowed from to make their loans. Since all of this money is based on real wealth being created, this is not inflationary, nor does it devalue the currency. As the borrowers make money off of their ventures, they pay back the bank, who pays back the central bank for the 'created' currency.  Real wealth is created, & there are no diluting or inflationary pressures on the currency.  Even if the currency is fiat, if sound lending practices were followed, there would be HYPOTHETICALLY no inflationary instability.

Regulations come into play in a scenario like this:
'A' loans Nepotist $1m to buy securities, lobby, & make kickbacks to govt officials. The OCC catches them, & puts both banker 'A' & Nepotist in prison.  Any remaining monies are returned to the investors & lenders.

But lets look at the current banking practices.
Bank 'A' has no assets.
'A' loans Scoundrel $10m, for donating $1m to Political Crony's campaign.
'A' loans Shyster $10m, who had loaned Scoundrel $2m to lobby.
'A' loans Conman $10m, who got a grant from Political Crony of $1m to study the effects of lobbying on the money supply.  (no effect, he concludes)
'A' loans bank 'B' $100m, so they can make loans to Crony, Liar, & Weasel. They are lawyers who put together a trade deal to help impoverished nations, an executive order made by Political Crony, who successfully ran for president.
'B' loans bank 'C' $500m who is the channel in payments made in foreign aid, & military contracts.
'C' loans bank 'A' $1B to buy derivatives & securities.

The fed considers all these valid loans, even though NOTHING of value is created. It is all money shuffling. All the small banks have been swallowed up by the central banking cartels. They have no competition, & shuffle cash between themselves, tapping the FED for more & more. NONE of the 'loans' made were based on the creation of wealth, but mere pyramid scheme parameters. This is inflationary, & dilutes the real value of the currency.

THAT is where the problem lies, by allowing shady loans to 'create' money, when nothing is being created. If the banking regulators put the crooks in prison, like they used to, these kinds of ponzi schemes would not dilute the currency or plunge us to bankruptcy. But our own govt is the worst offender. They make loans to themselves, paying interest on borrowed money, with borrowed money, created by fiat. It is a shell game, using smoke & mirrors to confuse everyone & obscure their crimes.

The treasury spends money that congress has allocated. They issue T-bills to get the cash. The Fed buys the t-bills, & gets interest from the treasury. The treasury sells more t-bills to pay the interest, & the Fed gives some of the interest back to the Treasury. The treasury boasts how they are making money off of the interest on t-bills.  It is nothing but a ponzi scheme

The whole system is corrupt, run by money shuffling thieves, with no basis in production. They are driving the currency to collapse.

One of the core concepts of America is that of man's inalienable rights. His right to life & property are paramount, & the ONLY purpose of govt is to protect & secure those rights. FIAT money is at its root a method to plunder the working man & take his property. It is foundationally contrary to the American ideal, & was slipped in by scoundrels & state worshippers to gain control & fleece the producers. It is at the root of statism, & is unamerican at its core. Nothing else we do.. no other reforms or changes will help, as long as the foundational principles of fiat money are in play. It is a redistributionary system employed by statists & oppressors, not a system of self rule. That change, began in 1913, was the turning point of American liberty. Since then, we have increasingly been plundered by a growing ruling class, enabled by the bankers & moneyed elite who also love this system, as they use it to enrich themselves without having to work or produce anything.

How did the stock markets respond to govt managed currency?  Did the Federal reserve bring stability & solvency to financial markets?  Hardly.  They brought the exact opposite:

Since the Fed, we have had wild swings in the markets, with fiat currency & debt used to fleece the producers & working man.  This was a progressive, big govt action, to grow & expand the role & power of a central govt.  The results have been a decrease in opportunity in America, & a destruction of the middle class, once the hallmark of a prosperous America.  Now, the money shuffling elite, who produce NOTHING, live in the lap of luxury on the backs of the working man.

This is just the great fiction that Bastiat wrote about. The delusion that govt can enable people to live off the labors of everybody else. If this delusion becomes a national religion, that society is on a downward spiral. Unless they wake up to the reality of work, production, & the source of wealth, they will collapse upon themselves in a massive dependency orgy.