2011


Economics and Stock Market31 Dec 2011 02:35 pm

Everyone Loses: Stock Market 101

Since the 1970’s the percent of people and stock trade activity which is involved in mutual funds and index funds in particular has mushroomed. While the frequent day traders have become more active, the typical non-professional as well as professional trader still engages in the buy and hold strategy advocated by market experts since there has been a stock market.

The goal of this post is to point out that the buying and holding of index funds in particular is seldom a winning proposition and very likely a sure way of slowly losing almost all your assets. Let me use this year as an example. I will attempt to use enough math examples to prove my point without traumatizing or boring those who are math-o-phobic.

Any fund that adjusts itself on a daily basis is almost inevitably going to lose value over time. This is true of all index funds and to my knowledge a great deal of mutual funds that deal with the bundling of several stocks.

Okay this is how it works (or doesn’t work for the investor). For convenience sake I’ll use nice round figures.

Let’s say that I have $100,000 invested long in the Nasdaq 100 (top 100 technology companies). Long means the standard way of trading in which I’m hoping for the market to go up. On my first day the Nasdaq rises from 2000 to 2060 an advance of 3%. To make the numbers big enough to quickly show what happens let’s say that I owned a fund such as RYVYX an ETF which doubles the movement.

So, in effect the market went up 6% and after one day I made a quite impressive $6000. Let’s say the next day the market gave back all it had gained and the Nasdaq returned to 2000. The drop from 2060 to 2000 comes out to a 2.9% drop. So, while yesterdays gain was 3% a drop of only 2.9% gets us back to even. Yet, while this sounds like you actually would have made a little money or stayed the same the actual math will show that you surprisingly lost some money.

Since you started the day at 106,000 you lost 5.8% of 106,000 which you get by multiplying .942 of 106,000 which comes out to 99,852. So during your two day round trip you actually lost $148.

Rather than give you a host of mathematical examples let’s take a look at what happened this year. The Nasdaq 100 began the year at 2218 and ended the year at 2278. This means that the Nasdaq 100 went relatively nowhere this year and if you owned an ETF or mutual fund on this index you would expect a modest gain of 2.7%.

In the example above I used a fund which doubled the movement of the index. Well if you wanted the maximum amount of potential gain you can own funds which triple the move of the index such as TQQQ for the Nasdaq 100. In owning the TQQQ then you would anticipate a gain of near 8.1% for the year (2.7 x 3). Yet, the actual performance of this ETF is quite different.

TQQQ ended last year at $73.94 and closed yesterday at $67.99. Therefore instead of gaining the expected 8.1% the fund logically would produce by its tracking the Nasdaq 100 it actually lost a hair over 8%. This means that due to how the index fund tracks the fund on a daily basis that the markets ups and downs caused the fund to deviate significantly to the downside.

In essence if you started the year with $100,000 you would currently have about $92,000. So while the market went up and you should have gained over 8%, you actually lost $8,000.

Now, as many of you know you can buy index funds which “short” the market. So, instead of you making money when the market goes up, you make money when the market goes down. The ETF SQQQ is the short version of the TQQQ which means that it should do the exact opposite.

If you owned the SQQQ for the entire year you would expect that since the market went down 2.7% that you would have lost 8.1% for the year. So, your $100,000 would be right near $92,000.

Well, let’s look at the actual numbers for SQQQ. The SQQQ ended last year at $31.18 and ended this year at $19.69. Okay, so $19.69 is only 63% of of $31.18. So instead of losing an expected 8% you would have in fact lost 37% of your money. Your $100,000 would have shrunk down to $63,000.

Okay, to review, despite the fact that the market went up a mere 2.7% for the year you would have lost money through the buying and holding of index funds whether you played the market to go up or down. These popular index funds were a lose/lose proposition.

Many studies suggest that over 80% of investors lose money. These studies fly in the face of market “experts” who claim that statistics show that despite setbacks even dramatic ones, that those long term investors who patiently buy and hold will typically find their money double every 8 to 10 years.

As you can see from the above example, which is more common than uncommon, the long term buy and hold approach may not be a wise one for most investors.

There are probably those out there who may object that the above example does not include the “dollar cost averaging” strategy of “experts” who advocate investing money into stocks at set intervals. The logic behind this is that pouring money into stocks when they are cheap (stock market has gone down) will just give you more shares and have your money earn more as the market recovers.

I became suspicious of this tendency for everyone to lose in the long term holding of index funds a few years ago. And over the past year ago I’ve factored in the use of “dollar cost averaging” on a monthly and quarterly basis without seeing any significant benefit to ending or even easing the steady erosion of wealth of index investing.

I’m not saying that successful index investing is impossible. I’m only pointing out that the practical and mathematical reality of this style of investment is rife with obstacles and complications, and that investor caution is more than warranted.

Jim Guido

Government and Politics and Social Issues30 Nov 2011 04:13 pm

I along with many were deeply saddened by the entire situation at Penn. State University. One, of course, feels sorry for any children who have been raped or sexually exploited. Joe Paterno was an icon to many and the possibility that his actions enabled the continued abuse of children is quite disturbing.

Yet, the media led crusade for quick and swift action based on allegations and here say is also quite disturbing. Judgments were made and actions taken before a thorough investigation was conducted. Now, it may turn out that there was a coverup by the university or people associated with the university. Yet, one injustice does not justify another and one from of abuse no matter how vile does not excuse another.

Even before we have any idea of what Mr. Paterno is actually being accused of, he is fired, and his entire career is in jeopardy of being vilified. Did Mr. Paterno fail to follow through on his original report of the allegations to his superiors? Is he being maligned because he didn’t demand that Mr. McQueary go to the police? Is he being accused of a willful coverup of child sex abuse?

Obviously the punishments and censure to be meted out to Mr. Paterno would greatly depend on what exactly he was accused of and found guilty of. Yet, many conclusions have been drawn on the actions and intentions of many including Mr. Parterno before the questions have even had a chance to be investigated or in many circumstances even asked.

We can not do anything to prevent the damage that may have occurred to the children said to be abused, but we do have the ability to make sure that we don’t damage the careers, reputations and lives of people who may or may not have played a role in the abuse of these children. If found guilty the abusers and anyone who abetted or enabled them should be dealt with and serviced by the penal and mental health professions.

I have worked in the field of human services for over 30 years. I have worked directly and supervised staff working with many abused children and their families. I know the damage that can be done, and the difficulties many of the abused face in ever establishing healthy relationships with others. I also know that many who rape and sexually abuse children have been raped and abused themselves when they were children.

The world of sex abuse is not only very sad it is also very complicated. Imprisoning sex offenders seldom prevents them from offending again, and even extended therapy often needs supplementation to insure the continued safety of children. Those who have been abused often need treatment to reduce the likelihood that they themselves will not seek out new abusers or become abusers themselves when they become adults.

Yet, the urgency of the public outrage is indicative of a society that is more into quickly punishing a supposed bad guy than truly solving a problem or helping people become more healthy. I have witnessed many situations in which a rush to judgment regarding legal intervention into sex abuse has in the long run done much more damage than good.

I feel it is also important to point out that the laws and procedures regarding the reporting of sex abuse has changed numerous times over my career. While it is true there are federal laws, there are often important differences in mandates and report procedures from state to state. I mention this because Mr. Paterno’s handling/mishandling of the reporting could have been influenced by the procedures he thought he was supposed to follow. I know of many places where reports of abuse are to be directed to superiors of the agency or to a body such as the department and child and family services and not the police.

I would feel better if the public outrage was based on findings not just innuendo. It would seem less hypocritical if outraged citizens took on the widespread abuse that occurs and has been occurring in our society and by our leaders for generations.

Barely five years ago Mark Foley resigned from congress amidst the mounting evidence that he had made overtures and had sex with underage children. While there appeared to be substantial evidence of emails and instant messages documenting his sexual dialogue with under age boys no criminal prosecution ever occurred. Another red flag was the admission by Foley’s lawyer that Foley himself had been sexually exploited by a priest while he was an altar boy, and a priest admitted to having an intimate relationship with Foley for a couple of years.

Quoting from Wikipedia: As a result of the disclosures, the Federal Bureau of Investigation (FBI) and the Florida Department of Law Enforcement conducted investigations of the messages to find possible criminal charges.[4] Each ended with no criminal finding. In the case of the Florida Department of Law Enforcement, the “FDLE conducted as thorough and comprehensive investigation as possible considering Congress and Mr. Foley denied us access to critical data,” said FDLE Commissioner Gerald Bailey with the closure of the case.[5] The House Ethics Committee also conducted an investigation into the response of the House Republican leadership and their staff to possible earlier warnings of Foley’s conduct.[6]

You can see by the above wording that Florida law enforcement intimated that congress obstructed the acquisition of “critical data”. The resistance of congress to properly support or assist any outside investigation of possible sexual misconduct involving children by its members has been the rule rather than the exception. The list of elected governmental officials with a reported tendency towards pedophilia is rather lengthy and stretched through much of our nations history.

Here is another account of a previous scandal during the late eighties. I didn’t include the link mentioned, but you can Google the info and see the newspaper headline.

Another prominent case is that of the Omaha child sex ring run by Larry King a Nebraska businessman and Republican rising star (no association with the radio talk show host) . The sex ring was uncovered in a 1988 FBI investigation of King’s theft of $40 million from the Franklin Credit Union, which he managed. The investigation discovered King had flown children to Washington DC on numerous cases. While in Washington DC, the children allegedly attended parties and provided sex for some of the members of Congress in attendance at these parties. On at least one occasion, the Presidential Limousine was alleged to have been parked outside King’s condo during one of these parties. During testimony in court, one of the children gave accurate details of rooms inside the White House which are not open to the public………Check out the link from the Washington Times front page of 6/29/89 pictured below to see how this story reached into the Reagan White House:

The “Franklin Coverup” resulted in a book by that title and a TV documentary entitled “Conspiracy of Silence” which was inexplicably pulled from its scheduled airing on the Discovery Channel at the last minute. Those interested can see the documentary on line if they so wish.

The point of the last few paragraphs was just to point out that accusations of pedophilia is not foreign to our government and that police involvement has been rare, and prosecution has been even rarer. If we think a possible coverup by a major university is totally unacceptable than we shouldn’t allow our government to bury and ignore the rather substantial evidence of sexual impropriety amongst our elected leaders, and we as voters should not vote for any member of congress who has not done his utmost to expose and assist all outside investigations.

Moving on I think it would be safe to say that rape and sex abuse of any kind an not just pedophilia should not be tolerated. Well, it is sufficiently documented that rape in the military occurs at an astounding level. I will offer up a few quoted examples which could begin your own research into the topic.

According to NPR, “In 2003, a survey of female veterans found that 30 percent said they were raped in the military. A 2004 study of veterans who were seeking help for post-traumatic stress disorder found that 71 percent of the women said they were sexually assaulted or raped while serving. And a 1995 study of female veterans of the Gulf and earlier wars, found that 90 percent had been sexually harassed.” While an estimated 90% of rapes do not get reported.

And later in the same article.

How the military is dealing with this appears to demonstrate a pattern of sweeping it under the rug. In 2008, 62% of those that were convicted of sexual assault or rape received very lenient punishments such as demotion, suspension, or a written reprimand.

In another article I found:

Military sexual trauma (MST) survivor Susan Avila-Smith is director of the veteran’s advocacy group Women Organizing Women. She has been serving female and scores of male clients in various stages of recovery from MST for 15 years and knows of its devastating effects up close.
“People cannot conceive how badly wounded these people are,” she said, “Of the 3,000 I’ve worked with, only one is employed. Combat trauma is bad enough, but with MST it’s not the enemy, it’s our guys who are doing it. You’re fighting your friends, your peers, people you’ve been told have your back. That betrayal, then the betrayal from the command is, they say, worse than the sexual assault itself.”

Another factoid I found:

In Congressional testimony in the summer of 2008, Lt. Gen. Rochelle, the army chief of personnel, reported the little known statistic that 12 percent (approximately 260) of the 2,200 reported rapes in the military in 2007 were reported by military male victims.

The data regarding our penal system is just as damning as the military. I remember reading several articles documenting the high percentage of rapes amongst woman who are incarcerated and their pointing out that the majority of these rapes were conducted by guards and wardens. Yet, even more surprising was the fact that a majority of rapes of male inmates were performed by guards and wardens and not inmate on inmate.

Yet, despite all the documentation and testimony spanning decades neither the military nor law enforcement has done anything substantial to end or even reduce the sexual abuse occurring. In fact those exposing or reporting the sexual abuse often face harsher consequences than the known perpetrators.

Yet, sex abuse of children is occurs in almost any business or industry catering to or employing children, as evidenced by articles such as the following one.

According to former child star Corey Feldman, child molestation is rampant in the entertainment industry, as he told Nightline in an interview.
“The No. 1 problem in Hollywood was and is and always will be pedophilia,” he said Wednesday. According to Feldman, the “casting couch” exists for children, too.
Feldman asserts that directors and other adults in the industry take advantage of young aspiring actors on a regular basis. “It’s all done under the radar… But it’s the big secret,” the 40-year-old said.

There are a lot of situations in which pedophilia and rape occur in which we are totally unaware or there is little we can do. Yet, when it comes to congress, law enforcement and the military there is enough evidence and sufficient resources where we could make a difference and prevent many men, women and children from being damaged.
All we lack is the will power and conviction to demand a thorough investigation of chronic abuses. We need to keep the focus and public scrutiny constant and we need to make sure that investigations aren’t stonewalled or allowed to die out.

I might add that our government carries out abuses and atrocities throughout the globe which we turn a blind eye to, or even in the case of some forms of torture and execution without trial even glorify. I myself, never forget these facts, and move on. Any politician who supports or even tolerates these abuses domestic and foreign does not deserve or receive my respect. The fact of the matter is that I don’t know of a single elected official who is even remotely dedicated to the stoppage of these abuses. Therefore, it is impossible for me to live up to my principles while not demanding them to live up to their principles.

I’m am waiting and searching for a politician with a shred of decency and the courage to stand up to the abusers. Do you know of any?

Is expecting our leaders to protect our children an unreasonable goal? Is it idealistic to think that we can live in a society whose political, penal and military systems do not tolerate and coverup the sexual abuse of those in their charge?

Is it setting the bar to high to expect basic human decency and respect for human dignity to be the norm, and the minimal standard of what we work toward and tolerate?

If you’re outraged by what may have happened to a few boys at a major university in Pennsylvania, then you may want to go after the perpetrators of all thousands upon thousands of people who are ritualistically abused by our most revered institutions cited above.

If Joe Paterno is guilty of not following through and not doing all he could, then who amongst us is any less guilty. While Mr. Paterno may not have made sure that the police were involved and that the university acted in the best interest of the children, we are all guilty of allowing our politicians, law enforcement, and military leaders to aid and abet in the abuse of thousands if not millions of people throughout our history.
But politicians needn’t worry you’ll vote for someone no matter how corrupt the system.

Jim Guido

PS I apologize for those of you who are offended by this post. My goal was not to blame, but only to begin a dialogue that could actually have an impact on reducing the amount of abuse and damage in modern society. If I was a little harsh it was only because I am haunted by the reality of the problem and am dissatisfied with how it is being addressed by our culture at large.

Philosophy and Relationships11 Nov 2011 12:48 pm

One of my popular posts is the one I entitled Learning How to Purr which I wrote back in 2008. I’m glad it has been read so often as I think Learning How to Purr is a rewarding skill. The post by the way was based on the lyrics of the song by that name which can be heard and read on Zephyr in the music section of the site.

What is amazing is that for a cat purring is not a rare event or a sign of perfect bliss. Purring is the default mode of a cat, if nothing pressing is happening then for most felines purring is the thing to do (feel). I, too, am learning how to make that humming type of contentment my fall back mode of being in the world.

My nature is to be reflective and thoughtful and even in the midst of activity I am often ruminating on some thought or observation. I love learning about myself, others and the world I perceive. Each day I find it easier to do all these things in a manner which makes purring commonplace.

A calm cellular joy which traverses my body and guides my perspective is finding its way into my daily activities. Even at the height of activity at work, playing music or sports, or in conversation I can sense the purr arising from deep inside me. I meditate twice a day and it is now becoming rare when the bulk of that time is not spent purring (basking) in cellular joy.

As you can tell from my posts, this purring does not prevent me from looking at the world critically and realistically. My cellular joy isn’t born of dreaming and escapism but from my visceral integration with others and my surroundings. The warm hum is visceral and emanates from and circulates through my body. It is not an abstract joy divorced from the real world and a possession of my mind, it is not a platonic ideal, or a spiritual consciousness, but rather a full bodied joy of the wonder of the dance of me perceiving myself and the world.

In my poems Awed and I Realize It is Me, which have been posted on this site, I try to paint and articulate this beauty in a form which helps create the perspective that gives rise to the experience of cellular joy and purring. Each day that passes I learn new ways of celebrating life, and make new discoveries revealing the wonder of human existence.

What I’ve learned from developing the habit of purring is that it is not what you do that’s is so important as how you do it. Cellular joy comes more from adopting the right perspectives than having total control over the activities you do from moment to moment. In fact, what seems to be emerging is an organic realization that the cellular joy has little to do with any specific activity and the very search for the right activity or accomplishment often runs counter to the experience of cellular joy (purring).

Though certain thoughts and attitudes are helpful in fostering or allowing purring to occur, I have come to learn that cellular joy is an actual organic experience. The human body makes our having a world and perception possible. Without my body there would be no me, and no way for me to experience a world. My sense of self is not a thing, it is a process, and without my body and its taking up a world there would be nothing to feel, know or experience.

Cellular joy is the celebration of being alive. And when it comes down to it, what better is there to celebrate that the gift of life.

Jim Guido

Economics and Government and Social Issues06 Nov 2011 12:49 pm

As a veteran of so many social movements since the 60’s I view the recent efforts in Arab nations, the US Tea Partyers, and the #OWS (OccupyWall Street) with a mixture of hope and skepticism. My hope is small in comparison to my skepticism because like previous social movements I think they underestimate, what they are up against. Too many people trust in the purity of entities such as alternative and social media.

After personally observing how the student revolutions were infiltrated, corrupted, and finally co-opted by the corporate/military/industrial complex I am aware of how the integrity of a noble cause can be not only destroyed, but end up serving the long term interests of the establishment (the 1% in today’s lingo).

There were many other movements that have and are suffering the same fate as the anti-war student movement of the 60’s. In fact the majority of the others fared much worse than the students movement. A short list would include the civil rights and women’s movements, the ecological movement, and the anti-war movements of both Gulf Wars.

Please read the following quote numerous times. In fact make a copy of it and put it on your fridge, on a home wall hanging, or any place where you will see and review it often.

“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this
unseen mechanism of society constitute an invisible government which is
the true ruling power of our country. …We are governed, our minds are
molded, our tastes formed, our ideas suggested, largely by men we have
never heard of. This is a logical result of the way in which our
democratic society is organized. Vast numbers of human beings must
cooperate in this manner if they are to live together as a smoothly
functioning society. In almost every act of our daily lives, whether in
the sphere of politics or business, in our social conduct or our ethical
thinking, we are dominated by the relatively small number of
persons…who understand the mental processes and social patterns of the
masses. It is they who pull the wires which control the public mind.” – Edward Bernays – Propaganda – 1928

Look at the year that was stated. Almost a century ago our world was already dominated by perceptual managers. Mr. Bernays was not heralding a new strategy, but a science of social psychology which had developed to the point where he could confidently identify propaganda as the most powerful and pervasive ingredient of maintaining a democracy. In fact, Mr. Bernays and his ilk did and do believe that the very survival of democracy is dependent on the successful control of the public mind.

In my previous post What Money Can Do, I mentioned amongst other things the fact that the wealthy can and do employ some of our greatest minds to insure and expand their power, wealth and control. There is no social movement that will not be monitored, infiltrated, corrupted and influenced by the perceptual managers and PR minions of the wealthy.

Every day the techniques and strategies of social influence and perceptual management are being refined, honed and expanded upon in the practical laboratory we call modern society. The sophisticated techniques used by our intelligence and military agencies in torture, propaganda, brain washing, and removing resistance are being adapted and deployed domestically by the wealthy to further their agenda and to insure their continued dominance.

Just as our government gathered and employed some of the best physicists for the Manhattan Project for the atomic bomb, the military industrial complex currently employs geniuses in the realm of social psychology. Terms such as spin doctors greatly downplays the sphere of influence of the perceptual managers who are working around the clock in their devotion to win our hearts and minds and make us dependent on those who are exploiting us and attacking our standard of living and quality of life.

All those who are feeling that the internet and social media are the tools of the next revolution should keep in mind that the internet was originally a pentagon project, and its main goals and objectives in terms of global and domestic surveillance and influence are still in tact. I see no indication that “they” have lost control of their project. In fact each day I see more and more signs of how they are once again successfully co-opting and incorporating all these Arab, European and domestic social movements into assets of their social engineering.

The desire for the powerful and ambitious to control and exploit the masses is not new, and as Bernays points out, it has a privileged role in democratic systems. Even in the earliest social democracies that existed over two thousand years ago the benefits of mechanisms such as bribery, corruption, deceit and torture were generally known by those in power. In the earliest democracies oratory was heralded and many politicians adopted the skill set of the conman.

Yet, over two thousand years the level of sophistication of propagandists, conmen and perceptual managers has mushroomed. One could say the effectiveness and knowledge of the techniques of persuasion and influence have grown geometrically with the birth of the sciences of social psychology and public relations.

Anyone who truly yearns for lasting and meaningful social change must understand and fully appreciate how potent are the forces able to corrupt, co-opt, redirect, or envelop any social movement. Everything said by or about a movement is monitored and analyzed and processed by perceptual managers. Every word uttered is an opportunity for the spin doctors and propagandists to find a point of entry into joining or redirecting the movement. Every moment new ways for a movements words to be reinterpreted or emotionally experienced are pondered. Without even knowing it followers of a social movement may be straying from the original intent into a version which is being promoted by the establishment.

The problem is that the average person does not have the time nor energy to sift through all of the words being said and have sufficient vigilance to keep their support of the movement pure. Movements themselves and their spokesman often do not see how subtle changes in language or in acceptance of minor ways their ideas are being framed by outside influences (media, splinter groups, etc.) are not only undermining but often altering the core issues of the movement. oftentimes altering the very proposals which have the most potential for dramatic social change. That level of thought and vigilance is more realistically able to be accomplished by the perceptual managers and their employers.

Significant, lasting and beneficial social change is still possible. Our desire to create harmonious and humane societies is a valid one. The goal of constructing societies which improve the quality of human life is not unrealistic or even idealistic. Yet, it is not the direction in which we are moving and until we fully recognize and divorce ourselves from the mechanisms of power, fear and hatred which are the basic tools of social engineering we will have a difficult time not falling prey to the agenda and dominance of perceptual managers who convince us that the elite are too big to fail and our very survival depends on their continued imbalanced success.

Jim Guido

Economics and Politics and Social Issues22 Oct 2011 06:24 pm

Whether wealth be of an individual, a corporation, or a cartel of like minded individuals their is much one can do to further their interests. If the primary goal is financial there are many things wealth can do to protect itself, increase its dominance and significantly expand its relative worth.

One of the most sure methods of slanting the playing field in your favor is to maintain or create laws which maximize your legal and commercial advantage. The more wealth has influence and control over the political arena the easier it becomes for wealth to maintain and increase its position.

Though wealth can use its resources to increase and better its position in almost any political system we will focus on the tools and strategies wealth can use in democratic governments. Since politicians need to get elected they are very dependent on money, media and public relations to insure their attaining the office they desire.

In many ways we could make the argument that campaign contributions is wealth’s best friend. First you could make the size of your contribution dependent on the candidates promise or active promotion of the passage of a bill from which you will directly benefit. Second, you could tie your contribution into the securing of a position for yourself or a minion that provides you with an undisputed current or future business advantage.

To insure that your money is not being wasted betting on a losing horse, you can always wait to commit yourself to a candidate until the polls are giving a nod in one direction. In such a case the size of your contribution would need to be sizable to establish the politicians dependence on your continued and future support.

Yet, true wealth is free to contribute to as many candidates as is thought prudent. Betting on more than one horse in a race is fine and often one does not have to feel constrained by party affiliation. Cartels functioning as voting blocks can funnel their contributions through an individual regarded as a Republican or Democrat in a given situation to avoid appearing contradictory or disloyal. If profit is your main motive than policy is much more important than party affiliation, and the goal is for your contribution to go to a winning candidate who will feel indebted to you and your support.

Once elected a politician is in constant need of funding for re-election and political power. So even if you weren’t a big contributor during the campaign, you can buy yourself support and friendship through contributions of almost any elected official. In such a situation those of wealth can donate money to a politician’s pet project in exchange for their support of passage of any legislation which enhances their business needs.

In the realm of political influence by the wealthy we are all very familiar with the power and influence of lobbyists. The wealthy have long realized the pampering of and pandering to politicians is a very wise investment. The money spent is but a fraction of what it can generate.

The history of capitalism is full of stories where a corporation or business cartel pushed through legislation which gave them an unfair advantage or actually destroyed their competitors. The joint efforts of construction, the automotive and related industries did a fine job of passing laws which undermined the survival of the electric trolley, as well as a budding electric train industry. When I was young there was an electric train line that ran from Chicago to Milwaukee that despite a loyal passenger base could not survive the onslaught of being legally handcuffed and marginalized.

When the US was young its economy thrived and became competitive by passing laws which protected it from the monetary and technological advantages of British mega-companies. Yet, once the US formed its own economic elite the laws have changed giving back all advantage to the wealthy. The major reason why “free trade” is so popular amongst our largest corporations is that it takes away all protections from smaller businesses and allows big business to dominate every region both domestic and international.

Misleading titles such as “free trade” seduce the population into handing over their last remaining hopes of ever competing against the wealthy. If you are wealthy you can use “free trade” and “free market principles” to simply buy out any competitor, underprice them through volume or even taking a temporary loss through low prices to force them out of business. In return for your political donations you can get government (tax payer) subsidies, low interest loans, and favorable tax laws making it almost impossible for any competition to arise in the first place.

In business perception is everything, that is why so much money is spent on advertising, public relations and on perceptual management. Knowing this wealth is able to invest huge sums of money into creating consumer loyalty and demand. The wealthy can hire the best minds in the fields of social psychology, public relations and neuropsychology to best understand and influence the public at large.

Yet, for the wealthy such moves are only preparing the soil for their public opinion commercial farming. Even the least innovative or ambitious tycoon can place beneficial news stories, use their role as advertisers to influence what a paper says or doesn’t, and pressure the media to print favorable stories. Yet, the wealthy need not stop their, for they can actually own media or become part of a conglomerate that does.

The truly wealthy can not only own media and publishing houses, but fund or own universities, research organizations, think tanks, or control education policies and curricula. The truly wealthy can reinterpret if not rewrite history giving them and their projects a heroic and revered image. The wealthy can write the scripts that the average person takes as historical and modern reality.
The wealthy can fund or create non-profit groups which appear to be philanthropic or humanitarian and which function as tax shelters and attack dogs. One of the possible explanations of why the world’s most renown economists can be wrong so often yet remain revered is that the wealthy control the title of respected and famous economists. The wealthy have created a world where the only sanctioned “schools of economic thought” are those generated by its think tanks, universities, and businesses which protect and further their interests.

The wealthy can and do increase their net worth while being the world’s most prolific philanthropists. Through their non-profit foundations, charities, and humanitarian projects even retired billionaires find ways of using these havens to increase their overall wealth. In essence, the wealthy are able to use philanthropy as a commercial boon, which protects them from the IRS and has them become the heroes and idols of the very populace which are becoming relatively poorer through their apparent generosity.

The wealthy can also create socially conscious non-profits who promulgate their economic and ideological message. Oftentimes this can be done with the public believing its a grass roots organization. The wealthy can also infiltrate or contaminate any existing socially conscious group or movement. The wealthy can usually corrupt a well intentioned union, or move astray from its original purpose.

The wealthy can and have taken a non-violent movement and make it militant. The wealthy can create a bogus ecological entity whose extreme views and actions discredit or destroy the public support of a legitimate group whose public backing is interfering with the business profits of the wealthy. The wealthy can create or incite a war which will either add to their coffers or divert the public’s attention away from their malfeasance.

The wealthy can do pretty much what it imagines, and can hire people who can imagine for them. This is not to say that the wealthy has to do these things. It is only to point out that they can, and that to the extent that profit is their guiding force, that it is logical that they do such things. It is also important to point out, that those of wealth who do not do these things will be at a disadvantage to those with wealth who do these things, and therefore, will likely lose to the more ambitious and self-serving in then long run.

I do not think it is human nature or inevitable for successful or ambitious people to act in this way. Yet, I don’t think it is paranoid to assume or anticipate that economically ambitious people are and will do such actions which increase and protect their wealth and privileged position.

The problem is not in human nature or in the desire to be successful. The problem is constructing a social and economic system that rewards and fosters this style of being in the world. We have choices, but much money and energy is bering spent trying to convince us through fear and deception that there is nothing inherently wrong with a profit based capitalistic society, in fact we being told that our problems are due to the fact that we have never had a truly free enterprise system.
We’ve never had and never will have a totally perfect any kind of system. Yet, I have no doubt that we can create a system and a social structure that is far more humane and far more successful at reducing human suffering while improving the quality of life for the majority of those on the planet.

Jim Guido

Relationships and Social Issues26 Sep 2011 01:21 pm

I recently read a book entitled Money and Psychotherapy that pointed out how specifics regarding people’s financial situation are seldom ever addressed in therapy. A major point of the book was to say that there is a taboo in therapy regarding any investigative discussion on money, and that this taboo reflects a general avoidance of personal finance discussion in everyday life.

When reading the book I thought about how many taboos we have in our culture regarding typical conversation between friends and associates. In fact it is hard to think of a topic of conversation that doesn’t have restrictions on what can be shared. There are taboos and restrictions on open dialogues about sex, religion, politics, ethics, government, law, desire, fantasy, parenting and education just to name a few.

Sometimes it is acceptable to have a general discussion about one of these topics with a group of like minded individuals, or we can tolerate a quick professing of strongly held beliefs. Yet, usually these conversations are more an opportunity for individuals to state or express their opinions and beliefs and are not usually forums for a true exchange of ideas.

In general our society has many rules regarding “polite” or “civilized” conversation. Topics which are emotionally powerful, full of personal significance or socially important are not considered appropriate for daily dialogue and more often than not are considered to be “private issues”.

I will readily admit that personal realities, set beliefs and certainties are rather fruitless topics of conversation. At best one can express these views, but since they are fixed and rigid they are by definition not useful for conversation or dialogue. Yet, as growing changing human beings there should be much of our lives which we are exploring and learning in which shared dialogue would be helpful and productive.

While my distaste for typical social conversation is stronger than most, I seldom meet a person who finds most social and party conversation satisfying. Most people express some form of emptiness or lack in the quality of most social conversation, yet feel the sense of community outweighs the deficits.

The taboos and rules regarding what can be discussed in one-on-one or small group conversation are far less restrictive. While there is an openness and even sometimes a willingness for self-disclosure and an articulation of one’s personal reality, there still exists a substantial resistance to a frank exchange of ideas or working through opposing perceptions.

I myself find even the best of friends can have a relatively small threshold and tolerance of meaningful or explorative conversation. Even my intimate life long friends who used to energetically engage in these type of conversations in high school and college, now find it difficult to delve for more than a few minutes before seeking a distraction.
I do find my thirst for meaningful conversation has stayed strong through out the years. My closest friends are very appreciative of the quality of our conversations and often express regret that they don’t have “these type” of conversations more often. Yet, when it comes down to it, they honor the taboos and inhibitions of socially accepted discourse.

Over the last few years I’ve noticed an aggressive nature to the avoidance of intimate or meaningful dialogue, and that is to make the desire for meaningful dialogue into a pathology or a sign of social ineptness. Now, efforts to engage in meaningful or emotionally invested discussion are rebuffed as a sign of a person’s “inability to read social cues” or their honesty as “a lack of social filters”.

I have worked many years with people on the Autism Spectrum and so I’m quite aware of individuals who have neurological deficits that limit their ability to read social situations, or to see things from another’s perspective. Yet, now people are now using this fact as a defense mechanism in rationalizing their resistance or discomfort with intimate dialogue.

In a future post I hope to talk more on the role inhibitions play on limiting our basic drive towards intimacy. Those willing to learn more of my thoughts regarding intimacy, should go to the words section of this website and read my book “Exploring Intimacy”.

Yet, in this post I only want to conclude by once again emphasizing my sadness at the lack of intimate and meaningful conversation allowed by social protocol and conventions. The taboos we have restricting meaningful interchange strip our social world from much of the richness it has to offer. Of course, one is free to express these things in the arts, such as I do in lyric, song and books. Yet, life and experience could be so much richer if our society encouraged meaningful exchange thereby allowing us to more fully benefit by the perspective, experience and energy of others in an immediate fashion.

It is a shame that our wonder of the world and depth of our experience often is expected to stay mute. There is so little time, and so much richness to share, and almost every individual I know possesses so many gems that, do to social conventions, stay hidden from my eyes.

Jim Guido

Government and Politics and Social Issues15 Sep 2011 04:11 pm

The debate regarding whether conspiracies exist and the labeling of individuals as conspiracists becomes inflamed near the anniversary of the twin towers tragedy. As time goes on the word conspiracy seems to become fixed between two points one being that conspiracies are believed in by people susceptible to paranoia or are very cynical or negative towards our government. Often times the corporate media and sometimes our government seems to suggest that belief in a conspiracy theory is unpatriotic at best, and a form of terrorism at worst.

Yet, in all the name calling and labeling one seldom hears a frank discussion regarding what a conspiracy actually is. This, of course, allows those interested in social engineering and perceptual management an opportunity to use their craft to influence people to support the agenda of their benefactors or political ideologies with no reference to actual meaning.

So, let’s take a moment of clarity to revisit the actual definition of conspiracy.

conspiracy
a secret plan by a group to do something unlawful or harmful:

Okay, so does anyone really think that the human social and political world is completely transparent, honest, lawful and benevolent. If not, and you think that some people get together in private (secret) in order to accomplish a self-interest which may bend the rules a little in order to defeat (harm, destroy) and opponent then you have to admit that conspiracies exist.

I think it is to safe to say that almost every business, political and economic entity, sport franchise, military and intelligence agencies and local social group conduct some if not a majority of their planning and strategizing in secret. In fact most would go so far as to state that total honesty and visibility is impractical, bad for business, and probably destroy capitalism. In the political arena it would give your opponent too much of an advantage and probably cause the destruction of democracy, freedom and open the door to totalitarianism (the dark side).

Due to humans being social creatures and are societies being so complex and interwoven it renders most of human activity to be done in groups. And since most group activity is not shared with the entire populace than the majority of human activity fulfills the first two aspects of the definition of conspiracy.

The only behaviors which would not fit the definition would be those that are both lawful and which do not harm anyone. An action would still be conspiratory if it was secret and lawful but harmful, or secret and beneficial but illegal.

Yet, the real question regarding conspiracy is whose laws are we considering and who is being harmed. In economics in general and capitalism in particular there is usually a winner and loser in each transaction. We live in very competitive societies and have been engaged in the fight for survival for eons. Seldom do we have win/win situations, and therefore when one wins the other loses or is harmed in one way or another. Therefore, conspiracy is the norm and not the exception.

Those who deny that conspiracies exist either are blind or ignorant of the meaning of conspiracy. Almost every action taken by our (or any) military and intelligence agency is by definition a act of conspiracy.

Yet, the media and perceptual managers have distorted conspiracy to be about kooks and paranoiacs. According to their Orwellian dictionary good people never engage in acts of conspiracy and only enablers of terrorism claim that good people conspire, or lie to the masses.

Conspiracy has now become synonymous with questioning the “official” story of governments and corporations who are spinning information for various reasons, some but not all of them harmful. Yet, again what might benefit a certain segment of the populace may be harmful to another. The fact that our “democratic” government often creates policy and takes action in direct opposition to public opinion regarding war, citizen rights, etc. is a violation of our trust. Any such action done behind close doors is an act of conspiracy.

Whoever brought down the towers did so through an act of conspiracy. The fact that the official story is illogical and refutes the laws of physics is very troubling. So, is the fact that much information is still hidden from us a decade after the event. Yet, as I said, in todays world questioning an illogical story and adhering to the world of science opens the door to being labeled a conspiracy theory kook, and even a terrorist.

Yet, this is just another example of how our language is being mangled by perceptual managers in their attempt to foster a spun reality serving the purpose of those who can afford perceptual managers and social engineers. Before ending I’ll point out a few other terms which have been artfully tailored to have meaning quite different from their literal and logical ones.

In previous posts I’ve talked of how social engineers have replaced the literal meaning of entitlement with the feeling of being entitled.

entitlement
the fact of having a right to something:

Entitlement is a fact and a right. The label entitlements such as social security as a “program” avoiding the fact that the bulk of social security is taken out of our pay check. Not getting social security is identical to not getting your paycheck. Soon they’ll be saying that too many Americans “feel entitled” to their pay check and that we can no longer support “these pay check programs”, for literally a pay check is an entitlement. All contracts are entitlements. Yet, in today’s world corporations and governments claim to be victims of unrealistic and lazy citizens who expect a free handout (their deferred paycheck in retirement and social security accounts).

Other terms being distorted and warped to fill the needs of social engineers, propagandists, and perceptual managers are terrorists, humanitarianism, and freedom.

All aggressive and pro-active armies strike terror into any foreign people they invade or “support”. In the US any action done by any nation which is counter to our governments narrow and ambitious global agenda is a terrorist. Never mind if they are only trying to protect their people’s rights or improve their standard of living. Never mind if the US citizen or foreign individual is acting in ways which are popular and respected by the majority of people. The only litmus test that matters is if it adheres to the global corporate and US government agenda that we can only watch and try not to offend, lest we become collateral damage or labeled terrorists.

The globalists are increasing their aggressive grab of resources and power in the middle east. They are engaging in some of the most heinous acts in the name of “humanitarian missions” which are ostensibly supporting democratic efforts to overthrow dictators. The nobleness of their avowed goal is supposed to justify what ever means necessary to “free” the people.

These actions are being made in private between corporate and governmental leaders and agencies such as NATO often in direct violation of the wishes of their citizens. Much harm is being done to land, air, water and much death is being suffered by soldiers, concerned citizens and innocent bystanders. The war in Libya, as an example, was never sanctioned by congress in complete violation of our constitution, and according to opinion polls, opposed by a vast majority of Americans.

Most of our recent wars and military interventions are planned and decided in secret without our prior knowledge or inclusion. The literal definition seems to say very loud and clear that these are the actions of conspiracy.

Yet, the word game will continue, and the perceptual managers and social engineers will monopolize the discussion and do most of the talking. Those of us who ask questions or have a shred of compassion for others will be in the verbal cross hairs and suffer the injustice and slander of being labeled conspiracists, terrorists and enablers of evil.

Its a shame that a person following the ten recommendations of the previous post is no longer welcomed by the leaders of our society.

Jim Guido

Philosophy27 Aug 2011 08:39 pm

Before reading these recommendations you may want to read Awed and Reflections on Awed to better place yourself in this post’s attitude and perspective.

1) When making any decision remember how rare and fragile life is in our vast universe, and strive to act in ways which honor and respect the dignity of all forms of life.

2) Keep in mind that human existence is a journey and be patient and understanding of those who are at a different point in the journey or are where you were years ago. When impatient with yourself or others ask yourself, “What makes me think I’m smarter today than I will be tomorrow?”

3) Enjoy the process of life, and the fact that you are forever learning and improving. Realize that certainty often deprives us of the joy and appreciation of personal growth and development.

4) Embrace your history and the passage of time. A reflected life is fertile ground for intimacy and poignancy.

5) Our sense of self (ego), life and experience are processes and not things. A rich life is less noun than verb, yet what we are is more important that what we do.

6) Take to heart the words of the sage, “there is no road to enlightenment, you are already there”. Revel in the beauty of the moment, and enjoy the process. When possible avoid engaging in unrewarding tasks and sacrifices performed for some future goal.

7) Right action is more about being compassionate and having good intentions than it is about choosing the perfect path. We cannot always control the fruits of our actions, but we can usually monitor the honorability of our intentions.

8) Satisfaction and contentment are more often than not accomplished by how you do something rather than what you do, just as the quality of a picture is more about how it is framed and presented than in its subject matter.

9) Remember that personal freedom and free will are only possible in an imperfect and ever changing world. An existence based on absolutes, eternals, infinities and universal laws and truths is a fated existence, and incompatible with any genuine notion of free will, personal choice, or individual existence.

10) Strive to see the good in others, and let others see the good in you.

Jim Guido

Economics and Government and Politics and Social Issues and Stock Market16 Aug 2011 12:10 pm

Anyone who has ever taken out a loan knows the importance of interest rates. Whether the loan be for school, home, car or business  “a good rate” can make all the difference. Even though much has been made of the high debt load of the US our historic low interest rates hovering near zero have made it serviceable. If interest rates were to rise even a little bit, our debt load would quickly become unmanageable.

Almost immediately after the S&P downgraded the US from its AAA rating the markets began to plummet. In essence that was like the entire nation getting a lower credit score and a signal that higher interest rates for our national debt were on the way. All eyes were on the Fed to see how it was going to respond. The Fed surprised a lot of people and said little in direct response to either the market, quantitative easing or the integrity of US debt, instead the Fed pledged to keep interest rates at near zero till at least 2013.

Historic low rates and floods of easy money have been behind the stock markets meteoric rise over the last two years despite a moribund rebound in the consumer economy. The Fed’s assurance of low interest rates through the middle of 2013 along with the rising of the debt ceiling through the same time period should give an all clear to the stock market if the European financial systems can avoid a meltdown.

Though the pledge of low interest rates may reassure the wealthy that debt won’t kill the flow of easy money, it will force many safe investors on a fixed income into the risky casino of the stock market. The certainty of low interest rates means that those with conservative safe investment and retirement portfolios may not be able to live or survive on the interest alone, thereby resulting in their putting larger portions of their retirement and pension funds into stocks in search of income to maintain their life style or avert the possibility of their outliving their savings.

For a more in depth analysis of the ways in which the Fed and our economic policies are making life miserable for retirees read the following:

BERNANKE PLEDGES TO SCREW YOUR GRANDMOTHER FOR AT LEAST TWO MORE YEARS

 http://www.theburningplatform.com/?p=199…

The market pundits and media could put up a rather convincing argument that the recent “crash” has already “priced into the stock market” a European financial meltdown and the prospect that “we’ve already entered a double dip recession”. Any data or announcements which indicate that Europe and the US economy are not as bad as recently advertised could result in a market rally and the official proclamation that the “economic soft patch” is over and the recovery is back on track. In that case a quick and strong market surge could begin which along with the dashing of any hopes of higher interest rates for those on a fixed or limited income, could entice/force those who have been risk aversive back into the stock market.

Then, soon as any recession data returns or another round of financial issues surface the stock market will tank even quicker and stronger than the last few weeks, resulting in a return of the bear market begun in 2007/2008. In this very likely scenario those coaxed and forced back in the stock market will be devastated. This means that not only will granny lose her last pennies, but those who missed out on the last stock market rally and who have been coaxed back in by the Fed’s last move will once again see half or more of their savings/investments evaporate.

Making matters worse is the likelihood that the last two year rally will prevent them from selling as the market goes down, for they won’t want to miss the next rebound. The problem is the rebound may not come this time. The same thing happened during the last great depression. The stock market crash of 1929 was not when most people lost their money, but after the rebound in the early 30’s followed by the real prolonged crash of the market.

So, those on a fixed income will lose their remaining money either through not receiving interest they are depended on, or in the stock market where they are attempting to make modest gains to supplement their lack of interest. Those who aren’t retired but are below or near where they were before the stock plunge of the 2008 recession, will either continue to stay out of the market or get in and get mauled in the next leg down in this bear market.

The transfer of wealth from the many to the few is about to pick up momentum. The coming deflationary depression will accomplish much of the same as the depression of the 30’s. A few entities will win the great game of monopoly and but up every thing at much lower prices. The great majority of people will be wiped out and be struggling to get by for decades while the handful of winners make the current billionaires look like paupers.

The common man will have no recourse. Very little of the money which was taken out of their paychecks for social security and medicare will be returned. Workers rights through the decline of unions and collective bargaining will be hard to rekindle. The great war machine of the military-industrial complex will continue to centralize power and wealth, and make most forms of protest or political discussion illegal and punishable.

Those who own debt such as the Fed and other central banks will not likely ever be repaid, but when the smoke clears they will own most assets, real estate and businesses around the world. At some point they will probably give up the ghost of trying to get loans paid off and find some way to forgive all debt. This has been done numerous times throughout history and even has a name for the occasion (Jubilee). After all is said and done money is an abstraction, but ownership is true wealth, and those who own the debt own the assets behind the loan.

Could I be wrong. Of course, I could be wrong. Yet, from a historical point of view this script has played out a number of times, and we all know the folly of thinking “this time is different”. The only way it will be different is if we make it different. Yet, at this moment I do not see any sign that we have the courage or insight on how to alter the unfolding script.

The combination of technology and globalism make it possible that this depression could be the most intense and severe of any on record. Will we end up in a return to Feudalism, or in a world similar to Brave New World or 1984? Perhaps.

Each previous global empire has fallen, and each previous monopoly game has resulted in new societies being formed in which the game begins again. Yet, sometimes there can be lost decades or even centuries before a revival. The scariest thing of this monolith is how efficient is its ability to monitor, survey, and shape perception.

Yet, the obvious question most of you are asking is what can be done? Well, we have missed a myriad of opportunities over the last few decades. Since the coming deflationary depression is weeks or months away from taking hold of the global economies there is almost nothing to do in  terms of prevention. The snowball is already careening down the hill, and the best we can hope for is not to be in its direct path.

Okay let’s take a look at what you can do in the short and long run to help yourself not only survive but actually improve your situation in the coming economic tsunami.

If possible get out of debt or at least continue to pay down your debt
On a political level stand up for the rights and freedoms of the little guy
Let Godzilla and King Kong do battle, but don’t get to close, or choose sides
Get out of the market and go to cash

To expand on the above points I’ll just say the following. People who own your debt own your possessions, rights and control your future.
On the level of regaining our rights and freedoms read my post 2nd Bill of Rights, or Google FDR’s second Bill of Rights. This would be a good start in terms of making sure that all citizens are treated with respect and dignity and not punished if they are not gifted, ambitious or ruthless. There is safety and power in numbers so embrace the little guy even if he’s a tad flawed or obnoxious.
Since so much wealth and power is at stake as the titans clash, it is best to get out of the way when untold trillions of dollars get lost and ownership goes to the last man standing.
Probably the last of my four recommendations is the most important. During a deflationary depression a great portion of money disappears as unserviceable debt gets wrung out of the economy.
In deflation wages and prices plummet kind of like what is happening on a relatively small scale in the housing market. During this time the buying power of money increases dramatically, whereby a thousand dollars today will buy 6 to 10 thousand dollars of goods then. A person worth $200,000 who keeps his money safe and out of risky investments will be able to live the life style of a person with assets over a million today. In other words as the money pool shrinks the relative worth of those not losing money skyrockets.

Let me address two other popular options often given to people looking to be winners during a severe economic downturn. One recommendation is to take advantage of a falling market and to short stocks. The second is to own gold, which is and has historically been viewed as real money.

An investor “shorts” a stock or the market when they feel the stock price is going down and not up. Since stock markets often go down faster than they go up, a good timer of the market can make substantial amounts of money in a very short period of time. Yet, shorting the market is highly dependent on smaller time frames and money made can be wiped out completely if the market has a rebound within the context of its overall decline.

Yet, even a vigilant and talented market timer can be thwarted by new rules and bans which are often enforced during “volatile” and turbulent markets. History has shown that the majority of market timers who have shorted the market have lost much more than they gained, and that during prolonged market declines bans and rule changes regarding shorting have made it almost impossible for the little guy to beat the odds.

I’ll have to admit that gold does have an allure, and one does feel a bit good about supporting a form of wealth and value that is tangible, and not completely arbitrary like fiat paper money. Yet, when I think about it and look at the historical record an investment in gold doesn’t seem as good as advertised. First, gold is both a commodity as well as “real money” and all commodities go down in a deflationary depression. Now, one could make an argument that gold goes down less than other commodities and largely be defended by historical record. Yet, during a deflationary depression the value of money is actually increasing so why hold have gold which is decreasing in value?

In answering my own question I could state that gold, having tangible real value, is an insurance policy against an arbitrary thing like the dollar. I could also state that since gold has real value one could always use it commercially even if the dollar were to fail. These arguments are valid in some contexts but fall short of supporting me recommending buying gold right now for the following reasons.

First, though gold is tangible and real, in dire times I distrust its functionality. I cannot picture a time in which my dollars would be worthless, but I could go into a local grocer and he would give me basic food stuffs in exchange for a fraction of an ounce of gold. When we all are in need, we need to barter need for need. If I were to getting tangible things to prepare for such an environment it would be amassing things like can goods, water, etc. for which I could barter. In a  depressed world of need, what can someone do with a bit of gold?

Second, if we use history as our guide we would notice that the ownership of gold was prohibited during the Great Depression of the 30’s.  The government banned private ownership and demanded all gold be handed in to banks which would give you something like $35 an ounce even though its stated worth was much higher. Now some people hid their gold and did not turn it in, but of course, they still couldn’t use it.

In today’s world of global tracking and surveillance it would even be harder to hide one’s gold than it was in the 30’s. Yet, your hiding of the gold would be in violation of the law, and therefore punishable if found out.

Since gold and gold stocks will most likely go down in the coming deflationary depression, it would make sense to me to wait on the purchase of gold until the bulk of the deflationary depression is over and the stock market has bottomed.

Currently the US dollar’s role as the reserve currency of the planet is viewed as being in jeopardy. Foreign nations threatening to stop using dollars as the currency of commerce are met with quick and strong political, economic and often military reaction by our government. Our political and economic leaders are very determined to keep the dollar’s role as reserve currency intact.

Many of the countries threatening to decouple themselves from the US dollar are increasing their storehouse of gold, and making efforts to replace the dollar with gold bullion. The nations most determined to get free of the dollar are or are quickly becoming our enemies and their actions and ambitions are labeled as terrorism. Therefore, it would not surprise me in the least if the US were to once again ban the ownership of gold for all US citizens and if they treated anyone who disregarded this ban as a terrorist or at least an abettor of terrorism.

In my post Communists, Terrorists, Charity and Compassion  I discussed a recent case in which something called the liberty dollar was being used locally in a transparent and open way as a form of barter/commerce. As far as I had known it was a very small economy agreed upon by a small number of merchants and was never misrepresented as actual US currency. So, in essence what you had was some actual silver being used similarly as gold advocates propose gold being used if our economic situation were to continue to worsen. Well, as you can see by the quote below the government came in and treated this practice as a form of terrorism.

“Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism. While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country”
-Anne M. Tompkins, U.S. Attorney, March 18, 2011 [von NotHaus trial]
Wouldn’t the government respond to the use of personal un-minted gold in the same manner?

One last thought before ending. Even the most doom and gloom conspiracist always talks about how the everyone including the Fed, central banks, government and financial elite are opposed and afraid of a deflationary depression.

The fact is that the majority of mega-wealth and power that these entities wield was created during and because of the Great Depression. Many of these same entities are well positioned to have another quantum leap of wealth an power due to an increase in the percentage of ownership in assets around the globe.

I find it hard to believe that the Fed and the financial elite are afraid or opposed to increasing their marketshare in their businesses or the percentage of global wealth they hold. The trend has been more and more money in fewer and fewer hands, is their a better or more complete example of how that takes place than in the aftermath of a deflationary depression?

Do we truly believe that those who most stand to benefit by the financial demise of the lower 99.9% of the populace are really working and making decisions on our behalf?

Jim Guido

Economics and Social Issues and Stock Market28 Jul 2011 03:16 pm

I am fascinated by the number of people who continue to debate whether or not we are going into a “double dip” recession, and who forever talk about and question the overall “strength of the recovery”. This debate runs opposite but parallel of the debate we had some years back when people asked if there was a housing bubble with some claiming that the housing market would never go down.

In terms of the housing and stock market bubbles we went from denying its possibility to almost instantaneously being deeply mired in a historically severe recession for months. I remember reading articles proclaiming the health of the economy and real estate market in newspapers and magazines and within a few weeks having the same periodicals bewailing our being mired in a bear market for months. Even this year I continue to find articles which continue to push back the origination of the housing and economic downturn further and further back.

All of this is done with no mention that their publications had previously characterized much of that same time period as part of a raging bull market, adamantly denying and showing statistics demonstrating the health of both housing and the economy. Time periods with graphs documenting the continued rise in house sales and prices have been replaced with current graphs stretching well back into the same years showing dramatic declines in house price and sales.

Now, the entire discussion regarding the possibility of a double dip recession is just as bizarre as the roaring bull market articles during the housing and stock market busts. The earlier recession that almost was never admitted has mushroomed into a lengthy one of some 18 months and is now unanimously viewed as ending in June of 2009 by all mainstream economists.

The stock market bottomed a few months before the official end of the recession in March of 2009. Historically it is normal for the stock market to begin its rebound in slight anticipation of the general economy. So, if the recession ended in mid 2009 how can we be in danger of a double dip recession in mid 2011.

Almost everyone who has any even the most casual knowledge of the economy has heard of the business cycle. The standard business includes periods of growth and decline, of expansion and contraction. The time in which the economy contracts is referred to as a recession. In typical length of a recession is typically 3/8 or about one third as long as the period of economic growth.

Over the last few hundred years there have been a few rather lengthy business cycles which have raised the overall average up a tad. What this means is that is not unusual for a business cycle to complete in less than four years. Since the average business cycle lasts between 4 and 5 years, the average recession, therefore, lasts between 12 and 15 months.

With the above information in mind lets take a look at the concerns about a double dip recession and a fear of the strength and sustainability of the recovery.

We are now entering the 26 month since the end of the last recession. Even if we were to begin to be in a recession right now and it lasted the standard length (1/3) of the period of economic expansion our current business cycle would have ended after a 3 year life span. Though this is a bit short for a business cycle it would not be unheard of. Short business cycles have a tendency to be a little bit bubbly with quick frenetic growth followed by a sharp contraction.

The purpose of the above paragraph was to point out that it is impossible to have a double dip recession after two years. By definition a double dip recession would have to occur a business quarter or two (3-6 months) after the previous recession, not over two years later.

Now lets address the second piece of crap being hurled at us by the economic media and that is the concern regarding the “strength and sustainability” of the recover. Okay, since the recession concluded over two years ago I would consider it foolish to question its sustainability. The recovery has already lasted much longer than the recession and is nearing the typical expansion time frame for the average business cycle, not much question that it has survived and lived an acceptable life span.

Two paragraphs back I mentioned that most short or truncated business cycles have sharp bubbly inclines and rather intense downturns. So, lets now look at the “strength” of this recovery. From a financial and stock market perspective this current business cycle has been one of the strongest cycles on record.

The economic glory years of the 90’s were led by the great technology boom which revolutionized and continues to revolutionize modern life. When we think of change and the future we still think of the global possibilities offered by the internet and related communication technologies. When one thinks of technology one has to look at the Nasdaq and in particular the Nasdaq 100.

The Nasdaq 100 bottomed at 1019 in March 2009. Since then the Nasdaq and Dow have had meteoric rises which are truly amazing. In as little as 21 months the Nasdaq 100 stood at 2400. Which means in less than two years the 100 stood was 235% higher than it as at its low. Though the Dow and S&P did not double during this time frame they incurred gains that haven’t been seen in over 60 years.

At the end of 2010 corporate America were able to declare record profits. And while the pace has slacked off, the profits of corporations continue to rise. Therefore, according to the stock market and corporate America one can not doubt the “strength” of this recovery. Hell, this hasn’t been a recovery, it has been an epic boon for corporations and the stock market demonstrating almost unparalleled strength.

I know many of you reading this are almost screaming at the screen, “wait a minute, I haven’t seen any improvement or growth. It still feels like we are in a recession.” Some of you are even going further noting, “how can we have high unemployment and a decrease in the standard of living and not be in a recession, or at least be in a slow and stagnant recovery?”

Well if you take some time to read my other posts on the economy you will fully understand how we can be in a financial and corporate boon while the standard of living of most of us is in escalating decline. Here is the short answer.

Giving you a job adds to a corporations expenses and such overhead eats away at their profits. In addition, due to inflation the cost of materials and energy needed to produce goods is rising and therefore increased production would also add to their overhead.

So, those of you still reading this may wonder how a company can manage record profits in spite of the fact that expenses of production and materials have risen significantly over the last couple of years.

Here again is the short answer. Corporate America is not dependent on you as a consumer of their goods, in fact most of their profits do not depend on revenue through sales and business expansion. Their profits are mainly generated through financial instruments that not only are not dependent on a strong economy but are maximized when the economy is struggling.

First, most industries don’t even need cheap labor, they can pretty much have the majority of their products made by automation and their business run by computers. The only need they have for workers is for you to have enough money to buy their product. Yet, now that they do business throughout the world, they now have over 7 billion potential customers, and they can thrive even as their customers are poorer. Like Walmart, they make money on volume of sales rather than high prices.

Second, and more importantly is that as long as the economy stays weak the interest rates will stay low. With low interest rates they can borrow money at almost no additional cost and buy stocks, foreign bonds, CD’s, etc. for a substantial profit. It’s a version of flipping that was happening in the real estate market. Here you can purchase (borrow) a million dollars at .1% interest and flip it by investing that same money in something in which they will give you 3, 5 or even 8% for the exact same time frame.
This scam can continue as long as interest rates stay lower here than in other nations. In this new economy the majority of us aren’t needed as consumers nor workers. We are just observers and non-participants of the greatest transference of wealth ever recorded.

Will it ever end? Probably, just like the housing bubble ended though their were plenty of flippers.

How will it end? Another financial crisis will likely be the culprit.

The current debt ceiling debate is more drama than reality. Fleecing the average American of his remaining resources and services is the common goal of all the plans on the table.

Yet, at this point there is no true motive to truly reduce debt, because cheap debt has become the best and most efficient way of making money in our country. More debt at low interest rates is the goal, not the problem. The problem is debt with high interest rates because then you actually have to pay off your debts without being able to make more money with that debt in other debt markets.

The only thing preventing interest rates from climbing are the underlying deflationary tendencies of our struggling economy. If this economy were to actually begin to expand the debt bonanza ends and the big boys will start to really feel the pain. In the meantime their continued record profits are dependent on our being patient with our decelerating standard of living. It depends on are still choosing sides between Democratic and Republicans and viewing each other as stupid or mean spirited.

Even when this business cycle goes crashing down like the previous one, another economic phoenix will rise out the ashes with even less people participating in its wealth and glory. The only way we will be able to participate is if we demand it and stop believing in false prophets spouting forth change, hope or reform. The other way to participate is to become one of the soulless shysters who has no problem owning everything while the masses suffer.

Jim Guido

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