Fascism: Life of the Parties

Political actors and too-big-to-fail business, the unholy alliance.  We are living what the framers of the Republic warned about and Eisenhower so eloquently reminded.   It's all too easy to experience government unaccountability at the local level first-hand.   Laws can be manipulated, a gullible public misled, but the most insidious statism occurs in the administrative domain.  I am not surprised that privacy-invading, constitution-breaking depredations at the Federal level are commensurate with its resources including the power of its private sector financial, communication, sick-care and defense enablers.

Sadly, we are witnessing a macabre war-on-freedom - as the 'developed' world entrenches itself in another incarnation of Fascism, the corrupt collusion of large powerful government and private organizations. This,  only a few decades after the enormous sacrifices of previous generations to ostensibly root Fascism out.  The losers, again, are ordinary folk who misplace their trust in government that is not their friend.

Humans give the lie to Lamarck over and over. Our political ‘learnings’ do not assimilate in DNA.  So we must speak out, rise up again. Smokey Bear, where are you when we need you most?  "Only YOOOUUUUU can prevent fascism."

Farmer Green's Horse and the New Real Estate Bubble

The New York Times had this to say today on the reason for the recent run-up in real estate prices --  http://dealbook.nytimes.com/2013/06/03/behind-the-rise-in-house-prices-wall-street-buyers/

Well, well.  This high-finance chicanery reminds me of a classic story --

Farmer Brown was walking by Farmer Green's farm one day and noticed a very fine looking mare in the side pen. He stopped to admire the horse and then decided he would ask Farmer Green what he wanted for the horse. Farmer Green said he would part with the horse for $50. Farmer Brown thought it was a steal so he paid the $50 and took the horse home. A week later, Farmer Green is walking past Farmer Brown's place and sees the mare in his side yard. Farmer Green thinks to himself that he was crazy to part with such a fine horse so he approaches Farmer Brown to buy the horse back. Farmer Brown says he'll sell the horse to Farmer Green for $100. Farmer Green hands over the $100 and takes the mare home with him. Another week passes and Farmer Brown is once again walking past Farmer Green's place and sees the mare, regrets selling her, and pays Farmer Green $150 to buy back the mare. A month passes and Farmer Green is passing Farmer Brown's farm and can find no sign of the mare so he goes up to the door of the farmhouse. Farmer Brown comes to the door and Farmer Green asks, "Where is the mare?" Farmer Brown responds that he sold the mare to someone from the city who was passing and wanted to buy her. Farmer Green admonished him saying, "How could you sell her. We were making a pretty good living off that horse!" 

Rebecca Liming, Indianapolis, IN, as published by Prairie Home Companion: http://prairiehome.publicradio.org/features/hodgepodge/19990410_jokeshow/jokes/0407_14.htm

Back to our regular programming --

If you are a too-big-to-fail zombie banking institution with access to almost limitless zero-interest cash from Big Brother Bank of Federal Reserve, and you happen to hold a huge mess of stinking below-market real-estate assets, what could be better than closing down the public market and trading these assets up with your bankster colleagues across the street?  Suddenly your balance sheet looks a WHOLE LOT BETTER!  An occasional public sale at the marked-up price is all the validation you need.  BRILLIANT.

Today's 1% Solution:
"nequaquam sumere possis prius publicum commodum" - Never give the public an opportunity if you can preempt it.

What Could the Federal Reserve Learn from the BLM?

Fire Season is here, and merits reflection.  Today's images are of the 1988 Yellowstone Fire, a spectacular consequence of Bureau of Land Management fire management policy.  

For many years, the BLM had a policy of suppressing wildfires.  In the Western USA, wildfire is an essential part of Nature's cycle.  Suppressing smaller fires may have made sense for National Park attendance and other economic interests, but the policy upset Nature's balance by building up a huge unsustainable supply of brush and under-story fuel.   When it finally ignited, the results were super-sized.

For many years, the Federal Reserve has demonstrated a policy of suppressing (the appearance of) economic corrections by continuously expanding debt; facilitating the Federal Government's expansion and expenditure far in excess of its income.  In a functioning market-based economy, cyclical expansion and contraction is normal.  Contractions clear out excess/bad inventory and debt, setting the stage for a new expansion.  The Fed has been busy attempting to suppress corrections, upsetting this natural cycle.  A couple of times (2000, 2008) the correction genie got part way out of the bottle.  Each episode was an excuse to use monetary policy to further accelerate inflation/reflation of debt to suppress future market corrections.

AFTER the 1988 Yellowstone fire, BLM modified its forestry policies to allow for more frequent and more widespread wildfires to keep the fuel supply from growing to epic proportion.   All of us lost a huge part of Yellowstone before common sense guided bureaucratic policy.

The Fed, together with its global central banking associates, has built up the greatest and ugliest debt pile in known history.  Some day, that pile will ignite.  And when it does, the financial markets and the economy are going to burn like Yellowstone in 1988.  I have given up on hoping that central bankers would learn from BLM's experience.  They are determined to repeat it.  Those responsible for the great coming Financial Fire of the 21st Century may be chastised but otherwise will continue to prosper.  The rest of us will get to share the ashes for a long, long time.