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This
is an important year to vote. Of course there are many who have strong
feelings about voting. Many say it is your right and “duty” to
vote in elections. Doug Casey has said many times, “Don’t vote, it just encourages the bastards.” I have even
heard that by voting you legitimize the politicians and that by reversal,
withholding your vote delegitimizes the politicians.
Of
course anyone who steps back and looks at the big picture will see that it
really doesn’t matter much exactly who is at the helm of the Titanic
when it sinks. The national debt is much larger than most people can fathom.
When all the promises of the next 75 years are calculated back to their
present worth and added to the pile of debt that has already been borrowed
the total comes to over $200 Trillion dollars. We are worried about borrowing
well over $1 Trillion dollars this year to balance the budget but the real
problem lies out into the future. We have promised way more than we can ever
hope to deliver. Even if we cut this estimate in half to $100 Trillion
dollars it is more than we could ever hope to pay.
Some
say that we can inflate our way out of this mess. Others say we can grow our
way out and still others say the problem lies in our very distant future.
Inflation has a nasty way of getting out of hand once people get a good whiff
of it. Our fiat currency is based on faith and once faith is doubted and then
lost; a stampede out of the currency can begin that is hard to stop. Growth
in the developed world seems to have stalled. I will not go into the causes
of this but the numbers do not inspire much faith that the “grow our
way out” solution will offer much hope. The medicare
and social security (especially the rampant disability payments) promises
will rear their ugly heads much sooner than most people think. I believe we
will face some hard choices in as little as the next 4 years so the
“distant future” aspect of the problem is closer than most people
think.
Of
course conventional wisdom says, “when you find yourself in a hole,
quit digging”. Not only have we failed to address our debt problems and
outrageous promises that we can never honor, we have failed to “quit
digging”. As a matter of fact we are digging our debt hole faster and
deeper than ever before in history. We have absolutely no hope of addressing
the future debt problem unless we quit adding to it today. Neither of the two
presidential hopefuls is offering any hope at all of meaningful reduction in
government. It seems that one is for bigger government and that the other is
for much bigger government. No solutions here other than for disaster and
even faster disaster.
Congressman
Ron Paul has passed his Audit the Fed bill in the House but it appears that
it will never come up for a vote in the Senate. Of course a real audit of the
Fed would have to not only count the gold but also to determine exactly who
holds custody of said gold. The Federal Reserve has been rumored to have
entered into “swaps” that have exchanged custody of gold in their
vaults with gold in the vaults of other central banks. That gold is then
rumored to have been sold into the market for nefarious reasons by the Fed.
Perhaps
the real problem is the Federal Reserve that makes outrageous federal
spending possible. The ZIRP (zero interest rate policy) of the Fed has made
it possible to pile on even more debt than anyone would have imagined only a
few years ago. It is too late for a Paul Volker Fed head to raise interest
rates and attempt to get things back under control as the Federal Government
could never afford to pay higher rates at the current debt levels.
Maybe
we are focusing on the wrong vote. Maybe Congressman Paul’s
“audit the Fed” bill is not really as important as you may think.
Perhaps we should not “Audit the Fed” so much as we should really
“Ignore the Fed” or even better yet, perhaps we should
“Laugh at the Fed”. After all the one
thing the Federal Reserve relies on more than anything else is to be seen as
a strong central bank with brilliant men at the controls pulling the correct
levers and adjusting the dials. What if the inmates are running the asylum at
the Fed? What if they have painted themselves in the corner? What if their
economic models are flawed? What if there is no way out but for them to speak
brave phrases and to slowly devalue their Federal Reserve Notes (just as they
have done for almost the last 100 years). What if there is no way out and
they know it and their only option is to try to slow down the inevitable
crash of the dollar and slowly bleed the accumulated wealth of this country a
little bit at a time until there is hardly anything left? Common sense says
that this will end badly. The only question is when.
The
Fed will probably juice the market with QE or easing of some sort before the
election. The stock market is practically begging for more liquidity. Bad
news is seen as good news since Wall Street sees bad economic news as proof
that the Fed must ease (which will be good news for the stock market-at least
in the short term). Well over half the stock market volume is now computer
trading by sophisticated electronic traders who move in and out of markets in
seconds. The stock market has gone sideways for the last 12 years with most
investors stuck in neutral. The only people making serious money in this
stock market are the professional traders. The stock market is becoming a
rigged game and the “muppets” are
abandoning ship, as they are tired of being taken advantage of by Wall
Street. Soon stockbrokers will be talked about in the same vein as used car
salesman.
Many
retirement accounts and IRAs will allow for investment in items other than
stocks and bonds. Just don’t count on your stockbroker to tell you
about them. Talk to a good accountant that specializes in retirement accounts
and get the real facts.
Vote
“no confidence” this year. Ignore the Federal Reserve. Better
yet, laugh at them and their Federal Reserve Notes. Opt out of their system
and don’t keep any more of their notes than you need for a few months
expenses. Trade them now while you can for things of real value. Buy
farmland, buy collectables, buy depressed real estate or buy a year’s
worth of non-perishable consumables (they will cost 8% more next year).
Become a venture capitalist and invest in small start-ups that you can
influence and guide. Invest in your neighbor’s small business and
finance a new piece of equipment for him. There are many options other than
Wall Street. Don’t trust your savings to Federal Reserve Notes, trust
3,000 years of history and buy precious metals. Vote where it counts. Take
action today and vote to preserve your wealth. Remember that it is better to
be a year too early than a minute too late.
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