Michael Krieger

The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum – even encourage the more critical and dissident views. That gives people the sense that there’s free thinking going on, while all the time the presuppositions of the system are being reinforced by the limits put on the range of the debate.
– Noam Chomsky
Nobel awards are merely a honorary award in groupthink, presented to anyone who perpetuates the status quo with little regard for actual merit-based contribution.

– Tyler Durden of Zerohedge

A Brief History

I am particularly untalented at a lot of things.  It can be frustrating sometimes, the way my mind works.  Some parts of it just seem to be overly stimulated and powerful, while others appear depressingly average.  I have always been of the belief that everyone has some personality trait that is particularly strong relative to the others and if they are able to identify that strength and focus on it they can ultimately reach their highest potential.  Early on in life it was pointed out to me by family and friends that I had an uncanny ability to process current information and extrapolate that into future likely trends.  To me the observations I made seemed so obvious I didn’t even contemplate that it could be a unique talent.  I didn’t realize it was until I came to Wall Street.

From 2000-2005 I toiled anonymously at Lehman Brothers as one of the junior people on the oil analyst’s research team.  Sometime around 2003, I started looking into the growth trends of China, India and other nations combined with recent oil supply growth trends and a light bulb went off.  Oil was about to explode higher.  It was around this time I also realized that research was too slow and painfully tedious for my personality.  Some of the most senior people in research thought I should look into being a trading desk analyst for energy.  Thus began a process where I would go down to the trading desk every few days and attempt to kiss ass.  I am the worst ass kisser on planet earth.  In fact, I am really actually incapable of it.  I also went through some one on one interviews with the guys on the desk.  We would talk oil and I was often asked where I thought it was going.  I would reply with “much higher” and that I thought it would need to get to at least $70/b in the next few years to ration demand.  I was literally laughed at or looked at as if I was insane.  Oil was trading at $30/b or so at the time.  I didn’t get the position.

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If you don’t become an actor, you’ll never be a factor
Pills with million side effects, take em when the pain’s felt
Wash them down with diet soda, killing off your brain cells
Crooked banks around the world, would gladly give a loan today
So if you ever miss a payment, they can take your home away
It’s so loud inside my head with words that I should have said
As I drown in my regrets I can’t take back the words I never said

I think that all the silence is worse than all the violence
Fear is such a weak emotion that’s why I despise it
We scared of almost everything, afraid to even tell the truth
So scared of what you think of me, I’m scared of even telling you
Sometimes I’m like the only person I feel safe to tell it to
I’m locked inside a cell in me, I know there’s a jail in you
Consider this your bailing out, so take a breath inhale a few
My screams are finally getting free, my thoughts are finally yelling through

– Lupe Fiasco, “Words I Never Said” (see music video here http://www.youtube.com/watch?v=22l1sf5JZD0)

All this was inspired by the principle–which is quite true within itself–that in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously.  Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying.

– Adolf Hitler in Mein Kampf

It’s Transitory
As I have mentioned several times before, CNBC is on in my apartment for about thirty minutes in the morning as I get prepared for the day ahead.  Even these thirty minutes have become essentially too intellectually painful to watch.  The channel is a total joke.  Nevertheless, it has become a good place to look for the latest “memes” being rolled out by the Wall Street Bankster/Washington D.C. Criminal “elite” class.  In case you haven’t noticed, the latest one is the “It’s Transitory” meme.  This was first launched in earnest by the Bernank whenever he refers to inflation.  Basically in his world of smoke and mirror parlor tricks any of the undesirable effects of QE such as the destruction of fiat money and the resultant surge in commodity prices are “transitory” yet any of the positive effects, like the three McDonalds jobs that have been created are signs of the economy gaining momentum.  The whole thing is actually quite brilliant.  We must give credit to the slimy sorcerers where it is due.   This so called “elite” class of people have achieved their positions by attaining an absolute mastery of the practice of lying.  They are expert illusionists.

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There is a tide in the affairs of men, which taken at the flood, leads on to fortune.  Omitted, all the voyage of their life is bound in shallows and in miseries.  On such a full sea are we now afloat.  And we must take the current when it serves, or lose our ventures.

– Brutus in William Shakespeare’s Julius Caesar

I was born for the storm and a calm does not suit me.

– Andrew Jackson

Risk Redefined
I remember the first time I saw someone us the terms “risk on” and “risk off” as a way to describe the flow of capital into and out of certain baskets of assets that are supposedly “risky” or “safe.”  The terms got under my skin back then and they continue to do so until this day.  Wall Street and the media just love coming up with trite and untruthful statements as a way to condition investor behavior and ultimately separate you from your money.  First of all, the world and the successful deployment of capital is much more complicated over any serious investment horizon than the simplification of everything into “risk on” and “risk off.”  This way of thinking is even more dangerous when conventional wisdom allocates to the “risky” category many items that are in reality the true safe havens and to the “safe” category those that are guaranteed to destroy your financial well being.

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Desolate and without purpose
Radiating from so many septic sources
Forming the fabric of a wayward people
Disappearing as the vestiges of our past

Scratched like tartan into virgin soil
A substrate for progress and disarray
A spreading network of broken dreams
Searching for a thoroughfare to take us away

Just a little tale from the streets of America
Sparkled promises paved with pathos and hysteria
Trenchant, weary native sons
Step back, step back
And see the damage done

Shoot straight to the horizon
The streets of America

– Bad Religion, “Streets of America”

A nation that is afraid to let its people judge truth and falsehood in an open market is a nation that is afraid of its people.
– John F. Kennedy

Printing and Propaganda
As I have been saying for the past several years, the misguided Keynesian witch doctor central planners unfortunately in charge of our economic fate are attempting a grand experiment on us based on completely insane and nonsensical theories that have no chance at success.  These clowns claim to have all sorts of “tools” but in reality they have nothing.  When faced with a complete credit collapse of proportions never seen before in recorded history there were and are only two “tools.”  It’s the two P’s:  Printing and Propaganda.

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The fatal attraction of government is that it allows busybodies to impose decisions on others without paying any price themselves. That enables them to act as if there were no price, even when there are ruinous prices — paid by  others.
– Thomas Sowell

The struggle for freedom … is not the struggle of the many against the few, but of minorities — sometimes of a minority of but one man — against the majority.
– Ludwig von Mises

The greatest Glory of a free-born People, is to transmit that Freedom to their Children.
– William Havard

The War on Freedom
What would we do without Barrack Obama as President?  I mean it is amazing.  The guy proved he was an American citizen and got public enemy number one all in the same week!  And what ladies and gentlemen do we get as a reward for this PR stunt?  Well, we immediately got more terror threats and fear mongering as we were conveniently told we were back on a war footing (the never ending “war on terror” just like Orwell wrote about in 1984).  We saw an infant being frisked by the TSA as a potential terrorist.  We also now find out that ALL cell phones will be equipped with a chip that will then be able to blast out warnings or instructions from our criminal, incompetent and corrupt Federal government.  Wait, here’s the best part NO ONE can opt out.  If you have a cell phone you will be required to get these messages.  I can’t wait to have Obama propaganda blasting me 24/7.  Again, this is straight out of the 1984 police state playbook.  Even if you think this service is a good idea you should still be very disturbed that you do not have a CHOICE in the matter.  Think about what Obama has done since he got into office.  This guy is all about taking away you choices, your freedoms.  First, he rams through a very unpopular healthcare bill that is designed to force you to act in a certain manner.  Now you are being forced to receive government messages on your cell phone.  This whole charade shouldn’t be called “The War on Terror.”  It is actually all about keeping the citizenry terrified.  The government loves keeping you in a state of fear so that then they can do anything they want to the little sheep.  It should be called “The War on Freedom.”  Your freedom.

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Gold today is no longer related to the normal economic cycle of supply and demand, jewelry, Indian wedding seasons, rain in the Middle East.  All those things are passé, forget about them.  Gold is driven today by one overriding and I am afraid, at least in my opinion, an irresistible and irreversible trend.  A fundamental, global and growing insecurity… A fundamental, global and growing lack of confidence of the world in everything they were brought up to believe.  Institutions, insurance companies, banks, issuers of mortgages, ratings agencies, equities, sovereign debt, Federal Reserve Banks.  Portugal and Iceland.  Greece and Spain.  Currencies.  What is left?  What is left?
– Peter Munk, Chairman of Barrick Gold

Bureaucracy defends the status quo long past the time when the quo has lost its status.
– Laurence J. Peter

The Big Lie
I feel completely blessed to be alive right now.  To be a witness and participant in a moment in human history that will be written about and passed down in tales for as long as humanity remains on this planet.  We are currently observing the evaporation of what Nazis referred to as “The Big Lie.”  In very basic terms the concept of The Big Lie is that if you are going to lie you may as well lie big.  So big in fact that the majority of well meaning citizenry could never imagine anyone lying on such a grand scale (particularly not their government “officials”) so that they don’t even question the basis of their own reality.  In the case of the United States the Big Lie is that we have a free market capitalist economy.  Instead we have a corporatist/fascist economy that enriches three main groups.  Wall street financiers, the military industrial complex and large multi-national corporations that don’t pay taxes.  So that begs the question, how can the American people be so brainwashed into thinking they live in this false reality?  It’s very easy.  It’s all about the money.

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The President does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation.
– Barack Obama in an interview with the Boston Globe on December 20, 2007

If the administration believes that any — any — use of force against Iran is necessary, the President must come to Congress to seek that authority.– Hilary Clinton in 2007

“Well, we would welcome congressional support,” the Secretary said, “but I don’t think that this kind of internationally authorized intervention where we are one of a number of countries participating to enforce a humanitarian mission is the kind of unilateral action that either I or President Obama was speaking of several years ago.”
– Hilary Clinton in 2011 when asked why not go to Congress for approval of the “Kinetic Military Action” (Newspeak for War) launched against Libya

From my simple reading, the Constitution is fairly clear on the subject: Congress is given the power to declare war. At that moment, the president as commander in chief is free to prosecute the war as he thinks best. But constitutional law and the language of the Constitution seem to have diverged. It is a complex field of study, obviously.”

And now in Libya, we have reached the point that even resolutions are no longer needed.

It is said that there is no precedent for fighting al Qaeda, for example, because it is not a nation but a subnational group. Therefore, Bush could not reasonably have been expected to ask for a declaration of war. But there is precedent: Thomas Jefferson asked for and received a declaration of war against the Barbary pirates. This authorized Jefferson to wage war against a subnational group of pirates as if they were a nation.

I began by talking about the American empire. I won’t make the argument on that here, but simply assert it. What is most important is that the republic not be overwhelmed in the course of pursuing imperial goals. The declaration of war is precisely the point at which imperial interests can overwhelm republican prerogatives.
– Quotes from George Friedman’s (of Stratfor) excellent piece from earlier this week “What Happened to the American Declaration of War?”  It can be found here http://www.stratfor.com/weekly/20110328-what-happened-american-declaration-war  This is MUST read for every American.

On the Road…Again
The last real vacation that I took was back in June when I spent six weeks driving around the United States of America.  The trip changed my life in a variety of ways, the most significant being the decision to move out of NYC to Colorado, which has so far been a fantastic choice.  Next week, I will be heading out to the West Coast for a little three week adventure, where I will be exploring parts of Northern California, Oregon and Washington state.  The latter two states I have never been to but I have heard fantastic things regarding the natural beauty and unique culture of the region.  After this journey is over I will have been to 44 of the 50 states.  For those that care, the ones still unvisited will be North Dakota, Minnesota, Oklahoma, Alabama, Kentucky and Alaska.  To be fair, I am not sure whether or not I have been to Rhode Island.  I think I went through there as a kid but seeing as I don’t remember the experience I am not convinced that should count.  In any event, the point is that most of you won’t be hearing from me for about a month.  While I would like to say things in the market will be calm during this period I highly doubt it.  Below I am going to try to outline some of the key things I would focus on while I am back on the road.

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The following correspondence was the reply to our objections in the establishment of the G5 in 1985 to “manage” the global economy through intervention on a coordinated basis.  Given the fact that the floating exchange rate system affords governments the freedom to now spend as they like pursuing their domestic policy objectives separate and apart from the international fiscal responsibility behind the value of the currency in global capital flows, it is simply unlikely that the current system will be sustainable long-term.  Volatility will rise and will spread among the markets driven by swings in currency values.  Eventually, in the course of events that will now follow, the global economy will become increasingly more unstable and reflect much higher degrees of volatility as historically has always taken place under floating exchange rate systems.  In the end game, the global economy will be attracted to the next major sovereign debt crisis that should appear going into 26 years from the 1985 birth of the G5 (2011) and perhaps culminate in a new global monetary system by 2016.
– Written by Martin A. Armstrong’s Princeton Economics International in 1986 (welcome to freedom Marty!)

Gold Breakout In Progress
Ok, let’s get right into it.  Gold first nudged above $1,400/oz in November of 2010 and has really for all intents and purposes been consolidating in a tight range between $1,350-$1,400 ever since.  Today’s breakout to new highs represents the fifth attempt to really get going beyond the high end of the range and this move appears to be the real deal.  Everyone likes to talk about the “dollar” and what it is doing but these folks are almost always referring to the DXY Index, which is about as useful an indicator as a Keynesian economist.  The reason of course is that the DXY is weighted 57% to the dollar/euro cross and in case your head has been in the sand for the last three years the European Union is a joke.  The citizens in the various countries whether on the periphery or Germany itself will increasingly want nothing to do with it and this sentiment will only increase as Brussels acts more and more like a despotic Medieval King when dealing with the broke nations.  But clearly the desires of the citizenry no longer matter as we have a self appointed global elite that think they know best and are busy cutting undemocratic deals and treaties behind closed doors (here is control freak Soros’ latest scheme http://www.mrc.org/bmi/commentary/2011/Unreported_Soros_Event_Aims_to_Remake_Entire_Global_Economy.html).  The more they do this the more the people will ultimately push back.  As I wrote last year, the irony of it all is the harder the incompetent “elite” push for their global government system the more likely we are to descend into even more fractured states and communities.  People don’t like to be told how to live generally, but will put up with it if the economic and social conditions are benign.  The moment that dynamic changes the people push back hard and revolt.  This is what is happening now and it will only escalate exponentially from here.

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We shall have world government, whether or not we like it.  The question is only whether world government will be achieved by consent or by conquest.
– James Paul Warburg appearing before the Senate on 7th February 1950

For more than a century ideological extremists at either end of the political spectrum have seized upon well-publicized incidents … to attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure—one world, if you will. If that’s the charge, I stand guilty, and I am proud of it.
– David Rockefeller in his autobiography, Memoirs

Before I get into it I want to pose a question for all of you to ponder this weekend:

What is more dangerous, building nuclear power plants on major fault lines or allowing Central Bankers to play God?

 

Bernanke’s Ring of Fire
The horrific human and societal tragedy that has befallen the people of Japan over the past week has brought up many questions with few answers.  One of the most frequent questions I have heard is why would anyone every build nuclear power plants on a major fault line that everyone knew would one day experience a nightmarish earthquake like the one that occurred last Friday?  I am not going to try to answer that question although I think there are many reasons ranging from the fact that Japan is a nation short on natural resources like oil and coal to the fact that there is a strange aspect of human nature that causes us to repeatedly think we can overcome the forces of nature with our superior intelligence manifested in technological advancements.

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