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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If we are to have another contest in the near future of our national existence, I predict that the dividing line will not be Mason and Dixon’s but between patriotism and intelligence on the one side, and superstition, ambition and ignorance on the other.
– Ulysses S. Grant

Mubarak has been an ally of ours in a number of things. And he’s been very responsible on, relative to geopolitical interest in the region, the Middle East peace efforts; the actions Egypt has taken relative to normalizing relationship with – with Israel. … I would not refer to him as a dictator.
– United States Vice President Joe Biden

Stuck in a Time Capsule
I remember as a kid on several occasion putting together a time capsule as part of a school project.  I am sure many of you reading this have done a similar thing at some point.  The concept is simple and elegant.  The group involved in creating the time capsule picks various things from their current society or culture that they feel is representative of the environment at the time and then they bury these items so that future generations can get a glimpse of what life was like for people in a prior time.  The reason humans have a desire to perform acts such as this is because our collective consciousness understands how much things change over time.  Empires rise and fall, major belief systems dominate and then become discredited, broad concepts of what is considered acceptable human behavior with respect to our fellow human beings also change and vary within different cultures over time.  Everyone knows the saying “nothing is certain except death and taxes.”  Actually this is garbage.  Taxes may be certain in the current society we live in but there is nothing eternal about taxes.  It is entirely a human creation.  I would replace taxes with the word change (not Obama change, real change).  From my perspective the one thing in addition to death that is certain in humanity’s existence is change.  Volatile, massive change.  What confuses people is that this change happens very suddenly and seemingly out of nowhere to those only paying attention to the establishment parrots that assure you all is stable and ok because they are the elites and they want things to stay the same.  They want that giant boot stamped firmly on your face forever.

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