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“We have 78 million baby boomers who, when fully retired, will collect benefits from Social Security, Medicare, and Medicaid that, on average, exceed per-capita GDP. The annual costs of these entitlements will total about $4 trillion in today’s dollars. Yes, our economy will be bigger in 20 years, but not big enough to handle this size load year after year.

This is what happens when you run a massive Ponzi scheme for six decades straight, taking ever larger resources from the young and giving them to the old while promising the young their eventual turn at passing the generational buck.

Herb Stein, chairman of the Council of Economic Advisers under U.S. President Richard Nixon, coined an oft-repeated phrase: “Something that can’t go on, will stop.” True enough. Uncle Sam’s Ponzi scheme will stop. But it will stop too late.

And it will stop in a very nasty manner. The first possibility is massive benefit cuts visited on the baby boomers in retirement. The second is astronomical tax increases that leave the young with little incentive to work and save. And the third is the government simply printing vast quantities of money to cover its bills.

Worse Than Greece

Most likely we will see a combination of all three responses with dramatic increases in poverty, tax, interest rates, and consumer prices. This is an awful, downhill road to follow, but it’s the one we are on. And bond traders will kick us miles down our road once they wake up and realize the U.S. is in worse fiscal shape than Greece.

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Jacqueline Michel, a geological chemist who is coordinating the federal assessment of damages to the shores of Texas, Louisiana, Mississippi, Alabama and Florida, says the impact of the oil spill has been “much, much less” than anticipated in the first days after the well blew out. Her survey teams have found only about 350 acres of oily marshland — sad and disheartening, but only a fraction of the 15,000 acres of Louisiana wetlands that slip into the sea each year. Wildlife-recovery workers have so far found only three dead oil-soaked mammals along the coast that they can attribute to the spill. The harsh restrictions on fishing the Gulf for shrimp, imposed with hysterical fanfare when we were told the universe as we know it would soon vanish, are being lifted.

Ivor van Heerden, a one-time wildlife professor at Louisiana State University who’s working now on the cleanup, says bluntly: “There’s just no data to suggest that this is an environmental disaster. I have no interest in making [British Petroleum] look good — I think they lied about the size of the spill — but we’re not seeing catastrophic impacts. There’s a lot of hype, but no evidence to justify it.”

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At the close of the Constitutional Convention of 1787, when queried by a lady as he left Independence Hall on the final day of deliberation, Benjamin Franklin was asked “Well, Doctor, what have we got—a Republic or a Monarchy?”

Franklin answered “A Republic, if you can keep it.”

Washington, 2010:

“Mr. Obama’s refusal to live up to his own oath of office – which includes the duty to defend the United States against foreign invasion – requires senators and representatives to live up to their oaths. Members of Congress must defend our nation against all enemies, foreign and domestic. Today, that means bringing impeachment charges against Mr. Obama.”

Tom Tancredo
Former Congressman, CO 6th District
read more here…

“President Obama has engaged in numerous high crimes and misdemeanors. The Democratic majority in Congress is in peril as Americans reject his agenda. Yet more must be done: Mr. Obama should be impeached.
He is slowly – piece by painful piece – erecting a socialist dictatorship. We are not there – yet. But he is putting America on that dangerous path. He is undermining our constitutional system of checks and balances; subverting democratic procedures and the rule of law; presiding over a corrupt, gangster regime; and assaulting the very pillars of traditional capitalism. Like Venezuela’s leftist strongman, Hugo Chavez, Mr. Obama is bent on imposing a revolution from above – one that is polarizing America along racial, political and ideological lines. Mr. Obama is the most divisive president since Richard Nixon. His policies are Balkanizing the country. It’s time for him to go.”

Jeffrey T Kuhner
Columnist The Washington Times
Edmund Burke Institute
read more here…

Hey America! It’s getting on time to stand up and be counted…some prescient movies to watch:

1984

Brazil

V for Vendetta

the kenverine

No much, it’s mostly what’s down. There’s a whole herd of talking heads out there trying to convince us that the Golden Years of uber-prosperity are just around the corner. Fortunately Algore’s invention of the internet affords us the opportunity for a less biased look at the tea leaves and chicken entrails of the financial markets.

One of the better sources of info I read is a Canadian blog, The Greater Fool written by Garth Turner with a blessedly ironic sense of humor. Turner is “a best-selling author, financial commentator, blogger, lecturer and entrepreneur and has twice served as a Member of Paliament in Canada’s House of Commons. He also is a member of Canada’s Privy Council.” The Greater Fool documents the imminent collapse of the Canadian real estate bubble which trails our American RE debacle by a few years, but is eerily similar.

Turner is also a financial advisor. Today he writes…

“He’s 26 and, if typical of his generation, we’re all screwed.
His entire net worth ($23,000) is in a ‘Smart Saver’ high-interest account at BMO. So long as he keeps more than $5,000, he gets 1.1%. Below that a little less – zero%.

Do you understand the inflation rate is 1.4%, I asked? Yeah, he said. But it’s safe. And do you understand that the $253 of interest you earn in a year is taxed at 100%? Yeah, he said, but it’s safe. So you realize that by saving your money you’re losing money? Yeah, he said, but it’s guaranteed.

Do you know that if you put your money in preferred shares of [Bank of Montreal], you can earn 5.95%, instead of having the same bank pay you 1.1% on the identical money? And that instead of paying 100% tax, you’ll pay about 20%? No, he said. But I don’t care.

And I gave up.

Turner is right of course. But..when I used to race sailboats in YVR and SEA there were days of light wind and high tidal flow when the first boat to anchor rapidly increased it’s lead over the other competitors. That was because we were sailing north at 2 mph and the tide was flowing south at 4 mph.

Similarly if stocks deflate in value in the next ‘tidal cycle’ that kid might be better in cash, although no question his money and the interest it generates should be in a tax sheltered account. When the tide turns favorable THEN buy equities. Meanwhile convert some of the declining dollars into gold and other precious metals. Preferred shares won’t decline in value, but they can be repurchased by the bank with 50 cent dollars.

It’s a crap shoot for sure. With sail boats you KNOW when the tide will turn. But no one issues financial tide tables, just vague estimates. The Baltic Dry Index is still going down, 30+ consecutive days now: very unusual tidal flow….

(The Baltic Dry Index is a daily average of prices to ship raw materials. It represents the cost paid by an end customer to have a shipping company transport raw materials across seas on the Baltic Exchange, the global marketplace for brokering shipping contracts. The index is quoted every working day at 1300 London time. The Baltic Exchange is similar to the New York Merc in that it is a medium for buyers and sellers of contracts and forward agreements (futures) for delivery of dry bulk cargo. The Baltic is owned and operated by the member buyers and sellers. The exchange maintains prices on several routes for different cargoes and then publishes its own index, the BDI, as a summary of the entire dry bulk shipping market. This index can be used as an overall economic indicator as it shows where end prices are heading for items that use the raw materials that are shipped in dry bulk.

The BDI is one of the purest leading indicators of economic activity. It measures the demand to moveraw materials and precursors to production, as well as the supply of ships available to move this cargo. Consumer spending and other economic indicators are backward looking, meaning they examine what has already occurred. The BDI offers a real time glimpse at global raw material and infrastructure demand. Unlike stock and commodities markets, the Baltic Dry Index is totally devoid of speculative players. The trading is limited only to the member companies, and the only relevant parties securing contracts are those who have actual cargo to move and those who have the ships to move it. )

More here…

The neighborhood Fourth of July fireworks began. Sitting in the backyard I could not see the Roman Candles, only hear the sound of Gatling guns from the strings of firecrackers and the accompanying cannonade of the heavier artillery. Occasionally the trees would glow red from nearby rocket bursts. I could imagine a Civil War battle going on in the golf course below. It is still going on as I write this.

Act Two commenced as the tree frogs tuned up and roared out in chorus. I thought of fireworks past, at New Year 1968 peering out the back window of the house on the hill in West Vancouver, on the Shepherd St bridge across Buffalo Bayou, that was 1986 in Houston and a decade later sitting on the roof of the redhead’s Explorer, for the show in Spring, Texas.

I have seen fireworks; for me the glow from my tasty cigar, the winking and blinking fireflies, and the basso profundo of one million tree frogs sufficed this year.

Happy Fourth America. Happy Canada Day Canadians. Hooray for long weekends. My youngest son is on the beach in Palacios, Texas. I am on the back steps in Tennessee which feels more and more like home. For now at least. Who knows what will happen tomorrow?

When you spend more than you make you go into debt. Congress has been spending more than Americans make for 25 years now, spending on foolish entitlements for the sole purpose of staying in office. They have taken your money and used it to buy elections by bribing the unwitting American public. Americans; we have shot ourselves in the foot.

Once you stop pegging your currency to a fixed standard such as gold, no restrictions remain on how many paper dollars you can print, (or nowadays enter digitally) at the flick of an imperious wrist. But if new dollars appear faster than the nation’s productivity grows each dollar is worth less and less. No new wealth is created, but the value of your savings melts away as the “new” dollars are handed out to handpicked recipients like Goldman Sachs, favored corporate and individual donors, faithful constituencies and select minorities.

The power of the State grows, wealth is confiscated from the productive, winners and losers are picked. People begin voting for a living, not working for a living. Bread is free, circuses abound, and barbarians appear at the gates. The Federal Bureau of Land Management is now actively discouraging US citizens from traveling in a large swath of Arizona south of I-8 which has been effectively abandoned to the Mexican drug gangs. The only thing that hasn’t changed are the outdated maps.

July Fourth is upon us. Can you still recall what it once meant?