Thursday, January 26, 2012

You Can't Fool Mother Nature For Long: The Substitution of Debt for Productivity

The "big story" of the U.S. economy is that we have substituted expansion of debt for meaningful increases in productivity.
For the past 30 years, the U.S. economy has become increasingly dependent on explosive debt expansion for its "growth" rather than on meaningful rises in meaningful productivity. Growth is in quotes because growth based on secular increases in productivity--that is, the same investment of labor and capital produces goods and services of greater value--is qualitatively different from "growth" based on a pyramiding of debt.
Real growth based on rising productivity is sustainable, "growth" based on ever-greater expansions of debt is not.
What has kept the Status Quo from falling off the debt cliff over the past four years is the substitution of exploding Federal/public debt for no-longer-rising private debt. If Federal borrowing were to return to 2006 levels, the economy would immediately experience a severe contraction.
We can understand this reaction as that of a debt junkie economy suddenly deprived of massive infusions of fresh credit.
This substitution of public debt for private debt is simply an attempt to fool Mother Nature. The justification of the Status Quo for impoverishing future generations is the massive expansion of Federal debt is needed to "kick start" the economy, i.e. "get us through a rough patch."
After four years of kick-starting and muddling through rough patches, the economy has yet to recover benchmarks set in 2007, much less grown. Meanwhile, the kick-starting added $6 trillion in visible public debt and trillions more in off-balance sheet obligations and backstops.
Substituting debt for productivity is also an attempt to fool Mother Nature. Here's how the substitutiion works: when productivity is flat, then "growth" can be created by leveraging the economy's surplus into greater amounts of debt, which can then be squandered on mal-investments and consumption to foster an illusion of "growth."
Note that I use the phrase "meaningful productivity." If a highrise tower is built in the middle of nowhere and sits empty, the construction and related costs (inspections, transport of goods, utilities, etc.) are added to the gross domestic product (GDP) as "growth," even though the empty building is not adding any real value to the economy.
The same can be said of millions of unneeded medical tests, millions of doses of medications that don't work as advertised, etc.--all the costs of sickcare that rarely add productive value to the economy but which are all added to the GDP as "growth."
If you leverage $100 per month in surplus capital in a household into a $100,000 home equity loan that is squandered on luxury cruises, a new kitchen, boats and dining out, then that explosion of spending boosts "growth" like a shot of cocaine.
But then what happens when the borrowed money has all been spent? What happens when the borrower defaults? The underlying assets--the boat, home, etc.--can all be auctioned off, but a massive loss remains to be swallowed by the lender.
Needless to say, the bankrupt borrower will be unable to borrow another $100,000 any time soon, even if interest rates are lowered to near-zero.
That's what happens when you try to fool Mother Nature by substituting debt expansion for increases in meaningful productivity. Eventually the surplus that is being leveraged into debt reaches the point where it cannot leverage any more debt, and the over-leveraged borrower defaults at the first financial bump.
An economy that is dependent on constant massive increases in debt to fund its "growth" is not sustainable. In a very real sense, the U.S. has been fooling Mother Nature for 30 years. Now we've overleveraged the nation's shrinking pool of surplus capital and assets, and the last rabbit has been pulled from the magician's hat. Mother Nature (i.e. reality in the form of a transparent, marked to market balance sheet) is about to take her revenge on all those who reckoned she could be fooled forever by ever-expanding debt.

Eleven ‘Stunning Revelations’ From a Confidential Economics Memo to Obama

Columnist Ryan Lizza’s in-depth New Yorker article (“The Obama Memos”) is an in-depth examination of the Obama administration’s handling of the U.S. economy. But unlike most op-eds, his column involves more than just speculation and conjecture. Lizza uses a 2008 “sensitive and confidential” memo written by the economist Larry Summers as one of the article’s chief resources.
For those unfamiliar with the memo’s author, Larry Summers is the former Director of the United States National Economic Council for President Obama. And although he resigned from this position in November 2010, as the White House’s chief economist he “played a leading role in crafting the administration’s interventions in the economy,” according to the Wall Street Journal.
Summers’ influence being understood, this 57-page memo helps explain why certain economic strategies and initiatives have been adopted, and in many cases maintained, by the Obama administration. But it does a little more than that: the memo also sheds some light on why the administration has failed to revive the economy.
Summers’ memo is “striking for two reasons,” writes Dean Baker of The Guardian. “First, it…showed the economic projections that the administration was looking at when it drafted its stimulus package. These projections proved to be hugely overly optimistic.”
Many critics would agree.
Baker continues:
The other striking part of this memo is the concern with “bond market vigilantes”. The memo discusses the need to focus on the medium-term deficit with the idea of reaching deficit targets by 2014. The highest deficit target listed in the memo for this year was 3.5% of GDP. The memo also includes calculations with a deficit target of 2.5% of GDP, and a balanced budget.

The deficit for the fiscal year that ended last October was 8.5% of GDP. Depending on how the payroll tax debate, the extension of unemployment benefits and a few other issues get resolved, the deficit is not likely to be very much lower in 2012.
This means that getting from a 2012 deficit near 8.0% of GDP to even the 3.5% target for 2014 would require some very serious budget cuts in an economy that will still be suffering from massive unemployment. The difference between a budget deficit of 8.0% of GDP and 3.5% of GDP is equal to almost $700bn annually.
So what does this mean?
11 Stunning Revelations From a Confidential Economics Memo to President Obama
Larry Summers and Barack Obama.
“In short, the Obama administration made plans that were quite obviously based on a far too rosy view of the economy,” Baker concludes. “While this favorable assessment was the prevailing view at the end of 2008, what is inexplicable is why the administration never appears to have strayed from its original path – even when it became clear that the economy was doing far worse than projected.”
Just how poorly did Summers and the Obama administration “fail to grasp” the seriousness of America’s economic situation?
For an answer to this question, one can turn to James Pethokoukis of The American, the online magazine for the American Enterprise Institute.
The following are the most “stunning revelations” about what the Obama economic team was thinking as the financial crisis was blowing up (as compiled by Pethokoukis, with quotes from the 2008 memo itself):
 1. The stimulus was about implementing the Obama agenda.
The short-run economic imperative was to identify as many campaign promises or high priority items that would spend out quickly and be inherently temporary. …  The stimulus package is a key tool for advancing clean energy goals and fulfilling a number of campaign commitments.
2. Team Obama knows these deficits are dangerous (although it has offered no long-term plan to deal with them).
Closing the gap between what the campaign proposed and the estimates of the campaign offsets would require scaling back proposals by about $100 billion annually or adding new offsets totaling the same. Even this, however, would leave an average deficit over the next decade that would be worse than any post-World War II decade. This would be entirely unsustainable and could cause serious economic problems in the both the short run and the long run.
3. Obamanomics was pricier than advertised.
Your campaign proposals add about $100 billion per year to the deficit largely because rescoring indicates that some of your revenue raisers do not raise as much as the campaign assumed and some of your proposals cost more than the campaign assumed. … Treasury estimates that repealing the tax cuts above $250,000 would raise about $40 billion less than the campaign assumed. … The health plan is about $10 billion more costly than the campaign estimated and the health savings are about $25 billion lower than the campaign estimated.
4. Even Washington can only spend so much money so fast.
Constructing a package of this size, or even in the $500 billion range, is a major challenge. While the most effective stimulus is government investment, it is difficult to identify feasible spending projects on the scale that is needed to stabilize the macroeconomy. Moreover, there is a tension between the need to spend the money quickly and the desire to spend the money wisely. To get the package to the requisite size, and also to address other problems, we recommend combining it with substantial state fiscal relief and tax cuts for individuals and businesses.
5. Liberals can complain about the stimulus having too many tax cuts, but even Team Obama thought more spending was unrealistic.
As noted above, it is not possible to spend out much more than $225 billion in the next two years with high-priority investments and protections for the most vulnerable. This total, however, falls well short of what economists believe is needed for the economy, both in total and especially in 2009. As a result, to achieve our macroeconomic objectives—minimally the 2.5 million job goal—will require other sources of stimulus including state fiscal relief, tax cuts for individuals, or tax cuts for businesses.
6. Team Obama wanted to use courts to force massive mortgage principal writedowns.
The next step in the housing plan is responsible bankruptcy reform along the lines of the Durbin bill you cosponsored. This would allow bankruptcy courts to write down the principal of primary residences to the current market value. We recommend announcing this reform to begin immediately following the close of the enhanced Hope for Homeowners period.
7. Team Obama thought a stimulus plan of more than $1 trillion would spook financial markets and send interest rates climbing.
To accomplish a more significant reduction in the output gap would require stimulus of well over $1 trillion based on purely mechanical assumptions—which would likely not accomplish the goal because of the impact it would have on markets.
8. Greg Mankiw, economic adviser to Mitt Romney, was dubious about the stimulus.
Greg Mankiw is the only economist we have consulted with who refused to name a number and was generally skeptical about stimulus.
9. But the Fed was a stimulus enabler.
Senior Federal Reserve officials appear to be of the view that a plan that well exceeds $600 billion would be desirable.
10. IPAB was there at the very beginning.
There are two possibilities for making tough decisions on the long-run budget, which could be done either separately or together: creating an executive-branch “health board” (which focuses on one part of the issue) and a Congressionally chartered commission (which could focus more broadly).
11. The financial crisis wasn’t just Wall Street’s fault.
A significant cause of the current crisis lies in the failure of regulators to exercise vigorously the authority they already have.
Perhaps more unsettling than Pethokoukis’ list is the fact that the Obama administration has done very little to update any of these ideas. It’s as if Summers set the tone in 2008, and the Obama administration never looked back.
Now, considering that there‘s a growing consensus that the president’s understanding of the U.S. economic crisis has been naïve (if not willfully ignorant), is it any surprise that he is receiving so much criticism? Take, for example, many of the conservative-to-moderate commentators who, despite having once possessed “a surprising degree of hope and good cheer” for his presidency, have denounced President Barack Obama as an abject failure:
In 2009, the president was a dinner guest in the home of conservative commentator George Will, according to Lizza. By 2011, Mr. Will had declared President Obama a “floundering naïf” and someone advancing “Lenin-Socialism.”
In 2009, Fox News commentator Charles Krauthammer wrote that Obama could be “a president with the political intelligence of a Bill Clinton harnessed to the steely self-discipline of a Vladimir Putin” who would “bestride the political stage as largely as did Reagan.” By 2011, Mr. Krauthammer had written the president off as “sanctimonious, demagogic, self-righteous, and arrogant.”
In 2009, the economist Larry Kudlow claimed that the president loved “to deal with both sides of the issue,” when it came to business and the economy and that he “revels in the back and forth. And he wants to keep the dialogue going with conservatives,” according to Lizza. By 2010, Mr. Kudlow had accused President Obama of presiding over a government of “crony capitalism at its worst.”
In 2009, while commenting on the violence set off by Iran’s rigged elections, the supposed “Reaganite” Peggy Noonan gushed “Mr. Obama was restrained, balanced and helpful in the crucial first days, keeping the government out of it.” By 2011, Miss Noonan declared the president “a loser.”
Given the fact that the Summers memo only confirms what several of these critics had already feared (i.e. that the Obama economic team has been utterly incompetent), perhaps these “over-the-top” criticisms aren’t that far off the mark.

Dollar Guaranteed To............

 For years, it was an unwritten rule. As of yesterday, it’s official policy: The dollars in your wallet are destined to lose at least 18% of their purchasing power during the next 10 years.

Lost in the noise of countless Federal Reserve announcements yesterday was a formal target of 2% annual inflation.

   Actually, it’s worse than 18% over 10 years. For the Fed’s favored measure of inflation is not the heavily gamed consumer price index — CPI — or the even-more-gamed “core” CPI that assumes your cost of living isn’t really affected by food and energy.

After all, CPI is currently running 3.0% year over year. Whoops, too high. Core CPI is 2.2%. Still too high.

The Fed prefers something called “core personal consumption expenditures.”

That number is currently running 1.7%.

Voila! Applying the logic only central bankers are capable of divining, there’s not enough inflation!

That’s the real take-away from the flurry of Fed declarations. Seen in that light, the announcement that the fed funds rate would remain near zero through “late 2014” is almost superfluous.

Financial repression? Old news. Even The New York Times is onto that game now, its Fed story describing “the transformation of a policy that began as shock therapy in the winter of 2008 into a six-year campaign to increase spending by rewarding borrowers and punishing savers.”

   Still, lest you think the Fed is suddenly acquiring a preference for “transparency,” some matters of policy remain sotto voce: “A weak U.S. dollar, despite its consequences, remains an unstated goal of both the Fed and Treasury Department,” says our Dan Amoss, who took the bullet watching Ben Bernanke’s news conference yesterday while Addison and a small group of us carried on with our editorial retreat in Miami.

Indeed, says Dan, “We will continue to see a global race to devalue currencies and ease government debt burdens. The Fed will not stand idly by as the Europeans, Chinese and Japanese print copious money and weaken their currencies.

“All of these central banks are going down a path from which they cannot return. They are monetizing government debts, and will continue to do so, with sad semantic arguments that they their money printing operations are not really monetizing government debts. The financial market consequences of selling assets from central bank balance sheets and shrinking money supplies are too scary for central bankers to consider.”

Nicely Said................

"The bravest are surely those who have the clearest vision of what is before them, glory and danger alike, and yet notwithstanding, go out to meet it.” - Thucydides

11 things Obama didn’t tell you about tax fairness last night

President Barack Obama talked a lot about taxes and fairness in his State of the Union speech last night. Like this bit:
But in return, we need to change our tax code so that people like me, and an awful lot of members of Congress, pay our fair share of taxes. … We don’t begrudge financial success in this country. We admire it. When Americans talk about folks like me paying my fair share of taxes, it’s not because they envy the rich. …Tax reform should follow the Buffett rule: If you make more than a million dollars a year, you should not pay less than 30 percent in taxes.
Are wealthier Americans really not paying their fair share? Here are some numbers on income inequality:
1. The top 1 percent pay 36.7 percent of federal income taxes and earn 16.9 percent of adjusted gross income (as of 2009).
2. The top 0.1 percent pay 17.1 percent of taxes and earn 7.8 percent of adjusted gross income.
3. The average income tax rate for the top 1 percent is 24 percent. The bottom 50 percent? Just 1.85 percent.
4. The bottom 50 percent pay just 2.3 percent of income taxes.
5. Buffett chose to leave most of his fortune to the Bill & Melinda Gates Foundation, avoiding a 55 percent estate tax.
6. Buffett actually pays 50 percent tax since capital gains and dividends taxes are a double tax on corporate income.
7. Taking half of yearly income from every person making between $1M and $10M would only decrease the nation’s debt by 1 percent.
8. Taking every dollar from everyone making more than $10M per year would only reduce the nation’s deficit by 12 percent and the debt by 2 percent.
9. IRS will give out roughly $110 billion in “refundable” tax credits this year to households that pay no income taxes.
10. If taxable income in the 35 percent bracket were taxed at 49 percent, federal income tax revenues would be just $78B higher (Tax Policy Center).
11. To get the deficit to 2 percent by 2020 using Obama’s budget baseline, it would take a 91 percent top rate by taxing just the rich.

Spending other people's money

Politicians like promising voters goodies that allegedly are paid for by others -- preferably by others whose wealth voters feel is undeserved (such as the "1 percent"). Even better for politicians, though, is promising voters goodies that cost nothing!
Who doesn't want goodies that are free?
The problem, of course, is that almost nothing worthwhile is truly free.
So how can politicians promise free goodies? Economists influenced by John Maynard Keynes often write as if they've uncorked the secret: government borrowing from fellow citizens.
Here's their argument: If Uncle Sam borrows to pay for, say, an extra $1 trillion of stimulus spending, this spending is free to the country as a whole if the debt is owed only to Americans. True, Uncle Sam must raise taxes tomorrow to pay this debt, but the debt payments will be made to Americans. Americans will be taxed an extra $1 trillion plus interest, but every cent of these higher tax collections from Americans will be paid to Americans. The money stays here. America, as a whole, pays nothing for today's stimulus spending!
In econ-speak, internally held debt is no burden on the economy.
At first glance, this argument appears sound. But look again.
Suppose the stimulus funds are spent to build roads. We might all agree that the roads are worth every cent spent to build them. But just because something is worthwhile doesn't mean it's costless.
Real resources are used up in building the roads. The millions of hours of labor, fuel to power the construction equipment, concrete, asphalt, steel and other building materials, the land that is now paved over with highways and boulevards -- all are resources that could have been used to produce other things of value. The satisfaction that people would have gotten from those things that instead could have been produced -- but in fact aren't produced -- are the cost of building these roads.
Those foregone goods and services don't become "unforegone" simply because Uncle Sam borrows the funds used to build the roads from Americans.
My George Mason University colleague James Buchanan won the 1986 Nobel Prize in economics in part for his work explaining why it's mistaken to conclude that internally held debt imposes no (or only minuscule) burdens on the economy.
Buchanan reasoned that the burden of the debt isn't borne by the lenders: They lend voluntarily in hopes of receiving an attractive return. Had they not loaned to the government, they would have used their money in other ways, likely as loans to private investors.
Nor is the burden of the debt borne by today's taxpayers. It's precisely to avoid raising taxes today -- to avoid burdening today's taxpayers -- that government borrows.
The burden of the debt falls just where common sense tells us it falls: on the people whose taxes are raised to pay it. Those people are taxpayers in the future. And again, that the bondholders are also Americans does nothing to "unforego" the goods and services sacrificed to build the roads.
Of course, if today's taxpayers save and pass on enough money to their kids so that their kids can use these savings to pay off the debt, then today's generation would relieve tomorrow's generation of the debt's burden. But today's generation is unlikely to be so kind. Again, government debt is incurred today for the very purpose of enabling today's taxpayers to "free-ride" on future taxpayers.
And such "free-riding" means that government today will likely overspend.


38. Identifying Different Psychopaths

Worth noting...........

USS Enterprise False Flag!!



“Remember the Maine!”, was the cry back in 1898 from William Randolph Heart’s New York Journal – a forerunner the modern Murdoch press. Then, some 274 men lost their lives as a result of the explosion which sunk the USS Maine in Havana Harbor. Hearst even told a story of how the enemy had planted a torpedo beneath the Maine and detonated it from shore. The only problem was – it never happened. Nonetheless, the event used as the popular pretext for the United State’s entry into the Spanish-American War, and ultimately, the acquisition of Cuba itself by the US. This was now the modern blueprint for using propaganda in conjunction with, what is accepted by many historians, a type of false-flag event.
Some 70 years later, on June 8, 1967, during the Six-Day War, a similar event took place off the coast of Egypt. It could well have been, “Remember the Liberty!”, following an event which saw 34 US men killed and 170 wounded when the USS Liberty was attacked by both the Israeli Air Force and Israeli Navy torpedo boats. History now reveals that Israel’s slaughter of the USS Liberty crew was designed as a false flag event, but luckily Russia intervened at the last minute before Israel could sink the decorated American ship. Had it worked, it could have been used to drag the US and her allies into a new regional, or even a third world war - with who knows what consequences.


If a conflict is to ignite in the Persian Gulf in 2012, it is highly likely that the US or Israel will use the false flag option. Two reasons support this. Firstly, Iran lacks a motive to want to engage in a suicidal first strike against the axis powers – a move which would no doubt cost them thousands of innocent lives and billions in infrastructure. Frankly, it’s safe to say that it’s not at all in the Iranian national interest to start such a conflict. History does show however, that the US and Israel can – and will, employ the technique of the false flag attack, where they would engineer an incident and then blame it on the Iranians. By all accounts, this is also how the US was able to fake their way into the costly and bloody Vietnam War, via the infamous Gulf of Tonkin Incident.
Recent weeks have seen a massive build-up of naval assets in the Persian Gulf by both the US and the British. The irony of surface naval power in the 21st century is that it is only good for one thing, and that is the ‘projection of force’. In fact, Naval Power ceased to be a major factor geopolitical power-play since the dawn of the 20th century, when it was usurped by Air Power.
As Great Britain learned in the Falklands War back in 1982, even a single French Exocet missile can sink a battleship, or aircraft carrier. Iran has more than this capability, so for all practical purposes, any American ships in the region are nothing more than bait – large, slow sitting targets. Which begs the obvious question: why would the US be sending its soon-to-be decommissioned, rusty chess piece – the 50 year old nuclear-powered USS Enterprise carrier into the line of fire in the Persian Gulf? A very large and expendable, floating museum, and one which, interestingly enough with its six on board nuclear reactors… would probably cost a fortune to dispose of.
If other sides are drawn in to a conflict, most experts agree that it has the danger of escalating into a WWIII situation, and both sides would surely be losers in such a scenario, not to mention the global economy.
However, we have the ideal set of conditions for a New Cold War to emerge in the early 21st Century – one where the Western Axis powers of the US, Europe, Israel and GCC countries sit on one side, and with Iran, Syria, Pakistan, China, and perhaps Russia sitting on the opposite side. This New Cold War will be more about the projection of power and securing sub-regional dominance in terms of economics – natural gas, mineral and trade relationships, as well as petroleum – than it will about the political ideologies that seemed to dominate the previous 20th Century Cold War.
On the surface, this latest spat between the US and Iran looks like a step closer to war, but on closer examination however, the present conditions are not at all ideal for a preemptive strike against Iran by the US, or Israel. Why? In a time when fuel consumption is down worldwide, and oil supplies are high, oil prices are defying economics and maintaining strength above $100 per barrel. It’s also worth noting that defense contracts – particularly in the GCC countries – are way up, meaning there is still much money to be made from this current crisis – on both sides, including Iran.
Still though, we must keep our eyes open for that false flag from the west.

Shock Docs: Total Federalization of Police Under New Homeland Security Mission

A new white paper presented to the House Permanent Select Committee on Intelligence carves out an ‘evolving mission’ for Homeland Security that moves away from fighting terrorism and towards growing a vast domestic intelligence apparatus that would expand integration with local/state agencies and private-public partnerships already underway via regional fusion centers.
Crafted by the Aspen Institute Homeland Security Group, co-chaired by former DHS chief Michael Chertoff and composed of a who’s who of national security figures, the report outlines a total mission creep, as the title “Homeland Security and Intelligence: Next Steps in Evolving the Mission” implies.
Significantly, it puts on paper and into the Congressional record a proposed transition from outwardly dealing with the threats posed by terrorism towards intelligence gathering “focused on more specific homeward-focused areas.” That is, the homegrown, domestic threats we’ve heard so much about from Big Sis already.
In short, it confirms the intentions of key insiders– including former NSA/CIA head Michael Hayden, former Rep. Jane Harmon, former Secretary of State Madeline Albright, 9/11 Commissioners Philip Zelikow and Richard Ben-Viniste, former National Security Advisor Samuel Berger and others– to flesh out a plan we have already seen developing from an outside perspective– namely, to build a domestic Stasi-like force to takeover, monitor and control the population.
Moreover, the media has reported on this changed mission– towards the full spectrum domination of the people under a patently-fascist framework– with the same calm as the weekly weather forecast.
LOCALIZED INTELLIGENCE: HIRING POLICE & BOWING TO PRIVATE INTERESTS
Achieving this new aim includes co-opting local law enforcement and other regional agencies.
“As the threat grows more localized,” the report reads, “the federal government’s need to train, and even staff, local agencies, such as major city police departments, will grow.
That’s right, the feds want to oversee the hiring of your local police.
Fusion Centers, now spread across the nation, have already infected police agencies and local governments with a federalization takeover mentality. A Dec. 2010 Aspen Homeland Security Group report, quoting the Superintendent of the New Orleans Police Department, recommends that “every mayor and governor of a major city in the country should have to attend a DHS-sponsored emergency management course where various scenarios – like hurricanes, levy breaks, and explosions – are exercised.”
But directing local police departments, mayors and governors is only the beginning. Indeed, the Aspen group envisions the ‘foundation for a separate DHS intelligence mission’ by building upon ‘decentralized’ partnerships with the private sector as well.
Homeland Security Should Re-Orient Its Mission, Aspen Panel Says
The bloated umbrella agency aims to lean on its ties with the hospitality (hotel), security and transportation industries, among others, as well. Already, Homeland Security conducts background checks on many security guards working with ‘critical infrastructure,’ and clearly, it aims to expand the use of quasi-government groups like InfraGard and other private snitch networks. Ultimately, all employment would be subject to federal background checks and security clearances.
Private interests should even shape Homeland Security priorities, according to the report: “different private sectors in the United States, from the hospitality industry to transportation, should drive requirements for DHS.”
ABANDONING THE FIGHT AGAINST TERRORISM
As unbelievable as it sounds, DHS says other agencies can handle the all-encompassing threat of terrorism that was used to justify the super-agency’s own existence and powers.
Abandoning specific focus on tracking terrorist cells and organizations, DHS instead plans to shift into broad coverage of border protection, integrating travel data, cyber defense, critical infrastructure protection and other areas.
There are enough agencies pursuing the terrorist adversary to allow DHS to build a new analytic foundation that emphasizes data, analytic questions, and customer groups that are not the focus for other agencies,” the report states.
And funding should be cut from terrorism-focused areas:
“Analysis that helps private-sector partners better understand how to mitigate threats to infrastructure, for example, should win more resourcing than a focus on all-source analysis of general threats, such as work on assessing the perpetrators of attacks. Conversely, all-source analysis of terrorist groups and general terrorist trends should remain the domain of other intelligence agencies.”
Instead, the “national security experts” who’ve brought us naked body scanners, checkpoints on highways, streets, airports, bus & train stations, and who have projected the homegrown terror threat into the theaters of private hotels, shopping malls and sports stadiums, are again expanding the bureaucratic growth of tyranny by infiltrating areas traditionally spared from federal intrusion.
A promotional article at the Homeland Security News Wire blog highlights the shift: “With a slew of intelligence agencies with similar missions safeguarding the United States, the report posits that DHS should avoid competing with other agencies and overlapping responsibilities, instead focusing on its areas of core strengths – analysis and the dissemination of critical intelligence to local law enforcement agency, the private sector, and critical infrastructure operators.”
“THE NEW, GROWING WORLD OF HOMELAND SECURITY INTELLIGENCE”
Further the Aspen report recommends “an entirely new enterprise,” stating that “DHS might consider the development of a homeland security training institute.” It hails the security-complex workforce that has been fostered by Homeland Security in the decade since 9/11, now seeking to influence and train its future recruits as well.
The report verifies previous information suggesting that DHS wants to comb the American homeland with private security contractors, trained and overseen by Homeland Security– a giant army of enforcers and snitches, brainwashed by propaganda scaremongering about terrorism, who could respond to crime as a whole with an atmosphere of universal preemptive suspicion that targets anyone who appears out of place.
“Working with state/local/private sector partners to draw their intelligence capabilities into a national picture” is a stated aim of this redirection of Homeland Security’s core mission. Installing and training individual members of these partner groups- from local police departments to the eyes and ears it would tap in the security, transportation and infrastructure industries- would facilitate the kind of over-arching homeland security infrastructure the document aims to construct over society.
DOMESTIC EXTREMISM: TARGETING AMERICAN SOCIETY
Doing so would put greater emphasis on the kind of politically-slanted domestic profiling (read: “intelligence product“) that has already drawn criticism and forced the agency to disavow one of its own reports, which targeted ‘right-wing extremism’:


The numerous federal and other officials familiar with the matter Homeland Security Today interviewed frankly said the April 7, 2009 DHS report that generated so much outrage, Right-wing Extremism: Current Economic and Political Climate Fueling Resurgence in Radicalization and Recruitment, was the most “poorly constructed” analytical “product in DHS history,” and that numerous reports dealing with rightwing extremists have in fact been produced by DHS since it disavowed that one report.

The Department of Homeland Security was sold to public on a wave of fear in the wake of the 9/11 attacks, under the promise of keeping America safe from terrorism. Instead, the Homeland Stasi agency is solidifying its role as a secret police over the United States. Not only have local police agencies been instructed that non-violent protesters, returning veterans and supporters of third party candidates are potential domestic terrorists, but Federal Protective Service (FPS) agents- dispatched with Homeland Security oversight- have been caught arresting photographers and spying on dissenters (in this case during an Occupy Wall Street protest in Portland).
Recent Homeland Security-related documents have already revealed that the American people have been designated as an enemy under emergency plans and that the feds are contracting and activating FEMA relocation centers for use during a crisis or catastrophe.
MISSION CREEP: HANDING OVER UNACCOUNTABLE POWER
Sadly, this warped mission creep is nothing new to the United States’ intelligence agencies.
Former President Harry Truman lamented the CIA’s extreme power grab some 16 years after he signed the bill ushering it– and the entire national security infrastructure– into existence. One month after the JFK assassination in 1963, he stated:
“For some time I have been disturbed by the way the CIA has been diverted from its original assignment. It has become an operational and at times a policy-making arm of the government… I never had any thought that when I set up the CIA that it would be injected into peacetime cloak and dagger operations.”
Behind the scenes, it was former CIA director Allen Dulles, along with a number of fellow travelers, who crafted the CIA’s transformation under a limited, intelligence gathering mandate into the unaccountable monster it became. During a decade as head of the CIA, Dulles utilized the Jackson-Correa white paper he helped write to usher in black ops and other operational aspects never intended to be, from assassinations, to coups, to revolutions, and more (see Col. Fletcher Prouty’s The Secret Team). Suddenly, the CIA was operating from the shadows, a virtual government-within-government, with no clear path towards reigning in its power.
Will the already-controversial Department of Homeland Security be allowed, too, to creep so far into our lives that we can never look back?

24 Facts That Show How Ridiculously Unfair Our Economy Is For Americans Under The Age Of 30

If you are an American under the age of 30, you have probably figured out by now that the entire economic system is stacked against you.  The way that our economy is structured today is ridiculously unfair to younger Americans.  First, we endlessly push our young people to go to our ridiculously expensive colleges and universities where the pile up enormous amounts of debt.  Then they get out into the real world where they find that only a handful of really good jobs are available for the vast army of college graduates entering the workforce.  Sadly, most of the jobs that our young people are working these days do not pay enough to be able to support a family or buy a decent home.  Meanwhile, our politicians are busy mortgaging their future.  Our young people are expected to support a Social Security system that will not be there when they get older, and every single day more than 2 billion dollars is added to a debt that will hang around the necks of younger Americans and their children for the rest of their lives.  If you stop and think about all of this for too long, your head might just explode with anger.  Well, not literally, but you get the point.  The truth is that this is going to be the first generation in U.S. history that is going to do significantly worse than their parents, and that is a terrible shame.
Are you not convinced that things are really bad for younger Americans?
Do you think that they should just shut up and quit whining about things?
Well, keep reading.  You just might change your mind by the time this article is over.
The following are 24 facts that show how ridiculously unfair our economy is for Americans under the age of 30 that will make your head explode....
#1 U.S. households led by someone 65 years of age or older are 47 times wealthier than U.S. households led by someone 35 years of age or younger.
#2 Today, only about 55 percent of all Americans between the ages of 16 and 29 have a job.
#3 Back in the year 2000, more than 50 percent of all Americans teens had a job.  This past summer, only 29.6% of all American teens had a job.
#4 Since the year 2000, incomes for U.S. households led by someone between the ages of 25 and 34 have fallen by about 12 percent after you adjust for inflation.
#5 It is absolutely ridiculous how much it costs to get a college education in America today.  After adjusting for inflation, U.S. college students are now borrowing about twice as much money as they did a decade ago.
#6 Average yearly tuition at private colleges and universities in the United States is now up to $27,293.  That figure has increased by 29% in just the past five years.
#7 Back in 1952, a full year of tuition at Harvard was only $600. Today, it is $35,568.
#8 The cost of college textbooks has tripled over the past decade.
#9 In 2010, the average college graduate had accumulated approximately $25,000 in student loan debt by graduation day.
#10 At some point this year, total student loan debt in the United States will surpass the 1 trillion dollar mark for the first time ever.
#11 The total amount of student loan debt in the United States now exceeds the total amount of credit card debt in the United States.
#12 Our economy is not producing nearly enough jobs for our college graduates.  The percentage of mail carriers with a college degree is now 4 times higher than it was back in 1970.
#13 One-third of all college graduates end up taking jobs that don't even require college degrees.
#14 In the United States today, there are more than 100,000 janitors that have college degrees.
#15 In the United States today, 317,000 waiters and waitresses have college degrees.
#16 Right now, there are 5.9 million Americans between the ages of 25 and 34 that are living with their parents.  According to recent Census data, men are almost twice as likely to live with their parents as women are.
#17 At this point, there are more than 3.5 million Americans that are behind on their mortgage payments.  Young people that were offered "teaser rates" on their first homes before the housing collapse represent a large proportion of these mortgages.
CNN recently featured the story of 29-year-old Ginny Gant....
I followed "the plan" to achieve the American dream and now I feel like I'm caught in a stagnant nightmare.
My husband now works for the Navy as a civilian and I am a high school teacher. We bought our two-bedroom townhouse nearly at the peak of the housing boom for $196,500. We're underwater on our mortgage with a high interest rate. I'm looking at having to stick with this house for eight, nine, 10 years.
I really would like to have two or three children, but I just don't think it's feasible to have that many children in this house. It's too small to have a family and it's not what I envisioned for myself when I followed the rules.
#18 The total value of household real estate in the U.S. has declined from $22.7 trillion in 2006 to $16.2 trillion today.  As noted above, large numbers of young Americans bought homes in the years leading up to the housing crash, and they lost a ton of wealth when home values plummeted.
#19 We are facing a retirement crisis that is absolutely unprecedented in U.S. history.  Right now, more than 10,000 Baby Boomers are turning 65 every single day.  Young Americans are expected to pay for their Social Security benefits, but Social Security will not be there when Americans under the age of 30 get older.
#20 Young Americans get arrested at a far higher rate than older Americans do.  Amazingly, 30% of all Americans get arrested by the time they reach the age of 23.  Once you spend time in prison, getting a good job becomes much tougher.
#21 Approximately one out of every five Americans under the age of 30 is currently living in poverty.
#22 In 2010, 42 percent of all single mothers in the United States were on food stamps.  A very large percentage of those single mothers are under the age of 30.
#23 According to one recent survey, only 14 percent of all Americans that are 28 or 29 years old are optimistic about their financial futures.
#24 The U.S. government is stealing about 150 million dollars from our children and our grandchildren every single hour.  Younger Americans will have to bear the burden of this debt far longer than older Americans will.
So what do you think about the plight of Americans that are under the age of 30?

Nicely Said.....

"Expecting the world to treat you fairly because you are a good person is a little like expecting the bull not to attack you because you are a vegetarian." - Dennis Wholey

Sell Treasuries, buy gold

With weak economic growth and disappointing private investment returns for the foreseeable future, highly regarded Wall Street financial analyst Charles K. Ortel of Newport Value Partners, LLC, offers a number of recommendations to investors, including liquidating long-dated U.S. Treasuries and increasing holdings of physical gold and other precious metals to as much as one-third the total value of a portfolio.
Ortel warns that unacceptably high levels of government debt plus a global surplus of cheap labor will continue to depress economic activity in the developed world, including the United States and the European Union.
He concludes that the U.S. and EU are likely to see an increase in economic rioting, especially as the unraveling of the eurozone gains speed and tensions between young workers and retired seniors intensifies.
Governments increasingly face fiscal insolvency as the elaborate social welfare states are required by law to provide an extensive and growing range of government-funded entitlement benefits to various political constituencies, regardless of the economic burden paying such benefit levels puts on taxpayers.
Avoid investing in fiat money securities
Ortel is concerned that “quantitative easing” programs in which the central banks engage in buying billions or trillions of dollars of government debt result in an artificial lifting of the values of securities.
Stock indices such as the Dow Jones Industrial Average, for example, are kept artificially high by the massive infusions of liquidity central banks such as the Federal Reserve pour into purchasing U.S. Treasuries and other debt issued by the federal government.
“Decisions by central banks to reduce benchmark risk-free government bond yields have certainly propped up quoted prices for securities,” he writes.
“But other government decisions and difficult-to-reverse, long-time demographic trends constrain fundamental growth in demand per household within Gray Zone nations [i.e., developed nations with aging economies], where economic activity remains concentrated for the moment.”
He argues that government policies worldwide have significantly destroyed financial wealth since 1999, a trend he expects to continue.
“A weaker U.S. dollar, higher interest rates and price inflation will likely continue to reduce the value of fiat-denominated investments,” Ortel cautions.
“We believe that investors should take steps to reposition their liquid portfolios immediately to protect against further destruction, to consider taking advantage of expected declines in the value of certain securities and to profit from heightened volatility.”
Investment recommendations
Specifically, Ortel urges investors to consider the following general investment strategy:
  • Liquidate portfolio positions in: (1) long-dated U.S. Treasuries and other sovereign debt; (2) any fixed income obligations of highly leveraged companies; and (3) equity in financial companies and industrial companies that do not own precious metals, natural resources, or strategic minerals.
  • Deploy proceeds in short-dated holdings of more responsibly run currencies such as the Norwegian krone, the Canadian dollar, the Swiss franc and the Singaporean dollar.
  • Increase holdings of physical gold and other precious metals to as much as one-third the value of an investor’s total portfolio.
  • Employ “short” investment strategies for special situations: (1) purchase credit default swaps (paying careful attention to counter-party and contractual risks) on sovereign debt, including U.S. Treasury obligations; and (2) take positions on overleveraged financial and industrial companies whose cash flows will be significantly and adversely affected by rising nominal interest rates.
  • Purchase securities in underleveraged companies that have legally enforceable interests in scarce commodities such as precious metals, natural resources and strategic minerals.
  • Consider allocating capital to professional investors who are equipped to trade volatility.
“Traditional, ‘long-only’ investors have been playing in the surf for too long, in our view,” Ortel concludes.
“Busy chasing profits calculated in nominal terms, most investors have failed to discern their ‘real’ after-tax wealth is being dissipated in a treacherous, unregulated global market that encourages devaluation of paper money.”

The Great Economic Storm: We Are Living In The Greatest Debt Bubble The World Has Ever Seen

If you increased your credit card spending by a couple thousand dollars per month would your lifestyle improve?  Of course it would.  By going into large amounts of debt, it is possible to live a lifestyle that you can’t really afford, at least for a while.  But if you keep racking up huge amounts of credit card debt every single month, eventually it gets to a point where it is extremely difficult to even keep up with the minimum monthly payments and the credit card companies will not lend you any more money.  Well, on a larger scale it is the same thing with government debt.  Right now, the U.S. government is spending more than a trillion dollars more than it takes in every year.  Even if the U.S. government spends all of that money on incredibly stupid stuff, it still gets into the pockets of ordinary Americans.  In turn, those ordinary Americans use that money to pay the mortgage, buy food, shop at the mall, etc.  All of this borrowing and spending by the U.S. government has created a “false prosperity” bubble that is not real.  It may feel real to you right now, but it is unsustainable by definition.  If the U.S. government suddenly started spending only the money that it actually brought in every year, our economy would be doomed and all of this “false prosperity” would rapidly disappear.  But if the U.S. government continues to rack up debt at this pace we are doomed as well.  In fact, every dollar that gets borrowed makes our eventual collapse ever worse.  We are heading down the exact same road that Greece has gone.  Eventually the rest of the world is not going to lend us gigantic mountains of super cheap money anymore.  When the flow of cheap money stops, it can be extremely painful.  Anyone that has ever seen the interest rates on their credit cards go above 20 percent knows how this feels.  If we had addressed these problems as a nation a decade or two ago, perhaps we could have found a solution.  But now there is no way out under our current financial system and a devastating economic collapse is on the horizon no matter what we do.
If there was a Hollywood movie where some crooks successfully stole 150 million dollars, what would you think of those crooks?
Would you have admiration for them?
Would you be disgusted with them?
Would you feel like your intelligence was insulted because nobody could ever steal 150 million dollars and get away with it?
Well, right now the federal government is stealing approximately 150 million dollars from our children and our grandchildren every single hour.
That’s right – the U.S. government is borrowing an astounding 150 million dollars an hour that our children and our grandchildren will be expected to deal with.
It is a theft so vast that it is almost unimaginable.
So what should be done?
A lot of people out there think that our problems would be solved if the government would just quit borrowing so much money.
Well, it is just not that simple.
Look at Greece.  They were forced by the EU and the IMF to dramatically reduce government spending.  But when Greece reduced government spending, that caused the economy to shrink rapidly and it caused tax receipts to go down more than expected.  So Greek budget deficits were even larger than anticipated and so Greece was forced to cut spending even more.  But that created even more economic problems.
A recent article by John Mauldin described the nightmarish effect that this cycle has had on Greece….
And as Greece began shake and bake its way to “austerity,” the very act of cutting deficits pushed the country into recession, which lowered tax revenues and increased expenses, putting the elusive goal of a balanced budget even further off. We should quickly note that this is not just a Greek problem. Spain’s “draconian” cuts have meant that its 6% deficit target for the year has this week been raised to a more likely 8%, making it harder to get back to even.
For country after country, this is the Endgame. It is the end of the Debt Supercycle. Debt has grown to the size that it cannot be sustained. The market will not lend any more money on terms that can be afforded, and any efforts to cut spending and raise taxes will result in an even worse economy, in various degrees of recession, with falling revenues and rising costs.
This is what happens when a country that has been spending far beyond its means is forced to dramatically cut back.
Those that are convinced that balancing the federal budget in the United States will be relatively painless should take a close look at what is happening in Greece.
As I have written about previously, the Greek economy has been plunged into a 21st century “Great Depression”.  In Greece, 20 percent of all retail stores have already shut down, the unemployment rate for those under the age of 24 is sitting at 39 percent, and one third of the entire nation is living in poverty.
And this is only just the beginning for Greece.
Things are going to get even worse.
Unfortunately, many believe that the United States is destined to experience far worse pain than Greece is currently experiencing.
For example, Peter Schiff insists that the United States is in worse financial shape than Europe at this point.  Just check out this video….
Anyone that attempts to downplay the U.S. debt problem is making a serious mistake.  Yes, we are still able to borrow trillions of dollars for next to nothing, but that is going to come to an end.
Remember all of those “suckers” that signed up for mortgages at “teaser rates” that later got jacked up dramatically?
Of course you do.
So what happened to them?
When the rates went up many of them ended up losing everything.
Well, we have gotten ourselves into the exact same kind of a position.  All of this cheap money has enabled us to live very nicely for now, but when the cheap money ends the nightmare will begin.
Right now, our debt is growing much, much faster than our economy is.  Between 2007 and 2010, U.S. GDP grew by only 4.26%, but the U.S. national debt soared by 61% during that same time period.
What would your household finances look like if your total debt grew by 61 percent next year but your income only grew by 4 percent?
When I was a little boy, the U.S. national debt was considered to be a huge national crisis.  Politicians from both major political parties were promising that they would fix things.
But what has happened since then?
Well, when Ronald Reagan took office the U.S. national debt was less than 1 trillion dollars.  Today, the U.S. national debt is over 15.2 trillion dollars.
During 2011, the federal government went into more debt than the U.S. government accumulated from the time that George Washington became president to the time that Ronald Reagan became president.
That may be hard to believe, but it is true.
During fiscal year 2011, the U.S. government spent 3.7 trillion dollars but it only brought in 2.4 trillion dollars.
That is utter insanity, and yet most Americans have become convinced that this is “normal” and that there is nothing to worry about.
It is hard to grasp how much money a trillion dollars is.
If right this moment you went out and started spending one dollar every single second, it would take you more than 31,000 years to spend one trillion dollars.
That is how much money a trillion dollars is.
And things look even worse when you look at the balance sheet of the U.S. government.
The U.S. government has total assets of 2.7 trillion dollars and has total liabilities of 17.5 trillion dollars.  Those liabilities do not even count 4.7 trillion dollars of intragovernmental debt that is currently outstanding.
But it is not just the federal government that has been living a fantasy.
The chart posted below shows the growth of total debt in America over the past several decades.  Consumers, businesses and government officials have been on a debt binge that is absolutely unprecedented….
The scary thing is that even with all of this borrowed money, our economy is still in the dumps.
So what in the world is it going to look like when the debt bubble totally bursts?
Even with all of this “borrowed prosperity”, anger at the government is rapidly growing.  A recent Gallup poll found that “satisfaction with government” in the United States is now at an all-time record low of 29 percent.
So how angry will the American people be when all of this “borrowed prosperity” disappears?
When this whole thing comes tumbling down, a lot of people are going to blame our problems on “capitalism”.
In fact, it is already happening.  Just check out what the founder of the World Economic Forum is saying….
“We have a general morality gap, we are over-leveraged, we have neglected to invest in the future, we have undermined social coherence, and we are in danger of completely losing the confidence of future generations,” said Klaus Schwab, host and founder of the annual World Economic Forum.
“Solving problems in the context of outdated and crumbling models will only dig us deeper into the hole.
“We are in an era of profound change that urgently requires new ways of thinking instead of more business-as-usual,” the 73-year-old said, adding that “capitalism in its current form, has no place in the world around us.”
But capitalism is not the problem.  Capitalism has produced the greatest eras of prosperity that the world has ever seen.
No, the real problem is our debt-based financial system that is managed and run by the central banks of the world.
You see, debt-based central banking is not capitalism.  But way too many people equate the two.
A lot of people cannot even imagine this, but theoretically you could have capitalism without any debt whatsoever.
But what we have today is a financial system that has debt as the very foundation.  And such a system is inevitably going to fail someday.
As I have written about so many times before, the Federal Reserve is at the very heart of our economic problems here in the United States.
The Federal Reserve was designed to be a perpetual debt machine.  And it has performed that task very well.  The U.S. national debt is now more than 5000 times larger than it was when the Federal Reserve was first created.
So yes, even though things seem somewhat “stable” for the moment, there are all kinds of reasons to be concerned about the viability of our economy and our financial system in the years ahead.
The other day, I was quoted in a Reuters article about our coming economic problems….
“Most people have a gut feeling that something has gone terribly wrong, but that doesn’t mean that they understand what is happening,” he said. “A lot of Americans sense that a massive economic storm is coming and they want to be prepared for it.”
Of course the Reuters reporter did not even bother to spell my name correctly, but at least he got the quote right.
A great economic storm is coming.
Don’t let this false prosperity and this “calm before the storm” fool you.
We are living in the greatest debt bubble the world has ever seen, and no matter how it plays out there is going to be a massive amount of pain.
You might want to get yourself and your family prepared for that

Robert Kiyosaki & Chris Waltzek - January 18, 2011

It's been awhile since we ran anything from the "Rich Dad, Poor Dad" guy. Overall we like Robert, if only for his optimism and drive. Listen to what he says, it's relevant.

Confiscation Through Inflation

Worth a viewing............

Wednesday, January 25, 2012

Is Europe Throwing Us Into A 1930s Moment?

The market has been watching Europe (NYSEArca:VGK), particularly the fact that (as of this writing) a deal still hasn’t been struck between the Greek government, the Troika (the ECB, IMF, and euro-zone leaders), and private holders of Greek debt (bankers, hedge funds, and sovereign wealth funds).
In order for Greece to avoid a default on €14.4 billion, which comes due on March 20, these groups must agree to reduce the value of Greece’s debt. Basically, they are negotiating to see how much money lenders will lose — in other words, accept a massive “haircut.”
Negotiations have been ongoing for a while, and a deal is expected to be reached. But the original agreement was supposed to have been struck months ago. So it’s interesting to see why this is taking so long.
The reason is because the Troika wants to get Greece’s debt/GDP ratio down to a manageable 120 percent from the current 200 percent. The problem is that every time they look at the Greek economy, they see that it’s slowing.
Consequently they have to re-do the growth forecasts, which then requires more of a haircut on the bonds to reach the 120 percent target debt/GDP ratio.
Think of it this way: Suppose you go to buy a house, and the bank wants to make sure that the mortgage isn’t more than 120 percent of your annual income. Let’s say you make $100k a year. The bank would be willing to loan you up to $120k. But, if your income decreases to $80k, the bank will only loan you $96k.
“It is about avoiding a 1930s moment … a moment, ultimately, leading to a downward spiral that could engulf the entire world.” — Christine Lagarde, chief of the IMF
The point of this is that every time the parties think they have an agreement, the private bondholders are told they need to take a bigger loss. Originally they were told it would be 50 percent, now the figure is 70 – 80 percent, so they’re taking a hard line approach.
In all likelihood, the negotiations will get done and a deal struck. But given the slowing of the Greek economy due to austerity the Greek government will have to impose to receive a bailout, the probability of the deal having to be re-negotiated at some point is high.
Longer-term Problem
Looking further down the road, the question comes up: How are the PIIGS countries supposed to pay back all this bailout money, when they are simultaneously being forced to implement austerity measures that will slow their economies, and in return tax receipts?
The answer isn’t at all clear. But it is a stark reminder that this whole European crisis is one that will take years to figure out — something to keep in mind the next time we get a furious rally in the European markets (NYSEArca:IEV), like we’ve seen lately.
Remember that in the short term, the market focuses on the rate of change in a trend, not the direction (i.e. are things getting worse than they were last week), not “are they getting better?” The rate of change in the euro zone is positive, and markets are reacting accordingly, but fixing the problems will take years.
So when the talking heads start saying the situation is fixed, you might consider the ProShares Ultra Short Euro ETF (NYSEArca:EUO) and Ultra Short MSCI Europe ETF (NYSEArca:EPV).
Both could potentially profit from overly short-term optimistic traders. Just keep in mind, though, that these are leveraged ETFs, and as such are good trading vehicles, but not meant to be buy-and-hold investments.

Nicely Said..............

"It is natural for man to indulge in the illusions of hope. We are apt to shut our eyes against a painful truth, and listen to the song of that siren till she transforms us into beasts...For my part, whatever anguish of spirit it may cost, I am willing to know the whole truth, to know the worst, and to provide for it."  - Patrick Henry