Saturday, December 04, 2010

Europe is printing huge amounts of new money too

Savings worldwide are being robbed of their value. Instead of cutting spending, they are raiding everybody's savings

As the full scope of Greece's budget problems came into full view — it had lied about the actual size of its national debt by over €40 billion — it could no longer sell its debt. The result was a €110 billion EU bailout for Greece earlier this year to help paper over its debt.

Unfortunately, the crisis was not merely limited to a gargantuan Greek accounting scandal. Other European nations were also taking a pounding in the bond markets, like Spain, Ireland, Portugal, and others.

As a result, months later the EU has announced that it is guaranteeing all of its member states' debts. This effectively turned the continent's €750 billion "temporary" sovereign debt bailout fund by the European Central Bank (ECB) into a permanent debt monetization fund, as reported by the Wall Street Journal. Now, the EU has agreed to an €85 billion bailout for Ireland. As other states fail to sell their debts, they'll get bailouts, too.

The way the bailout essentially works is that when member states like Ireland, Greece, and others cannot sell their debt, the ECB agrees to print more euros to fill in the gaps. So shaky are the finances of these European states that the only way they can pay their bills is by printing the money needed.

The ostensible purpose of the money-printing has been to ease the borrowing costs of member states. The logic is that if the ECB agrees to prevent the nations from defaulting on their debts, the risk of failure is removed from the equation, therefore market demand for the bonds would be restored, and interest rates on sovereign debt should come down.

Except, the exact opposite has happened. Since the Irish bailout was announced on November 28th, yields on Italian, Portuguese, Spanish and Belgian debt have risen. What does this mean? That far from calming the bond markets, the central bank interventionism has sent a decidedly different message to creditors, warning that the value of their investments are being diluted with printed money.

Therefore, the more money a central bank prints to pay its nation's debts, the higher the interest rates the markets will demand for that debt to stave off inflation and the depreciation of their assets. If it gets really bad, nobody will even accept the currency as a means of payment. That's essentially what happened to the Weimar Republic in the 1920's, and we all saw how that turned out.

For the U.S., it will be even worse. As the caretaker of the world's reserve currency, a run on the dollar would likely level the entire global economy, leaving a new economic order in its place. The dollar run may have already begun, as China and Russia recently announced that bilateral trade relations would no longer be conducted with dollars. That could be a preemptive move by the Chinese and Russians to prepare for dumping their dollar holdings, which are considerable.



'Constitutional conservatism' is freaking the NYT

NYT editorial below

John Boehner, the next House speaker, expresses the message of constitutional conservatism in calling for every bill to identify the part of the Constitution it rests on. Sarah Palin used the phrase to campaign for limited government. Tea Party members call themselves constitutional conservatives. It is the new mantle in which Republican politicians are wrapping themselves.

The challenge lies in understanding what, if anything, it actually means.

The phrase is used mainly in opposition: against health care reform; against the General Motors bailout; against President Obama’s policies. A year ago, conservatives focused on the gravity of economic problems. This election, their concern shifted to the danger represented by solutions.

Public Opinion Strategies, a Republican polling firm, says the message that 4 out of 5 Republicans wanted to send in the House elections was that American governance must “return to the Constitution.” Constitutional conservatives have an ill-defined faith in the redeeming power of the founders’ vision.

A polemic called the Mount Vernon Statement used the phrase last winter to rally an expanded Republican Party. The statement noted five principles: limited government; individual liberty; free enterprise; advancing freedom, opposing tyranny; and defending family, neighborhood, community and faith.

The phrase is connected to a radical vision. (The Web site of Mike Lee, the Republican senator-elect from Utah, touted him as a constitutional conservative and, as The Times reported, he “views much of what the federal government currently does as unconstitutional.”) But the statement is a vague, highly selective catchall.

It makes no mention of “We the people,” of forming “a more perfect union” or pursuing “the general welfare” — of equality arm in arm with liberty. It seems based on nostalgia for an inadequate version of the country’s past. Like many slogans, it doesn’t bear close examination. Which Americans don’t want liberty, or support tyranny?

That doesn’t mean the effort can be ignored. The prime mover behind the statement, and its first signer, was Edwin Meese III, the former attorney general who helped shape the Reagan revolution. A quarter of a century ago, Mr. Meese led a similar effort to turn a slogan into a movement. That campaign aimed to stem the tide of liberalism in law and bring about a “restoration of fundamental Constitutional values.”

Mr. Meese stirred an impassioned controversy. He drew then-Justices William Brennan and John Paul Stevens into a debate — the first sitting justices to respond to a challenge by an executive branch official since F.D.R.’s court-packing scheme.

Justice Brennan summed up, “It is arrogant to pretend that from our vantage we can gauge accurately the intent of the framers on application of principle to specific, contemporary questions.”

The news media judged that the justices got the better of the attorney general, but Mr. Meese’s rhetoric had political appeal even when it lacked legal persuasiveness. It helped energize a change in government that made conservatism dominant in the law. It helped ensure the strong influence of conservatism generally.

The anger felt by those who favor constitutional conservatism is potent. Call the slogan vague. Call it arrogant. It would be shortsighted to dismiss this increasingly used rallying cry.



A volunteer military can vote with their feet

Oliver North

Adolf Hitler, Benito Mussolini and Hideki Tojo tried and failed. Mao Zedong, Nikita Khrushchev and Ho Chi Minh couldn't do it. But commander in chief Barack Obama may well succeed where others could not. If he has his way, he will demolish the finest force for good in the history of mankind -- the U.S. armed forces. And he wants to make it all happen before the end of the year.

On Nov. 30, Defense Secretary Robert Gates released the much-leaked "Report of the Comprehensive Review of the Issues Associated with a Repeal of 'Don't Ask, Don't Tell.'" Only the Pentagon could come up with a title like that.

The "report" -- 266 pages long -- purports to provide military and civilian leaders in Washington with "a comprehensive assessment" and "recommendations" on changes in Defense Department regulations if Section 654 of Title 10 of the U.S. Code is repealed. The 17-year-old law states: "The presence in the armed forces of persons who demonstrate a propensity or intent to engage in homosexual acts would create an unacceptable risk to the high standards of morale, good order and discipline, and unit cohesion that are the essence of military capability." Importantly, the phrase "don't ask, don't tell" appears nowhere in the law.

Supposedly, the "conclusions" and "recommendations" proffered in the "report" are based on a "survey" of currently serving soldiers, sailors, airmen, guardsmen and Marines. Though nearly 400,000 questionnaires on changing the law were circulated, only 115,052 responded. Of those who did reply, 27 percent indicated that allowing open homosexuals into the ranks would adversely affect unit cohesion. Thirty-five percent of service members in deployed combat units said such a change would have a negative impact on combat effectiveness. Sixty-seven percent of Marines and more than 57 percent of soldiers in U.S. Army combat units believe changing the law would hurt combat efficiency, unit cohesion, readiness and retention. Notably, military chaplains -- from all denominations -- overwhelmingly oppose changing the "don't ask, don't tell" policy.

Apparently unmoved by the concern expressed by well over half of our soldiers, sailors and Marines deployed in war zones, Gates and Mullen now argue that Congress must repeal the law immediately or the courts will intervene. That, too, is a phony argument. Section 654 has withstood more than a dozen legal challenges since it has been on the books. The case now pending in the 9th U.S. Circuit Court of Appeals is but the most recent test. The Obama administration's "legal eagles" need only dust off old files going back to the Clinton administration to see how the law has been upheld in the past.

Obama's push to have the law repealed by this lame-duck session of Congress has been seconded by Senate Majority Leader Harry Reid. But the full-court press may yet produce the political equivalent of an elbow in the face for the O-Team.

Concerns about repeal -- on readiness, retention and recruitment in the brightest, best-educated and most combat-experienced military force in history -- are not assuaged by the report. Nearly 25 percent of those now serving -- and as many as 32 percent of Marines -- said they are likely to leave the service rather than be assigned to live with and serve beside active homosexuals.



Why Palin Should Run

‘Morning Joe’ Scarborough’s scathing piece on Sarah Palin in Politico, rather than discouraging a run by Palin for President in 2012, may have convinced more conservatives she should run.

Joe Scarborough’s stated concerns include how Palin drew a comparison between the disparagement of her and Ronald Reagan, which is a fair assessment by Palin, and her polite but firm retort to former First Lady Barbara Bush’s comment that Palin should stay in Alaska.

Sarah Palin is the Republican “it” girl right now because she yields no ground to establishment types, bluebloods, political consultants, media elites and all those who contributed to the political and moral deterioration of the Republican Party.

Palin was ahead of the curve in taking on the GOP establishment, which is why she is a Tea Party favorite. She is now what Ronald Reagan said in 1976 we needed in our leaders: those who are unfettered by old ties and old relationships.

If Palin were to run, even if she didn’t win she would unquestionably transform the GOP primary for the better. Her mere force of presence would require Republican contestants to address issues they otherwise wouldn’t -- in ways they otherwise wouldn’t.

In a time when the GOP teeters between returning to its constitutional small-government roots and remaining the party of Democrat-lite, Palin has a confluence of several appeals that most other prospective GOP candidates lack. Add to that her Tea Party credentials, and she’s hands-down a bigger big-tent prospective candidate than Mitt Romney, Tim Pawlenty, Newt Gingrich and others frequently named.

Most importantly, Palin is a boat rocker who isn’t afraid to say the Republican Party needs to move in a direction it hasn’t even debated in over a decade, and actually shrink the size of the federal government.

The best thing for the GOP may be a presidential primary field that includes not only Palin, but Jim DeMint, Mike Pence and one or two other conservatives who don’t toe the establishment GOP line.

Ronald Reagan’s biggest initial obstacles came from within the Republican Party itself. He didn’t become the transformational figure in the GOP we now know him to be based his first run for the presidency.

Reagan’s ability to lead by identifying issues of importance to people was remarkably similar to Sarah Palin’s. Those attempting to tear her down may be kicking up more than they bargain for.



A Memo to New Republican Lawmakers

A thoughtful conservative activist in Illinois -- with strong ties to both the state's Republican Party and grassroots movement -- issued the following memo to a State Senator-elect. His sound advice on how to boldly navigate Springfield's treacherous political waters can easily be tweaked and applied to new members of Congress:

Random Thoughts for a New Legislator

1. First priority – ORGANIZE.

2. Springfield is a fetid dung heap of corruption.

3. Everything they do there is wrong.

4. Most of them are idiots, just look at the Brady [gubernatorial] campaign.

5. It and they will try constantly to suck you in. It is the natural pull of gravity.

6. And that equals death.

7. The status quo is your enemy, the taxpayer’s enemy and the public’s enemy.

8. Your choices are binary (Ask: Am I growing government, or growing liberty?), not multiple. Read Radical-in-Chief.

9. Always choose the anti-Springfield, anti-status quo, anti-business-as-usual option.

10. At least as significant as “conservative/moderate” is “reformer/establishmentarian.”

11. Conservative reformers will inherit public support.

12. Never speak in Springfield’s terms, always speak in taxpayer’s terms.

13. Only speak of successful examples of conservative reforms.

14. Friendly, quiet, knowledgeable and supportive.

15. “I want justice now.” – Albert Camus. Let others grant grace to the dung heap and ask the people to shoulder its burden. Advocate reform now, not next year or next session or next decade. Now.

16. Have a great time.

This simple missive contains a heavy jolt of distilled wisdom. If you hail from a district or state that just elected a freshman Republican to the House or Senate, I'd encourage you to forward this memo to his or her office. Simply substitute "Washington" for "Springfield," and send away.



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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)


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