Category: Uncategorized

It’s hard to connect the dots on this one, but it was kind of fun, so here goes:

Little did I realize that one of the world’s so called democracies actually has a state religion, but yes indeed, those zany Brits have yet to change the fact that the Anglican Church is their state religion. Hopefully they don’t still burn or behead heretics, Jews and Catholics!

The other day, that very Church sent to Parliament a request to ban all pointy knives.  I thought that curious until I learned that not too long ago an MP proposed the same thing but was laughed down so bitterly that he actually disclaimed he ever thought of such a stupid idea.  Not so fast dear stupid MP, Parliament has agreed to take the proposal under consideration!

Now thinking that some priest of this state religion had nothing better to do and pulled this stupidity out of his holier-than-thou ass with no reference to anything in particular, I learned that this was in reaction to the homicide rate in the UK continuing to stubbornly rise, and has now exceeded that of the US, which has continued to fall. Well let’s get those grinders out and de-point (likely not a real word – at least yet) all knives before things really get out of hand!

Now considering the fact that even the strictest areas of the US when it comes to gun laws pale in comparison to those of the UK, my question for the UK folks is why do you think that a ban on pointy knives will do anymore in regard to homicide rates than your gun bans have done?

Normally a rational conclusion in such circumstances, as in the case of the US Prohibition, would be that laws don’t prevent people from doing “illegal” things, they just define the penalties when people get caught. Take the War-On-Drugs in the US as a great example, which has done nothing about the drug trade or addiction, but has fed the prison industry the greatest incarceration rate than any other country in the world. I can only imagine the swelling prison rates in the UK for all those found with pointy knives!

Long live the Queen…and of course the Anglican Church.

#STATERELIGION

Are Trump policies just a disjointed array of campaign promises, and is there no way to connect the dots that would show some coherent pattern, like a plan? My initial observation was no way there’s a plan. Upon further consideration, I may have been wrong.

Trump was elected mostly with the support of what some call the forgotten class of God-fearing, conservative, mostly white middle class Americans, most of whom live in what the press and political parties dismissively call “flyover country”. These people feel that their demise, i.e. losing good paying, unionized manufacturing jobs, was due to free trade, the driving force behind globalization and the trade deficit. Trump promised to end this and said if elected tariffs would be the order of the day, and he delivered. The main target is China, although he went after Canada, Mexico and the EU also.

Trump also blasted Fed chairman Jerome Powell, who he appointed, for raising interest rates and continuing QT. Wall Street howled, Trump tweeted, and Powell relented; so much for the theory of an independent central bank. Note that the Fed now is on a program of cutting interest rates.

Trump also revoked the Iran Nuclear Deal, ostensibly because he found it ineffective as a means to curtail that country’s nuclear arms capabilities. Now I am not advocating for or against Trump’s policies here; for the moment I’m just trying to see if these dots can be connected.

For reasons going back long before Trump’s election, the dollar is the world’s reserve currency, which makes it the medium of exchange in international trade, and therefore requires reserves by the world’s central banks. Given that all of the world’s currencies are fiat based there is only one way to obtain this reserve currency, i.e. trade and underselling American products for dollars. The difference between these sales and purchases in America accounts for the trade deficit.

This requires an extraordinary supply of dollars in order to keep this system liquid. Apparently Trump has bought in to the accepted “wisdom” that reducing the trade deficit requires a weaker dollar. To make the dollar weaker, Trump needs low interest rates and/or keeping QE in play. The Iran deal threatened the dollar as the reserve currency because it would have exponentially increased trade between China, Iran, and the EU; it’s all about oil.  So Trump needed those sanctions back. There is a dilemma here for Trump as tariffs will hurt American exports despite depressed interest rates weakening the dollar, so the two may cancel each other out and not help the trade deficit.

So that’s my thinking, which you may find fault with, but at least it’s based on the facts at hand. What we really need to question is not just Trump’s policies, but whether or not the premise that trade deficits are a problem is true. Given the context of the current world monetary system governments are adverse to free markets, especially free trade, rely on fiat currencies and interventionist foreign and domestic policies. This statist mentality has created a dangerous conflict in international trade that has led to wars in the past, so yes, there is a method to this madness, but just don’t blame Trump because we’ve seen this movie before, and it didn’t end well. 

#MADNESS

I was curious about this as I had assumed that because Madoff’s was the largest in terms of size and investor losses, it was the worst in regards to personal greed, but I was wrong.  Allen Stanford stole $2B from his scheme’s fund whereas Madoff stole a paltry $250M. But in terms of size, I also learned that neither was the biggest as that currently comes in at $42.1T in unfunded liabilities!

I once read an article in Forbes about the Madoff scandal wherein they gave a pretty good idea of exactly what a Ponzi Scheme is:

“A Ponzi scheme (/ˈpɒn.zi/; also a Ponzi game)[1] is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned through legitimate sources.”

I checked my Oxford dictionary and got pretty much the same definition:

“A form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.”

So I got to thinking, why does this sound alarmingly similar in many respects to what Social Security is as we hear all about how the younger generations are actually funding for the older generations, and the Trust will at some point run out of money?

Well I again recalled an article in Forbes in which they were responding to those that took a rather vociferous exception to the notion that Social Security is a Ponzi Scheme:

“We have today the insistence that Social Security isn’t a Ponzi Scheme because it uses the taxes being paid today to cover the benefits earned in the past, when that is in fact the very definition of a Ponzi Scheme.”

I have heard other criticisms about Social Security, such as claims that Congress illegally borrows from the Trust for other purposes or the taxes are diverted to other appropriations.  I don’t know if that happens or not, but according to The Center on Budget and Policy Priorities “Although legally distinct, they are often referred to collectively as the Social Security trust fund. All of Social Security’s payroll taxes and other earmarked income are deposited in the trust funds, and all of Social Security’s benefits and administrative expenses are paid from the trust funds.”

While this does not necessarily address the claims about nefarious Congressional acts, let’s proceed on the basis that it does not happen as no proof is known. What we do know is that all money paid into the Trust is invested in US Treasury instruments, bonds and notes, because they are deemed the safest.  Arguable, but such investments are susceptible to the Federal Reserve’s interest rate manipulations as we recently saw creating very poor yields, and hardly return enough together with principals to cover liabilities.

Now I’ll bet that all of you have some form of insurance for car, home, life, work, whatever, and you pay good money for that.  Insurance policies are contracts, the essential terms of which are premiums now for basically benefits to cover some future, and in many cases, unknown need.

Let’s just focus on that which is known and disregard car, home, business liability and similar catastrophic insurances, which are still contracts but provide benefits for unknown problems in the future like accidents, hurricanes, etc.

Let’s focus on life, income and retirement. There are many variables to all these insurances but they have one thing in common, i.e. premiums and contributions are paid now for greater benefits in the future, with varying degrees of risks depending on the contract, and how the investments of premiums and contributions are managed. 

With a whole life policy that usually means a guaranteed future return based on low-to-no risk, but likely a lower but stable return to cover death benefits and ultimate cash values.  With certain types of retirement insurances, such as IRAs, 401Ks, etc. there can be higher risk as in the 2008 financial crisis that slammed those retirement accounts that invested in the type of high risk derivative stuff that such accounts should never have in their portfolio; with such investment accounts you can also elect fixed income. The point is that the terms and conditions of these various insurances are known and form a contract, paid with funds from the insured for the benefit of the insured.

Now look at Social Security Insurance; while it is an insurance policy, you can’t count on what the benefits will be as whatever benefits there may be for anyone at any time is up to the dictates of Congress, i.e. the terms and conditions of the contract will vary accordingly; please note that the Supreme Court has ruled as such when this was challenged, but I am not writing about that; simply note that there’s no way out on this because knowing that no one in their right mind would voluntarily invest their hard earned money in such a scheme, had they been aware of it, Congress made your enrollment mandatory.  Now think for a minute if let’s say Prudential Insurance would offer a whole life policy in NYS with such a deal, would sane people buy such a product, and wouldn’t the NYSDFS get on their case?

How can we rely on what the future benefits will be with SSI when it’s burdened with $42.1T in unfunded liabilities? Whether you believe this will bankrupt SSI in 10, 20 or 30 years does not change the” if”, only the “when” this will happen.  It was an unsustainable Ponzi scheme in 1935 and will remain so to its bitter end, and all the gimmicks, like changing the law that provided the benefits not be taxed, to now 85% taxed, or extending income limits for FICA taxes, or whatever future tweaking Congress can come up with, are all bandages on a hemorrhage.

All those younger than retirement age are essentially funding the gap for current beneficiaries, but they are likely to see less and less of those benefits themselves, if at all.  We are crushing the future of our children to fund an insurance policy which is not an insurance policy at all as it actually guarantees diminishing returns. So whatever you tell your children, tell them to find some way to save for the future in the private sector and understand that the FICA taxes they are paying are just funding the biggest Ponzi scheme of all time.

One other thing, if there are any honest politicians out there in favor of ending this scheme and allowing Americans to put their money in their own retirement insurance funds versus paying FICA taxes, vote for them and you vote for our children’s future.

#PONZISCHEME

While we suffer through the current pain of the trade war, the Fed interest rate manipulations, ever earlier campaign hysterics, threats of recession, and all other maddening modern phenomenon, there is seemingly an odd confidence that the American economy is still doing just fine because there is no apparent bubble like there was in 2008.

There has been some news regarding the irrational behavior of the world’s central banks with $16T of sovereign debt trading with negative interest rates, and the equally irrational behavior regarding the federal debt and deficit situation; but we hear little about the same issue in the private sector.  Why is that? Let’s look at some simple statistics published by the Federal Reserve:

1. Corporate High Yield Bonds, also known as Junk Bonds for their high risk, have been increasing in defaults, somewhere around $35B this year alone.  That means that there are companies out there that are considered Zombies, i.e. with earnings less than their debt service, who have simply found they are now incapable of continuing to pay their debts.
2. Earlier this year, defaults on auto loans were up nearly 5% year-over-year; this is about the same it was in 2009.
3. Mortgage debt exceeded $9T last quarter, more than the record breaker in 2009.
4. Student loan defaults are skyrocketing.

So why does the Fed and politicians tell us that there are no bubbles to indicate concerns that we would have a crash.  One hypothesis is that governments are not prone to call a debt crisis a bubble, such as the Dot.Com bubble of 2000 or Housing Bubble of 2008, because to do so would make it apparent that it can be directly tracked to artificially depressed interest rates.

We are told that we need to be more accommodating to maintain a healthy economy, as has the ECB done in Europe.  Well if that were so, why then are they in recession given that interest rates are so “accommodating” that they went negative? The fact the Germany could only sell less than half its recent bond offering, and that in the US the Fed’s quarter point reduction caused an inversion and bond panic should be a warning that debt markets are in crisis.

If we have a healthy economy as we are being told, why the need for stimulus, or why do we have a record deficit when historically deficits decline in a healthy economy? Why are these policies focused on getting the consumer to spend when it is known that consumption is not actually growth?   

If the Federal Reserve and the Federal government were interested in true and long term growth, it would do whatever it can to increase savings which creates capital needed for investing.  This is such an obvious concept to grasp that you have to wonder why the Fed does not promote it as a policy.  A society that emphasizes differed consumption in order to secure a more financially secure state for future generations creates long term sustainability.  Clearly, this is no longer the case in America and is not a sustainable economic condition as savings are at a record low. The absence of yield created by a policy to manipulatimg interest rates lower is meant to encourage consumption over savings, and is unsustainable. wObj�V=��*

#WHATBUBBLE

It is a large and bewildering field of candidates for the Democratic Presidential nomination and their respective campaigns seem to meld in to each other, confusing and overwhelming even for our huge media establishment. What does come across in varying degrees of coherency is the dominant theme about social justice and the need for equality, presented in moralistic tones as a progressive approach to solve inequality. I hear little if at all from the Republican side, which indicates either the absence of coverage, or perhaps the absence of anything at all; I suspect a little of both as it’s clear that the Republican Party has chosen to remain silent, in a state of appeasement allowing the President to be their speaker.

This social justice theme is irrational as it lacks a basic understanding of the nature of rights, the essential one being that it is the nature of man that his basic right is to own himself.  Based on the 18^th C liberalism of their time, the Founding Fathers expressed this belief in man’s basic rights with such phrases as  …all men are created equal…” with “…the right of life, liberty and the pursuit of happiness…” Please note that it is not happiness itself that is stated as a right, but the pursuit of it.

Any other concept of equality is delusional, and any action for what is called social justice is some morally twisted concept that is little more than vicious envy.  Are all soccer players equal to Lionel Messi? Are all investors equal to Warren Buffet? Are all mathematicians equal to Fibonacci? What should move all soccer players, investors and mathematicians is not to envy these people, but to admire them.

The point is we are not equal to anyone else because we are all different, possess different attributes and talents, which consequently represent an idiosyncratic value that results in some form of wealth we may derive from these attributes and talents, and which defines who we are, and the ownership of ourselves is for all of us our only equal and basic right.

So as we are bombarded with the new clichés about income inequality, the wealth gap, or the like, with the attenuating claims about the “rights” to free education, equal pay, free health care, etc., what we are not getting is a justification why such desires are “rights”. A claim to such rights would in turn require someone to provide whatever is claimed as a right, but who can do that? 

In that question, and the answer to it, lies the inherent fallacy of social justice. The often given answer in this political context is if elected, whoever supports these desires as rights will see to it that the government provides for such rights.  Once you assert that such a desire is a right, you then have to assert how such a right is to be realized; if it requires compelling someone to provide the means to satisfy such claims in the name of social justice, then the assertion is actually immoral as it deprives someone of their own rights in order to meet these desires that you have claimed as a right.

The more politically astute candidates will not go further than asserting such rights as doing so would expose such assertions as either fantasies or confiscations; the less astute but perhaps more honest candidates such as Warren and Sanders do go further, and consequently may therefore be less likely to be nominated. Ultimately, it may not make a difference which candidate is nominated to run against Trump as regardless of the winner, the basic right to own oneself is in peril.

As I have already written about the absurd cronyism and inherent corruption in the QE by the government to the benefit of their elite circle, I agree that such actions contributed to “income inequality” in that it dislocated capital from growth to financial manipulation, and disproportionately burdened us with even more debt.  So why then would we expect such corruption to be absent from the government’s pursuit of “social justice”? That, coupled with the moral bankruptcy of such concepts, should be compelling enough for Americans to see through such policies as the destruction of our basic right to own ourselves, which includes the fruits of our talents and labors. To put it another way, the pursuit of equality as social justice asserts the moral prerogative to have others supply you with your desires at the expense of their efforts.

Consider two examples of the basic right to own oneself:

1. The immutable (unless the Supreme Court overturns Roe v. Wade) justification for a women to own her right of free choice to choose pregnancy or its termination.
2. The abolitionist position as expressed by Fredrick Douglass based on this basic right to own oneself.

Why so many “Progressives” see women’s right to choose what is best for their own bodies as clearly a basic human right, but appear incapable of extending such a basic right in all things is bewildering.  Among Fredrick Douglass’ detractors were many socialists who felt his position undercut their belief that all men are slaves to the existence of private property and capitalism, a position which Douglas rejected as contrary to the basic right of man. Our shared natural basic right to own ourselves is the only equality there is, and a right for all regardless of race, wealth, or whatever our individual attributes and talents may be that distinguish us as who we are.

#EQUALITYMYTH

Sociologists are always looking for patterns in society to explain phenomenon that is otherwise difficult to find or explain.  The most difficult of the past decade or so is the growing phenomenon in American society of looking to blame someone for……well, just about everything.

Now this is a phenomenon that used to be alien to the American DNA, known as Yankee Ingenuity, an inherent cultural phenomenon to always find a way forward; why look backwards at the problem if you have that? Obviously that would be a waste of time and effort, so move on and win the day!

This growing tendency to seek blame first and solutions afterwards is not just counterproductive but just plain stupid. If you find a solution you also find what should have been done to begin with to avoid the problem at hand. When that happens, who needs to waste time and effort on blame?

This is no longer the case as our DNA has been altered.  Herein then lies the problem of where we find ourselves as a culture.  Everything becomes a crusade to find blame with everything but ourselves.  We have externalized the cause of problems to the extent we no longer find it necessary to accept responsibility for our own actions; we are constantly told in media and politics that everything can be explained as an issue that “others” have caused.  Therefore everyone but ourselves is to blame for whatever we find to be a problem.

So how have we to come to this? Let’s start by being honest and understand that we have created this phenomenon the moment we say that a problem exists outside of ourselves as we cease to take the responsibility for it or to fix it, and we did so the moment we looked to someone else to do so. We as Americans have been doing so for decades now.  We blamed the economy on big corporations, government for stupid wars, Mexico for drug addiction, rock-and-roll for loose morals, China for lost jobs….anything but face reality, always playing the blame game.

Game is up! Look around at the presidential candidates, and ask yourselves who is saying to take responsibility for ourselves?  Most are preaching that government will solve the problems of healthcare, equality, income, debt,….whatever ails you, they tell us that they have the fix, just trust them and put them in charge and they will take care of whatever you find to be a problem because after all, someone else is to blame and they will make sure they pay, and we all know who “they” are, don’t we?

Actually, we don’t have a clue, but apparently politicians always do because they have learned how to play us because we have bought in to the blame game.

So what would happen if we reject the game, take back control and assume responsibility for ourselves, starting with exercising freedom, which includes being masters of ourselves, responsible for our actions, and therefore have no need to blame anyone….except the politicians who are playing us with the blame game. Find those candidates who are not seeking to get you to buy in to blaming others, don’t vote for those that preach parasitical policies like a wealth tax, compulsory national service, denial of choice such as health insurance, denial of free speech…oh the joys of actually having the freedom from blame and back to the positive life view that we are all free to pursue happiness and not get dragged in to the abyss of the blame game!

#BLAMEGAME

Debunking the Myths

From the prior two posts we have the inflation myths that provide cover for monetary manipulation and the gold myths deflecting attention from the basic issue of what money is. Given that both myths deal with money we should consider their relationship to each other.

Let’s start with the bizarre circumstances of negative interest rates that arose during the Great Recession, and apparently is still the case in Europe.  In recent articles in Bloomberg News, the NY Times and the Wall Street Journal, there were discussions about ECB Euro Bonds with a negative yield, meaning you are as the lender paying the borrower to take your money. The ostensible reasoning offered is that the ECB needs to provide liquidity to the market to prevent a recession. Similarly, we hear the same from the Fed as they propose moving the USA in the same direction.

What is not offered is an explanation as to why this requires such an incredible perversion of capital markets, undermining the very incentives that provide for investment. These articles also importantly note that this phenomenon is no longer isolated to sovereign debt, but has also spread to corporate bonds. So why would anyone pay someone to take their money? The answer on the sovereign side is a bit more complex, but on the corporate side the answer is few are; without these investment sources for growth there’s little wonder why Europe is technically if not virtually back in a recession.

On the sovereign side, if you’re a pension fund, you are usually legally obligated to invest in the least risk related investments, such as was the case with sovereign bonds; those that have contributed to the fund are not only losing money on negative yields, but also due to inflation. Little wonder that they are angry about that as the stress in these funds has diminished their future income, and in some cases may eliminate it if there are defaults such as happened in Greece.

These government manipulations are really perversions of capitalism, and in fact not capitalism at all. A basic tenant of free markets is that when you lend money it is a reasonable expectation that by deferring its current use you expect compensation from the borrower in the form of interest, which in the case of investments such as bonds is generally referred to as yield. 

So in order to perpetuate these myths, the first step is to pervert money by eliminating the basis for its actual value, diminishing restrictions on its manipulations. That took time to do and it began with the creation of a central bank.  If there were diversity, it would be difficult to accomplish this, so the Fed was the logical first step. With that you now have the means to expand the money supply with the stroke of a pen, or now with a few strokes on a keyboard.  

But you still have a constraint in that there was a standard. No problem, overtime that was also addressed; simply corrupt the standard, and starting in the late twenties, through to the FDR era, this idea took hold until you have the coup d’etat on the standard itself, i.e. simply make it illegal to own gold and confiscate it.  Brilliant, but not quite there yet.  After a few more perversions of the standard you come to Tricky Dick, and presto you take the standard and kill it altogether.  Ah, relief at last, the USA enters the age of fiat currency, what a game saver!

But not so fast, we’re behind a little as all other countries have had a head start and have manipulated their currencies relative to the dollar.  A grand scheme is devised, making the dollar the reserve currency of the world, some countries even directly linking their currency to the dollar. International trade is conducted in dollars, and currency exchange rates are allowed to “float”. Now you have currency wars wherein various countries blatantly devalue their currencies against the dollar without constraint as after all, fiat literally means “by decree”. Now there are “trade imbalances” as prices are no longer a reflection of market value, only relative value, as in who can make something cheaper than someone else via currency exchange, which now is less a production issue but a monetary one.  The cost of labor is now relative more to what a worker in any country is being paid in that currency rather than a stable market value.

Now I’m all for free trade and I feel that it has done good for the consumers in all countries and has even helped raise many above the poverty level in many third world countries, but with the destruction of sound money and the free float of fiat currencies, it is inevitable that the country with the strongest currency will export the least, in this case the USA as compared to Asia and South America.

This may have happened over time even with policies of real sound money as more advanced economies moved on to higher technological production and away from industrial and agricultural production, but the exasperating issue is that the absence of sound money made the evolution needlessly risky and unstable, causing dislocations in labor and resources that are chaotic and not true market reflections, and inevitably unsustainable.

So when you hear Powell talk about the likelihood of the Fed cutting rates despite record stock evaluations, low unemployment and inflation, compare that to the Fed’s statutory mandate to direct monetary policy in order to provide for maximum employment, stable prices, and moderate long-term interest rates, and you can see why I previously called that mandate in contradiction of itself. If we truly have record unemployment unmatched in 50 years, and stable prices due to little inflation, then why cut interest rates which are at the very least already “moderate”? Pardon me for stating the obvious, but it appears to be a case of liars doing the figuring, and so the figures lie.

Consider last fall when the Fed raised rates and deleveraged its balance sheet and the stock market fell hard; Trump trashed the Fed and Powell caved, stopped the rate hikes and deleveraging, and stocks took off. Here again we see the revolving door between Wall Street and Washington, cronyism at its worst. This again is a perversion of capitalism, but what you hear instead on the political front is a need for more “progressive” policies, yet more myths at work deflecting what any reasonable observation should expose.

The Fed is in a hole that it just can’t stop digging deeper.  If it stops its manipulation, in this case cutting rates further, the lies about unemployment , inflation, growth, etc. will show up as they did in the past as the credit bubble bursts; but that will eventually happen anyway as it has happened in the past, so the trick is how to spin it.

What we hear from our leaders in government and aspiring presidential candidates regarding all this is alarming; raise the debt ceiling, lower interest rates, more military interventions, free health care and education, and other proposals the like of which got us in to this mess to begin with; depending on how this plays out, including the elections, we will get some of that, and the spin will be that those who are not on board with it are to blame.  In politics, when you are caught in a lie, the reaction is to lash out and blame those that expose it. 

When Senator Rand Paul proposes such a common sense bill to balance the budget, a bill actually based on the Senate committee plan to address deficits and the debt crisis, the Republican controlled Senate doesn’t even allow it to get to the floor for debate, denouncing their own idea as “unworkable”.  Keep in mind these are the same Republicans who have criticized previous administrations for this very problem and who tell their constituents back home that they want to stop deficit spending. All this in the face of a record trillion dollar deficit for 2019.

The fact that neither party has the common sense and/or political courage to do the right thing does not provide for much optimism for the future economic health of the USA. Add to this a questionable tax law, a trade war that no one can win, war mongering that will destabilize already shaky markets, growing nationalism and socialism on all political fronts, and you can be forgiven if you see little which would contribute to a positive outlook.

Thoreau once said that “Only that day dawns to which we are awake.” I believe, or at least still hope, that Americans are capable of awakening to the facts, and pull the plug on political regimes that have given us not only a welfare state, but also a warfare state. The alternative is to repeat the failures of the last century where the world was subject to growing authoritarianism, economic chaos, and multiple catastrophic wars; we seem to be already heading down that road.

But why are there so few voices calling us to awake to these realities and change the misguided direction that both major political parties are so bent on pursuing? Sounds like something to discuss in another post.

#DEBUNKING

It was an interesting testimony that Jerome Powel gave Congress recently.  For an institution that supposed to be independent from government, you would never know it reading any of the interchanges with members of the House and Senate.

One of the issues discussed in these hearings was the gold standard. Like the hearings on social media where politicians showed little knowledge, let alone understanding, of technology, likewise was the case with economics, especially when the gold standard came up.  This was compounded by the fact that Powell is the first non-economists to chair the Fed since William Miller, whose short tenure (1979-1981) was such a disaster that it led to his early resignation. In fairness to Powell, many Fed chairpersons prior to Miller were not economists, but if you are going to have a data driven decision process for monetary policy in the modern era of chaotic fiat currencies, it would be helpful to have a strong background in economics.

The Fed’s statutory mandate per the Federal Reserve Act is to direct monetary policy in order to provide for maximum employment, stable prices, and moderate long-term interest rates. This is a mandate in contradiction of itself, an issue which we will address in future posts.

First, we should consider what the fundamental requirements are for something to be considered money. These requirements have been defined over a long time ever since methods other than barter were employed by mankind, so they are historically cumulative based on experience as well as economic principles:

1. Durability – something that does not deteriorate over time, but is basically non-reactive to the elements.
2. Portability – not so cumbersome as to be difficult or impossible to carry around enabling ready access and use.
3. Divisibility – a workable commodity that can be fabricated in various measures.
4. Unit of Account – can be used to establish the price of goods and services.
5. Uniformity – the measure of a specific quantity of what is being used as money is consistently the same.
6. Limited Supply – the amount is not unlimited or subject to significant inflation or deflation in circulation.
7. Acceptability – people generally accept the commodity item as a medium of exchange.
8. Medium of Exchange – the commodity used as money is an accepted standard of value.
9. Store of Value – for something to be considered money, it must be able to be saved, retrieved and exchanged at a later time, which means it remains the same at the time it is used in the future as it is now.
10. Means of payment – this is not exclusively an attribute of money as there are others, such as promissory notes, bonds, letters-of-credit, and other financial instruments, but for money it means the colloquial “cash” payment.
11. Numeraire – basically means any commodity that has a measure of value that can be used in currency exchange.

That’s a lot of stuff, but we must appreciate that money has been around a very long time, and so people have come to understand what it means.  Even before Nixon took the dollar off the gold standard, it had been already corrupted by failing the essential test of the above criteria, principally via inflation.  Even when the dollar was under the gold standard, fluctuations in both the printed money and the gold base were manipulated causing inflationary devaluations. 

It is worthwhile considering this point before we even discuss a gold standard.  Take for instance 19^th century silver coinage in use by many countries such as Austria and India.  At one point both these countries over minted coinage to the extent that the currencies fell in value below that of their silver content.  To remedy this inflation they then limited coinage which caused the currencies to rise above the value of their silver content; clearly examples of the corrosive effects of inflated currencies.

Note also that at that time both the US and Great Britain also had silver standards, and in fact the very definition of the British Pound Sterling was a pound of silver, and it issued notes accordingly that could be redeemed in silver, which is what made the British Pound a universal currency of trade in its heyday.  In the US we have the history of silver mostly associated with the Free Silver Movement calling for unlimited silver coinage, mostly as a reaction to Congress doing away with minting silver coins for a period of time.

The point is that it is not enough to have something that meets most of the requirements to be money if you expand circulation to inflationary levels violating the limited supply criteria, which not only devalues a currency, but corrodes confidence in its store of value.  That in turn makes the future of its value questionable.

So when you hear gold bugs say that gold is money, they are correct as it does meet all the requirements of something to be considered money, perhaps more than anything else throughout history, but that does not mean that as money it can’t be inflated.  True, an ounce of gold will always be an ounce of gold, and its value expressed in any currency does not change that.  What actually changes is the currency, not the unit of account of gold. But this does not mean that, even though the amount of gold in the world is approaching its natural limit, we can’t have inflation of it as a currency or a standard for a currency.

From what is stated above we should also note that while there is no currency left with a gold standard, that does not mean that any currency is free from an evaluation comparison to gold because you still have the cost of gold expressed in currencies.  At this time the dollar can be so evaluated by looking at how much gold “costs’ in dollars, which as of this post is approximately $1,400/ounce, about $500 off its all-time high. The ounce of gold has not changed, so compare how much gold cost in dollars in 1973 after Nixon took the dollar off the gold standard and you will see a range (year’s low/high) of $64 – $126/ounce. The ounce of gold is still an ounce of gold, but the dollar by its measure is a shadow of itself.

Based on the above, I am not saying that the gold bugs are wrong; I’m saying that we need to consider all the characteristics of something to be money, and while gold is the best commodity around to be considered money, it is still subject to these criteria.  Why then isn’t silver also money as both historically and by the standards noted has and can serve the same purpose as they did for the examples of Austria and India as noted above?

Can’t argue against that, but there are a few things to consider about silver that are not problematic for gold:

1. Silver is not as durable as gold.  Gold is completely inert, i.e. will not react with the elements, whereas silver tarnishes, which in a crude way can be likened to steel rusting.
2. Silver has significant industrial uses whereas, aside from highly specialized oncological and electronic applications, gold has limited uses; commodity influences are less with gold than silver.
3. Silver is far more plentiful than gold, making it susceptible to instability as currency as seen in the examples above.  Gold is rare, and even with ongoing mining, is becoming even more so.

So with all these virtues of gold, and assuming that its rarity can be a virtue against inflationary tendencies, why then are so many people, including some economists, most politicians, and our Fed chairman so negative about a gold standard?  Well they have plenty of reasons provided by gold bashers to rely on in denouncing those that favor a gold standard.  Consider some of these and also consider the counterpoints the gold bugs offer:

1. Bashers say that gold has no “intrinsic value” whereas as gold bugs say it does.  I think both are wrong. The very concept of intrinsic value is actually a Marxian one regarding labor, and while I don’t subscribe to that at all, it is really not a relevant argument either way regarding gold.  All value is subjective, meaning each individual determines what is of value to them; however, if we consider empirical evidence, history will support the fact that mankind’s consensus is that gold is of value and has been used as money throughout history.
2. Bashers deride gold as a “Barbarous Relic”; bugs say it is the “Noble Metal” because it can’t be corrupted.  Regarding the former, I’ve read numerous articles that use that phrase, but did not identify who to credit for it until recently when I found that it was Keynes.  However, the quote was taken out of the context of his objection to the post Great War gold standard; what is odd is that Keynes was always an advocate of a gold standard, while at the same time he was also an advocate of the idea that governments can spend their way out of economic difficulties.  The contradictory nature of these two concepts is curious but that’s a topic for another time. As to the bugs crowning gold as the “Noble Metal”, the phrase was not used in the monetary sense, but an aesthetic one.
3. Bashers say gold has no yield, and the bugs say it is an excellent investment.  I again disagree with both. Gold, as money, is not supposed to have yield, because if it did, it would lack the characteristics that make it money.  Gold has no risks, which sets it apart from bonds, real estate, stocks, etc. all of which you buy with money, and they can produce yield, but they come with risk as that yield can be negative.  Gold has no risk, so no reward; yes it can be a hedge against currency devaluations, but that is not yield.
4. Bashers say there is not enough gold to support an economy, meaning inadequate circulation for commerce or finance, and/or the actual supply of gold can’t grow fast enough to support currencies for real growth. The bugs correctly point out that there is inherent elasticity with gold because of the mechanism of currency ratios. Current estimates of the world gold supply are about 200,000 metric tons.  Now assuming that people would prefer the convenience of paper currency with a gold standard versus carrying around gold coins and bullion, the issue is what is the correct ratio and how to avoid inflationary problems, and that can be discussed later, but the basher’s argument is just not valid. Neither is the argument regarding real growth.  First of all, if you are referring to real growth, then you are not referring to the false concept that conspicuous consumption is growth at all. Consider the fact that GDP over the last decade has averaged less than 3%, whereas the money supply has just about trebled; the real issue is not gold supply but a massive increase in the fiat money supply, i.e. inflation.  Gold production has more or less kept pace with population growth, so where is the real problem here? Bugs say there’s always mining going on that constantly increases the gold supply; currently, that’s correct, but in the long run most gold production estimates say gold will become increasing scarce with mining sources exhausted in the near future.  There is a very real scientific fact backing this up.  Geologically, most of earth’s gold has always been inaccessible, being so deep within the planet due to its nature and the course of a molten planet cooling over time; most of the gold we have is alien to the planet, literally deposited on earth’s surface from the early universe’s era of meteor and asteroid showers. Those phenomena are thankfully rare now, but that means less and less gold production in the near future. However, that is not really a problem in terms of gold as money as noted above.
5. Bashers say that the Great Depression was caused by the gold standard; bugs say it was the Fed that caused it.  Both are right and wrong.  While it is true that the Fed was inept in handling monetary policy at the time, what the gold standard did in the 1930’s in the short term is restrict the ability of the government and the Fed to basically do what it did in 2008, i.e. massively expand the money supply to shore up the credit market; I’m not saying that would have helped or was even a good idea, but it was a contributing short term factor.  However, that may not have worked for other reasons, principally that the FDR administrations passed huge tax measures, suffocating regulation, restrictive labor policies, and the real and lethal psychological body punch of gold confiscation. While blatantly unconstitutional, FDRs big gold heist coupled with all the other vices of the times shook the economic confidence of the nation to its foundations; no one wanted to borrow, but neither did anyone want to lend.  The result was an economy dead in its tracks.  The gold confiscation has an even more sinister element to it.  When FDR issued the confiscation decree, supposedly to ward off speculators and prevent a rush to the redemption window, gold was fixed at $20/ounce; following the confiscation, the government reset the standard to $35/ounce, in effect boosting its booty in dollar value by 75%.  It’s good to be king!  Only issue is we were supposed to be a republic.

So back to Mr. Powell’s testimony, where he was often asked if he was an advocate of a gold standard, and he repeatedly said no.  At one point he was also asked if he would support the nomination of Judy Shelton, the U.S. Executive Director for the European Bank of Reconstruction and Development, a well-known gold standard advocate, to one of the vacancies coming up at the Fed.  He correctly deflected an obvious politically charged question. He was asked the same regarding Christopher Waller, who is Executive Vice President and Research Director at the Federal Reserve Bank of St. Louis, but gave the same response. Both these nominees face confirmation opposition, even though both are interest rate doves, something the administration and congress both seem to want. Clearly there is great confusion in Congress regarding a consensus on these nominations, but one thing is clear – they want more inflation and no gold standard.

To confound the issue even further we have little consensus on the issue even among free market champions.  Consider what Friedrich A. Hayek, champion of the Austrian School of Economics, published on this issue.  He saw little if any value in a gold standard so much as he sees the need for real money i.e. no inflationary pressure, more feasible if the creation of money was not a government monopoly; so much for bashers maintaining that such libertarian thinkers are all and only about gold.

So where does this leave us regarding the myths about gold and how to get sound money back in our pockets.  Well here are my thoughts:

1. Going back to a gold standard before addressing the dangerously inflated dollar, and the resulting debt and asset bubbles, is not productive. You can’t cure a disease until the patient’s symptoms are addressed so they can withstand the results of the cure.
2. Hayek makes enormous sense when he says that inflation is the main and immediate problem, not the absence of an underlying standard.
3. However, assuming we have the courage to address monetary inflation, and that’s a big assumption, a gold standard would be a great restriction on the government’s malignant tendency to constantly corrupt money for its purposes of expanding itself ad infinitum. This is not only in regards to the Welfare State, but also the Warfare State.  If left unchecked, the cycle of inflationary policies will eventually mute the government’s attempts to control the economy, providing it with the self-proclaimed necessity of further expanding authoritarian policies, such as wage and price controls.
4. It is also noteworthy to go back to Hayek’s idea of ending the government’s monopoly on the creation of money. In reality there is no extant law against this as evidenced by the advent of cryptocurrencies such as Bitcoin.

Now on that last point for a moment, I need to clarify that the volatility of cryptocurrencies is more to do with its failure to meet the standards of money than the technology behind it.  In fact, that technology, known as block chain, is a beacon of light for the freedom that technology can provide on many fronts, including the possibility of sound money, not to mention an unhackable system keeping out criminal and governmental elements from our financial transactions, and facilitating business operations exponentially.

The next post will discuss what the effects of both the inflation myths from the prior post and the gold myths of this post are having on the economy and people’s perception on who and or what to blame for that.

#GOLDMYTHS

You can’t avoid all the news about inflation, interest rates, slowing economy, debt crises, trade wars, currency problems, etc. These items should be in the news, but are we getting the facts from all the talking heads, or are the issues being talked around to avoid what’s really going on?

Consider the following:

1.    The government’s calculation of inflation, with some exceptions, relies on the Core CPI only, currently reported around 2.1%.

2.    The Core CPI excludes food and energy, two essential elements of life that have increased substantially, even during the Great Recession.

3.    The Standard CPI includes food and energy, and is used for instance by the SSA in calculating benefit rates. According to the US Government, the Standard CPI inflation rate is 2.4%, which would lead us to believe that food and energy contribute only .3%.

4.   In 2011 food prices were up 4.5%, and in 2014 up 3.3%, and for all other years from 2008 to 2018 varied from 1.1% to 1.8% annually. Similarly energy costs have inflated an average of 1.7% annually in this same period.

5.    The CPI is offered as a measure of price inflation, a reflection of supply and demand, taxes, tariffs and other regulatory interventions.

6.    The government’s inflation calculations for CPI do not consider monetary inflation, which is a measure of the increase in the money supply.

7.    From 2008 – 2018 there are so many varying reports that most economists are at a loss to estimate monetary inflation accurately; given the trillions of dollars created by the Fed and the US Treasury under QE out of thin air, the common consensus is that during this period the money supply at least tripled. Consider for example that before the Great Recession, the Feds balance sheet was about $1T; by 2016 it rose to $4.5T, and then came down to about $3.8T in 2019.  Most of that was due to QE, a creation of liquidity (i.e. money supply) literally by decree.

8.    Prior to 1959 inflation calculation was primarily focused on monetary inflation as it was assumed that price inflation was simply a market driven phenomenon which varied up and down over time due to supply and demand; subsequently inflation insistently rose on an annual basis, leading to a differentiation in calculations of price and monetary inflation.

9.    Monetary inflation has a lag time effect as there are many variables that can affect the timing of its impacts such as expanded credit, asset bubbles, currency devaluation, apparent growth, conspicuous consumption, etc.

These are just some of the common facts and data available that, when viewed in the context of what we hear and read in the news, should cause us to ask some apparent questions:

1.    If inflation is so stubbornly holding at 2.1% or lower, which the Fed sees as a problem, and except for the last 18 months average income growth remained about the same rate as inflation, why is it the news and political campaigns lament that wages and salaries can’t keep pace with the cost of living?

2.    Why isn’t the government, the news and political campaigns not talking more about monetary inflation, which compared to price inflation is the 800 pound gorilla in the room?

3.    What is the correlation between price and monetary inflation; does the latter have some impact on the former?

4.    If the Fed and UST have combined their efforts to triple the money supply under QE, where did it all go?

5.    With such an expansion of the money supply, which usually results in ready credit, why isn’t there a real expansion of plant and industry, traditionally a measure of real growth?

6.    Also with such an expansion of the money supply, there should be a good spread between short term and long term interest rates, but why are these two near an inversion?

8.    Why does the Fed consider inflation to be a good thing?

So, my thought process tells me that we are not getting the full story when you connect all the dots on the above. Let’s use some common sense and basic economics to decipher some of this stuff:

1. Obviously, just looking at what we paid for something a decade ago compared to today tells us that we have had about 20% inflation over that time.
2. Average wages and salaries increased hardly at all over that same period.  Based on this, I see little benefit with inflation.
3. We have not had any meaningful shortages of supply to our demand, so I see little real market forces creating simple price inflation. What is readily apparent is that the dollar simply does not buy what it used to, so it is devalued, and that is a reflection of monetary inflation. That’s the correlation between the two, i.e. prices went up because we inflated the money supply and made the dollar worth less. We should not convolute that fact with comparisons to other currencies that have fared worse than the dollar; while it’s true that a strong dollar means we can buy imported goods at a lesser cost, the bottom line is still that we are paying more on an absolute basis than we did a decade ago.
4. Interest is a reflection of a time preference on the money we have.  If we have more than enough to sustain ourselves, we have excess money in hand, i.e. capital.
5. Now we have the decision of what to do with this excess money; we can spend and consume, or save for future benefits.  Thankfully we find ourselves in this position and welcome the decision process we need to go through. We look at our options and decide if we invest in our company, buy stocks or bonds, deposit in savings accounts, buy a new car…etc.  OK, but all of these choices are influenced by the cost-benefit of our options.
6. The stock market is volatile, bonds provide record low yield and savings accounts have near meaningless interest rates all thanks to the UST and Fed manipulation; given this situation we are likely to spend and consume.
7. If you don’t have any excess money, and credit is so plentiful and cheap, you barrow, and then spend and consume.
8. The fact is most Americans have not saved, have little excess money to do so, but have continued to accumulate debt with ever constant borrowing in an artificially created credit market; this occurs on the corporate, government and personal level.

The UST and Fed justify this manipulation of both interest rates and the money supply because the thought process is that consumption is growth. However, if we simply look back just a short time in history, we would see that this thought process is obviously flawed as it led to the Dot Com Bubble of the nineties and the Housing Bubble of 2008 that caused the Great Recession.  There was no real growth, just inflated bubbles that burst with catastrophic results.

When these bubbles burst, they had a deflationary effect by drying up credit, depressing spending, increasing unemployment, but at the same time the monetary inflation had devalued the dollar. Monetary inflation has been an issue throughout history.  I’m sure you all remember the Stagflation of the Carter years, and the tough measures Fed Chairman Volker famously employed tightening the money supply to drive down rampant inflation.  I say tough because while it worked it did in turn cause interest rates to soar, tightening credit and slowing growth; it is here that we see the interest rate relationship become evident between price and monetary inflation, but note that the Fed did not dictate interest rates at that time but instead tightened the money supply as an effective tool against inflation. Subsequent to the Volker years, including the Greenspan years, the Fed started to manipulate short term interest rates as another tool to supposedly “control” the economy.

The Fed understandably calculates the money supply in the most broad sense, i.e. more than just the M1 that accounts for basically actual cash, but other monetary assets that are convertible on demand to cash at any time or at a certain time, such as UST 2 or 10 year bonds; for the sake of discussion we simply understand that monetary inflation devalues currencies which in turn raises costs, expands credit, and fuels a false growth better looked on as conspicuous consumption, all of which causes price inflation. 

The fact that this has not had the inflationary effect the Fed had hoped for is curious, but can be explained as a false flag, because the metric used is flawed because the focus has been primarily on the issue as price inflation.

So putting all this altogether we should have a healthy skepticism about the officially reported rate of inflation, and its relationship to manipulated money supply and  interest rates – clearly a case that either the figures lie or liars figure……but why? Consider the following:

1. We already noted that the UST and Fed justify this manipulation of both interest rates and the money supply because the thought process is that consumption is growth.
2. Falsely reporting that inflation is low means the government pays less on benefits that are based on the CPI alone; ask SSA recipients and others on entitlement programs or on government salaries how that’s working for them?
3. I asked earlier that given the fact that the Fed and UST have combined their efforts to triple the money supply under QE, where did it all go?  The velocity of the movement of money through the economy starts with its creation, which in the case of QE was by decree, a real problem with fiat currencies, but as it came out of the UST and Fed, its first stop was the big banks who are the primary members of the Fed system, but also the primary source of funding for investments; one result we have seen with this is all the financial engineering in stock evaluations via buy backs, which is a benefit to certain elites such as the power brokers in government and Wall Street, but not real growth that creates good jobs.
4. We are told that low interest rates help both companies grow and consumers spend; what it really creates is an enormous debt bubble, such to a degree that many Americans are incapable of ever paying off that debt; so what happens if interest rates go up or when the credit bubble bursts? Consider the growth in American business of what has become known as “Zombie” companies; so called because they are the walking dead, i.e. their profits are less than the interest due on their debt.  They currently represent about 20% of American business, even more globally.
5. Keeping inflation rates low hides the problem that the government, including the obviously politicized Fed, is running out of options when another recession hits and also in their attempt to maintain a fiat currency and the US Dollar as a reserve currency. 
6. The false premise that a lower dollar helps our trade balance contradicts the government’s policy that the rising trade imbalance is a justification for tariffs, the reality of which is not only inflationary but also a tax on the people it’s supposed to benefit.

It has been said by some historians that it is in the nature of myths that if enough people believe them, they become accepted as facts, a phenomenon that often underlies the causes for disasters. Apparently our government believes Americans are dumb enough to believe myths; after all, it worked in the assassination of JFK, the Vietnam and Iraq Wars, so why not with our money?

It does not take a Nobel Prize in economics to connect the dots here; objectively, meaning without allowing your politics to bend logic, anyone should see that what we are told just doesn’t add up. To have Jerome Powell in front of Congress the last couple of days actually talking about the likelihood of even lower rates because the Fed is now “data sensitive” should cause a real crisis in the Fed’s credibility. How about some sensitivity to common sense and basic economics?  In my view, we should all use both of these virtues and question why we need the Fed at all.

#INFLATIONMYTHS

It is interesting seeing the various labels that many of the current presidential candidates cloak themselves with, the dominant being “Progressive”; that is not very helpful as it could mean anything a candidate wishes it to mean, or a misdirection of what they really mean, or just a way to say they are superior to anyone who does not think “progressively”, which with political elitism is a consistent problem.

There were three principal instances when the USA had a “Progressive Party”, the first in 1912 with Teddy Roosevelt, 1924 with Robert La Folette and 1948 with Henry Wallace; all three were a product of a split in the Republican Party, all had anti-corruption, anti-tariff, and anti-trust platforms; all ran presidential campaigns, all lost, and all three faded away soon thereafter, but at least then there was a forthright idea of what progressive meant.

Consider a political label example in the past from Norman Thomas, a six time Socialist Party candidate for president; in 1944 he announced his withdrawal from the campaign in a speech in which he stated, “The American people will never adopt socialism. But under the name of liberalism they will adopt every fragment of the socialist program, until one day America will be a socialist nation without knowing how it happened. I no longer need to run as a presidential candidate for the Socialist Party. The Democratic Party has adopted our platform.”.

I dispute one thing about his statement – it is not just the Democratic Party at issue here as the Republicans, though labeling themselves as champions of the free market, are as responsible in many regards as the Democrats for what Norman Thomas says. Also, I assume he uses the word “liberalism” in the 20th Century and not the classical 18th Century sense.

If there is one current candidate that honestly embraces who and what he is, it’s Bernie Sanders, who not only promotes socialism, but cloaks himself in its label….well, almost since he uses the oxymoronic title of a “Democratic Socialist”,whatever that’s supposed to mean; at least he doesn’t try to hide what he’s really about. I’m just not sure if the prefix is meant to align with his DNC affiliation or is meant to soften the label to convey a more acceptable “brand”.

Consider what the leading fund raiser in this huge pack of Democratic candidates, Pete Buttigieg, promotes as a “progressive” approach to help cure the disharmony in America today, i.e. mandatory national service; he clarifies that this could be non-military in nature, but that does not make it any less a form of enslavement than the draft of times past. Baby boomers should remember the Federal Commission hearings on the draft during the late stages of the Viet Nam War in the early 70’s. In one famous interchange, General Westmoreland defended compulsory service against an all-volunteer army that he said would result in “….mere mercenaries…”; Milton Friedman, who served on that commission that helped end the draft, replied, “General, would you rather command an army of slaves?”. The same logic applies to mandatory non-military national service. Let’s remember that it was the Republicans who supported the draft, and the Democrats who were against it; my how things have changed, but at least Mr. Buttigieg provides us with some insight about what the current progressive label means.

Another peek into this progressive label is provided by Senator Kamala Harris, who in 2010 as District Attorney for San Francisco and again in 2011 as Attorney General for California, supported truancy laws that provided for the prosecution and incarceration of parents of children who had in excess of three unaccounted absences of 30 minutes or more during a school year; and yes, there are parents who suffered jail time as a “progressive” approach to truancy. She now claims that the incarcerations were an “unintended” consequence, but the laws she pushed for explicitly provided for that.

This progressive label is beginning to get some definition, but perhaps some of the candidates who embrace it may not really want to have that out there….with the exception of Bernie, who again, if nothing else is at least forthright.

There are so many other examples of bad labels in modern politics, including definitions of political actions. Take for example the recently released Mueller report which raises a lot of questions, but I have yet to hear anyone mouth the word “treason”. There are two instances where that could apply, i.e. levying war against your own country and/or giving aid and comfort to our enemies. I can’t see Trump et al guilty of the former, but couldn’t colluding (or conspiring) with foreign governments apply under the latter, regardless of their intentions? The punishments for treason can no longer include the death penalty as was the 1953 case of Julius and Ethel Rosenberg for conspiracy with the Russians, but if we are to believe that Trump and his staff worked with Russia during the 2016 campaign to undermine our electoral process, is this not treason?

It has been suggested by some politicians that we face an existential moment in our national history; perhaps that should read as “another” such moment, but if this is so, how do we find the right leaders if all we have are meaningless and/or misleading labels? How can we understand who we are dealing with if we can’t get beyond those labels? We do not appear to have made any “progress” in this regard, so I fear that we could wind up with something even worse than what we now have without really knowing how, as Norman Thomas said; we should not think for a minute that isn’t possible as who ever thought that Trump would be elected?

#POLITICALLABELS