Monty Pelerin's World

Economic, Financial and Political Analysis

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Government is Hunter, You are Prey

If you don’t hold it, you may not own it.

This video is an interview of Ann Barnhardt by Peter Schiff  where Ms. Barnhardt expresses in a “no-holds barred” manner her opinions on what is happening.

She is one angry woman with every right to be so. Her views should be heard by every American whether they invest or not. While the interview deals specifically with MF Global, the implications of what happened here are important to us all.

The Rule of Law no longer is honored. Without that, we are no better than a third-world banana republic subject to the whims of a dictator or dictator-class. Contracts and agreements have no meaning without the effective and impartial force of Law.

Every piece of paper is a contract waiting to be abrogated — stocks, bonds etc. Even segregated, identifiable, tagged assets are at risk. Even they were confiscated (stolen).

How many people are aware that brokerage funds are at risk? What about storage accounts at bullion houses? Is there any place where assets are safe other than buried in your backyard? When the government is starving, it goes hunting. We, unfortunately, are the prey. To the ruling class, we are nothing more than the feedstock to keep their plunder going.

Listen to Ms. Barnhardt and be aware of how far down the slippery slope we have already slid.

Our Amazing Congress

Wolf Richter   www.testosteronepit.com:

Congress is the ideal American institution: it spends far more than it takes in and borrows the difference. We love that. To heck with the future. It means free money, services, wars, and other goodies. At least some of us get to profit from it. And then we blow it or invest it, and lose it or make money on it. It all adds up to that glorious GDP. It’s the American dream.

Lawmakers are so efficient at it that 36% of every dollar in the budget has to be borrowed…. Oh wait. They don’t do budgets anymore. They’re uncool. They do continuing resolutions. Given this bottomless largesse, mathematically speaking, it’s logical that Congress would have sky-high approval rating. Wait…. Oh no!

Only 11% of the people approve of the Herculean job lawmakers are doing, according to Gallup, which has a knack for peeking at our innermost feelings. It’s the lowest score since Gallup started tracking it in 1974.

How can that be? Didn’t we just learn that it’s a virtuous activity for lawmakers to give out privileged information on pending legislation? Profiting from opportunity is an American principle we cherish. So, a few hedge funds were given tradable information about compromises in the healthcare law just before the announcement on December 8, 2009. According to the Wall Street Journal:

They belong to a select group who pay for early, firsthand

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Vaclav Havel (1936-2011)

The playwright turned hero died on December 18,2011.  He was described by CNN as “the shy but iron-willed Czech writer endowed with a playful sense of humor and a powerful moral compass.”

W. L. Webb wrote in Havel’s obit:

… it was a stocky Czech dramatist lately released from prison who produced the abiding metaphor for what had happened. In 1947, after Yalta and Potsdam, said Václav Havel, who has died aged 75 after a long illness, the clock of history had been stopped in his half of Europe – and now it had started again. Havel’s own career might resemble the very incarnation of that metaphor – of the notion it encapsulates of communism as no more than a bracket in history, a long deviation from the onward march of capitalism’s permanent revolution.

This unlikely hero is owed a debt of gratitude by freedom-loving people around the world. His “body of work” was greater than can be described by merely citing his literary and political accomplishments. He stood up bravely against totalitarianism when it was both lonely and suicidal to do so.

There are too many passages from his work worth quoting. I chose the following because it describes so well current conditions in the US and much of Europe:

The post-totalitarian system touches people at every step, but it does so with its ideological gloves on. This is why life in the system is so thoroughly permeated with hypocrisy and lies: government by bureaucracy is called popular government; the working class is enslaved in the name of the working class; the complete degradation of the individual is presented as his ultimate liberation; depriving people of information is called making it available; the use of power to manipulate is called the public control of power, and the arbitrary abuse of power is called observing the legal code; the repression of culture is called its development; the expansion of imperial influence is presented as support for the oppressed; the lack of free expression becomes the highest form of freedom; farcical elections become the highest form of democracy; banning independent thought becomes the most scientific of world views; military occupation becomes fraternal assistance. Because the regime is captive to its own lies, it must falsify everything. It falsifies the past. It falsifies the present, and it falsifies the future. It falsifies statistics. It pretends not to possess an omnipotent and unprincipled police apparatus. It pretends to respect human rights. It pretends to persecute no one. It pretends to fear nothing. It pretends to pretend nothing.

It is people like Mr. Havel who rise to the occasion when the natural states of freedom and liberty appear endangered. They refuse to tolerate the unnatural condition of slavery into which unconstrained and oppressive government devolves.

There is no particular training or way to spot these seemingly ordinary individuals. There is no school to which they go. Their  origins and preparations differ.  They are out there, often in the most unlikely of places, going on with their lives like others. Yet when freedom is threatened, these quite typical citizens rise to greater heights. They are the reason that freedom will never die. They are the true patriots. They are not patriots to oppressive government. They are patriots to the natural need of human beings — freedom.

Mr. Havel, you were an unlikely, and remain a, true hero. Thank you for your distinguished service to freedom and mankind. Your contributions go well beyond the borders of your own country and serve as a beacon in these increasingly dark times.

When The Rule Of Law Is Dead ….

The more one hears of MF Global the more worried one should be. The issues are much bigger and more dangerous than the likely fraud/theft that seems likely in this situation. Whether political favorite Jon Corzine will even be tried is unsure at this stage. But the implications for the Rule of Law which has taken numerous beatings in the last few years are even more important.

Without the Rule of Law, contracts are meaningless. Without the sanctity of contract, trade will shrink. A modern economy cannot run when limited to agreements between family and old friends.

The latest blow to our legal system is this one:

Trustee to Seize and Liquidate Even the Stored Customer Gold and Silver Bullion From MF Global

Courtesy of Jesse’s Cafe Americain 

The bottom line is that apparently some warehouses and bullion dealers are not a safe place to store your gold and silver, even if you hold a specific warehouse receipt. In an oligarchy, private ownership is merely a concept, subject to interpretation and confiscation.

Although the details and the individual …  [Read the rest of the article]

Richard Russell

The esteemed Richard Russell describes matters as only someone with his longevity can:

Nobody in America under the age of 70 has never, ever seen truly hard times. Most under 70 have never even heard stories from their parents about hard times (their parents had never experienced hard times). Ever since World War II Americans have sipped at a punch bowl that was a mixture of borrowing, greed, impatience, debt and inflation. I believe we are now on the path to once again see really hard times, times that force us to think about our current dire situation.

For years America was the shining beacon that allowed the world to see what freedom and free speech and wealth and democracy were all about. — America was the dream-land, the ideal. In the years since WWII, that has changed. America is now seen as the meddling, fat, money hungry, war-loving immoral land where you can do what ever you want, and if you have a good lawyer you can get away with it.

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