Free kibbles

ECONOMY:

Peter Schiff explains that not only are we losing jobs, the jobs we're creating are lousy jobs that don't help America's productivity.

"In a press conference today, the President claimed that the latest extension of unemployment benefits will not only help the unemployed, but the overall economy as recipients spend the money. If spending government-granted money really were a benefit to the economy, why not simply increase the amounts endlessly? Why limit the benefits to the unemployed? Let's make this recovery a real barn burner: send out million-dollar checks to everyone! Of course, what Obama and his economic advisors do not understand is that money spent by recipients of unemployment benefits is money not spent or invested by taxpayers. It's a transfer of wealth, not a creation on new wealth.
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As a first step, our politicians must stop pushing us backward. Rather than imposing more market-distorting regulations, we should repeal those most responsible for inefficient resource allocation. Rather than creating new moral hazards, we should withdraw guarantees for large financial institutions and irresponsible consumers. Rather than continuing the Greenspan policy of keeping interest rates too low, we should let them rise. Rather than trying to prop up asset prices, we should let them fall to market levels. Rather than increasing the burden of bureaucracy on the economy, we should look for ways to lighten the load. Rather than encouraging people to borrow and spend, we should reward those who save and produce."

How about a Schiff-Napolitano ticket? I don't care who is at the top.

FEDERAL RESERVE:

When the dollar rallies, markets will crash.

"Interest rates. The Fed does not need slinky women in plunging necklines to peddle money. All it needs is low interest rates. When rates are pushed lower than the rate of inflation, the Fed provides a subsidy for borrowing. This is not as hard to grasp as it sounds. If I offered to give you $1.00 for very 90 cents you gave me in return, you would buy as many dollars from me as you could. The Fed operates the same way. It generates market activity by creating incentives for borrowing. Borrowing leads to speculation, and speculation leads to steadily rising asset prices. This is how the game is played. The Fed is not an unbiased observer of free market activity. The Fed drives the market. It fuels speculation and controls behavior by fixing interest rates.
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Bernanke has underwritten every sector of the financial system with government guarantees. He has provided full-value loans for dodgy collateral which is worth only a fraction of its original value. The market can no longer operate without the Fed. The Fed IS the market, which is why it is foolish to talk about a "recovery". The idea of recovery implies a free-standing system based on supply and demand. But, for now, the government provides the demand, which is why there is no market and no recovery. Analysts at Goldman Sachs sum it up like this:

"How much of the rebound in real GDP was due to the fiscal stimulus, and where do we stand in terms of the effects of stimulus thus far? Although precise answers are impossible at this juncture, several aspects of the report are consistent with our estimates that the fiscal package enacted in mid-February as the American Recovery and Reinvestment Act (ARRA) would have accounted for virtually all of the growth reported for the third quarter."

Positive growth is an illusion created by government spending. The economy is still flat on its back. Consumer spending and credit are in sharp decline. Unemployment is steadily rising (although at a slower pace) and wages are flatlining with a chance of falling for the first time in 30 years. Deflationary pressures are building. The talk of a "jobless recovery" is intentionally misleading. Jobs ARE recovery; therefore a jobless recovery merely points to asset-inflation brought on by erratic monetary policy. Surging stocks shouldn't be confused with a genuine recovery.

The Fed faces stiff headwinds ahead. Low interest rates can have unintended consequences. The "cheapness" of the greenback has made the dollar the funding currency for the carry trade. Investors are borrowing low-cost dollars and using them to purchase higher-interest assets elsewhere. The process, which is rapidly escalating.

But while the US and global economy have begun a modest recovery, asset prices have gone through the roof since March in a major and synchronized rally... Risky asset prices have risen too much, too soon and too fast compared with macroeconomic fundamentals.

So what is behind this massive rally? Certainly it has been helped by a wave of liquidity from near-zero interest rates and quantitative easing. But a more important factor fueling this asset bubble is the weakness of the US dollar, driven by the mother of all carry trades. The US dollar has become the major funding currency of carry trades as the Fed has kept interest rates on hold and is expected to do so for a long time. Investors who are shorting the US dollar to buy on a highly leveraged basis higher-yielding assets and other global assets are not just borrowing at zero interest rates in dollar terms; they are borrowing at very negative interest rates...

Every investor who plays this risky game looks like a genius – even if they are just riding a huge bubble financed by a large negative cost of borrowing...

...This policy feeds the global asset bubble it is also feeding a new US asset bubble...
The reckless US policy that is feeding these carry trades is forcing other countries to follow its easy monetary policy... This is keeping short-term rates lower than is desirable... So the perfectly correlated bubble across all global asset classes gets bigger by the day."

This is scary. Bernanke is setting us up for the biggest crash in history.

The four reasons we haven't seen hyper-inflation yet.

HEALTH CARE:

Judge Napolitano explains the consequences of Democrats' health care oppression plan.

"Congress recognizes no limits on its power. It doesn't care about the Constitution, it doesn't care about your inalienable rights. If this health care bill becomes law, America, life as you have known it, freedom as you have exercised it and privacy as you have enjoyed it will cease to be."

You can't get any more clear than that. He also calls the Republican health care proposal, Obamacare-lite. That sounds about par for Republicans. They're only goal in life is to be slightly less worse than Democrats because that gets them the power they crave just like Democrats.

"We do not have two political parties in this country, America. We have one party; called the Big Government Party. The Republican wing likes deficits, war, and assaults on civil liberties. The Democratic wing likes wealth transfer, taxes, and assaults on commercial liberties. Both parties like power; and neither is interested in your freedoms. Think about it. Government is the negation of freedom. Freedom is your power and ability to follow your own free will and your own conscience. The government wants you to follow the will of some faceless bureaucrat.
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Congress recognizes no limits on its power. It doesn't care about the Constitution, it doesn't care about your inalienable rights, it doesn't care about the liberties protected by the Bill of Rights, it doesn't even read the laws it writes."

Napolitano should run for president. We should draft him.

Health care oppression bill passes House 220 to 215. One Republican voted for i and 39 Democrats voted against it. Cloward and Piven are celebrating. Obama is one step closer to collapsing the US economy. We have to kill this thing in the Senate.

EDUCATION:

Walter Williams explains why are children are getting dumber - government schools.

" The Program for International Student Assessment (PISA) is an international comparison of 15-year-olds conducted by The Organisation for Economic Co-operation and Development (OECD) that measures applied learning and problem-solving ability. In 2006, U.S. students ranked 25th of 30 advanced nations in math and 24th in science. McKinsey & Company, in releasing its report "The Economic Impact of the Achievement Gap in America's Schools" (April 2009) said, "Several other facts paint a worrisome picture. First, the longer American children are in school, the worse they perform compared to their international peers. In recent cross-country comparisons of fourth grade reading, math, and science, US students scored in the top quarter or top half of advanced nations. By age 15 these rankings drop to the bottom half. In other words, American students are farthest behind just as they are about to enter higher education or the workforce." That's a sobering thought. The longer kids are in school and the more money we spend on them, the further behind they get.
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The teaching establishment and politicians have hoodwinked taxpayers into believing that more money is needed to improve education. The Washington, D.C., school budget is about the nation's costliest, spending about $15,000 per pupil. Its student/teacher ratio, at 15.2 to 1, is lower than the nation's average. Yet student achievement is just about the lowest in the nation.
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Any long-term solution to our education problems requires the decentralization that can come from competition. Centralization has been massive. In 1930, there were 119,000 school districts across the U.S; today, there are less than 15,000. Control has moved from local communities to the school district, to the state, and to the federal government. Public education has become a highly centralized government-backed monopoly and we shouldn't be surprised by the results."

The solution is to free people from chains of government schools.

MEDIA:

On the symbiotic relationship between government and the press.

MISC:

It's about time scientists figured this out - babies learn language in the womb. I'm sure they learn lots of things, especially about their mother but also about others around her.

Chinese explorer Zheng He visited the Americas and Africa decades before Columbus.