The Last Nail - by Ron Paul

Why is this important to us here in New Zealand?  Because wherever the U.S.A. goes, there we follow just a step behind:-

Sunday, 29 May 2011 21:00

Congressman Ron Paul delivered a five-minute speech on the floor of the House of Representatives May 25, a short speech that may sound to the uninformed like one wild statement after another.  However, as documented in hyperlinks, everything he is saying is based on actual facts.  In his speech, Dr. Paul (he's an obstetrician) made a number of charges that the executive branch of government has established a virtual dictatorship with the willing assistance of Congress and many Americans who fear for their "security." But Congressman Paul is complaining about the erosion of constitutional protections that have already happened. It is not foreseeable, it is already in place. Following is his speech verbatim, along with links documenting his allegations. All words are by Congressman Paul; hyperlinks were added by The New American's Thomas R. Eddlem. The Last Nail by Congressman Ron Paul The last nail is being driven into the coffin of the American Republic. Yet, Congress remains in total denial as our liberties are rapidly fading before our eyes. The process is propelled by unwarranted fear and ignorance as to the true meaning of liberty. It is driven by economic myths, fallacies and irrational good intentions. The rule of law is constantly rejected and authoritarian answers are offered as panaceas for all our problems. Runaway welfarism is used to benefit the rich at the expense of the middle class. Who would have ever thought that the current generation and Congress would stand idly by and watch such a rapid disintegration of the American Republic? Characteristic of this epic event is the casual acceptance by the people and political leaders of the unitary presidency, which is equivalent to granting dictatorial powers to the President. Our Presidents can now, on their own: • Order assassinations, including American citizens; • Operate secret military tribunals; • Engage in torture; • Enforce indefinite imprisonment without due process; • Order searches and seizures without proper warrants, gutting the Fourth Amendment; • Ignore the 60-day rule for reporting to the Congress the nature of any military operations as required by the War Power Resolution; • Continue the Patriot Act abuses without oversight; • Wage war at will; • Treat all Americans as suspected terrorists at airports with TSA groping and nude x-raying. And the Federal Reserve accommodates by counterfeiting the funds needed and not paid for by taxation and borrowing, permitting runaway spending, endless debt, and special interest bail-outs. And all of this is not enough. The abuses and usurpations of the war power are soon to be codified in the National Defense Authorization Act now rapidly moving its way through Congress. Instead of repealing the 2001 Authorization for the Use of Military Force [AUMF], as we should, now that bin Laden is dead and gone, Congress is planning to massively increase the war power of the President. Though an opportunity presents itself to end the wars in Iraq, Afghanistan, and Pakistan, Congress, with bipartisan support, obsesses on how to expand the unconstitutional war power the President already holds. The current proposal would allow a President to pursue war any time, any place, for any reason, without congressional approval. Many believe this would even permit military activity against American suspects here at home. The proposed authority does not reference the 9/11 attacks. It would be expanded to include the Taliban and "associated" forces — a dangerously vague and expansive definition of our potential enemies. There is no denial that the changes in Section 1034 totally eliminate the hard-fought-for restraint on Presidential authority to go to war without Congressional approval achieved at the Constitutional Convention. Congress' war authority has been severely undermined since World War II beginning with the advent of the Korean War which was fought solely under a UN Resolution. Even today, we're waging war in Libya without even consulting with the Congress, similar to how we went to war in Bosnia in the 1990s under President Clinton. The three major reasons for our Constitutional Convention were to: • Guarantee free trade and travel among the states; • Make gold and silver legal tender and abolish paper money; and • Strictly limit the Executive Branch's authority to pursue war without Congressional approval. But today: • Federal Reserve notes are legal tender, gold and silver are illegal; • The Interstate Commerce Clause is used to regulate all commerce at the expense of free trade among the states; • And now the final nail is placed in the coffin of congressional responsibility for the war power, delivering this power completely to the President — a sharp and huge blow to the concept of our republic. In my view, it appears that the fate of the American republic is now sealed — unless these recent trends are quickly reversed. The saddest part of this tragedy is that all these horrible changes are being done in the name of patriotism and protecting freedom. They are justified by good intentions while believing the sacrifice of liberty is required for our safety. Nothing could be further from the truth. More sadly is the conviction that our enemies are driven to attack us for our freedoms and prosperity, and not because of our deeply flawed foreign policy that has generated justifiable grievances and has inspired the radical violence against us. Without this understanding, our endless, unnamed, and undeclared wars will continue and our wonderful experiment with liberty will end

NZ Government is Anti-Resilience

I don't believe the government has any intention of taking steps to build resilience or even to take steps to create the conditions for communities to create resilience for themselves. I believe the government are actively hostile to the concept of community resilience. I believe a government of the left would equally be hostile to community resilience but they would use bureaucratic rather than economic means to undermine resilience. It is the nature of all politicians to seek to create  dependence amongst those they govern / claim to represent, but this particular government are pursuing a particularly vicious course.

Most countries in the "free" world are suffering to a greater or lesser degree from Sovereign Debt Crisis. In most parts of the world this has been caused by bank bale-outs following the collapse in credit (electronic money) supply as the value of the securities that it was backed by have plunged. The governments have been using many devices to shore up the banks but the end result is the same. The private debt of the banks has become the public debt of the Sovereign Nations.

New Zealand doesn't need to be running up a massive sovereign debt. We only had to bale out a few dodgy finance companies, the bill was less than $4 billion (thats still $1000 for every Kiwi adult and child alive. but small beer compared to the US, for example). In fact we didn't have to bale them out at all. Our government chose to extend the "bank credit guarantee scheme" to these small finance companies in order to show "good faith" to the larger institutions. In my view the gamblers that put their life savings into these institutions that were offering high interest rates and thus were obviously high risk should have been allowed to lose all. But thats another story.

No, In New Zealand the government is choosing keep in step with the US, UK etc, creating sovereign debt by running the economy with spending levels at the OECD average but revenue levels lower than OECD levels. Why the hell would they want to do that!

As is the way with ruling elites, they always manage to find a way to pluck an advantage from other peoples misery. Fortunes have been made in dire times of war. During the depression of the 1930's the banks ended up owning vast tracts of land across the US midwest and so-on. The advantage that the ruling elites seek most in the present crisis is resource capture.

Globalised business knows that in the near future, as a result of peak oil and other resource depletion, it is going to become very difficult to make money by the more traditional business activities like producing goods and services to sell at a profit. This is because de-globalisation ( it is coming whether we seek it or not due to infrastructure failure) is going to cause business to be done on a local scale that does not fit the global corporate model. Their answer is to maintain profit and control by what economists call rent seeking. This means that they control resources such as land,water, minerals, intellectual property and so-on and charge money for access to them. This means they get paid regardless of how profitable or not the human activity requiring these resources is. Masterplan!

The problem is that a lot of these resources are in the public domain as they have traditionally seen as being too important to be controlled by private interests. This does not sit well with the rent seeking elites.
In other parts of the world, bank baleouts and the resulting sovereign debt crisis have resulted in conditions where sovereign governments will have to sell off public assets just to balance the books. Here in New Zealand, that precondition is not present so the debt crisis is being manufactured.

This all sits very cleverly with the Trans-Pacific Partnership Agreement, presently being negotiated in secret, which aims to secure a situation such that when these assets are privatised, a future sovereign government of a signatory country will be unable to re-nationalise the assets without paying punitive compensation to the usurpers.

Well-being as a Measure of a Nations Success.

If you have ever looked at the UK's New Economics Foundation you will find a lot of interest in the concept of Well-Being as a measure of a nations success or otherwise as an alternative to GDP. Most recently a post entitled Well-Being, then and now
Well I just followed the Integrated Household Survey link and I have to say the "four questions"
• Overall, how satisfied are you with your life nowadays?
• Overall, how happy did you feel yesterday?
• Overall, how anxious did you feel yesterday?
• Overall, to what extent do you feel the things you do in your life are worthwhile?-  might as well have been written by a fourteen year old for a school project- I do understand from later on in the Office for National Statistic's press release that a smaller number (1000) will be surveyed in more detail but these four questions are trivia.
 I once heard a psychologist say that happiness is an unbalanced state of mind. Wellbeing is best defined in terms of the more stable senses of security, satisfaction and contentment rather than the more ephemoral feelings such as happiness, sadness, anxiety. these are secondary emotions that are in part derivative from the presence or lack of the previous mentioned stable senses, but are also in part determined by an individuals psychological make-up.
 I consider well-being best reflected by a persons sense of security, meaningfulness-of-life, social, and civic engagement. Of course these factors would have different weightings for different individuals, that would be an item for further research. To-whit, I have come up with my own "four questions" as follows:

 On a scale of nought to ten

•  How certain are you that, for the forseeable future, you will be able to secure an income sufficient to fulfil your financial obligations and maintain an acceptable standard of living? (0=completely uncertain, 5=obligations only, 10=completely certain of an acceptable s.o.l.)

•  How trivial or meaningful do you consider the sum of your worklife, recreational activity, hobbies, volountary work, etc. to be? (0=completely trivial, 10= completely meaningful)

•  To what extent do you feel that you have meaningful social engagement with your close and extended family mambers, friends, neighbours and colleagues in work and leisure activities? ( 0= not at all, 10= fully engaged)

•  To what extent do you believe that national and local politicians and public servants in general are willing and able to address issues that you consider to be important to you personally? (0= do not believe at all, 10= believe completely)

 Of course these could be subdivided further if you actually wanted an indication of what policies to pursue to enhance well-being, rather than just to measure it.

The Saxon Villages of Transylvania: A Mediaeval Model for the Future Eco-Village?

I was prompted by an article in the most recent Ecologist magazine to find out more about these remnant mediaeval villages as a potential model for future farming as I see it.  All the links from the article had the inevitable "coffee-table magazine' look about them- pretty flowers, wild animals you know the sort of thing- triumph of style over substance.
Eventually I came across this report commissioned by H.R.H. the Prince of Wales and published way back in 2001

http://www.kimwilkie.com/images/projects/ovs/transylv/transylvania_prt1.pdf

It still has lovely pictures but more importantly it has diagrams, aerial views and descriptive text. The producers of the report have included the inevitable nod to "sensitive tourism" and  "appropriate integration of agricultural technology",  but then this was ten years ago before peak oil awareness and agricultural commodities were at very low prices. The need for "cash earners" was predicated upon the notion that cash is needed to provide the "mod-cons" that must be provided to discourage all the young people from deserting their communities.  I believe that ten years later with agricultural prices rising, peak oil a historical fact a billion hungry people in the world and apparently a change of heart in the E.U. that has until recently sought to destroy the remnants of "peasant farming", this mode of living could suddenly become very attractive to those who formerly might have wished (and been encouraged by politicians) to abandon it for a "better life" in the cities.

I am particularly impressed by the combination of family autonomy in the gardens and arable lands and community co-operation in the use of the common pastures and woodlands. As you will see from the village layout the houses, yards and barns are all very similiar in size indicating a self-imposed egalitarianism in these communities (remember these people were free peasants- not vassals of some feudal lord). I am sure that hundreds of years fighting off Mongol and Saracen hordes built a great sense of community solidarity.




As you know, I pretty much sit firmly in the "doomer" camp when it comes to the notion of sudden vs. gradual collapse.  I have been a long time looking for a model of what I see as a realistic and practical solution to post peak  secure and sustainable living and have found on the one hand a lot of fluffy co-operative idealists (everything is everyones responsibility so no-one does much) and individualistic fortress building survivalists on the other. Here I find inspiration- but sadly I have little confidence in our ability to act in a suitably urgent fashion. Perhaps I need to take a crash-course in Romanian language?

The TPPA is a Traitors Gambit

In reply to   Media Release: Professor Jane Kelsey . Friday, 10 December 2010

“The negotiators themselves say this is not an ordinary free trade agreement."
 “ why are they scared to release the draft text and open it to scrutiny?”

 Absolutely this is not even a free trade agreement or even a treaty in the normal sense as has been understood since the middle ages. The TPPA  promoting itself as a free trade agreement whilst shrouding itself in secrecy is essentially like a pirate ship of old flying a false flag in order to engage its intended victim by deception, that is to say  to secure a binding agreement behind the backs of the citizens of sovereign nations.

 It would not even be true to say this is about the Americans trying to pull a fast one on smaller nations. Essentially the agreement is designed to make international capital the sovereign power within nations with precedence over the elected assemblies that are presently considered to be sovereign. The incumbent leadership of the nations involved are attempting to tie the hands of future generations of elected representatives who may choose to make decisions based on their "national interest" rather than the interest of the worlds elite.

 Arguably, the financial elite see the writing on the wall for the future of their ability to dominate the worlds economic activity. As the global financial bubble deflates, as it is doing right now and will continue to do so at an accellerating pace over the next few years, future governments and communities will need to pursue initiatives of relocalisation that will severely reduce the elites ability to make profit through trade, commerce and industry. The elites plan for the future is to use their present wealth (before it deflates to nothing in the financial meltdown) to capture resources (such as land, water, minerals) and enforce intellectual property rights so as to maintain their wealth and position through "rents" (In the economic sense of the word).

 The TPPA agreement is a "traitors gambit " and should be exposed as such at every possible occasion. John Key, (through his connection to Merrell Lynch an obvious croney of the financial elite)  had to climb down over the Crafar Farms sellout and even coined the populist slogan "Tenants in our own Country", but  as usual the fuzzy glow of that climbdown will be used to blur the greater evil of this TPPA  treachery.

The Future Belongs to the Adaptable.

Read this and understand what you need to do to survive the coming economic meltdown.

1- Get out of debt by any means possible.
2- Be liquid- cash or govt. short term bonds will do nicely thanks.
3- Make the effort to produce at least some of what you need for your day-to-day existence yourself.

Reposted abridged from The Automatic Earth



Stoneleigh: As our readers know, we do not provide investment advice. We do not exist to help people make money in the markets, but to help them avoid losing what they have in a deflationary crisis, at a time when almost everyone will lose a great deal. Our position is that being in cash on the sidelines is by far the safest option at this point, and where most people would be better off by far. Those who are still in the markets are playing a very dangerous game. Many of them know this perfectly well, but they can't walk away from the casino. The upside is limited, possibly very limited, and the risks are steadily increasing.

Stock market bubbles (and housing bubbles etc) are ponzi schemes. As with all ponzi schemes, only a few manage to cash out, and the majority are those who do so early. Those who do not cash out become the designated empty bag holders, but that empty bag can look awfully attractive at a market top. Trying to catch the top tick, and wring every last ounce of profit out of a collapsing system, is foolish. Most investors who play that game are likely to lose badly.

They may be convinced that they are clever and quick enough to get out before the rest, but the odds are not good. Also, the rules of the game are likely to be changed along the way, so that one would have to be both right and lucky in order to profit. For instance, shorting is likely to be banned at some point, and speculators demonized. There will be opportunities to make a killing, but many more 'opportunities' to lose your shirt.

Capital preservation is essential in a deflation, and the best way to preserve capital at this point is to be liquid. Cash constitutes uncommitted choices, and in a world of uncertainty, one needs to be flexible. There will be plenty of opportunities over the next few years (both to improve circumstances and avoid disaster) that will only be available to the few who still have the options cash provides. It isn't necessary to have a fortune. Even a small amount of cash can go a long way as deflation causes prices to fall.

Those without any cash, or the means to earn some (in what will be a very difficult earning environment), will be at the mercy of whatever the world has to throw at them. Most of us are accustomed to far more choice and self-determination than most people have had in human history, and there would be nothing harder to lose. Nothing is as addictive as freedom.

The best way to approach a major threat with attendant uncertainty is to minimize the consequences of being wrong. If people follow our suggestions then they will have reduced or eliminated debt, will have cash on hand and will have perhaps some control over the essentials of their own existence. In short they will be far more resilient in a world where many families are brittle, with little ability to weather even minor turbulence.

These measures are actually prudent under most circumstances. If one takes such steps and things do not go as badly wrong as we think they will, what is the downside? There may be some opportunity cost, but the result will not be catastrophic. Alternatively, if one does nothing to prepare, on the assumption that the situation is under control when it is not, then being wrong could easily be an unrecoverable disaster.

The rally we are living through has done nothing whatsoever to change the nature of our times. We have lived through the largest credit expansion in human history. Credit expansions create excess claims to underlying real wealth through ponzi finance. When the debt created can no longer be serviced, the bubble will implode and the excess claims will be messily extinguished. This is deflation, and it is inevitable once a bubble has developed. The aftermath of a bubble implosion is generally proportionate to the scale of the excesses that preceded it, hence we can expect the impact to be extremely severe.

Being grounded in positive feedback, deflation builds momentum relatively slowly at first, but later at an increasing pace. When credit contraction reaches a 'critical mass' it can unfold with terrifying speed, and for this reason extreme caution is warranted. It is well possible for the global banking system to seize up in a matter of hours, as it came very close to doing in September 2008. Given the scale of the threat, and how long it can take to extract oneself from an over-leveraged and highly vulnerable position, it is entirely appropriate to convey a sense of urgency. In fact it would be irresponsible of us not to do so.


We are now seeing a firmly established received wisdom that recovery is underway and that the Fed has saved the day with quantitative easing. Bullishness is at an extreme. The psychology of the market is the opposite of what it was at the March 2009 bottom. This represents a large red flag, as sentiment extremes are major indicators of approaching trend changes. It takes time for a position to be widely accepted and internalized, and the greater the extent to which that has happened, the closer one is to a reversal. I think we are close to one, but it really doesn't matter whether the top is this week, next month, or even next year. It is coming soon enough that evasive action is thoroughly warranted now.

In fact several years ago, when we first began warning people, would have been a better time to act. Those who did are now sitting comfortably liquid on the sidelines with little or (preferably) no leverage. They didn't suffer huge loses in the first phase of the credit crunch, which other less lucky people have been using this rally to recover from (and if the less lucky hang on too long they will see even larger losses once the decline resumes). The prudent early movers can sleep at night because they will not be wiped out in a bubble implosion. They may have forgone a certain amount of profit in the meantime, but they have also avoided an enormous amount of risk.

There are many actions one can take to lessen the impact of deflation for family, friends and community. The challenge is reaching enough people who are aware to be able to work together with a group rather than in isolation. The effort is absolutely worth it, as those who prepare will be very much better off in a few years time than those who do not. It can be difficult to convince others, however. It certainly strains relationships when people have widely differing views of the future, hence we work to disseminate the information people need to make informed decisions that will allow them to retain their freedom of action. The future belongs to the adaptable.

There will definitely be hard choices to be made, as we have collectively invested so much in a way of life that cannot continue, and extracting oneself from the resulting structural dependencies can be both difficult and time consuming. Trying to live with a foot in two different worlds during the transition to a more resilient life can initially mean all the work of both, without the many of the benefits of either. This is not an easy path to walk. We wish all our readers the very best of luck in walking it, and we intend to remain your traveling companions.

Taming the Vampire Squid

Comment on this article by Ruth Potts at the  New Economics Foundation  concerning the proposed changes to the Bank of England Act, though equally applicable in all countries.

Of course the banks wield a very big stick when it comes to the damage they could do to a nation or government that threatens their hegemony. It seems unlikely, but we may hope the government are playing a bluff with the banks in order to buy time to organise a "coup de grace" against the vampires, placing them under administration, reforming accounts strictly into safe storage accounts for those who seek a safe home for their money, investment accounts for those that can afford to take a risk in order to seek a return on their capital and to "mark to market value" those toxic "assets", derivatives etc that the bankers have invented to inflate the apparent worth of their business and so justify their huge bonuses. The banks are certain to be as obstructive as possible in this matter. The political elite must realise that the unfettered growth of the financial sector in the last thirty years or so at the expense of the real economy has made the economy highly unstable, and that the social trauma of the inevitable deflation that must follow as night follows day will send the world into chaos and tyrany. The big question is- who will be brave enough to take the quantum leap?