"As a practical formula, this does little to help us. We still do not know when or how the correction will come. And, to borrow an idea from Lord Keynes, the deception can last a lot longer than you can remain solvent betting against it. And yet, it is even more dangerous to bet on it.

"America's empire of debt rests on many huge deceptions that we have described in this book:

• That one generation can consume - and stick the next with the bill.

• That you can get something for nothing.

• That the rest of the world will take American IOUs forever - no
questions asked.

• That house prices will forever go up.

• That American labor is inherently more valuable than foreign labor.

• That the American capitalist system is freer, more dynamic, and
more productive than other systems.

• That other countries want to be more like America, even if it is
forced on them.

• That the virtues that made America rich and powerful are no

longer required to keep it rich and powerful.

• That domestic savings and capital investment are no longer necessary.

• That the United States no longer needs to make things for export."

More...

Trusting government to keep statistics on its management of the economy is like trusting a fox to count chickens in the henhouse.

To the average person, the economy is rolling along like it always has. Yes gasoline has gone up a lot, food prices and other prices a little, but this is nothing new. The stock market has gone nowhere in six years, but it is not cause for alarm. Interest rates are low which seems good. There seems to be no reason to be concerned by the monetary signals reported in the media. Contrary to what is reported in the news, Mr. Buckler presents an alarming picture of the weak underpinnings of our world economy. As big as these numbers are, there is no way to know where and when the breakpoint is. Economies have a pattern of deteriorating slowly below the surface until one day, BOING, something pops.

We're not facing a traditional recession like the kind we have since WWII. This one has been accumulating pressures since WWII; the others were babies. For the foreseable future, your wages are going to buy less and less. If you count on your credit cards or your mortage equity to keep afloat, you are digging a hole for yourself you cannot get out of.

To the right of the page of the above link is a list of past articles by Charley Reese. You don't find people with a practical sense of reality very often. His analyses is penetrating and his writing style is easy to absorb.

Though federal law forbids using the military in domestic situations, SWAT teams were created as a way of getting around the law. If you have ever watched the TV program "Cops," watch how SWAT teams enter, or more accurately, attack a house. In scattered incidents, surprised homeowners have gotten themselves killed when they were seen even holding a weapon. This is what set off the sieges at WACO and Ruby Ridge. Like you, I don't feel personally threatened by this. I'm more bothered that our government sees us as the enemy. Once in a while one of us gets caught in their net. Spend an evening in a courtroom and you'll see what I mean. Our political class didn't create the most powerful military in the world for nothing.

When prices go up, consumers are most likely to blame the messenger, the retailers and businessmen. In actuality, it is the federal government that dilutes the purchasing power of money by creating whatever amount it needs to make up for its budget shortfalls. Though the world's central banking systems are all inflating to keep their currency differences about on par, they can't alter the disparities with commodities. Thus, it is not that commodities are getting more valuable; it is the declining puchasing power of paper money that buys less commodities.

This country has been in a long inflationary cycle since WWII. Once these cycles start, they feed on themselves. At some point it is inevitable for this inflationary cycle to end in a deflationary collapse. But for now, expect prices to rise faster than your earnings.

What gives is that the statistics are being massaged to hide the underlying weaknesses. I'm citing the findings of economist Walter J. Williams who has made a living on reading the fine print in government economic statistics. Shadow Statistics

If unemployment was calculated the way it was done during the 1930s, it would run about 12%. The first change in statistics was a "discouraged worker" category that treated unemployed separately. Now they are not counted at all.

The Consumer Price Index (CPI) would be about 8%. The original statistics measured the changes in a fixed basket of goods over time. The index was changed to allow substitutions that in effect measure the cost of survival. If the CPI was calculated the way it was during the Carter years, Social Security checks would be 70% higher. Secondly, if a product is improved, it is calculated to have gone down in price.

The Domestic Gross Product (GDP) overstates growth by 3% year to year. When inflations is understated, real growh is overstated. If you are a homeowner, you are considered to be paying yourself rental income. This in turn jacks up household income which is actually dropping.

Federal budget numbers are kept on a cash basis with no accruals made for future obligations. If set-asides for Social Security and Medicare were counted, the deficit would be $3.4 trillion, not the reported $616 billion. Total federal obligations at the end of September were $51 trillion, over four times the GDP.

If you comprehend what this means, get your debts and living expenses as low as you practically can. It looks like the economy is in the early stages of slipping into an inflationary recession. Wages won't keep up.

I first met Harry in his first book in 1970, "How You Can Profit From the Coming Devaluation." He foresaw what would happen when Nixon abandoned the gold standard. The book was my first lesson in economics, for which I will be forever grateful. He went on to write four more books on economic investment, each time foreseeing the calamity that like ahead. Alas during those years, the costs of raising a family and my slow learning curve prevented me for taking advantage of those opportunities.

Harry did not just write about economics; he wrote about individual freedom. His other work that had a great impression on me was, "How I Found Freedom in an Unfree World." Twice he was the Libertarian Candidate for president. I know he did not expect to win or even wanted to win. The candidacy gave him a forum to explain the cause of freedom. Having heard him a few times, he was as eloquent in voice as he was in written word.

In one article he explains "Why You Are a Libertarian": "As one who abhors violence, you're willing to tolerate anything that's peaceful, and you practice the principle of live and let live – opposing the initiation of force (violence) against anyone for any purpose." Harry Browne archives

His website is still in operation, but I don't know for how much longer. I hope his family keeps it online. One that stands out is The Seven Vital Principles of Government

He died of Lou Gehrig's disease. It was only a few months ago when he stopped refreshing his website when he could write no longer.

harrybrowne.org

But alas, we are creatures of habit. Habits that continue for decades despite the ominous consequences of ignoring the warning signs. I think his name was Hans Selye who won a Nobel Prize for his studies of stress. He found that our bodies have a limited capacity for maintaining equilibrium. That is, after a years of rebalancing repeated assaults, the most stressed organs reach a point of exhaustion, no longer able to respond. This is the major reason for why people get diabetes. We don't have to eat a perfect diet, but we do need to have the sense to stay within those limits. Speaking from experience at the age of 63, I can tell you I've had to make many adjustments as my aging body diminishes in capacity to handle abuses.

Knowing what I've had to do to maintain health and seeing what other people don't do, I've long wondered when statistics would show American health on decline. I got the answer from my company newsletter.

It has a chart which shows that the Consumer Price Index has risen 35% in the past ten years, while health care costs have risen 140%. It maintains that American health is on the decline for the first time ever. Within the company alone, 20% of employees incur 82% of costs.

More than 60% of American adults are not regularly active, and 25% are not active at all. 2/3 of Americans are overweight or obese. America is number one in terms of medical spending and 50% higher than the second highest country. At the same time we are 42nd in infant mortality and 47th in life expectancy. Medical errors are the 8th leading cause of death.

Here's the kicker: the US spent approximately $1.9 trillion on health care while the defense budget was "only" $401.7 billion.

And finally, the newsletter hints that the company is looking for ways to get itself out of this albatross. It's a good bet that every company large and small is thinking the same way. As the cost of government health care systems continue to escalate, expect more bureaucratic rationing. You don't want to tempt disease.