Sunday, September 29, 2013

The Man who may have Saved the World – Survival-of-the-Fittest v Civilization

The man who may have saved the world is Stanislav Petrov who was one of those bureaucrats who received a report that the US had launched nuclear missiles on a first strike to Russia. Normally, he should have reported the attack to his superiors but did not perhaps on a gut feeling it was a computer error. Had he reported the attack, Russia would have launched and there would have been nuclear war in 1983. (see BBC Report)
This is what I mean can we BLINK? We are going to nee help. The world is full of hate and greed. People who think life is all about trying to hurt someone else to get even or to grab as much money for yourself as possible. This is the sad state of character and they justify themselves by saying this is what everyone else does – me first (survival of the Fittest).
Perhaps the most common theory that dominates so many concepts has been the famous idea that has risen to doctrine known as the survival-of-the-fittest. Indeed, survival-of-the-fittest on the surface appears to be a logical theory that has been applied on a wide scale basis including economics, business and human behavior. The term “fittest” has most often been cast into a roll that is not so loving and selfless. Essentially, many have applied this concept to justify the most aggressive and violent conduct. The phrase survival-of-the-fittest was not really coined by Charles Darwin (1809-1882), but by the English philosopher Herbert Spencer. (1820-1903) who developed the all-embracing conception of evolution as the progressive development of the physical world. Spencer coined the phrase survival-of-the-fittest in his Principles of Biology (1864), after reading Charles Darwin’s On the Origin of Species. This term strongly suggests natural selection, yet as Spencer extended evolution into realms of sociology and ethics. Nevertheless, Spencer did write about evolution before Darwin  demonstrating that the theory clearly existed prior to Darwin who more or less provided more flesh to the bare bones yet there remains gaps that people still argue over as in human anthropology known as the missing link.
The theory of survival-of-the-fittest has justified human individualism whereby looking-out-for-number one is really what it is all about in modern terminology. Nonetheless, survival-of-the-fittest has been greatly distorted for in a true sense; looking-out-for-number has adopted the idea that being selfish is best. Looking-out-for-number has been used by socialists demanding to take the wealth away from those who have earned it to redistribute it to themselves. They have twisted idea that the greed of the rich is somehow evil and the greed of the socialist is good yet even the Bible includes within the Ten Commandments that it is a sin to covet thy neighbor’s goods.
A deeper understanding of the theory of the survival-of-the-fittest must also embrace the concept of cooperative synergy that emerges from a collective group. Recent studies suggest that evolution actually punishes the selfish ( Many animals operate individually lacking the idea of forming a group effort while others form collectives like bees and ants. Lions will hunt together or alone. Wolves will hunt in packs and monkeys will form troops. Likewise, humankind has also tended to form social groups and we see this as self-evident within politics for there will never be just one political philosophy.
Consequently, what is overlooked within this superficial idea of survival-of-the-fittest is that isolation creates vulnerability and being uncooperative within human society results in the majority attacking that individual. This is the same within nature even at the cell level. If one cell turns rouge becoming cancer, this uncooperative behavior can kill the host. There is no theory of monopoly that has ever survived. The whole idea that a monopoly can exist on any sustainable basis is absurd. Within this assumption is that we can actually control any situation. You can pass a law to prohibit drinking, gambling, prostitution, or any vice. That does not eliminate it any more than a 55 mile an hour speed limit means everyone will drive at that speed. We cannot control social behavior nor can we suppress human nature as attempted within society by communism. And we certainly cannot create a monopoly and maintain the price at anything above market value as has been shown by OPEC with oil prices and every other commodity. Nor have we been able to eliminate the business cycle to prevent recessions and depressions. When has any regulatory body prevented any financial scandal?
Not everything functions in a solitary mode of pure independence that is what we call “uncivilized”. The theory of me-first is self-destructive. This is why the banks are collapsing for their have only looked at this proprietary trading model and to hell with clients.
To survive what we face and to avoid a MAD MAX event, we need a common bond. Anyone who is out only for themselves will fail. History proves this point. That is the UNCIVILIZED behavior of survival-of-the-fittest  whereas we need to retain CIVILIZATION and that and means serious political reform – eliminating REPUBLICS and moving toward the only real check and balance – REAL DEMOCRACY minus the full time politicians.

Thursday, September 26, 2013


When a currency collapses, it is replaced with a new one, then ALL tangible assets become the means to transfer wealth from one to the next. Germany backed its currency with real estate to stop the hyperinflation. Real estate loses its value if you go too far as will gold and you move into a Dark Age. Then it becomes food and that is the origin of money – back to square one. Hopefully, we can stop that before it is too late.

You will pray for hyperinflation because that way at least the government is not becoming aggressive hunting down money – they print it. Unfortunately, they are coming after everyone. They will be raising taxes dramatically once interest rates start to rise.


QUESTION: “You have said in your blog that stocks and real estate (tangibles) are the place to be but you also mention deflation. … Can we really have inflating asset prices and deflation at the same time — or are you saying the deflation comes down the road, after 2015.75 (when we will pray for hyperinflation)?

ANSWER: We are experiencing DEFLATION as the cost of government rises and is squeezing out excess cash from the economy. The higher costs of taxes and regulation (such as Obamacare) will force prices higher. This is STAGFLATION where prices rise not from a DEMAND boom, but from a rising COST BOOM. This is similar to what took place during the 1970s with OPEC.

The assumption of hyperinflation is that they will print money to meet obligations. Governments in deflation will attack the people and cannibalize the economy trying to meet the costs with taxes rising and courts ruling in favor of government. In part, government is also creating DEFLATION by keeping interest rates low their robbing from the elderly as they are unable to live off of their savings. The artificially low interest rates are also sending the pension funds into default (the next crisis) while they try to prevent their own expenditures rising. The inflation we will see with RISING interest rates. That is when you will see gold start to rise and sustain its gains

The major economies have NEVER gone into hyperinflation that is for new revolutionary governments or ones without sovereign debt. Mature governments instead attack their own economies and destroy them with taxes and the collapse in the rule of law in search of money to survive. Americans cannot have accounts outside the nation and government greed is creating a shrinking global economy that will manifest in higher unemployment, lower economic growth, and STAGFLATION (rising costs with declining economy growth).

Thursday, September 19, 2013

Fed is Trapped – They Have Injected Tremendous Volatility Into the System

Posted on  by 

While the decision surprised financial markets, Bernanke refused to commit to a tapering of purchases later this year, as he had previously suggested. We are in a credit ceiling crisis and any rise in rates will blow the deficit out dramatically. I wrote an op-ed for the Wall Street Journal. I pointed that the miracle of the balanced budget under Clinton was shifting the debt more short-term saving on interest expenditure. This is the same policy. The Fed is trapped. It has boxed itself in and there is ABSOLUTELY no escape. It bought back long-term bonds to help mortgages and that reduced the debt to even shorter-term.
The Fed is in such a crisis mode that it cannot escape. Stop the $85 billion per month that is really negligible, and you are off and running as the market will anticipate higher rates. Bernanke tested those waters and hinted at what he would do and rates shot up like a rocket. They have injected tremendous volatility into the economy that will blow the lid off come 2015.75.

Wednesday, September 18, 2013

Gold – The Next Leg

QUESTION: Been reading your writings for over twenty years, enjoying everything. Quick question, in regards to 2015.75 and the time frame for unrest, economic implosion and capital flow directional changes. Is this the time frame that gold will once again embark on a new up leg which will conclude in the famous and typical blow off phase ?
Also, do you foresee a reset with a new currency basket here in the USA or something else, that will involve gold.
Thank you Martin. have a nice evening
ANSWER: I am preparing a gold report now. Many people keep harping on the QE and how this will be inflationary. This is really rubbish. That amounts to 0.06%. A 2% rise in rates will result in an additional $340 billion increase. If rates went back to where they were in 2007, we will be looking at $1.3 trillion in interest annually. It will be the rise in interest that is inflationary, not the monetization of $85 billion. We are now looking at annual interest expenditures greater than the $1 trillion national debt in 1980. The rates will rise when they cannot sell. We are shifting from PUBLIC to PRIVATE assets. Just look at the Dow.
The new currency comes into play when we are forced by the FREE MARKETS to confront the fact that socialism is collapsing the same as communism did in 1989. This is where gold will rise, not because of hyperinflation nonsense, but because the value of money will become volatile and uncertain. That is what will impact gold. There will be NO hyperinflation for that assumes that government will honor its debts and print. Historically, they always default – i.e. 1931.
The leg up in gold will come with the realization of a crisis hits the majority. That is what we require and that comes after 2015.75.