Liberty Maven

by John Browne – Senior Market Strategist, Euro Pacific Capital

Anyone looking for thrills these days should forget roller coasters and skydiving. Instead, simply buy a few shares of U.S. stock. The past year has reminded us how truly stomach-churning the financial ride can be. And after a white-knuckled drop in 2008, investors who held on are now enjoying a dizzying ascent. In the past five months alone, the S&P has risen by 22 percent and the NASDAQ by 33 percent. Emerging markets are back almost to their pre-recession levels. Even individual American stocks have performed in a stellar manner. Apple, Cisco and Oracle have all risen by over 200 percent. Ford, an aging relic once given up for dead, has risen by 268 percent!

But what we have seen is more than just a lesson in physics. Stocks are not going up only because they previously went down. We are witnessing a return of hope. While the change is heartening, it is sadly based on the flimsiest of evidence.

The current rally has been sparked by some modestly good news: the Purchasing Managers’ Index is up, GDP has retracted by only 1 percent, and the fall in home values appears to be leveling off. Taken together, the appearance of these ‘green shoots’ has many, such as Larry Summers and Tim Geithner, convinced that the recession is over.

Somewhat more guarded than his colleagues within the Administration, Fed Chairman Ben Bernanke testified to Congress that he foresaw a “jobless recovery.” One is left to wonder how an economy burdened with double-digit unemployment can recover without new jobs. In recent decades, there have been some jobless recoveries from mild recessions, but they were built upon asset booms. Today, we face a very deep recession. The asset boom has collapsed. A jobless recovery in an economy based on 72 percent consumer spending is an oxymoron.

Unless our economy can go through a needed and painful reorganization, in which the industrial sector is revitalized, recovery from this recession will have to be based upon consumer demand. With unemployment increasing at over 500,000 workers a month, wages dropping, and hours worked declining, it is hard to see consumer demand rising convincingly enough to provide the engine for a rebound.

Meanwhile, U.S. Treasury debt is exploding, the U.S. dollar falling, and unemployment rising. In such circumstances, how can the stock market rise be trusted? What is the reality?

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On July 31, 1809, General John Stark made a toast to his troops in which he wrote the words “Live Free or Die, Death is Not the Greatest of Evils”.

Since 1945, the great state of New Hampshire has used the first part of the Revolutionary War hero’s stirring words as its state motto, which appears on the state quarter and on the state’s license plates.  But now that the state has celebrated the 200th anniversary of the phrase, state leaders are talking about getting rid of it.

Huh?

Indeed, the Governor’s Task Force for the Recruitment and Retention of a Young Workforce for the State of New Hampshire reports that the state motto “doesn’t connect with [the] demographic” and that “the Live Free Or Die motto is prohibitive to what young people are looking for in their home community“.  It complains that the motto portrays an “unfriendly message“, makes the state out to be a cold and harsh place, and sends “an unfriendly message that every individual has to succeed on their own, rather than count on a support system for assistance“.

Golly, how horrible it would be if people were expected to stand on their own two feet!  How heartless!

Those interested in preserving the state’s motto might be interested in checking out the Live Free or Die Alliance which will attempt to encourage “civil engagement” and explore the meaning behind the motto and the state’s libertarian tradition.

If the Republican Party wants to regain its prominence among what my mother likes to call “real people” in America they should look no further than Rand Paul. The notion of a reborn Republican Party is a bit of a “Catch-22″ though. These days the establishment Republicans are still clinging to their neo-conservative foreign interventions of offense and their legislation of morality. Rand Paul represents the anti-establishment which seems to becoming more and more what the “real people” want. As we suggested last week it appears Rand Paul will officially announce his run for Senate later today on the Glenn Beck show.

From Kentucky.com:

FRANKFORT — Bowling Green eye surgeon Rand Paul is expected to announce his Republican candidacy for the U.S. Senate on Wednesday on a national television news show.

Paul, who has been exploring a U.S. Senate bid for several weeks, is to appear on Glenn Beck’s show on the Fox News Channel at 5 p.m. Wednesday and will hold a media conference call at 9:15 a.m. Thursday, said campaign manager David Adams.

Rand Paul’s father was painted with the fringe brush by his fellow Republicans during his 2008 Presidential campaign. All indications at this point are that the Republicans are about to make the same mistake again. The establishment is supporting and funding Rand’s likely opponent Trey Grayson. Could succeeding in raising a million dollars in a single day change all of that?

Hopefully we get to find out.

D o w n s i z e r – D i s p a t c h

Quote of the Day: “The purpose of a government investigatory commission is to place blame where it does the least harm politically.” — Paul Craig Roberts

This is true for our overall effort, and for specific projects too, like Congressman Ron Paul’s Audit the FED bill.

Today, as promised, I want to be realistic about the prospects for the Audit the FED bill, by exploring five possible outcomes . . .

Outcome #1: The audit is ignored.

The FED is a complex operation, and the audit will reflect that. There may be no soundbites that the media and the public can understand. The audit report may simply be ignored, and then forgotten.

Outcome #2: The FED gets a passing grade.

We can’t guarantee that the audit will tell us what we want, or that the auditors will even focus on the things we think are important. The audit will most likely be conducted by establishment insiders, not by people like us. The result could be the exact opposite of what we expect.

Outcome #3: The audit reports bad things, but nothing is done about it.

We think this is the most likely result. In the 1980s the Grace Commission found massive examples of government waste and fraud, but nothing was ever done about it. Instead, the problem just got worse. People may pay attention to the audit, just as they did the Grace Commission, but that doesn’t mean real change will happen.

Outcome #4: The auditors report big problems, and Congress decides to fix the FED.

This may sound like the result we want, but it could be the worst outcome. We want to end the FED, not have Congress micro-manage it.

Imagine what would happen if money creation was a partisan political power. Imagine the consequences if a single branch of government, Congress, could both spend money, and create it.

Have you ever watched a Financial Services Committee hearings on C-Span? It’s frightening. I hate the FED, but Lord, please, don’t let these people control our money supply!

Outcome #5: The auditors report horrifying things, and Congress decides to close the FED.

This is what we want, but it’s the least likely result. This outcome would only happen if there was a huge army pressuring Congress to make it happen.

That’s always the bottom line. Unless you have a huge army you’re not going to get what you want.

The audit may give us a lot of ammunition, but we’re still going to need an army of activists to keep firing the intellectual bullets. In addition . . .

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D o w n s i z e r – D i s p a t c h

Quote of the Day: “The moment of greatest vulnerability is the instant after victory” – Napoleon Bonaparte (as quoted by Lt. Col. Dave Grossman)

* The bill now has majority support in the House, with 282 co-sponsors
* And growing support in the Senate, with 20 co-sponsors

This has happened because of public pressure, including vast numbers of letters to Congress from DC Downsizers.

We cheer the success, but urge caution. Many of us hope this bill will . . .

* Expose corruption and incompetence by the FED
* Cause angry taxpayers to demand that Congress close the FED and restore Honest Money

These outcomes are indeed possible, but we’re also mindful that “The moment of greatest vulnerability is the instant after victory.” If passing this bill fails to achieve our dreams then many who fought for the Audit may despair, and give up the fight. This must not happen. That’s why . . .

* Tomorrow, I’m going to describe five different things that could happen if this bill passes, so you’ll be prepared for possible negative outcomes that could result from victory
* Today, before I give you an action item, I’m going to explain how you can use something called The Stockdale Paradox to keep fighting, even in the face of disappointment

We must learn to manage our own expectations, just as Admiral James Stockdale did when he was a Prisoner of War (POW) in Vietnam.

Author Jim Collins once asked Stockdale, “Who didn’t survive the camps?”

Stockdale replied, “Oh that’s easy. It was the POWs who thought they’d be home by Christmas.”

Those who thought they’d be home by a certain date tended to despair and perish when they still found themselves in captivity after their expected freedom-date came and went. By contrast . . .

Admiral Stockdale survived caustic captivity for 7 years by accepting the brutal reality of his situation, and being confident of eventual release. This belief kept him going.

But he did NOT believe freedom would come by any specific date, or in any special way. This is what saved him from despair and death.

Collins, in his excellent book, “Good to Great,” labeled these seemingly opposed ways of thinking the “Stockdale Paradox.”

The Stockdale Paradox is…

Recognizing and owning the brutal facts, while holding the determination that you’re going to win, no matter how long it takes.

It’s not positive thinking. It’s not fantasizing about how great things will be when everything goes your way, by the next election.

We must think as Stockdale thought.

Victory will come at some point, if we keep fighting. But we must not expect it to come by any specific date, or because of any specific victory, or to be delivered with a nice shiny bow because we passed the Audit the FED bill — or even the Read the Bills Act.

The fight is long. Our enemies numerous, and they aren’t going to go quietly. We must be mentally prepared to fight past Christmas. That’s why . . .

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“A time came when the only people who had ever been free began to ask: ‘What is freedom?’ ” – from The People’s Pottage

by Jake Towne, the Champion of the Constitution

Originally published on Monday, August 3rd at http://towneforcongress.com/economy/health-care-platform-announcement

“A time came when the only people who had ever been free began to ask: ‘What is freedom?’ ” – from The People’s Pottage

Summary: Our health care is simply too important to be left to bureaucrats in Washington, plus it is unconstitutional. I strongly disapprove of the Democrats’ Obamacare and also the incumbent Republican’s “Medical Rights and Reform Act” as both are simply matching strains of the same disease – socialized medicine. (1) (2) (3) (symbol)

Beyond establishing a framework of laws and acts for a competitive free market, running health care is simply not a duty of the federal government, and is best left to individuals and privatized insurance. While the federal government should do it’s best to deliver the promised benefits from the current form of socialized medicine, Medicare, expanding this system is out of the question. Younger generations should be given the opportunity to opt out as Medicare’s total unfunded liabilities were $85 trillion in 2008. (4)

If elected, I will not enroll in Congress’s elite health care plan. Citizens should be wary of politicians who plot to control their constituents’ health care, but will not and do not enroll in it themselves.

Why You Should Oppose Government-Run Health Care

Government-run health care, also known as socialized medicine, also called ObamaCare, is an unsustainable idea and is an erosion of personal freedom. Health care is much too important to be run by the government. The services and products that are most abundant and affordable in America are those that are produced and exchanged in a free market. Health care is no different.

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A bit of an announcement/reminder. Our “Audit the Fed” cosponsor counter image can be placed on your own web site if you so desire. We update it regularly as more and more cosponsors sign on to HR.1207 and S.604.

It’s not a fancy flash widget. It’s a simple image that we modify for the latest count (almost every weekday when there are additions). The image links to our cosponsor scorecard page. The page lists the most recent cosponsors for each bill at the top of the list. It makes it easy to see if your own representatives have cosponsored the bill.

A recent poll revealed that 3 out of every 4 Americans want a Fed audit. It’s time our lawmakers listened to us.

Here is the code to use the counter badge/image on your site if you so desire:

<a href="http://libertymaven.com/wp-content/uploads/hr1207s604cosponsors.html"><img src="http://libertymaven.com/images/af.png" alt="HR1207/S.604 Cosponsor Count" border="0" width="160" height="130" />


NOTE: Don’t expect many updates in the next month (if any at all) while Congress is in recess.

If we listen to the proponents of Obamacare, you’d be led to believe that we have a failing free-market health care system.  If you listen to most of the opponents of Obamacare, you’d be led to believe we have a failing free-market health care system.  As Shikha Dalmia, Senior Analyst of the Reason Foundation points out, as long as this myth continues to be so pervasive we have no chance of getting the government out of the “solution” business.  In fact, our system isn’t radically different from what Europeans have.

How did his plan for a government takeover of roughly a fifth of the U.S. economy get this far in the first place?

The answer is not that Democrats have a lock on Washington right now–although they do. Nor that Republicans are intellectually bereft–although they are. The answer is that both ObamaCare’s supporters and opponents believe that–unlike Europe–America has something called a free market health care system. So long as this myth holds sway, it will be exceedingly difficult to prescribe free market fixes to America’s health care woes–or, conversely, end the lure of big government remedies.

The fact of the matter is that America’s health care system is like a free market in the same way that Madonna is like a virgin–i.e. in fiction only. [Continue reading]