Liberty Maven

by Neeraj Chaudhary, Investment Consultant, Euro Pacific Capital

With the mainstream media focusing on the country’s leveling unemployment rate, improving retail sales, and nascent housing recovery, one might think that the US government has successfully navigated the economy through recession and growth has returned. But I will argue that a look under the proverbial hood reveals a very different picture. I believe the data shows that the US economy is badly damaged, and a modern-day depression has begun. In fact, just as World War I was originally called The Great War (and was retroactively renamed after World War II), Peter Schiff has said that one day the world will refer to the 1929-41 era as Great Depression I, and the current period as Great Depression II.

For starters, look at unemployment. During Great Depression I, unemployment broke 25%. If government statistics are taken at face value, the current unemployment rate is 9.9%, but a closer look reveals that the broadest measure of unemployment is currently at 20% – and rising. So, today’s numbers are in the same ballpark as the ’30s even though the federal government is using unprecedented measures to keep the economy afloat. Remember, in Great Depression I, FDR never ran a deficit nearly as large as President Obama’s. Moreover, the Federal Reserve of the 1930s still had a gold standard with which to contend, while today’s Fed has increased the monetary base with impunity. Yet even with all that intervention, unemployment figures still indicate that we have entered depression territory.

What is demoralizing to an unemployed person is not simply being let go, it is being unable to find a new job for an extended period of time. And this is where Great Depression II really rears its ugly head. According to the US federal government’s own data, the median duration of unemployment is now over five months – and rising. This is the highest it’s been since the BLS started compiling this statistic in 1965. As workers start to go this long without jobs, they eat into their savings. Eventually – and especially in a country with a savings rate as low as ours and debt as high as ours – they run out of cushion and hit the street. Formerly middle-class people have to make decisions never thought possible: do I eat in a shelter or go hungry in my home?

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Ron Paul has inspired so many to take the leap into politics. Jake Towne is one of the inspired. Jake has been providing insight through his writing here at Liberty Maven for longer than he’s been a candidate for U.S. Congress. In an era when “politician” is the dirtiest word in the English language Jake stands out as an anti-politician politician. Through his writing and speaking you can feel and see his supreme dedication to liberty.

He’s running for Congress in Pennsylvania’s 15th district. His “open office” idea is one that every single lawmaker should adopt. He errs on the side of freedom on every issue and he deserves every liberty-lover’s support.

Check out his excellent newly re-designed Towne for Congress web site and consider supporting him with a donation.

Quote of the Day:

“It will be of little avail to the people that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed before they are promulgated, or undergo such incessant changes that no man who knows what the law is today can guess what it will be tomorrow.”

– James Madison (1751-1836), Father of the Constitution, 4th US President, Source: “Federalist” # 62

Politicians have a standard cure for every problem — REGULATION. But what happens when there are so many regulations that not even the regulators can know them all, or understand what their consequences are? A case in point . . .

Widespread reliance on credit rating agencies, and a lack of knowledge about how those agencies were regulated, were major contributors to the 2008 financial meltdown.

Just this one example (explained in our sample letter below) is enough reason to reject the so-called financial reform bills being put forward by Barney Frank and Chris Dodd. Complicated regulations helped cause the 2008 mess, and they are NO part of the solution.

If you agree, please send Congress a letter telling them so.

You may borrow from or copy from this sample letter . . .    Read More »