Liberty Maven

by Neeraj Chaudhary, Investment Consultant in the Los Angeles branch of Euro Pacific Capital

In his weekly radio address this past Saturday, President Obama happily commemorated the 75th anniversary of Social Security. From my perspective, the milestone is nothing to celebrate. For although the president spoke earnestly about the “obligation to keep the promise” of Social Security, in reality, the program will wreck the government’s finances within 10 years.

The numbers are simply astounding. Social Security is the largest social program in the world, making up over 40% of all federal spending. Over 58 million Americans – 1 in 5 citizens – receive a monthly check from Social Security. Although these numbers are already daunting, demographic realities will soon cause the program to expand much more rapidly.

According to the Government Accountability Office (GAO), entitlement programs and net interest costs may be expected to consume fully 93% of federal revenue by 2020. Think about that: in less than 10 years, the Social Security program (which includes Medicare and Medicaid) will have gotten so big that only 7 cents of every dollar of federal revenue may be left for everything else.

What exactly does “everything else” include? Try the entire military, FBI, freeways, disaster relief, NASA, housing agencies, and the postal service – to name a few. If new revenue is not found, and if current Social Security obligations are not changed, the remainder of federal programs would have to be cut by 88% by 2020. Simply put, the “third rail” of American politics is about to electrocute us all.

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In the name of “fighting terrorism,” President Obama wants to give the FBI more powers to monitor Internet activities without a judge’s approval.

You may think this wouldn’t apply to you because you’re not a terrorist. You would be wrong. It could apply to anyone and anything that the FBI deems “related” to a terrorism investigation. FBI agents don’t even have to go before a court to explain themselves. The FBI alone gets to decide.

Obama wants this new power even though the FBI has abused the powers it already has!

Do you want Big Brother knowing the people you email or the sites you visit?

If you don’t, then please tell Congress to deny Obama’s request using DownsizeDC.org’s I Am Not Afraid Campaign.

You can borrow from or copy the following letter . . .   Read More »

A watered-down version of the Read the Bills Act, the so-called “72 hour” rule, would require all final bills to be posted on-line for 72 hours before coming to a vote. It now has 218 sponsors – a majority of the House!

It is DownsizeDC.org’s position that a) we are largely responsible for this rule and how far it’s come, and b) it’s not going to do much — we really need the 24-carat Read the Bills Act. Still, we support it because it was a nearly inevitable stage of progress that our opponents would try to assuage us with a watered-down, milquetoast version first. So we must pass it, even while we remind everyone that it’s not enough.

And so we ask you to please tell the House to pass the 72 Hour Rule.

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

by John Browne, Senior Market Strategist, Euro Pacific Capital

At long last, a good portion of mainstream economists now concede that a ‘double dip’ recession is in the cards for the United States. To head off the pain, sixteen top economists addressed an open letter to the President urging him to “stimulate” the economy with a massive new round of government spending. We feel this is a recipe for driving a recession into a depression. However, there can be few doubts that such a move is being considered in the highest policy circles. Flush from victories in financial regulation and healthcare, the Administration may feel the conditions are ripe to push through another bold initiative.

If so, the United States may find itself in a very diminishing bloc of nations who fail to appreciate the magnitude of the global debt crisis. Its policies will become increasingly at odds with the drift of other world powers. Given American dependence on economic support from abroad, the risks of such isolation are significant.

On July 20th, UK Prime Minister David Cameron made his first official visit to the US. At a joint press conference that followed the private meeting, President Obama and Mr. Cameron papered over the fundamental economic disagreements that separate both governments.

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by John Browne, Senior Market Strategist, Euro Pacific Capital

Statists constantly tell us that we need a huge government to protect us from business monopolies. But they fail to notice that The State is the biggest, baddest monopoly of them all, as well as a major reason why some companies grow so monstrously large.

Just consider the recent economic crisis. The politicians have raged against the banks, but government bailouts, regulations, and shot-gun mergers, have caused the banking industry to become more concentrated rather than less. This is standard operating procedure. Politicians and bureaucrats constantly speak with a forked tongue . . .

* They claim they’re protecting “the little guy” from “the fat cats,” when in reality . . .
* The State actually works for the fat cats (though in an unreliable Mafia kind of way).

A huge part of the business of politics involves conferring subsidies and special protections on favored companies and industries, making many of them near (or actual) monopolies that also happen to be “too big to fail.” Now here comes the latest example of monopoly creation by The State . . .

The Feds want to monopolize the user names and passwords that you employ on the Internet!

The so-called Department of Homeland Security, in cooperation with major corporations like Microsoft, has drafted what they call a “National Strategy for Trusted Identities in Cyberspace.”

That sounds ominous, and it is. Will you be a “trusted entity,” or a distrusted one?

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by John Browne, Senior Market Strategist, Euro Pacific Capital

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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Obamacare is only a few weeks old, but the evidence against it is mounting with every passing day. A small portion of that evidence is described in the open letter to Congress provided below.

Please send Congress another letter demanding that they repeal the recently passed healthcare bill.

You can copy or borrow from this sample letter:

Please take immediate action to repeal the recently passed healthcare bill. To understand just a few of the reasons why repeal is needed please read this column by Cato Institute scholar Michael Tanner: http://www.ocregister.com/opinion/health-246711-care-insurance.html

Here’s a partial summary . . .

A study by the RAND Corporation has now confirmed the warning Congress was given by the CBO (Congressional Budget Office) prior to passing the healthcare bill. Obamacare will do NOTHING to curb increases in insurance premiums. For example, RAND predicts that premiums will rise by 17% for young people.

A recent CBO report also predicts that up to 10 million workers will lose their current insurance under Obamacare, and will either have to buy new insurance through the government-run exchanges, or be forced into Medicaid.

Remember, President Obama and Congressional leaders promised us that none of us would lose our current coverage.

In addition, Read More »

Like many free Americans who want to stay that way, I was at a Tea Party rally on April 15th. I’m not a card-carrying member of that group but I agree with them wholeheartedly on the bad direction this country is taking under the Obama regime. So I picked a spot on the sidewalk on Menaul Boulevard at 4 in the afternoon, brandished my sign, yelled a bit, waved a bit, and said what had to be said. For the most part, the event was very, very peaceful except for a young lady who stopped at the light and tried to share the water she had with her in her environmentally-friendly and recyclable water bottle. I was deeply dismayed for it appeared she was far more in need of a shower than any of us.

But it is the difference between conservatives and those on the Left that we tend not to make horse’s rear ends of ourselves at rallies and protests. I don’t think I’ve ever read of a single conservative riot, no angry mobs of grown-ups running down the street overturning cars, setting fire to buildings, breaking windows, pillaging, and looting. But every time I see rallies on the Left, there they are obstructing traffic, breaking things, making their presence known through obscene gestures and foul language. None of that was in evidence at this day’s Tea Party protest.

We voiced our opinions on Mr. Obama, federal spending, politicians who won’t listen to us, liberty, freedom, the Constitution, you name it, we wrote it on out signs and discussed it with one another as the time passed. A finer group of people I could never find myself around. Thoughtful, opinionated, and, most importantly, intelligent.

We came, we made our point, and if the powers that be still won’t take notice of what we have to say, they’ll hear from us again this November.