Terrorists Win: Fascist Police Shred 4th Amendment In Watertown MA

Where are the Oathkeepers now, huh?

“The time is now near at hand which must probably determine, whether Americans are to be, Freemen, or Slaves; whether they are to have any property they can call their own; whether their Houses, and Farms, are to be pillaged and destroyed, and they consigned to a State of Wretchedness from which no human efforts will probably deliver them. The fate of unborn Millions will now depend, under God, on the Courage and Conduct of this army” – Gen. George Washington, to his troops before the battle of Long Island

After violating the 4th Amendment rights of just about everybody in Watertown, Massachusetts, the incompetent police couldn't find Tsarnaev, but the wretched of Watertown meekly groveled and even thanked their oppressors.

"Haende Hoch!" the Gestapo cries in the video, except in English. You'll be hearing this next at your local train station, bus stop and at road checkpoints manned by Obama's ever-expanding army of TSA goons, just as you do now at every airport. 

Video here.

Story here.

Incompetent FBI Interviewed T. Tsarnaev In 2011, Overlooked Travel In 2012

What we have after all these billons of tax dollars wasted by DHS, TSA, FBI and the rest of the federal alphabet soup is another case of the one that got away. The "security" was just theatre.

As one astute guest said yesterday on the Sean Hannity show, nobody at the FBI remembered a guy whom they interrogated personally in 2011 (after being alerted by the Russians in 2010) when they reviewed photo and video evidence of the bombing in Boston showing Tamerlan Tsarnaev in April 2013. That's right. It took a victim, Jeff Bauman, to finger Tamerlan's brother to get to Tamerlan Tsarnaev.

And now Sen. Lindsey Grahamnesty is claiming the exit of Tamerlan Tsarnaev to visit Russia in 2012 for what looks like six months of terrorist training was missed by the FBI because his name was misspelled.

That was the same problem with the Fruit of Kaboom bomber, who got on a flight to the US because even though he was supposed to be on a no-fly list his name, Abdulmutallab, was misspelled by a government employee, as reported here:

"Officials say the failed plot also tipped them off to the potentially serious consequences of a small mistake: a spelling error. The State Department incorrectly spelled Abdulmutallab's name on his visa application. When Abdulmutallab's father warned the U.S. embassy in Nigeria that his son had been radicalized, embassy staffers couldn't find Abdulmutallab's name in their visa database — because it was entered with an incorrect spelling."

That was months before the flight to Detroit.

As I've maintained before, people who can't spell are dangerous.

CBS story here.

Washington Times story here.

The New Yorker Magazine Engages In Pure Fantasy About The Underground Economy

This is your stereotypical New York look-down-your-nose-at-the-rubes dismissal of fly-over country where God, guns and cash deals are the bogeymen gussied up with an appeal to an ignorant authority even as real retail adjusted for population shows we are still over 8% below the 2005 peak:

Off-the-books activity also helps explain a mystery about the current economy: even though the percentage of Americans officially working has dropped dramatically, and even though household income is still well below what it was in 2007, personal consumption is higher than it was before the recession, and retail sales have been growing briskly (despite a dip in March). Bernard Baumohl, an economist at the Economic Outlook Group, estimates that, based on historical patterns, current retail sales are actually what you’d expect if the unemployment rate were around five or six per cent, rather than the 7.6 per cent we’re stuck with. The difference, he argues, probably reflects workers migrating into the shadow economy. “It’s typical that during recessions people work on the side while collecting unemployment,” Baumohl told me. “But the severity of the recession and the profound weakness of this recovery may mean that a lot more people have entered the underground economy, and have had to stay there longer.”

It's pure fantasy that $2 trillion in income (!) didn't get reported to the IRS based on nominal numbers of less than, for example, $5 trillion in retail sales in 2012, all generated by suddenly sidelined people (!), when real retail adjusted for population growth and ex-gasoline is still over 8% below the 2005 high:

(See Doug Short's discussion, here.)

That's right. The patriotic core of the country is a bunch of dishonest tax-evaders who are robbing the government blind with their vibrant, dishonest cash economy! They don't even have bank accounts, the pikers!

How dare they?!

The Line Of The Day Belongs To Rush Limbaugh

Rush Limbaugh parodied Rev. Jeremiah Wright today:

"Obama's Chechens . . . have come home . . . to roost!"

In Boston Bombing Case, The Score Is Actually Police 0, Citizens 2

Victim Jeff Bauman identified the bagman.

Boatowner Dave Henneberry bagged him.

Julius Genachowski's Favorite Baseball Player Talks Just Like The Terrorists' Friends

The Boston Red Sox' David Ortiz and Azmat and Diaz share a rather limited vocabulary.

Story here.

Julius Genachowski, Public Menace At The FCC

Obama's amoral commie at the FCC.

To Julius Genachowski, public menace:

Your statement excusing the public profanity of Red Sox player David Ortiz is completely unacceptable.

It's public officials like you who are responsible for advancing the decline of America pushed by its worst examples in sports and entertainment. You are supposed to enforce standards of public decency, but your disgusting rationalizations only mean our children will be exposed to more and more barbarity without our consent, degradations from which we find it increasingly difficult to protect them.

I can't say for whom I feel more contempt, David Ortiz, you, or the ne'er-do-well who gave you your job.

Signed,

A Patriot

Incompetent Government Couldn't Stop Tsarnaev Or Find Him Afterwards

Our incompetent government, after spending billions of our dollars to stop terrorists and shredding our liberties in the process through surveillance of email and cellphone traffic and body searches at airports, couldn't stop yet another massacre by a couple of determined punks.

And afterwards it couldn't find the last suspect, even though the rights of a free people were trampled with the imposition of a police state and the shut down of a great American city:

"Up until the younger man's capture, it was looking like a grim day for police. As night fell, they announced that they were scaling back the hunt because they had come up empty-handed," it was reported here.

Maybe we should rethink who we let in here and why, instead of what we are doing, which is acting more like the unfree world from which immigrants to our country flee.

Why A Hailstorm Of Gunfire If Tsarnaev Was Found By Homeowner Curled-Up In A Ball?

These reports don't add up:

CNN here, where the video doesn't show the boat covered in a blue tarp but white, casting doubt on the credibility of what the stepson says but CNN seems to accept as fact anyway:

Henneberry [the homeowner] climbed a stepladder to look inside. "He basically stuck his head under the tarp (and) noticed a pool of blood," Duffy said. It was dark under the tarpaulin, so the boat owner could only make out vague contours, "but he definitely noticed there was something crumpled up in a ball," the stepson said. A pool of blood; a manhunt in Watertown; time to call 911. Squad cars with lights flashing raced in and lined the streets. Officers fanned out around the house. ... Duffy said he tried frantically to call his mother and stepfather as he watched on TV while law officers unleashed a hailstorm of gunfire into the backyard.

UK Daily Mail here, whose photos clearly show not a blue tarp but white, quotes the police spokesman unaccountably ringing the same bell that Tsarnaev was too out of it to resist:

'He had lost a lot of blood. He was so weak that we were able to just go in and scoop him up,' state police spokesman David Procopio told the Boston Herald adding that the suspect was in 'serious if not critical condition'.

Another video of gunfire, here, which is mostly noteworthy for what you hear, not what you see:

Barack Obama Wants Us All To Become Yuri Zhivago

"Yuri Zhivago (Omar Sharif) is essentially apolitical but he is also an idealist and when he returns home from the war to Moscow to discover that the People have taken over his home and moved 15 families into it, he pauses to process this infomation and then says 'It's much better this way. More just.' When his slightly more cynical uncle (Ralph Richardson) laughs at this, Yuri insists, 'but it is more just!'"

-- Kyle Smith, here

"President Obama’s fiscal 2014 budget has a section prohibiting individuals from accumulating over $3 million in tax-preferred retirement accounts. It states: 'Individual Retirement Accounts and other tax-preferred savings vehicles are intended to help middle class families save for retirement. But under current rules, some wealthy individuals are able to accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving. The budget would limit an individual’s total balance across tax-preferred accounts to an amount sufficient to finance an annuity of not more than $205,000 per year in retirement, or about $3 million for someone retiring in 2013.'"

-- Blake Hurst, here

Louis Woodhill: Gold As Money Is Inevitably Deflationary In Terms Of Its Supply

So says Louis Woodhill for Forbes, here:

"The most fundamental issue that determines the workability of a gold standard is whether it attempts to use gold as money.  Any gold standard system where the size of the monetary base is determined by the physical supply of gold will eventually suffer a deflationary collapse.  The economic catastrophe that occurred in 1930 was inevitable, given the design of the gold standard system in use at the time. ...

"The use of gold as base money would quickly become the biggest single source of demand for gold, just as was the case during the years prior to the Great Depression.  Sooner or later, this new demand for gold would cause the real price of gold to start rising.  This would automatically cause the real value of the dollar to rise, precipitating a financial and economic crisis.

"Our highly leveraged financial system simply cannot tolerate monetary deflation.  During a financial crisis, everyone tries to become more liquid at the same time.  That is, everyone tries to increase their holdings of money, because the possession of money itself is the only thing that can guarantee that you will be able to pay your debts.

"If gold is money, and money is gold, this means that, once a liquidity crisis started, the demand for gold would increase.  This would drive up gold’s real value even farther, intensifying the crisis.  A destructive feedback loop would develop, leading to a complete meltdown of the financial system and the real economy.  This is exactly what happened in 1930."

It should be added that a monetarist system, by way of contrast, cannot tolerate credit deflation, but that is exactly what the United States is now facing with total credit market debt outstanding slowing to a crawl of $1.17 trillion added per year between 2007 and 2012. At the very slowest it should be growing at a rate of $4.33 trillion per year by historical measures, and at its fastest by $8.31 trillion per year.

The United States at present is in the throes of a deflationary collapse of monetarist making, not of dollar currency but of credit money, and it is the principal reason for the collapse of GDP. One of the largest sources of the "currency" of credit money in recent years has been mortgages, which are now effectively unacceptable as collateral because of the rot permeating the system in the form of defaults and underwaters.

Federal Reserve policy has actually been removing such collateral from circulation, along with US Treasuries, by placing it on its balance sheet. But since there is nothing "real" behind the dollars the Fed replaces this collateral with, there is no corresponding expansion of credit in size to match the former vigor of the process.

So perhaps the Fed should QE gold instead of MBS and Treasuries to provide something real behind the money created which would give that money a surer basis in collateral.

Central banks around the world have been buying gold in quantities not seen in 30 years in order to fill the collateral gap. The Fed should join them.

Bob Pisani's Wrong: GLD ETF Is Much Larger Than He Says

Bob Pisani reported here on Monday that the ETF GLD "only has 1,300 tons of gold":

"The largest gold ETF, the GLD, only has 1,300 tons of gold. Compare that to the 8,000 tons the U.S. has."

But Bloomberg's Nicholas Larkin reported here on Tuesday it's twice that amount as recently as December, and still nearly 2,400 tons since the price drop:

"The metal’s drop wiped out almost $1 billion of hedge-fund manager John Paulson’s wealth in the past two days. The 57-year-old began the year with about $9.5 billion invested across his hedge funds, of which 85 percent was in gold share classes. He’s sticking with his thesis that gold is the best hedge against inflation and currency debasement, John Reade, a partner and gold strategist at New York-based Paulson & Co., said in an e-mailed statement.

"Paulson is the largest investor in the SPDR Gold Trust (GLD), the biggest bullion-backed exchange-traded product. Global holdings in the products declined 9.5 percent this year to 2,382.4 tons, according to data compiled by Bloomberg. Assets reached a record 2,632.5 tons in December.

"The cost of protecting gold from losses in the options market increased. Puts protecting against a 10 percent drop in the SPDR Gold Trust cost 4.28 points more than calls betting on a 10 percent gain, the biggest difference on record, according to three-month data compiled by Bloomberg."

GLD is a much larger market maker for gold than many people realize.

Forget The "Threat" Of Deflation. Its Crushing REALITY Means Monetarism Is Doomed.

Galactic hitchhikers know this is the answer to everything.

Ambrose Evans-Pritchard and Lars Christensen, here, think deflation is only an omnipresent threat:

The world is still in a contained depression. Sliding commodities tell us global money is if anything too tight. "There is a threat of deflation almost everywhere. A lot of central banks will have to follow the Bank of Japan, whatever they say now," said Lars Christensen from Danske Bank.

The era of money printing is young yet. Gold will have its day again.

I couldn't agree less. The threat isn't everywhere. The reality is everywhere.

Total credit market debt outstanding (TCMDO) for the five years ended on July 1, 2012 was up a paltry $5.83 trillion. Yes, I said paltry. For monetarism to continue working as it has in the past, TCMDO needs to double on average every 8.25 years. That's the historical experience of America going back to the beginning of the post-war. At the current rate since 2007, however, it's going to take until the year 2049 for TCMDO to double from July 1, 2007.

We've had periods of doubling as short as six years for TCMDO, and periods as long as 11.5 years, but at the current rate over the last five years continued into the indefinite future it's going to take 42 years to double. 42 years. Not 11.5 years. And not 6 years. 42 YEARS. America has hit a brick wall.

People who talk about an L-shaped recovery and decades of economic shrinkage ahead may not appreciate quite adequately enough just how right they are.

Deflation is on CNBC's radar.

Jeff Cox, here:

"What seemed like economic fantasy could soon become cold reality as the global economy wrestles with deflation despite hundreds of billions in central bank money creation."

Jim Cramer Gets It Right, Links Long Rise Of Commodity Prices To Creation Of ETFs

Think GLD, SLV, etc., as we've been saying.

Here:

"In the past two decades we have seen an unprecedented financialization, if you will, of all commodities. Pretty much everything is traded either through glibly created ETFs or through futures backed up by warehouses somewhere or through physical hoarding via tanker ships. The pools of money that have chosen to make commodities as an asset class is much larger than we can ever know because those funds aren't registered anywhere and pretty much report to no one.

"I am sure at one time, before the ETFs and the large pools of capital, you might have traded these commodities on actual supply and demand. ...

"What mattered was the financial buyer not the natural buyer."

So we all have been paying too much for this stuff for a long time already.

Same thing happened in housing, and commodities will end up just like housing, down big time.

Twelve Times Today's Silver Price Means $279 Gold

Louis Woodhill doesn't get there by the same rule, but he's in the same ballpark in this story from May 2012, when the average price of gold was $1,586:

[I]t only makes sense that the gold price be set by the application of a rule, and not via discretion exercised by “experts”.

It is possible to imagine catastrophic consequences to setting the value of the dollar in terms of either a gold price of $800 or $1600/oz.  In The Golden Constant, Roy Jastram argued that, over time, gold maintains its value in terms of the general price level.  If Jastram is correct (and he may well be), the gold price that would be consistent with today’s general price level would be around $225/oz.

Based on the average price of silver in May 2012, twelve times that yielded $343 gold.

Plato's Gold/Silver Ratio was 12, Founding Fathers' 15. At this hour it is 59.7!

Socrates

Now answer this further question: you say that if one acquires more than the amount one has spent, it is gain?

Friend

I do not mean, when it is evil, but if one gets more gold or silver than one has spent.

Socrates

Now, I am just going to ask you about that. Tell me,  if one spends half a pound of gold and gets double that weight in silver, has one got gain or loss?

Friend

Loss, I presume, Socrates for one's gold is reduced to twice, instead of twelve times, the value of silver.

Socrates

But you see, one has got more; or is double not more than half?

Friend

Not in worth, the one being silver and the other gold.

-- Plato's Hipparchus 231cd

First Time Claims for Unemployment In 2013 Still About Like Last Year: Bad

The raw number of first time unemployment claims averaged 336K per week in the last month in today's report. The seasonally-adjusted 4-week average number of first time claims for unemployment is higher at 361,000.

The raw figure of 336K yields an annualized 17.5 million, the seasonally-adjusted number 18.8 million. Both are still in excess of the annual actuals for 2006 or 2007, before the financial crisis, which were 16.2 million and 16.7 million respectively.

Actual claims for 2012 were 19.4 million, so we are right now in the last month still doing better than last year's overall rate of claims, at roughly 10% higher than pre-crisis averages. However, the average of all the raw claims for 2013 year to date is running at 375,000 per week, which annualized is 19.5 million, just slightly worse than last year.

At the height of the unemployment crisis in 2009 the raw number of first time claims totaled 29.5 million for the year, a rate of 567,000 per week.

Today's report is here. The link to past data which was unusually missing in last week's report got put back in today's.

Margaret Thatcher's Last Words

(here)

Barry Ritholtz Is Against The World Religion Of Gold

Barry Ritholtz here recently had some fun with the goldbugs, whom he ridicules as devotees of a "religious cult".

The piece is regrettably inflammatory. Doesn't he know he's writing off the whole world as a bunch of religious kooks in this temper tantrum? That's pretty much what ideologues do when reality won't cooperate with their theories, but surely he must know that sovereigns and central banks the world over continue to build their hoardes of gold year upon year, now approaching 32,000 tonnes and 20% of all the stuff ever pulled out of the ground. That's quite the foundation for the edifice of the worldwide church of gold.

In fact, many of the central banks in particular have been on a tear recently, acquiring the stuff in quantities not seen in 30 years. Evidently they are to a man possessed by the Oracle of Au (pronounced "Ow"). But try as they may to acquire new gold reserves, no one of them yet even comes close to the chief priest bowing and scraping before the barbarous relic, namely the USA, the number one holder of gold in reserve to the tune of 8,134 tonnes (not to be confused with tons). 

That even the USA with all its fiat money still considers this gold to be the most sublime of all currencies can be seen in its own gold issues. Gold Eagles, in one ounce sizes down to tenth ounce, are denominated from $50 down to $5. It says so right on the coins. (I understand if you don't believe me because you haven't seen one. They are expensive these days.) I myself haven't seen one of these things in my change at Walmart recently, or anywhere else, but theoretically you could. In various places around the country they are in fact found in Salvation Army kettles from time to time, usually around the time of a holiday formerly known as "Christmas".

There is a reason for what appears on a Gold Eagle: The US government has decreed that gold is money, and that the price of gold cannot fall. It has fixed the price at $42.22 per troy ounce since 1973, and it hasn't fallen since. The one ounce $50 Gold Eagle thus closely approximates this valuation, as it should if America wants to maintain its credibility as the leader of the free world and the spokesman for truth, justice and the, well, American way. The excess, in case you were wondering, is simply a small bonus in exchange for providing the world with both its security and its reserve currency, both of which are quite costly to the inhabitants of the land of the free.

Over our long history, the price of gold has indeed risen despite the best efforts of "manipulators" to stop it from doing so. For a long time the price of gold had been ruthlessly kept down at $20.67, from the War Between the States to FDR, but suddenly became $35 when the greatest Democrat ever saved us from the bad old ways. Not to be outdone, however, the great Republican Richard Nixon managed to make gold higher still, at $42.22, where it has stood ever since.

See, the price of gold hasn't ever fallen in America, it's only risen, just like Jesus. It's God's will. It is our manifest destiny.

That said, more people these days do need to come to accept the reality of this defacto gold standard to which our benevolent government all too secretly adheres. Younger generations of mockers actually have arisen among us who need to repent of their intemperate outbursts against gold and believe in the Gold Gospel once again. Instead of denying the reality of this kingdom of gold, which is really present here and now in the sacramental dollar, they need to wake up and consider the future possibilities of our great civilization and its gold religion.

Perhaps then there would be more public support for all these central bankers who print funny money to drive gold prices higher, especially for our own Ben Bernanke at the Federal Reserve who far excells all others at this. What he really needs most right now is more public encouragement to use that funny money like our competitors do in the world. Like them, we need to start augmenting our gold reserves once again using funny dollars to buy gold just as they are doing using, say, funny yuans. After all, this is actually a divinely sanctioned practice, what the Bible calls making use of "unrighteous mammon". You can look it up, it's right in there. Ben really needs to get on this right away. It should be a matter of his monetary policy to drive up the price of gold by hoarding it. Who knows, maybe we can even get our tonnage back up where it used to be after WWII, around 20,000 tonnes, and just think, all it will cost us is some paper and ink.

Meanwhile gold continues to work for us in season and out of season, in good times and in bad. Our reserves have seen us through thick and thin, whether it's been the boom times under Reagan/Bush/Clinton or the misery index years of Jimmy Carter or the new depression years of Barack Obama. Our gold is still there, just like the flag. It hasn't rusted, shrunk in the rain, or even tarnished. Good as gold as they say. Things might be even better if we had more of it, but you've got to be thankful for your blessings, thankful for what you do have.

The truth is, even in the very worst of circumstances imaginable gold has performed miracles for people. A few well-placed gold coins not that long ago meant the difference between some of our fellow countrymen coming here or going to the gas chambers. Ask them and their progeny if escaping an apocalypse wasn't "just fine", even if they were penniless afterward.

No, the only suckers when it comes to gold have been those who let theirs go when misguided government came looking for it. Some of those babies confiscated in 1933 now fetch $300,000. The rest appreciated in value in their melted down form in the government's vault, but only 6600%. You could go to Harvard today with just 120 of those ounces. In the present banks and governments across the globe are finding the collateral gold provides rather more reliable than US Treasuries in a pinch, which is why they keep acquiring it. Evidently we haven't yet understood the message that this sends. 

It's true in a sense that gold is a rejection of government control, but only in the sense of its opposite, self-control, which is what in America is the unique basis of our form of government. It was an idea bequeathed to us by Protestantism, and also by Plato, both of which are unhappily out of favor. But seeking to control your own destiny, which is what many foreigners are doing by acquiring gold, is actually the sincerest form of flattery of what the United States used to stand for. Free from the control of a reserve currency, there's no telling what others in the world may accomplish without us. But under a universal currency, there's no telling what we could still accomplish together.