The Federal Reserve and The Big Con, or the Bambi Orphans Home See FSOs: http://www.financialsense.com/editorials/2004/1228.html See: http://www.kitco.com/ind/Downs/dec172004.html See:
http://www.lewrockwell.com/orig5/rosen-scott4.html EDITOR'S
COMMENTS The Federal Reserve and The Big Con or the Bambi Orphans Home It is always a double treat to offer commentary on a FSO author or essayist. Author Benson has created a nice little micro-gem essay on dumbing down the American Public and the Smoke of Mirrors by the American Central Bankers and the Federal Reserve System, and its control of the CPI and the BLS, through omission of key segments of the economy in the numbers, as well as the hedonistic hedonic measurement used by the BLS. The other two articles on paper money and the FED are great companion works by different authors, which work well with Benson's essay. What is hedonics?
1965 Cadillac Fleetwood 2005 Cadillac Simple! A 1965 Cadillac Fleetwood costs $5,500 [in 1965]. A new 2005 Fleetwood [with all the toys] costs $55,000+ with a lot more bells and whistles, has a top end of 140 MPH, has a CD player, premium sound system, keyless entry, a burglar alarm, gold script trim, allow wheels instead of hubcabs, premium Michelins, air bags, and a built in foot and behind massager, complete with heated seats. [[Rear passenger creature comfort foot and behind massagers are usually $1,000 above dealer sticker, but if you dicker, you can get it for the list price, aka for free, so that lowers your cost by $1000! as our hedonistic [hedonic fudge factor]]. Your 1965 Caddy has air con, leather, an AM-FM Radio, a power antenna, and you had to pay an extra $500 for cruise control. The 1965 Caddy has Brocade cloth from North Carolina, but the factory went bust, so that's a 50 basis point deduction, since we at the FED cannot find a suitable replacement for American Made Brocade -- you will just have to do with leather imported from Mexico from Argentinean Steers. Since you are making do with an inferior product, deduct 50 basis points on the 1965 Caddy! With all the extra bells and whistles, and the 2005 Caddy getting 22 miles a gallon at 100 miles per hour, it actually costs less than the 1965 Caddy gas hog that overheated at 125 MPH in Death Valley on a 125 Degree Day, as it sucked in 15 miles to the gallon at 100 MPH, but the extra 25 MPH in speed is too fast for Death Valley, so an extra surcharge is placed on the vintage Caddy, as an adjustment factor to properly weight the bulging 5,000 pound behemoth, as the 2005 Caddy, only weights 3,500 pounds since there are no real metal components in this plastic wondercar. Since the 2005 Caddy had front and side airbags, that will kill small children in a real collision, an extra cost savings is padded into the plastic of the 2005 Caddy [since you pack the kiddies off early and don't have to pay for Mall Trips in High School and pay for college tuition!], costing the American Public - less, with small air bagged children, out of the house early -- hedonistically [oops... hedonically] speaking. Also, vehicular behemoths with chrome on the bumpers, door handles, and interior trim positively contribute to the CRB [commodities index], so another 25 basis point deduction is noted for adverse influences to the environment [ehhh, our manipulation of Wall Street] in favor of the plastic wondercar. The Crash Test Now do you all get it? Those Liars [FED and their Minions] forgot to tell you that the 2005 Caddy does not have a frame, has no real bumper system worth a flip, and the motor will be sitting in your lap upon a collision. Given the hedonics of hitting another vehicle at the 70 MPH speed limit on I-70 when most folks are really traveling 85 MPH, hedonically I would prefer to be in the 1965 Caddy Fleetwood with seat belts -- I still might be dead after the crash, but unless I hit head-on one really big Peterbuilt carrying a full load at 100 MPH, at least I don't have to worry about the motor come flying through the dash behind the airbags crushing me to death as it bounces around on my lap and other sundry parts of my body. Besides, 1965 Caddy's were patterned off high performance Sherman Tanks with tail fins they added right at the end of WWII. Oh, I forgot to mention.... the 1965 Caddy has real wood trim on the interior... so that's another 25 basis point deduction as this is not safe for the environment killing all those trees, and in a crash, the occupants are liable to get real splinters in their assets, hedonically speaking. It will take more time for the surgeons to remove the splinters from the crash victims assets, raising medical and insurance costs! That's another 25 basis points! The Deer Phactor and the Bambi Orphans Home Hells Bells, let's factor in the Deer Phactor as well! In the 2005, you get an extra 50 basis points because if you hit a deer in the headlights at 85 MPH in the 2005 Caddy, the repair bill will be $3,000 which is good for the Economy. The 1965 Caddy flunks this crash test and is a menace to Society at large, losing 100 basis points, because it not only knocked Father Deer on his assets [avoiding coming through the windshield at 85 MPH], it scared Mother Deer into a coronary by the side of the Interstate with its loud double Caddy two-toned horn, and now Bambi is a burden on Society at Large, having to go to the Deer Orphans Home! Chalk another for the 2005 Cadillac! Repair bill to the 1965 Caddy? A little 409 to get the blood stains off the hood and front bumper chrome [not good for the local repair shop economy!]. Chrome cleans up nice, but is a menace! Deduct another 60 points! That's hedonic manipulation of the numbers in a nutshell. [Ooops.... we forgot to mention Cadillac does not make a 2005 Fleetwood! -- you will just have to settle for the DeVille!] An Unsuspecting American Public The FED and their Minions have a numero uno priority as part of their function -- that is to control the educational system of the American Public, and to keep them ignorant, non-thinking, and in the dark when it comes to real money and the money issue. Our Founding Fathers understood the real money issue, and that is one of the reasons for the War for Independence from George III and the Bank of England. Andrew Jackson understood the pitfalls and loss of freedom and liberty under central banking and the Second Bank of the United States. Since 1913, the FED has been responsible for destroying at least 95% of the value of the 1913 US Silver Dollar [371.25 grains of fine silver as Constitutionally defined, based on the Spanish Piece of Eight]. Central Banking and the Federal Reserve System is built on the premise of Inflate the currency to make it less valuable, or Die. Inflation of a currency diminishing the purchasing power of the citizenry is stealing by the government symbiosis of the Carpetbaggers inside the Beltway and the Federal Reserve System and the Minions it controls. It is outright fraud by the monopoly over a paper money system, and it happens 24/7 as a perpetual motion machine. DNA History Replication and Bernanke in the Back Room Printing Money History has repeated examples of this monetary fraud from the coin clipping of kings and queens, the debasement of the Roman Empire Currency, down through the ages. More recent examples include the Continentals of the Revolutionary War, Mr. Lincoln's Greenbacks which depreciated to 35 cents in relation to the real gold backed paper currency, the French assignats during the French Revolution, and the Hyperinflation of Weimar Republic Germany in the early 1920s after WWI -- people used wheel barrels transporting paper money to buy bread, and the government was printing the stuff so fast, they finally resorted to printing it just on one side of the paper. Recent history includes Turkey, Brazil, Argentina, and a few others. Any y'all have any Confederate States of America Bonds or Paper Currency? Grin! The winner's currency always has some value, at least! During the time of the French Revolution, a time of great paper money experimentation, the merchants and tradesmen knew they were getting the monetary shaft by the Assignat Paper Money Government. When they would only accept real gold and silver for their wares, products, and services, the government made it a crime to deal in real money, gold and silver, hired informants, and the crime was punishable by Madame Guillotine. CNBC and Air Heads Anonymous A really sad thing is that financial showmanship news channels are in the hip pocket of the FED and their Minions as part of the controlled media disinformation propaganda and publicity stunts bamboozling the American Public. Bill Fleckenstein calls Chairman Greenspan a "menace." I broaden that take to American Central Fractional Reserve Banking and the Federal Reserve System as a menace to the Constitution and Civil Liberty. Every utterance from central bankers is blasted all over their papers and networks as the Gospel according to the Saint FED, in their cover-up from an unsuspecting American Pubic of their Inflate, or Die monetary policy, with their hands in your pockets.... clipping your coins, one by one, by one. [Think electronic checking accounts, Folks!] Denouement on Benson's Essay Author Benson has penned a most eloquent micro-gem that packs a one, two punch at the reader, and is written in a very easy read style for the average Jane and Joe Six-Pack with 2 SUVs, a big mortgage, home equity line, 3.5 kids, and 2.5 soccer games per week. The OFHEO annualized numbers on housing inflation alone at 12% [3rd quarter 2003 to 3rd quarter 2004] and 18.5% [3rd quarter 2004 annual rate] should make Messieurs Economists McCarty and Peach at the NY Federal Reserve Bank turn Beet Red with their mundane and overly simplistic observation that realty prices had only increased "about 36% since 1995." The other two essays are also indicative of the Great Con, and well worth the effort. Ole
Bear, Editor
c.1930s - Bread Lines The Fatal Parasite Great
Myths of the Great Depression
-- Lawrence W. Reed Want to Learn More on Economics, the Money Issue, and the Federal Reserve? Memorandum
of Law -- The Money Issue
[Becraft] Fannie Watch -- The Sophisticated Preferred Investor See: http://www.washingtonpost.com/wp-dyn/articles/A35283-2004Dec29.html See: http://www.msnbc.msn.com/id/6765475/ EDITOR'S
COMMENTS Fannie Watch -- The Sophisticated Preferred Investor From Terrence O'Hara at the Washington Post we are tossed these snippets: Fannie chose to issue the preferred stock through what is known as a "144a" offering, in which only sophisticated institutions or wealthy investors are allowed to buy the stock. Such offerings are exempt from the time-consuming and costly process of registering the shares with the Securities and Exchange Commission, in which the terms and potential risks to ordinary investors are outlined in great detail in a formal prospectus. A 144a offering has the benefit of speed, allowing Fannie to show its regulator and the public that it has ready access to capital. In a 144a, investors would probably include large mutual fund companies, banks, pension funds, large endowment funds or other institutional investors. Fannie Mae is going to issue $5 Billion Bux in preferred stock to boost morale and liquidity for the regulators. Only sophisticated institutions or wealthy investors will be allowed to buy this preferred 144a stock offering. Sophisticated and wealthy investors would probably include large mutual funds, banks, pension funds, endowment funds, and other institutional investors. I like O'Hara's tongue in cheek wording -- sophisticated and wealthy investors! I also like the part about "benefit of speed." Crack cocaine provides a benefit of speed as an alternative. We shall just see how sophisticated and wealthy these investors shall be when more dead kitty kats are tossed out there on the table at Fannie Mae [actual loan loss reserves combined with the 1.075 Loan to Deposit Ratio for the 9,025 FDIC insured institutions]. Perhaps everything will be hunky dory when Fannie Mae files a revised liquidity plan with the regulators, should some of their Big Boy Lenders selling Fannie paper have to file a liquidity plan with the regulators in a foreclosure cash crunch? Now, this is what we would call a sophisticated liquidity plan. Speaking of a liquidity plan, Peter Coy's Protecting Yourself from a Housing Slump, does offer to Main Street America some sound monetary advice about reining in debt, saving, and other good stuff to weather a financial blip in realty markets. We find it humorous that only 6 months worth of stashed cash mortgage payments are suggested. We would recommend at least two years worth of stashed cash to cover the mortgage if Jane or Joe Six-Pack get laid off since their job got sent off-shore. It is also humorous that NAR [National Association of Realtors] is coming out with a new book in February 2005, Are You Missing the Real Estate Boom? I have to hand it to NAR for being a day late and a dollar short. Sure, there are plenty of cities where prices are reasonable and could continue to climb. David Lereah, chief economist of the National Association of Realtors, recently finished a book, due out in February, called Are You Missing the Real Estate Boom? He predicts that strong growth will boost incomes, mortgage rates will stay reasonable, immigration will feed housing demand, zoning laws will restrict construction, and demand for housing from baby boomers and their children, the echo generation, will remain strong. Says Lereah: "I foresee a healthy expansion." Excuse me, I must be the only one on Planet Earth who doesn't believe mortgage rates will remain at 40-45 year lows, and that family incomes are truly increasing with the current Monetary Destruction by the FED. Further, I don't believe that illegal immigration into give away housing programs is healthy for real estate values and prices. Zoning laws and government does nothing but increase the price of realty and debt to the consumer by ever-increasing the cost of production through legislation. Finally, the baby boomers are in hock up to their Ying Yang already in debt, and will be in the poor house if the financial tsunami hits the West, East, and Gulf Coasts! I am not being pessimistic, just realistic. Real estate markets in a severe recession or a depression don't rebound in six months' time. It takes a lot longer, Folks, for realty to hit the big bottom in market price, and a long time to recoup lost "shareholder value." Plus the fact, real estate is a fixed depreciating asset -- you can dump a falling knife stock like Fannie Mae in a heartbeat by pushing a button, but it takes considerable time, expertise, and money to sell a property. These include title insurance, Realtor fees, repairs, as well as others customary to your local realty market. And then... there's that silly, pesky little mortgage that's bleeding you dry while you are trying to sell and you don't have job? Ole
Bear, Editor © 2004 Realty Reality |
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