How the rich avoid paying taxes

Systemic Debt 2012

Here is my projection of Systemic Debt for 2012, as I don't have all the data.

Systemic Debt as of 12/31/2012

TCMDO                        56,281

Intragov. Holdings            4,851

FERS (as of 9/30/2012)        6,274

Soc. Security unfunded (est.) 9,000

Medicare unfunded (est.)      5,500

                            -------

Total Systemic Debt          81,906

                            =======

This is up 3.6% from 2011, and maybe more, depending on how the Social Security and Medicare Trustee's reports come out.

Systemic Debt 2007

Systemic Debt as of 12/31/2007:

TCMDO                     50,972

Intragov. Holdings         4,093

FERS (as of 9/30/2008)     4,769

Soc. Security unfunded     4,400

Medicare unfunded          2,400

                         -------

Total Systemic Debt       66,634

                         =======

For Medicare unfunded liabilities, I am using the 2009 number.

Systemic Debt 2008

Systemic Debt as of 12/31/2008

TCMDO                     53,361

Intragov. Holdings         4,330

FERS (as of 9/30/2008)     5,319

Soc. Security unfunded     5,300

Medicare unfunded          2,400

                         -------

Total Systemic Debt       70,710

                         =======

Note that the method of calculated the Medicare unfunded liabilities changed between 2008 and 2009.  To prevent distortion, I am just using the 2009 number here.

This number is almost identical to 2008.

The Bank of International Settlements

"They head to a fortress of a building that might have been designed as a workplace for George Jetson: a cylindrical tower that looks as if someone squeezed it slightly in the middle, with a base that wraps around without a straight line in sight, the elegance of the curves hiding the imposing thickness of the blast-protective stone.

The building may be steps from the Basel train station, but it isn’t on Swiss soil. Like the United Nations headquarters in New York, it’s an entity without a country, belonging to the world. The sign out front reads “Bank for International Settlements,” but the place might more easily be thought of as the central bank of central banks. "--Washington Post

Is this the secret headquarters of the world, where the real power lies?

System Debt 2009

And here are the numbers for 2009:

Systemic Debt as of 12/31/2009

TCMDO                     53,278

Intragov. Holdings         4,500

FERS (as of 9/30/2009)     5,284

Soc. Security unfunded     5,400

Medicare unfunded          2,400

                         -------

Total Systemic Debt       70,862

                         =======

So the increase from 2009 to 2010 was 3.7%.  Between the end of 2008 and the end of 2009 there was almost no change.  This is because of the Great Recession.

This can't be calculated for previous years because the method of calculating the Medicare unfunded liability changed because Obamacare supposedly fixed it.

Systemic Debt 2010

This follows up on the previous blog post

Systemic Debt as of 12/31/2010

TCMDO                     53,636

Intragov. Holdings         4,635

FERS (as of 9/30/2010)     5,720

Soc. Security unfunded     6,500

Medicare unfunded          3,000

                         -------

Total Systemic Debt       73,491

                         =======

I said that this had to increase by about 3% per year.  It actually increased by 7.6% from 2010 to 2011.  The theory is that we can keep kicking this can down the road FOREVER.

The next trustee's reports come out in April, so I can run the 2012 numbers then.

Systemic Debt

Systemic Debt is my measurement of all the debt that is in the system.  I am using 12/31/2011 as the measurement date, because that is the last date that I have all the data for.  Here are the components:

Systemic Debt as of 12/31/2011

TCMDO (includes debt held by public)  54,600 [1]

Intragov. Holdings                     4,775 [2]

FERS (as of 9/30/2011)                 5,792 [3]

Soc. Security unfunded                 8,600 [4]

Medicare unfunded                      5,300 [5]

                                     -------

Total Systemic Debt                   79,067

                                     =======

Notes:

1. TCMDO, Q4 2011 from http://research.stlouisfed.org/fred2/series/TCMDO

2. Intragovernmental holdings, from http://www.treasurydirect.gov/govt/reports/pd/mspd/2011/opds122011.pdf.  

3. Fed Employee and Vet Benefits Payable, as of 9/30/2011, from http://www.fms.treas.gov/frsummary/frsummary2011.pdf.

4. Social Security information as of 12/31/2011 from http://www.ssa.gov/oact/tr/2012/tr2012.pdf ("The open group unfunded obligation for OASDI over the 75-year period is $8.6 trillion in present value and is $2.1 trillion more than the measured level of a year ago.")

5. Medicare information as of 12/31/2011 from http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/Downloads/TR2012.pdf. ("The present value of future expenditures less future tax income, decreased by the amount of HI trust fund assets on hand at the beginning of the projection, amounts to $5.3 trillion. This value is referred to as the 75-year “unfunded obligation” for the HI trust fund, and it is significantly higher than last year’s value of $3.0 trillion.")

Now, what is the significance of this?  This is pretty much all the debt in the system, both public and private, and the majority of all the debt in the whole world.  I am not including unfunded portions of Medicare parts B or D, or Obamacare, because these do not have trust funds and so are not really entitlements.  Although a lot of this debt is private, there is an implicit guarantee by the FedGov and FedReserve not to allow widespread defaults.

Debt must increase each and every year into infinity, or the economy is considered to be in a recession.  So assuming an increase of 3%/year, that is about $2.4 trillion that the debt must increase every year.  Of the total debt, about $44 trillion of this is private debt.  The private sector has very little appetite for increasing its debt.  Therefore the Federal debt (including unfunded liabilities) must increase by at least $2 trillion/year.  Some of the federal funds are used to pay down the private debt.

The solution?  Again, 1) higher taxes, 2) cuts in expenditures and/or promised benefits, or 3) default.  The real question - can the debt just continue to expand forever, without collapsing?  That is the assumption that our financial system relies on.

==========================
The debt is an asset to someone. Most of the debt is owed by the US government.  Who is it owed to?

Type          Owner/Beneficiary    Debtor
------------  -------              --------
Private Debt  Banks                Private companies and households

Public Debt   Bondholders          US Gov.

Intragov      Retirees/Recipients  US Gov.

FERS          Fed. Retirees        US Gov. 

Soc Sec unfund  Retirees           US Gov.

Medicare unfund Retirees           US Gov.

Monopoly money

Source: http://www.businessinsider.com/reddit-fed-monopoly-money-image-2013-3

Hangzhou

Source: http://imgur.com/gallery/metPRQz

Public Debt is not a problem

Now, from the other side of the universe comes claims that rapidly growing public debt is good.

 

http://michael-hudson.com/2013/03/bank-bailouts-burden-the-public-debt/

How Debt Ruins Systems

http://reason.com/archives/2013/03/24/how-debt-ruins-systems

Taleb’s new book, Antifragile: Things that Gain with Disorder, argues that in order to create robust institutions we must allow them to build resilience through adversity. The essence of capitalism, he argues, is encouraging failure, not rewarding success.

T-Bills are Greenbacks

T-Bills are Treasury securities that mature in one year or less.  The current rate of interest on them is 0.06 for 1 month to 0.14 for 1 year.  The supply of them is about $1.7 trillion as of Feb. 2013.

Greenbacks were United States Notes issued directly by the US Treasury to pay for the Civil War.  The total issued were $447 million. They circulated interchangeably with Federal Reserve Notes until 1971 when no new United States Notes were placed into circulation.  They are still valid as legal tender however, and there are $239 million still outstanding, probably all in the hands of collectors.

Now T-Bills aren't quite like cash.  You can't hold them in your hand and you can't take them to the store to buy things. And while ownership can theoretically be transferred, it isn't easy.  Instead, money market mutual funds with attached checking accounts are used.  When you write a check, your balance is reduced but the owner of the T-bill remains the same. The money market would have to daily buy or sell T-bills as needed.

A wealthy person could open up their own money market mutual fund with an attached checking account at a bank, and then buy or sell T-bills as needed.  The advantage would be less risk on large deposits, and a slightly higher interest rate.  If he invested in longer term notes, there would be slightly higher interest, but more interest rate risk as well.

So my point is that they function like cash, but require a little more work.  The reason they are like greenbacks is that they are completely outside the Federal Reserve System and issued directly by the Treasury.

Why do we care?  Because of inflation.  It is worth monitoring them to see how the balances change.  So, for example, in December 2007, before all the craziness started, the balance of T-Bills was about $1.0 trillion.  So that is an increase of 70% in 5 years.  If hyper-inflation starts, this is where I would expect it to begin.  By the way the amount of T-Bills outstanding as of January 2013 was $1.605 trillion.  So they increased 6% in one month.  That sounds like inflation to me.

So how about a measurement of M1+T-Bills and see how it changes over time?

Consumer Loans owned by FedGov

Source: http://research.stlouisfed.org/fred2/series/TOTALGOV

I think these are entirely student loans.  Because this is considered an asset of the government, it is not included in spending.

Hengqin

Hengqin is an island in Zhuhai that is adjacent to Macau.  It is 3 times the size of Macau but only has a population of 3,000.  It seems like a no-brainer to expand Macau onto Hengqin.  Already, the University of Macau is building a new campus there.  It will be connected to Macau via an under-river tunnel.

It sounds to me like it is pronounced "Hong Cheng".

America's Secret Welfare Program

SSDI now covers 11.5 million people, and costs $185 billion per year (including Medicare costs).  These are mostly people who are not disabled but are long term unemployed.  The SSDI trust fund will run out by 2016, at which time this will start bleeding Social Security dry.

See:  http://www.theatlantic.com/business/archive/2013/03/disability-insurance-americas-124-billion-secret-welfare-program/274302/

==========================

In an eye-opening six-month investigation into America’s disability program, Planet Money reporter Chana Joffe-Walt uncovered a “disability industrial complex” fraught with fraud that churns out 14 million checks every month to citizens the government has deemed disabled.   

“Since the economy began its slow, slow recovery in late 2009, we’ve been averaging about 150,000 jobs created per month,” said Joffe-Walt in an Public Radio International (PRI) “This American Life” interview. “In that same period every month, almost 250,000 people have been applying for disability.”

--http://www.breitbart.com/Big-Government/2013/03/25/Govt-Spends-More-On-Disability-Than-Food-Stamps-And-Welfare-Combined

Comment:  This article says the cost has risen to $260 billion/year.

See also:  http://brucekrasting.com/chief-actuary-for-ss-raid-the-retirement-fund/

The fraud of bankster capitalism

I am all in favor of a free market capitalistic system, but we have not had such a system since at least 1971 when Nixon took the dollar off the gold standard.  I'm not saying everything was fine before then, but this is when what I call "bankster capitalism" took over.

The justification for debt is that it will increase your ability to earn more in the future.  Thus student loans theoretically improve one's ability to earn future income with a degree.  A mortgage on a house will allow one to earn equity as the price rises.  Well, I believe that debt can only rarely improve future income as a whole.  The way to look at this is to compare the increase of income to the increase in debt as a ratio.  I call this the "Marginal Utility of Debt".  If this is over 1, then debt actually increased income.  If this is less than 1, then you are going deeper in debt without having an increased ability to pay.

Since 1980, this number has been greater than 1 only once, in the first quarter of 1981.  In the first quarter of 1984, the ratio was 0.65.  Also in the 2nd quarter of 2000 it hit 0.65. It has never been higher than this since.  Much more common than this are negative correlations, where an increase in debt is accompanied by a decrease in GDP, or where GDP increases even though debt decreases.  This reached an extreme in the 2nd quarter of 2011 where GDP increased 188, but Debt decreased by 20, leading to  ratio of -9.2.  See the following chart:

So what's my point.  The system is saturated with debt and has been since at least 1980.  More debt does not help the situation.  Almost none of the debt that currently exists today will actually be paid off, instead it will just be rolled over indefinitely until it defaults.

I was thinking that things will return to "normal" in about 2016 when interest rates rise.  But why should interest rates ever rise?  Instead it is a struggle to keep them above zero.  Most debt today is non-productive, even if the payments on it are current.  I think we have already reached the end game, and we are now in "zombie" mode, just like Japan.  We will be stuck in this mode forever until people realize the fraud and abandon the dollar and all dollar-denominated debt defaults. 

The government is trying to reinflate the system by issuing more debt.  But this merely keeps it on life support.  The patient will never recover; instead he is a zombie, a dead man who appears to be living.

The solution, if I was in charge?  Immediately cut government spending enough so the budget balances and so there is even a small surplus.  This will unfortunately throw many people out of work.  Slowly pay off the debt.  Allow massive defaults and bankruptcies until real estate resets at 1980 levels, adjusted for inflation.  Then when we have reached equilibrium, make a new system that does not rely on debt for growth.  But this will never happen because the banksters are in charge, and our leaders are beholden to them. 

===================

Update:  Here is another article that says the same thing (without the same conclusion).

The Failure of Debt-Leveraged Faux "Growth".

Source:  http://market-ticker.org/akcs-www?post=219086

The green line shows sustainable growth, which was positive only in 3 quarters from 3rd quarter 2009 to 1st quater 2010. 

============================================

Here is another chart showing the diminishing marginal utility of debt from a couple of years ago:

Source: http://economicedge.blogspot.com/2010/04/guest-post-and-more-on-most-important.html

Note that this has never been greater than $1.00. This shows that the marginal utility will actually go negative.  I don't believe this, but I think the marginal utility will bounce around the $.10 to $.20 line.

Where the Rich People live in 2013

1. New York
2. London 
3. Tokyo
4. San Francisco
5. Los Angeles
6. Beijing
7. Mumbai
8. Hong Kong
9. Sao Paulo
10. Rio de Janiero
11. Delhi
12. Mexico City
13. Osaka
14. Shanghai
15. Chicago
16. Paris
17. Houston
18. Washington DC
19. Dallas
20. Toronto
21. Zurich
22. Munich
23. Singapore
24. Sydney
25. Dusseldorf
26. Hamburg
27. Geneva
28. Melbourne
29. Frankfurt
30. Rome

From:  http://my.knightfrank.com/research-reports/the-wealth-report.aspx

Here is another list in the report.  What rich people think are the most important cities in the world.

1. London
2. New York
3. Singapore
4. Hong Kong
5. Geneva
6. Shanghai
7. Dubai
8. Miami
9. Paris
10. Beijing

Honorable Mention:

Sydney

Mumbai

Melbourne

Jakarta

Auckland/Wellington

Perth

Zurich

Madrid

Barcelona

Abu Dhabi

Los Angeles

Beirut

Moscow

Monaco

=================

The Re-Leveraging Hypothesis

I started this blog to try to understand what is wrong with our system and how much longer it is sustainable.  Here is another thought.

I am going to use 9/30/2001 as a starting date, right after the 9/11 attacks, when the U.S. is coming out of a mild recession.  TCMDO is 28743, and GDP is 10305. Federal debt held by the public (FDHBTP) is 3339. The ratio of TCMDO to GDP is 280%. TCMDO less FDHBTP is 25404, which is 246% of GDP. Presumably this is sustainable because this is the start of a growth cycle.

Now jump forward to 9/30/2008, right after the Lehman Brothers collapse. TCMDO is 52985, GDP is 14395, and FDHBTP is 5814. The ratio of TCMDO to GDP is 368%. TCMDO less FDHBTP is 47171, which is 328% of GDP. This is because of the huge real estate bubble.

If the government and the Fed had not intervened, presumably the TCMDO less FDHBTP would have collapsed and delevered back to about 36000, the sustainable level. This would have been incredibly painful, but would have happened over a couple of years until it dropped to a sustainable level. Instead, the government intervened, and it will take longer.

What is happening is that federal debt is refilling the collapsing bubble. The stimulus provided by the huge deficits is being used to repay the excess debt. As of 9/30/2012, TCMDO is 55668, GDP is 15811, and FDHBTP is 11274. TCMDO less FDHBTP is 44394, which is 280% of GDP. So there is another 30% GDP (4700) worth of debt that the system is trying to delever out of.

What percent of the federal debt is being used to pay back the private debt? Compare the numbers from 9/30/2011, when TCMDO was 54212, GDP was 15163, and FDHBTP was 10132. TCMDO less FDHBTP was 44080, which was 290% of GDP. So at the time, there was about 6000 of excess debt. So it delevered 1300, when the public debt increased by 1142. So it is safe to assume that all the federal debt was in effect used to pay back private debt.

With the deficits running about 1200 per year, we can see that it will take about 4 more years for the level of private debt to get back to where it is a "normal" 250% of GDP. So we are looking at 9/30/2016, for a return to "normalcy". At this point TCMDO will be about 60000, the public debt will be about 16000, and GDP will be about 17500.

So based on this, I think trillion dollar deficits are sustainable for about 4 more years, after which they need to drop to zero. This will be when the public debt is about 16000 (that is $16 trillion).

Continuing these huge deficits after that point will be hyperinflationary. So this solves for me the question of how is this possibly sustainable.

==============
Note: I just said in an earlier post that TCMDO would be 61000 by 2014. So obviously I don't have a good handle on it. Anyways, something to keep an eye on.

Is this the start of a global banking panic?

"Cyprus is a small country.  Still, the failure of its banks could trigger massive bank runs in Greece.  After all, if the European Central Bank is abandoning Cypriot depositors, they may abandon Greek depositors next.  A run on Greek banks could then spread to Portugal, Ireland, Spain, and Italy and from there to Belgium and France and, you get the picture, to other countries around the globe, including, drum roll, the U.S.   Every bank in each of these countries has made promises they can’t keep were push come to shove, i.e., if all depositors demand their money back immediately.

We’ve seen this movie before.  And not just in real life.  Every Christmas our tellys show It’s a Wonderful Life in which banker Jimmy Stewart barely saves his small town from economic ruin arising from a banking panic.

But could little Cyprus , figuratively speaking, be the thin sheen of water that flipped my Corvair from a fun buggy into a death trap?  Could it really kick off a global banking panic?  Yes.  The chances are small.  But even a very small chance of an enormous collapse can spell a huge expected problem."

--http://www.forbes.com/sites/kotlikoff/2013/03/23/cyprus-the-nightmare-scenario/

New Metric using TCMDO

Here is a new way of looking at the debt.

First of all, forget about GDP.  It can be manipulated. How exactly is it measured, and don't tell me it doesn't include estimates.  It is unfair.  To do a measurement of debt to GDP implies that the government is entitled to some portion of my income.  And it has a bias towards government spending.  Since reducing spending reduces GDP, everyone freaks out.

Instead use TCMDO.  This is all the debt in the economy, or, looking at it from the opposite perspective, it is all of the assets in the economy that pay interest.  We want this number to grow about 3% per year.  This would allow interest to be paid on existing debt and also include a little bit of growth and inflation.  If this number is less than say, 3%, then there is a valid reason for Keynesian deficit spending of up to this amount.

So, looking backwards, how does this compare?

Date         TCMDO   Growth  Targ.(3%)   Deficit  Sugg. Defic. 

---------    -----   ------  ---------   -------  ----------

9/30/2007    49482

9/30/2008    52985   3503    1500        459         0

9/30/2009    53352   367     1600        1413     2646

9/30/2010    53058   -294    1600        1293     3187

9/30/2011    54212   1154    1600        1300     1746

9/30/2012    55668   1456    1600        1090     1234

9/30/2013    58100   2432    1700        1100      368

9/30/2014    61000   2900    1700        1150        0

So, I don't know if this makes any sense or has any validity at all, but the Keynesian philosophy was that during a recession you run up deficits to make up for the lag in demand and during normal years you balance the budget or run a surplus.  Without deficit spending, the economy would have been shrinking for the last 3 years.  But now that things are returning to almost-normal, there is no valid reason to continue to run huge deficits.

Anyways, this theory explains why the huge deficits of the last 4 years haven't been inflationary, because they are counteracting the deflating private debt.  But relatively soon, maybe as early as next year, inflation will start to reappear, along with rising interest rates.

Deficits do matter

"The budget deficit has exceeded $1 trillion since 2009. Combined with a shrinking economy, deficits increased the publicly held federal debt by over 30 percentage points of GDP between 2008 and 2012. Deficits of this size are NOT SUSTAINABLE in the long run because the federal debt cannot indefinitely grow faster than output. Over time, a greater and greater share of national income would be devoted to servicing the debt, until eventually the government would be forced to finance the debt through money creation or default.

The current policy debate on the “fiscal cliff” occurring at the end of 2012 has raised the question of whether a deficit of the current magnitude is manageable and what risks it poses to the economy. Since deficit reduction could have a contractionary effect on the economy in the short run at a time when the economy is still fragile, restoring fiscal sustainability poses another set of risks that must be balanced against the risks of continuing an UNSUSTAINABLY large deficit. This report will evaluate sustainability issues.

Although the debt cannot persistently rise relative to GDP, it can rise for a time. It is hard to predict at what point bond holders would deem it to be unsustainable. A few other advanced economies have debt-to-GDP ratios higher than that of the United States. Some of those countries in Europe have recently seen their financing costs rise to the point that they are unable to finance their deficits solely through private markets. But Japan has the highest debt-to-GDP ratio of any advanced economy, and it has continued to be able to finance its debt at extremely low costs. If investors on balance deemed the debt to be unsustainable, the yields and the cost of credit default swaps on Treasury securities would be expected to rise. Instead, both are currently low. This may seem surprising, given that the debt is currently growing more rapidly than output and is projected to continue to do so under current policy. The willingness of bond holders to finance the federal debt at low interest rates in light of these projections suggests that they believe that policy changes will eventually be made to place the federal debt on a sustainable path. This belief could change at any time; if it did, the experience of foreign countries suggests that the effects on the economy and financial markets could be severe. A failure to raise the debt limit or a ratings downgrade of U.S. debt by a credit rating agency are two events that have been seen as potential catalysts for a change in investor sentiment, although the downgrade when the debt nearly reached its statutory limit in 2011 did not result in higher yields.

According to standard macroeconomic theory, large deficits have temporarily boosted overall spending at a time when there is significant slack in the economy. Once private investment demand recovers, a large deficit would be expected to “crowd out” private investment spending. By accounting identity, domestic investment spending equals national saving plus net borrowing from abroad. The budget deficit has been equal to about half of private saving over the last three years. Even before the increase in the deficit, national saving was insufficient to finance domestic investment spending, and the United States was borrowing from abroad at unprecedented rates, peaking at about 6% of GDP. (Borrowing from abroad has since fallen by half, but remains relatively high.) To sustain large deficits, the economy will require some combination of higher private saving, lower investment, and higher borrowing from abroad. Some economists have argued that borrowing much more than 6% of GDP from abroad is unrealistic, and the already heavy U.S. reliance on borrowing from abroad makes the maintenance of a large budget deficit even less sustainable."
--http://www.fas.org/sgp/crs/misc/R40770.pdf

TCMDO

Making charts isn't my strong point, but I will give it a shot.  Total Credit Market Debt Owed is the total of all marketable debt in the US.  It is also an asset to the creditor.  When this number shrinks it causes the bankster class to freak out.

TCMDO less Fed Gov debt peaked on 9/30/2008 at about $47 tn, and then shrank until it hit bottom on 9/30/2010, and since then it has been flat at about $44 tn, although it grew about 0.6% in the last quarter of 2012.

In order for the economy to grow, more and more debt must be pumped into the system.  Private debt has reached its limit, so the only way for total debt to grow is for public debt to increase.  This will continue until public debt reaches its limit.  No one knows what this limit is, and the uber-keynesians truly believe that there is no limit, but I think we will have another crisis about 2016 when the Fed stops pumping money and interest rates start to climb.

Tax Trek

The IRS to the rescue!

Resorts World Las Vegas

Vegas is coming back.  A new giant casino is being built in Las Vegas:


Source: http://www.vegaschatter.com/vegas-photos/full/278/Renderings+of+Resorts+World+Las+Vegas

It will replace the abandoned Echelon project

Source: http://www.flickr.com/photos/36113180@N00/3588216918/in/photostream/


See also: http://aftermath2022.blogspot.com/2013/02/echelon-place.html

Dmitry Orlov: The similarities between the old USSR and the USA

Prince Joseph

America, the world's beacon of liberty, has never had royalty.  Recently it has had a fascination with royalty from other countries as seen by the royal wedding of Prince Charles and Princess Diana in 1981, and the wedding of royal wedding of Prince William and Princess Kate in 2011.

But now, America has its own royalty class headed by King Barrack and Prince Joseph.  Prince Joseph spent $585,000 on a suite of hotel rooms in Paris for himself and his entourage of 136 on February 4 where he had a meeting with Prime Minister Francois Hollande.  The next day, he spent $459,000 on hotel rooms in London for a meeting with Prime Minister David Cameron.

The American royalty has access to the unlimited amount of money that can be produced by the Fed's magic printing press and the trip was in effect part of a stimulus package for Europe.

====================================

"Taxpayers spent $1.4 billion dollars on everything from staffing, housing, flying and entertaining President Obama and his family last year, according to the author of a new book on taxpayer-funded presidential perks.
In comparison, British taxpayers spent just $57.8 million on the royal family.
Author Robert Keith Gray writes in “Presidential Perks Gone Royal” that Obama isn’t the only president to have taken advantage of the expensive trappings of his office. But the amount of money spent on the first family, he argues, has risen tremendously under the Obama administration and needs to be reined in."
Read more: http://dailycaller.com/2012/09/26/taxpayers-spent-1-4-billion-on-obama-family-last-year-perks-questioned-in-new-book/

=================================


The First Daughters are spring breaking it at the Atlantis Paradise Island resort in the Bahamas.
http://www.breitbart.com/Big-Government/2013/03/25/Exclusive-Sasha-Malia-Obama-vacation-in-Bahamas-Atlantis

Vertical Forest in Milan

Source: http://www.zmescience.com/ecology/milans-vertical-forest-towers/

See also: http://www.architizer.com/en_us/blog/dyn/71460/green-architects-takes-big-leap-with-milans-vertical-forest/
"The world’s first vertical forest (trademark?) is rising in Milan. The Bosco Verticale, the project’s official title, will be completed later this year, marking a significant step in development of green architecture. The plan consists of two apartment towers festooned with a series of concrete decks, staggered and offset from each other to give the structures their Jenga-like appearance. Once completed, nearly 2.5 acres of “forest” will have been planted in these balconies, helping to absorb dust—a major problem in Milan—and C02, while shading and cooling the residents within."

Love's Theme - The Hustle

Everything's gonna be alright

Electric Guitar Air

Rachmaninoff

Burning Man 2013 has a British theme

One does not simply steal Russian mafia money

"Ah, but now you’ve stolen Russia money... or soon shall depending upon the vote in the Cypriot parliament... and that is dangerous... very. One does not steal Russian mafia money and get away with it. There are fewer statements of fact that are more certain, more factual, more unyielding than this statement. Russian Mafia figures do not take well to being stolen from, and they take even less well to be made fools of. We see no reason to mince words at this point: People will be hurt over this decision; some shall be killed."

Read more: http://www.businessinsider.com/gartman-cyprus-stealing-russian-money-2013-3#ixzz2NwgUTkJ8

Was 9/11 conspiracy theorist murdered?

See http://english.pravda.ru/society/stories/11-03-2013/124028-Phillip_Marshall-0/

Who killed Phillip Marshall?

Putrajaya Roundabout

Source: http://mcarlosp1.blogspot.com/2009/11/putrajaya-owns-largest-roundabout-in_26.html

The Great Cyprus Bank Robbery

Istanbul

Source:  http://www.businessinsider.com/istanbul-wall-street-2013-3

More Than a Feeling

Boston - More Than A Feeling



I looked out this morning and the sun was gone
Turned on some music to start my day
I lost myself in a familiar song
I closed my eyes and I slipped away

It's more than a feeling
(More than a feeling)
When I hear that old song they used to play
(More than a feeling)
I begin dreaming
(More than a feeling)
'Til I see Marianne walk away
I see my Marianne walkin' away

So many people have come and gone
Their faces fade as the years go by
Yet I still recall as I wander on
As clear as the sun in the summer sky

It's more than a feeling
(More than a feeling)
When I hear that old song they used to play
(More than a feeling)
I begin dreaming
(More than a feeling)
'Til I see Marianne walk away
I see my Marianne walkin' away

When I'm tired and thinking cold
I hide in my music, forget the day
And dream of a girl I used to know
I closed my eyes and she slipped away
She slipped away

It's more than a feeling
(More than a feeling)
When I hear that old song they used to play
(More than a feeling)
I begin dreaming
(More than a feeling)
'Til I see Marianne walk away

Bearish on China

http://www.globalsecuritieswatch.org/Hedge_Funds_Perspectives_China.pdf


"most of the conditions that have given rise to China's extraordinary growth either no longer exist or are disappearing fast. And so this is an economy in trouble."

One Hyde Park

http://www.vanityfair.com/society/2013/04/mysterious-residents-one-hyde-park-london

"One Hyde Park ... the world’s most exclusive address and the most expensive residential development ever built anywhere on earth. ... We can conclude at least two things with certainty about the tenants of One Hyde Park: they are extremely wealthy, and most of them don’t want you to know who they are and how they got their money."

Obama: the National Debt is no problem

There has been no shortage of dire warnings about the mounting US national debt, but President Obama is now offering a different assessment: no big deal.  “We don’t have an immediate crisis in terms of debt.  In fact, for the next 10 years, it’s gonna be in a sustainable place.”

--http://abcnews.go.com/blogs/politics/2013/03/president-obama-there-is-no-debt-crisis/

The president is in his own bubble.  He is already a lame duck.  He is irrelevant. He is in over his head and doesn't have a clue as to what is going on.  The next crisis is going to hit about 2016 or 2017, about the time his term ends.

Obama, go back to watching basketball on television and golfing.  The next president will be forced to deal with the mess.

Alone in the Zone

When researchers at the Japan Aerospace Exploration Agency conducted tests, Mr Matsumura was found to have the highest level of radiation in anyone they had tested.  'But they also told me that I wouldn’t get sick for 30 or 40 years. I’ll most likely be dead by then anyway, so I couldn’t care less.'

From: http://www.dailymail.co.uk/news/article-2292273/Radioactive-man-The-Japanese-farmer-living-crippled-Fukushima-nuclear-plant-care-animals.html

Mauldin vs. Schiff

I like John Mauldin.  He's not a Keynesian idealogue.  He tries to look at both sides of an issue and figure out how we can actually muddle through the mess we are in.  And Peter Schiff is a genius, but he needs to lighten up a little on some points.  Well worth the time watching.

25:30  Mauldin tells a story of him having dinner with John Boehner.  They are discussing the debt ceiling crisis and Mauldin tell Boehner: "Too bad that you have to work with Harry, err, Sen. Reid to try to get this solved".  Boehner: "Harry, hell, Harry, ain't the problem.  It's Obama. The man can't make a decision.  He's got balls made out of marshmallows."   Hilarious.

Is new CIA director a muslim?

One of the FBI’s former top experts on Islam has announced that President Obama’s pick to head the Central Intelligence Agency, John Brennan, converted to Islam years ago in Saudi Arabia.
As WND has reported, former FBI Islam expert John Guandolo has long warned that the federal government is being infiltrated by members of the radical Muslim Brotherhood. But Guandolo now warns that by appointing Brennan to CIA director, Obama has not only chosen a man “naïve” to these infiltrations, but also picked a candidate who is himself a Muslim.
“Mr. Brennan did convert to Islam when he served in an official capacity on the behalf of the United States in Saudi Arabia,” Guandolo told interviewer and radio host Tom Trento.
“That fact alone is not what is most disturbing,” Guandolo continued. “His conversion to Islam was the culmination of a counterintelligence operation against him to recruit him. The fact that foreign intelligence service operatives recruited Mr. Brennan when he was in a very sensitive and senior U.S. government position in a foreign country means that he either a traitor … [or] he has the inability to discern and understand how to walk in those kinds of environments, which makes him completely unfit to the be the director of Central Intelligence.”
Read more at http://www.wnd.com/2013/02/shock-claim-obama-picks-muslim-for-cia-chief/

M4 up 0.9% in February

As of 2/28/13:
M2 = 10,389.9
Public Debt = 11,822.4
Fed held = -1749.6
------------
Total (as of 2/28/13) = 20462.7

This is up 0.9% over January, and up 3.6% since 9/30/2012.

All else being equal, this is what you would expect the rate of inflation to be.

I want to comment on the relationship between the 3 numbers.  If new T-bills are issued in the amount of, say $50 bn, and paid for from existing M2, then M2 will decrease and the total will remain the same.  If those same T-bills are monetized by the Fed, then M2 will increase but the "Fed held" portion, which is negative, will also increase, and the total will remain the same.

So how would M4, which is what I call the total, ever increase?  1) with the Fed purchase of MBS, 2) with private loans increasing (which has not been happening, since M2 has been decreasing), or 3) with Federal deficit spending.  When the deficit check is written, this increases the amount of money in circulation, but not when T-bills are sold.

Cough syrup danger

"Paracetamol is classified as a mild analgesic. It is commonly used for the relief of headaches and other minor aches and pains and is a major ingredient in numerous cold and flu remedies.  Paracetamol hepatotoxicity is, by far, the most common cause of acute liver failure in both the United States and the United Kingdom. ...  Untreated overdose can lead to liver failure and death within days."  Paracetamol is also known as acetaminophen, and is the active ingredient in Tylenol and many other types of pain relief medication.

Why can't someone find something safer?  In the meantime, do not take more than the recommended dosage.

======================================
Dextromethorphan, another common ingredient in cough syrups, is also dangerous.
"DXM has been used as the active ingredient in cough medicines for years, but has only recently begun making waves around the world. Teens have begun ingesting it in extremely high doses for recreational use, and slowly but surely, the drug is climbing the ranks as one of the leading causes of emergency room visits and drug-related deaths in young adults."
--http://healthychild.org/beware-childrens-cough-medicines-containing-a-controversial-drug/

I guess it is still better than what it replaced - codeine.

UFO over Los Angeles in 1942

Pirate Bay moving to North Korea

http://shanghaiist.com/2013/03/06/the_pirate_bay_announces_move_to_north_korea.php

"Popular file-sharing site The Pirate Bay, posted a press release on Sunday claiming that they had been invited by Kim-Jong Un and the DPRK to host and share content on their network."

Misandry

"The Western World has quietly become a civilization that undervalues men and overvalues women, where the state forcibly transfers resources from men to women creating various perverse incentives for otherwise good women to conduct great evil against men and children, and where male nature is vilified but female nature is celebrated.  This is unfair to both genders, and is a recipe for a rapid civilizational decline and displacement."
--http://www.singularity2050.com/2010/01/the-misandry-bubble.html

Ludwig van on electric guitar

See also: http://aftermath2022.blogspot.com/2013/06/moonlight-sonata-3rd.html