I told you in yesterday’s report that the reason the markets stopped their decline of recent days was they were channeling the future: a Ryan win in the veep debate last night. And, indeed, Ryan was formidable, depending on which MSM outlet you watched:
So does it matter? Maybe not…depends on what happens over the weekend…which we’ll cover for Peoplenomics subscribers first thing in the morning.
“Why would Ure say the outcome doesn’t matter?“ I feel the urge to explain something in detail…but since this is going to get into an realm of opinion, let me clearly label this as…
Editorial Comment
Pearls Before Readers
A reader asked me to explain a bit more about how the Obama strong dollar versus the Romney weak dollar due to tax levies works. He just wasn’t getting the picture. So here’s a short mental exercise to explain why – when tax rates are high – the Dow would be lower than when tax rates are low. Pay attention here!
Sit four people down in a circle with a bunch of change in their pockets. Next, get each one a piece of paper with the word “Dollar” on it.
Meantime, you hang a silly sign around your neck that says Central Bank. You own all four of those paper “Dollars”.
I’ll stand over on your side and play the role of…..China, let’s say.
Now, I (China) has a widget to sell which costs 40-cents US.
Since all the Central Bank has is paper they need to collect something to give it’s “currency” some value. So they levy a tax on each of the four people in our circle….each one tosses a dime to you – the central bank.
Now, you collect your paper from the circle (the dour papers labeled Dollar) and hand them to China. “These papers collectively represent 40-cents of taxes paid and thus, are a storehouse of value. So in return, give me one 40-cent widget. The deal is done.
Now suppose we do things exactly the same except this time, we double the tax, tribute, or levy we put on the four people in the circle. Each puts in 20-cents.
Now, when you playing the role of the central bank collects the four pieces of paper and presents them to China, you say “Here is four dollars, but now they represent 20-cents each…so our paper is worth 80-cents. Give me two of those 40-cent widgets.”
And, they gladly would since even though the four pieces of paper are still the same, they represent twice as much extraction from the public – the circle of four.
The people in the circle of four, of course, wouldn’t understand the machinations of the central bank…but what they would understand is that the price of Chinese goods just dropped to half its previous price (in dollars).
The same would happen to gold, silver, European models you’ve been hiring for photo shoots (perv!) and whatever else.
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It reality, we – the public – are that circle of four. And while we pay actual money as tax, what’s really going on is a storage of value for hours worked and goods produced. But you get the idea: High tax (portion of people’s wealth paid in taxes) results in the lowering of foreign goods prices and hence, contains what would otherwise be inflation.
The reason the US has not gone the way of Greece, Iceland, and Spain soon, is that we have a larger navy and can “project power.” As our ability to intimidate other countries declines, so would the purchasing power of our dollar.
The US – since I’m letting you look at the cat in the bag here – cannot afford not to run multiple wars and play the role of Global Policeman. Despite other countries looking at us like Global Thugs and Loansharks, we have the baseball bat and as Iraq, Afghanistan, and sooner or later Iran and Syria will demonstration, the US Dollar Hegemony will continue because without that brute force approach, we go Greece or we go Spain.
Frankly, I don’t give a rip about which “presidential” nominee wins. It doesn’t matter. The only thing that matters is how long the US Dollar Hegemony persists and when’s the critical time to be ready for soaring prices that accompany fall of empire.
It’s sort of like the “power curve”. If you have a big stick, paying more tax will result in a stronger currency. In the case of the US presently, that currency/brutality spread is keeping us afloat, like it or not. On the other hand, if it ends, then down comes the international purchasing power of the dollar and hjyperinflation will come to America.
Now the dirtiest secret of all: The reason we have the political choice we do in a bit more than three weeks is simple: Barack Obama will raise the tax, which will be disinflationary – e.g. will hold inflation at bay. Mitt Romney is already talking war hawk, ultra pro military, so that, too, will force the maintenance of a strong dollar.
What’s missing is the reasonable candidate who will say: We are not going to pay anyone but the people in the circle of four for interest on our borrowed money. That would bring ab out the wrath of the banksters.
So instead, we have a non-choice: The Tax-Raiser or the War Drummer. Maybe in your world that’s a choice, but in mine it’s sice – or at least pretty lame at best. In both instances the political trick is to convince (us) the people in the circle of four that whatevers the bankers demand (and they answer to whom?) is really in our best interests.
It’s not. Sure as the sun will come up this morning, it will lead to a national “reputation hangover.” That’s the same phenomena, scaled down, that killed the US auto industry. Picture that internationally – and that’s US.
So once again, we see an election rigged such that a win by either candidate is a win for the banker class of the USA.
While it could be argued I’m throwing my vote away by considering a vote for Gary Johnson this year, at least it’s an honest throw made with eyes open to the bigger picture. Time to turn the corporate parties out and get a little more humane and responsible to the rest of the world. But the the arising of the police state at home is directly a result of the bankrupt financial policies in homeland America and trumped up military adventurism in foreign policy overseas.
The cycles of abuse – just like in families – pass from generation to generation and we are squandering America’s finest in wars over drugs and “terror” but in reality it’s about backdoor funding and wars for show in order to keep the world banker order in place.
Enough!
PPI Calling Romney Win/M.E. War?
Of course, since a Romney win would (*likely) reduce taxes, or extend expiring tax cuts, that would result in our expecting inflation to come along later this year and into next.
So it’s no surprise to read what’s in this morning’s Produce Price Index report:
“The Producer Price Index for finished goods rose 1.1 percent in September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Prices for finished goods advanced 1.7 percent in August and moved up 0.3 percent in July. At the earlier stages of processing, prices received by manufacturers of intermediate goods rose 1.5 percent in September, and the crude goods index advanced 2.8 percent. On an unadjusted basis, prices for finished goods climbed 2.1 percent for the 12 months ended September 2012, the largest rise since a 2.8-percent increase for the 12 months ended March 2012.“
OK, just how bad would a 1.1% rise in finished goods be if it were persistent?
Well…let me see: That would mean that over a 12-month period of identical performance that finished goods would be up 14.03%. And that would surely be enough of a pisser…since middlemen aren’t going to eat those increases…they will be passed along (with the Astroglide, thanks) to us consumers.
But bad as that is, you know what happens if you pencil out possible one-year out energy prices (if this month’s rate of rise in energy were to go on for 12-months? Angles please! A 73.5% increase in prices from here.
Which would put premium gas a year from now at what? Lemme see: Triple A fuel gauge report puts gas at $4.132 for premium nationally today, so with a strong war in the Middle East (keep that dollar value up there, right) we would be looking at….pencil please?….$7.17 gas per gallon.
Now, don’t go getting your knickers in a not…I am not stumping for Obama…just pointing out how the dynamics (emphasis on the die part) of financial calculations work. The do tend to drive world events….if you haven’t noticed.
So, how might I make some long green in this? Gee, I dunno, pocketful of call options on an energy ETF is Romney wins? What is it Howard says? “Your money doesn’t know where it came from.”
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Don’t tell me it can’t happen ($7/gallon gas): Just look at the latest Fed H.6 report (Money Stocks) and there it is in black and white:
Yep! “Holy shit Batman! M-1 is going up 22% annualized on the most recent three months??? Why isn’t everyone reporting this? OMG we’re soooo screwed…”
That’s right, Robbing. Not MSM stuff this close to electile dysfunction day. Besides, fortunately I have that lone gold coin of mine…and about that pocket full of call options on an energy ETF….
Paper Hangers Win Nobel
The NWO is giving itself prizes now: Yessir. The paper-hangers of Europe, better known as the EU, has won the Nobel Prize for Peace. Like what, Greece was going to invade Germany? EU slips the cuffs of banker cabal tax slavery sans direct representation on a whole continent and the proxies of arms dealing applaud? Where’s my damn ViseGrips?
Turkey Shoot
Getting to be that time of the year…early? Not really…because once again this morning, Turkey has warplanes up and down the Syrian border…and there’s been some suspicions voiced that the rebels in Syria may be doing some of the shelling of Turkey in order to goad the West into the fight…but of course, we all know the West is giving them arms…so, OMG this becomes convoluted. Time & flash goggles.
Russia’s Vlad Putin has scrubbed a trip to Turkey Sunday over the Turkish grounding of a jet this weekend which the Turks thought had arms aboard, but instead had Russians and now nerves are getting raw…
Which all goes into our special report tomorrow called Middle East Tettrazini which we’ll serve up with noodles for Peoplenomics subscribers tomorrow.
Quake Spotting
You know what happens next weekend, right? The Great SouthEast ShakeOut…a chance for all the quake planners to strut their stuff and see how they would reactive if a real earthquake came along and disturbed our nation (im)balance.
Warm up quake this morning was down off Papua, Indonedia – 6.7 and part of the Pacific Plate smashup, near as I can figure.
Truth Team or Disinfo Squad
A 12-member BBC team was busted at Area 51 this week, says this report out of the UK’s Mail Online this morning.
Since this is the same crew that suggested London bombings (by purported ‘terrorists’) were really goverment agent provacateurs, we’re left wondering whether they’s nutters…or really on the trail of the larger reality hidden from us plebes?
More after this…
