George Orwell was right!!!

Following excerpt is taken from http://www.newspeak.com/Newspeak.htm

The purpose of Newspeak was to drastically reduce the number of words in the English language in order to eliminate ideas that were deemed dangerous and, most importantly, seditious to the totalitarian dictator, Big Brother and the Party. "Thoughtcrime," the mere act of thinking about ideas like Freedom or Revolution, was punishable by torture and brainwashing.

Newspeak was the sinister answer. A character in 1984 describes it succinctly: "Don't you see that the whole aim of Newspeak is to narrow the range of thought? In the end, we shall make thoughtcrime literally impossible because there will be no words in which to express it... The whole climate of thought will be different. In fact, there will be no thought as we understand it now."

Is our real world today, at the beginning of the new millennium, so very different on a fundamental level from what Orwell predicted? There have been countless refutations of the 1984 dystopia: Totalitarianism is on the wane, Communism is dead, there is more prosperity, more community, more freedom than ever before.

Arguably, on a geo-political level, the global information economy has promoted the causes of peace and freedom, preventing potentially worse atrocities and repression in hotspots such as China and the Balkans. The Internet is likely going to give more people more access to first hand information that has ever been available on the planet, and the means to spontaneously and instantaneously communicate their ideas and concerns to as many other people as they can cram into their contact management programs.

But who is really calling the shots? In Oceania, there was the Party and there were the Proles - the great unwashed proletariat, living in subhuman squalor. In our world, out of the now 6 billion souls living on this planet, who belongs to the Party? Well, let's just deal with it in Internet terms. How many Internet subscribers are there in the world - 505 million by most recent count (Source: Global Reach 12/01) - that's 8% of the population of 6.2 billion. OK, so Ingsoc had an Inner Party and an Outer Party. If 5% of the world is in the Inner Party (those who have access to more prosperity, education, can shape their own destiny more than most), then let's say that another 10% belongs to the Outer Party (those who still benefit from the spoils, but don't make the rules). In today's word, that's another 600 million people. Let's be generous and say that 900 million people (15%) or the population, in one way or another, benefit from the freedom and prosperity of the modern world, can get an education, medical care etc. What about the 85% - the "proles" of our world? They're living in a world where 30% of them do not live with drinkable water, where infant disease and mortality are still raging out of control, where there is minimal education, inadequate social services if any, and no prospects whatsoever.

Think about it:

You can shut off your TV, but do you really want to?
You live in a democratic society and have the right to vote, but only 5% of registered voters in the U.S. actually contribute money to political campaigns. And you wonder why it's so tough to pass campaign finance reform?
You are free to spend your money however you choose. But why do you feel compelled to spend it? Is advertising just the free market at work, or is it the ultimate form of brainwashing to part you from your hard-earned cash?
How come you're pre-approved for so many credit cards? Isn't debt just another form of indentured servitude?

The bottom line is:

you have no freedom, no power,
you feel no need or desire for freedom or power, and, what's worse
you don't even know that you don't have it.
George Orwell was right!

http://www.newspeak.com/Newspeak.htm

Moral Alchemy by Sheldon Richman

"The welfare state is based on “legal plunder.” Only an impossible moral alchemy could turn theft into beneficence."


Alexis de Tocqueville, in volume two of Democracy in America, wondered, “What Sort of Despotism Democratic Nations Have to Fear.” Anticipating that democratic despotism would come from government’s smothering the people with control-laden benefits, he wrote: “Above this race of men stands an immense and tutelary power, which takes upon itself alone to secure their gratifications and to watch over their fate. That power is absolute, minute, regular, provident, and mild. It would be like the authority of a parent if, like that authority, its object was to prepare men for manhood; but it seeks, on the contrary, to keep them in perpetual childhood.”

From Short Article by Sheldon Richman - Link

Economic Crisis - Manufactured (Surprised? i am not)

Excellent explanation of Illiquid assets and current economic crisis BY Karl Denninger. In shorts it is a manufactured problem. Yes thats right. This is a manufactured crisis.

"Illiquid Assets" are not an act of the markets, nor are they an accident. They are in fact created by GOVERNMENT INTERFERENCE in the marketplace.

In 10 minutes you'll "get it" - why the government - not the markets - has led to the credit freeze. Why the market cannot clear. And why it is in fact explicitly the things that the government has done and is doing that has led us to have a "credit crunch", where assets that normally would trade won't.

AIG Explained - Max Keiser

What's Dead (Short Answer: All Of It)

Thursday, March 5. 2009
Posted by Karl Denninger in Editorial at 09:57

What's Dead (Short Answer: All Of It)

Just so you have a short list of what's at stake if Washington DC doesn't change policy here and now (which means before the collapse in equities comes, which could start as soon as today, if the indicators I watch have any validity at all. For what its worth, those indicators are painting a picture of the Apocalypse that I simply can't believe, and they're showing it as an imminent event - like perhaps today imminent.)

All pension funds, private and public, are done. If you are receiving one, you won't be. If you think you will in the future, you won't be. PBGC will fail as well. Pension funds will be forced to start eating their "seed corn" within the next 12 months and once that begins there is no way to recover.

All annuities will be defaulted to the state insurance protection (if any) on them. The state insurance funds will be bankrupted and unable to be replenished. Essentially, all annuities are toast. Expect zero, be ecstatic if you do better. All insurance companies with material exposure to these obligations will go bankrupt, without exception. Some of these firms are dangerously close to this happening right here and now; the rest will die within the next 6-12 months. If you have other insured interests with these firms, be prepared to pay a LOT more with a new company that can't earn anything off investments, and if you have a claim in process at the time it happens, it won't get paid. The probability of you getting "boned" on any transaction with an insurance company is extremely high - I rate this risk in excess of 90%.

The FDIC will be unable to cover bank failure obligations. They will attempt to do more of what they're doing now (raising insurance rates and doing special assessments) but will fail; the current path has no chance of success. Congress will backstop them (because they must lest shotguns come out) with disastrous results. In short, FDIC backstops will take precedence even over Social Security and Medicare.

Government debt costs will ramp. This warning has already been issued and is being ignored by President Obama. When (not if) it happens debt-based Federal Funding will disappear. This leads to....

Tax receipts are cratering and will continue to. I expect total tax receipts to fall to under $1 trillion within the next 12 months. Combined with the impossibility of continued debt issue (rollover will only remain possible at the short duration Treasury has committed to over the last ten years if they cease new issue) a 66% cut in the Federal Budget will become necessary. This will require a complete repudiation of Social Security, Medicare and Medicaid, a 50% cut in the military budget and a 50% across-the-board cut in all other federal programs. That will likely get close.

Tax-deferred accounts will be seized to fund rollovers of Treasury debt at essentially zero coupon (interest). If you have a 401k, or what's left of it, or an IRA, consider it locked up in Treasuries; it's not yours any more. Count on this happening - it is essentially a certainty.
Any firm with debt outstanding is currently presumed dead as the street presumption is that they have lied in some way.

Expect at least 20% of the S&P 500 to fail within 12 months as a consequence of the complete and total lockup of all credit markets which The Fed will be unable to unlock or backstop. This will in turn lead to....

The unemployed will have 5-10 million in direct layoffs added within the next 12 months. Collateral damage (suppliers, customers, etc) will add at least another 5-10 million workers to that, perhaps double that many. U-3 (official unemployment rate) will go beyond 15%, U-6 (broad form) will reach 30%.

Civil unrest will break out before the end of the year. The Military and Guard will be called up to try to stop it. They won't be able to. Big cities are at risk of becoming a free-fire death zone. If you live in one, figure out how you can get out and live somewhere else if you detect signs that yours is starting to go "feral"; witness New Orleans after Katrina for how fast, and how bad, it can get.

The good news is that this process will clear The Bezzle out of the system.
The bad news is that you won't have a job, pension, annuity, Social Security, Medicare, Medicaid and, quite possibly, your life.

It really is that bleak folks, and it all goes back to Washington DC being unwilling to lock up the crooks, putting the market in the role it has always played - that of truth-finder, no matter how destructive that process is.

Only immediate action from Washington DC, taking the market's place, can stop this, and as I get ready to hit "send" I see the market rolling over again, now down more than 3% and flashing "crash imminent" warnings. You may be reading this too late for it to matter.

Hilarious take on ongoing crisis (Warning - some foul language used)

When the World Went Bankrupt

by Butler Shaffer

To understand the machinations of a complex world, one must become sensitive to how apparently separate phenomena interconnect to produce unexpected consequences. Otherwise intelligent men and women struggle to make sense of the destructive turbulence that is fast becoming the norm in modern society. Wars that fail to satisfy even the most meager of excuses for their prosecution; rapidly-expanding police states rationalized as necessary for the ferreting out of "terrorist" bogeymen; state-sponsored torture conducted for no more apparent purpose than an end in itself; the wholesale looting engaged in – with bipartisan support – for the purpose of creating trillions of dollars of booty to subsidize the corporate owners of American society for losses sustained through incompetent management; these are the major examples of the failure to see interrelated causes of social disorder.

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