http://www.breitbart.com/article.php?id=D9BNKH3O1&show_article=1

CHICAGO (AP) – Nearly half of all U.S. children and 90 percent of black youngsters will be on food stamps at some point during childhood, and fallout from the current recession could push those numbers even higher, researchers say.

The estimate comes from an analysis of 30 years of national data, and it bolsters other recent evidence on the pervasiveness of youngsters at economic risk. It suggests that almost everyone knows a family who has received food stamps, or will in the future, said lead author Mark Rank, a sociologist at Washington University in St. Louis.

"Your neighbor may be using some of these programs but it’s not the kind of thing people want to talk about," Rank said.

The analysis was released Monday in the November issue of Archives of Pediatrics and Adolescent Medicine. The authors say it’s a medical issue pediatricians need to be aware of because children on food stamps are at risk for malnutrition and other ills linked with poverty.

"This is a real danger sign that we as a society need to do a lot more to protect children," Rank said.

Hold on there, Rank. Aren’t we doing a lot already by feeding these kids? What more are we expected to do as taxpayers beyond providing their basic needs?

The real danger sign is that half of all parents can’t feed their own children, and rely on the government to provide for their families. I’m not getting into WHY these parents can’t feed their kids. The point is that they’re apparently just unable to. And they’ve been told that whatever happens, the nanny-state will be there to provide for their needs. It’s Hurricane Katrina times a thousand, just waiting to happen.

I’m not rich, and every month is a little tight, but I’m still among the minority of people who pay taxes. And every paycheck a chunk of my money is taken for the purpose of feeding some other poor schmuck’s kids without my having a say in it. It’s not charity, since I have no choice. Nobody ever has to ask me to contribute or donate, they just go to the government. Since it’s taken from me against my will, it’s theft.

I have bankers and politicians stealing from my ass in one direction, and half of the rest of the country stealing from my ass in the other. And yet we wonder why the “middle class” is shrinking?

Here’s the modern truth: there is no middle class. There are producers and looters. There are rich looters, and poor looters, and a few of us in the middle who they feed off of. And when the SHTF, these food-stamp parents are the people who are literally going to be trying to feed off of me. A bunch of dependent, brain-eating, zombie bastards.

Quantitative Easing

The term quantitative easing describes an extreme form of monetary policy used to stimulate an economy where interest rates are either at, or close to, zero. Normally, a central bank stimulates the economy indirectly by lowering interest rates but when it cannot lower them any further it can attempt to seed the financial system with new money through quantitative easing.

In practical terms, the central bank purchases financial assets (mostly short-term)…from financial institutions (such as banks) using money it has created ex nihilo (out of nothing). The creation of this new money is supposed to seed the increase in the overall money supply through deposit multiplication by encouraging lending by these institutions and reducing the cost of borrowing, thereby stimulating the economy. However, there is a risk that banks will still refuse to lend despite the increase in their deposits, or that the policy will be too effective, leading in a worst case scenario to hyperinflation.

Quantitative easing is sometimes described as ‘printing money’, although the central bank actually creates it electronically ‘out of nothing’ by increasing the credit in its own bank account.

When economists talk, they can’t just say what they mean, or normal people will catch on and get pissed or panic. So they use language that implies one thing when it really means another. “Easing” sounds reasonable enough. Things are tough right now. We could all use a little more “ease” in our lives, quantitative or otherwise. Right?

But what they really mean is that the Federal Reserve just puts new money in its own bank account and then lends it out at 0% interest to whatever bank (or government, or insurance company) needs it. But when you say it like that, people don’t believe it. They can’t wrap their heads around it.

Ben Bernanke can’t come out and say, “we’ve created $2 trillion dollars out of nothing in order to buy stuff from banks that don’t want it anymore.” It’s a lot more palatable to say, “we’re using qualitative easing to reduce the exposure of our economic system to toxic assets.” Which one makes you want to string the fucker up and set him on fire, and which one makes you think, “alright, that sounds like a pretty good idea”?

And in case you’re unsure, yes, it’s thievery. It’s legalized, government-approved theft, at the expense of individuals, for the enrichment of bankers and authoritarian rulers.

So to sum up what I’ve written  so far in Part 1 and Part 2:

1. The value of something is determined by what someone is willing trade for it.

2. Money is a medium of exchange, and as such it only works if people think it’s worth something.

3. Money is valuable because the government says it is, but

4. The more money that’s available in circulation, the less valuable it is.

So now let’s close the loop on that last one. Money isn’t backed by anything solid or valuable. It’s only backed by the promise of the government that issues it to be responsible with it. If the government allows too much of it to be created, the value of the money relative to the amount of goods declines. Also, if the government itself becomes unstable or appears to be irresponsible, or reaches a point where it appears to be unable to support its debt, the value of that money will decline. People will want less of something if they’re uncertain that its going to be as valuable tomorrow as it is today.

So that’s how we get exchange rates. If your country is politically stable, responsible with the amount of money it creates, and responsible with its debt load, foreigners with less stable currency will want to hold your currency instead. People have liked the dollar more than other currencies for a long time because of America’s political stability, military strength, vast industrial base, prospects for growth, etc.

There’s been talk through the years of creating a new world currency backed by oil, but that petro-currency would be backed by a lot of goofy countries with goofy leaders and populations that are dominated by a goofy religion that encourages self-detonation and Jew-killing when things aren’t going right. That’s a little too much uncertainty for people who don’t want to risk their money. Similarly, up until recently with the introduction of the Euro, no single European currency was very attractive, what with the European tendency to reduce its infrastructure to rubble and population to corpses every few decades.

By comparison, the dollar looked pretty sweet.

But now, for many reasons (most of them self-inflicted) the dollar is weakening relative to other currencies. China and India have emerged as real economic players. American deficits are skyrocketing, and we’re making money out of nothing to pay for them. Our industrial base is moving off-shore. We seem to be intent on expanding the welfare state, further burdening the producers while increasing benefits for non-producers. Our economic health now rests not with ourselves, but in the hands of a couple of Asian countries who have been willing to buy our government’s debt since we’re addicted to spending more than we earn, but who are now not so sure they want to keep buying and holding quite so much.

So things aren’t quite as rosy as they used to be.

In Part 1, I came to the conclusion that the value of something is determined by what someone is willing trade for it, and that includes the value of cash/paper money/currency.

Our money has absolutely no intrinsic value (to have intrinsic value means that it can serve a purpose in and of itself, ie, you can eat it, build something with it, perform a service with it, etc.) Intrinsically, a dollar bill is actually worth less than the paper it’s printed on, because in order to use it for writing on effectively, you’d have to recycle it and bleach it to get all the green crap off of it first. A dollar only has value as long as someone else wants it, and its only worth what someone will give you for it. (Note, it didn’t used to be that way, but it’s the way it is now.)

Here’s what gives dollars value:

1. The government says it has value. As strange as it sounds, that’s about the best answer I can find. From the United States Coinage Act of 1965, "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes and dues. Foreign gold or silver coins are not legal tender for debts." In other words, in order to pay your taxes, debts and dues, you have to pay in dollars. The government will not accept your sack of potatoes or your pair of shoes as payment for your taxes. Since everyone has to pay taxes, and the government only accepts dollars, people have to acquire dollars, and therefore find value in them. It’s arbitrary and phony value, but it’s value. (Oh, and it’s illegal for a business to refuse payment in US currency, but that’s more of a supply thing than a demand thing. It’s interesting to note, though, that people are forced by law to accept something as payment that has no intrinsic value.)

Another factor that affects the dollar’s value is that, since around the time of World War 2, when the United States emerged as the ultimate victor, economic colossus, and western military superpower, the dollar has been, in effect, the world’s reserve currency. This means that international commodity prices are quoted and traded in US dollars. Why US dollars? Because a) early on, the US dollar was backed by gold, b) the United States was the most economically and politically stable country on earth, and c) we had a massive trade surplus that meant people needed our dollars to buy our stuff. People wanted dollars, which meant dollars had more value. Countries stockpile dollars by trading their own currency for them, or by buying US government debt. Either way, with everybody wanting dollars, the value of the dollar increased. Supply and demand at work.

In the 1970s, the United States abandoned the gold standard. Before this point, people could trade currency to the government for a set amount of gold. This meant that in order to issue money, the government had to have a certain amount of gold reserves available to exchange for currency. This gave paper money real value. It wasn’t intrinsic value, and the government still set the amount of gold you could exchange it for, but it was still backed by a valuable asset. But by abandoning the gold standard, the dollar was suddenly backed by nothing more than the promise that the US government (and its proxy, the Federal Reserve) would act responsibly with the money supply (and/or kill anybody who threatened the dollar-based, centrally-managed global economic regime, but let’s save that for another time).

The point is that since the dollar doesn’t really mean anything, it can mean…anything. It’s ripe for manipulation by politicians, central bankers, financial cartels and other miscreants.

OK, so now that we know that a dollar has value, how do you really know what the value of a dollar is at any given time? Well, that’s super-complicated, but I’ll start trying to explain it using another massively oversimplified potato sack analogy!

Let’s say that there are only $100 dollars available in the world. You and your neighbor each have $1 to spend each week. The local grocer is sells 2 sacks of potatoes every week for $1 each, and you and your neighbor each buy a sack of potatoes every week. This situation has been going on for quite some time.

Now let’s say the government that issues dollars increases the amount of money available to everybody, and now you and your neigbor each have $2 to spend each week. The first week, you show up, flush with cash, and buy both sacks of potatoes for a total of $2. Your neighbor shows up later, but can’t buy potatoes, and so goes home hungry and pissed. The next week, your neighbor shows up first, hungry as hell and afraid to go hungry ever again. The potato merchant, knowing that the demand went up last week, raised his price to $2 per sack, which he learned is now the price that the “market” will accept. Your neighbor buys both sacks ($2 from this week plus his $2 from last week = 2 sacks of potatoes). You stay home, since you’ve still got enough potatoes from your double-purchase last week. The following week, you show up, but now your $2, which seemed like a windfall a couple weeks ago, will now only get you one sack of potatoes, just like before you got your raise. Your neighbor blows his extra money for the week on some shit he didn’t need before, artificially driving up demand (and prices) for whatever he bought. The grocer thinks he’s a business genius until he realizes that all the crap he usually buys has inflated in price, too, since everybody has twice as much money to spend. It’s a friggin cluster-eff for everybody involved.

Meanwhile, there’s a third neighbor who, with his $1 per week, decided to scrimp and save and get by on half a dollar worth of apples each week and save the rest of the money. Over time, he had $20 saved up, almost enough to buy a fine new mule! Then the government came along and inflated the currency, everybody spent it willy-nilly, prices increased, and now his $20 would only pay for half a mule, and it’ll take another 20 weeks of scraping by on crappy apples just to get back to the point where he was before inflation. All of this through absolutely no fault of his own.

And that’s inflation. Inflation is increased prices caused by the increase in the supply of currency relative to the amount of goods available. This is important to understand, because a lot of people think that inflation is any increase in prices. For example, they think that when oil prices go up, it’s because of inflation, or that inflation can be caused by high oil prices, but that’s not really true. Inflation is a very specific kind of price increase that’s caused by an increase in the amount of currency available. So there.

Now obviously, we don’t generally see 100% inflation rates in this country very often (although we have in the past). The mechanic works the same though. If inflation is steady at 3%, any money that you’re hiding in your mattress loses that much of its value every year. You have to earn at least that amount in interest in order to stay even. It’s sickening and stupid, unfortunately.

Anyhow, next up, I’ll try to explain to myself how exchange rates work, and why currency manipulation is an important tool for all the pointy-headed bastards who run the financial system in the country. Cheers!

I’ve been reading a lot about the nature of money lately, and with some of the geopolitical stuff that’s coming down, I think it’s becoming a subject that a lot of people are getting concerned about for the first time in ~70 years or so. A lot of times, writing about an idea helps me to understand it better than just reading an idea, so here goes.

What is money?

Let’s say I have a sack of potatoes, and you have a pair of shoes. I need shoes, and you need potatoes. We each value what the other person has more than what we already have, so we trade them. If I value my potatoes more than I value your shoes, I wouldn’t trade for them. And vice versa in regard to you and your shoes. So we each conclude the transaction believing that we’ve gotten the best end of the deal at that point in time. If I had waited a week, it might have turned out that my food supply was running low, and I might value my potatoes more and would not have made the trade. So the value of something changes based on the conditions of the moment, and we take on some measure of risk whenever we engage in a transaction.

Anyway, having to find a specific somebody with shoes who also happens to want potatoes can be complicated and time-consuming. So enter money. Money is an abstraction that represents something of value in order to streamline the process of trade. If there are a lot of people who want potatoes, then it’s easier for me to trade my potatoes for money, and then use that money to negotiate with anybody who happens to be selling shoes. Money is a medium of exchange. Money is a tool. But it only works if people think it’s worth something.

So let’s back up again. How do you know what a sack of potatoes is worth? That’s easy. A sack of potatoes is worth whatever someone is willing to give you for it. I may feel that it’s worth $10, but if nobody will give me more than $5 for it, then it’s only worth $5. If I still value those potatoes more than what someone is willing to give me for them, then it’s in my interest to keep them and eat them myself. On the other hand, if those potatoes are going to rot before I get around to eating them, then it’s in my interest to settle for the $5.

So given the above, we know that something only has value as long as someone values it. This is tough to wrap your head around at first, because in real life we assume that the price tag on items at the grocery store represent a solid commodity price. A gallon of milk is $3 because if they charged more, people would buy less of it, and if they charged less, people would buy more of it. Since the total quantity at a given time is limited and known, the milk producers can maximize what they earn from it by selling it at an optimum price while it’s fresh. That price is the one at which milk producers value dollars more than their milk, and where milk buyers value the milk more than the dollars in their pockets.

Therefore, the value of something is determined by what someone is willing trade for it.

Which brings me to the next layer of confusion: the statement above applies not only to products and services we spend money on, but to the money itself. In our financial system, the dollars that represent value don’t have a fixed value themselves. They’re subject to the same effects of supply and demand as any other commodity. But I’m gonna split that to another post. Coming soon…