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I do not and can not condone violence, ever, except in the most dire and extreme circumstances in defense of home and family. The resort to violence in the case of a powerful oppressor is to give them what they desire, the intention of their provocations: the excuse to repression, murder, and genocide.
But non-violence, as Gandhi so eloquently observed, is the weapon of the strong, of the clear-headed, of the disciplined and devoted, and of the exceptionally brave whose courage is deeply grounded in something other than themselves. Without exceptional leadership, it rarely occurs naturally.
"There is no bravery greater than a resolute refusal to bend the knee to an earthly power, no matter how great, and that without bitterness of spirit, and in the fullness of faith that the spirit alone lives, nothing else does."
So as a response to prolonged injustice, violence often occurs, sparking mindlessly. To try and understand it, where its roots lie, is not to condone it, but to determine what it is and why it might be happening. This is the path to a lasting remedy.
Is this some excess of youth fueled by drink and wild spirits, as in the aftermath of a sporting event, or is it something more profound than the wildness of men in groups?
There is little doubt in my mind about the nature of what we are seeing today. I forecast the progress of these events years ago, as far back as 2002.
I am appalled to see that things are following that course. I even forecast the burning of cities in Britain. People at the time were incredulous at this. And yet here we are.
When you suppress discussion and choice, and abuse reason and justice over a period of years, you will ultimately bring forth the madness. And those who would use such a crisis, who imagine that it will serve their purpose, they will find that the will to power serves none but itself.
"Our government teaches the whole people by its example. If the government becomes the lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy...If we desire respect for the law, we must first make the law respectable."
Louis D. Brandeis
"Men naturally rebel against the injustice of which they are victims. Thus, when plunder is organized by law for the profit of those who make the law, all the plundered classes try somehow to enter, by peaceful or revolutionary means, into the making of laws. According to their degree of enlightenment, these plundered classes may propose one of two entirely different purposes when they attempt to attain political power: Either they may wish to stop lawful plunder, or they may wish to share in it."
Frederic Bastiat
"And remember, where you have the concentration of power in a few hands, all too frequently men with the mentality of gangsters get control. History has proven that."
Lord Acton
"Those who make peaceful revolution impossible will make violent revolution inevitable."
John F. Kennedy
When the governance of a society refuses to listen to the calls for justice and reform over a long period of time, when it acts to ignore, co-opt, diffuse, and then suppress the voice of the reformers, when it uses the law as a means of legal plunder, that government and society will eventually answer not to reasoned dissent, not to principled calls for reforms, but to the rage of the mob.
And then that society may call for the strong man to come forward and bring these unruly other ones to heel, operating on his own and beyond the law, using whatever means he wishes, even to suspending of the law for the sake of expediency, and ultimately engaging in crimes against humanity for the sake of justice.
And that is always a Faustian bargain, a path of self-destruction. But in a people gripped by frustration, anger and fear, it is a powerful temptation.
Violence and expediency invites dark powers to rise and insinuate themselves among you. And then begins the downfall, an almost inevitable descent, and perilous journey, into a hell on earth.
"One may dislike Hitler's system and yet admire his patriotic achievement. If our country were defeated, I hope we should find a champion as indomitable to restore our courage and lead us back to our place among the nations."
Winston Churchill, The Times, November 7, 1938
Tsar Nicholas II: I know what will make them happy. They're children, and they need a Tsar! They need tradition. Not this! They're the victims of agitators. A Duma would make them bewildered and discontented. And don't tell me about London and Berlin. God save us from the mess they're in!
Count Witte: I see. So they talk, pray, march, plead, petition and what do they get? Cossacks, prison, flogging, police, spies, and now, after today, they will be shot. Is this God's will? Are these His methods? Make war on your own people? How long do you think they're going to stand there and let you shoot them? YOU ask ME who's responsible? YOU ask?
Tsar Nicholas II: The English have a parliament. Our British cousins gave their rights away. The Hapsburgs, and the Hoehenzollerns too. The Romanovs will not. What I was given, I will give my son.
For his obsession with power and privilege Nicholas gave his son, his wife, and his daughters a hard death in a dark cellar. But their dresses were sewn with jewels.
You have to choose between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the Government. And, with due respect for these gentlemen, I advise you, as long as the Capitalist system lasts, to vote for gold.
George Bernard Shaw
Very volatile day in the markets, with gold leading the way higher and silver lagging a bit here in the short term.
Gold appears to be rising strongly, but not so much parabolic as some might imagine. It is certainly short term extended to the upside, calling for some type of correction or consolidation. But the fundamentals remain compelling.
These are dangerous markets, especially the equity markets. Please be very careful with your trading.
Stocks are now trading like commodities, largely on the technicals, and with High Frequency Trading still dominating the trade, they are only loosely associated with reality. This is what has been driving people to look for something solid, reliable.
Alas, it is hard to find. Even in gold, the paper trade has distorted markets for years as a result of the failure of the CFTC and SEC to maintain honest and efficient markets. So the rest of the world starts to create its own markets, and the decline of the American Empire begins to accelerate.
Any excuse will serve a tyrant.
Aesop
The Fed threw the market a bone, stating that they would maintain easing through the upcoming Presidential election if the economic conditions called for it.
And so a powerful relief rally ensued. Whether it will be maintained is another question and answer, heavily influenced by the upcoming economic reports, especially with regard to employment, median wage, and spending. And of course the sovereign debt situations and wobbly governments around the world.
About what one might have expected.
No specific action at this time, but reassurances that the Fed recognizes the downturn in the economy, with fresh evidence of this since their last meeting in June, and higher risks to recovery through lack of confidence in financial assets, and slack employment and spending by consumers.
In a very real sense the Fed is attempting to bridge the gap between fiscal and monetary policy, given the inadequate response from the federal government to the financial crisis.
The Fed changed the wording from 'extended period' to 'through 2013.' I had expected them to say 2012 but since this is not a binding limit it is of little consequence, except to signal that the upcoming presidential election will not deter them from taking what they believe to be the necessary steps to maintain the financial system. Default may be all right with some, but the Fed apparently does not concur.
There were three dissenting votes, from Plosser (Phila), Kocherlakota (Minn), and Fisher (Dallas), based according to reports primarily on this statement regarding longer term easing based on economic conditions.
"...are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013."
I tend to think that their dissent, if based solely on this, represented some sort of intellectual stand, as the statement clearly represents no firm commitment to rate policy, but is intended to put some meat in the reassurance. There is recent precedent for this approach in other central banks. It is intended to convey intent to reassure the longer term horizon of business decision, but is clearly not a commitment.
And if the dissent was based on a desire to RAISE rates, which I highly doubt, I would think that those governors might be operating in some alternate universe with different relationships and conditions. I am open to contrary arguments, but it is most likely that a desire to raise rates would be based on some ideological persuasion or first principle rather than on sound economic theory.
The dissenting votes may feed into the 'no confidence' in the governance of the country based on ideological differences and zombie economic theories that continue to hinder real recovery.
But at the end of the day it is official acknowledgement of the weakness of the economy, and easy money as needed through 2013. The markets will most likely recover from these extreme short term trends, barring new difficulties, especially from Europe. How robust that recovery will be is another matter. The inability to reform is a significant impediment to growth and a return to normalcy.
Whether any sort of a sustained rally of more than a few days ensues is another matter. The system appears to be broken, corrupt, and dysfunctional. The solution may not appear until the suffering becomes more widespread, shaking the fortunate out of their comfortable complacency.
I should add here that if the equity market does not respond sufficiently on the announcement, we may see the entry of the Exchange Stabilization Fund and its house banks, either into the close or tomorrow. They tend to do this to reinforce some Fed action if the market does not respond on its own. This is view as benign, similar to jawboning, the 'management of perception.'
Federal Open Market Committee
Release Date: August 9, 2011
Information received since the Federal Open Market Committee met in June indicates that economic growth so far this year has been considerably slower than the Committee had expected. Indicators suggest a deterioration in overall labor market conditions in recent months, and the unemployment rate has moved up. Household spending has flattened out, investment in nonresidential structures is still weak, and the housing sector remains depressed. However, business investment in equipment and software continues to expand. Temporary factors, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan, appear to account for only some of the recent weakness in economic activity. Inflation picked up earlier in the year, mainly reflecting higher prices for some commodities and imported goods, as well as the supply chain disruptions. More recently, inflation has moderated as prices of energy and some commodities have declined from their earlier peaks. Longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee now expects a somewhat slower pace of recovery over coming quarters than it did at the time of the previous meeting and anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Moreover, downside risks to the economic outlook have increased. The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee's dual mandate as the effects of past energy and other commodity price increases dissipate further. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.
To promote the ongoing economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent. The Committee currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013. The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.
The Committee discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability. It will continue to assess the economic outlook in light of incoming information and is prepared to employ these tools as appropriate.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen.
Voting against the action were: Richard W. Fisher, Narayana Kocherlakota, and Charles I. Plosser, who would have preferred to continue to describe economic conditions as likely to warrant exceptionally low levels for the federal funds rate for an extended period.
