Gold Daily and Silver Weekly Charts.

I believe the general manipulation of markets we are seeing now will be traced back to Robert Rubin who formulated a principle of financial activism, or intervention before the fact, as being cheaper and more effective that repairing markets after they suffer a significant decline as Greenspan had done in 1987.

As you may recall the 1987 experience led Reagan to form the President's Working Group on Markets, which grew into the infamous 'Plunge Protection Team' of the 1990's which made generous use of the Exchange Stabilization Fund, an opaque kitty used for general market tinkering.

Treasury Secretary Rubin's favorite tool of choice in the markets was said to be the SP futures since they carry the best 'bang for the buck.'

Apparently LIBOR is quite good on the interest rate side of things as well.


The Federal Reserve is adding Daily Gold Prices to their FRED database.


Perhaps they think the price might become more interesting in the near future, or more deserving of their official concern.

SP 500 and NDX Futures Daily Charts

Lackluster trading day with the usual late day 'pop.'

William L. Shirer, In Time of War and the Life of the Spirit - Murrow and McCarthy

I have had the opportunity to read most of Shirer's works, including Berlin Diary, Rise and Fall of the Third Reich, and The Nightmare Years. I have his work on France in 1940, The Fall of the Third Republic, on my to-be-read list. I have also read a few books about him, that describe him in that milieu of the lead up to the second great war.  I also have a great appreciation of his colleague, Edward R. Murrow.

As an aside, you know I have read and enjoyed the account of the US ambassador to Berlin, In the Garden of Beasts by Erik Larson. I recently picked up a book that caught my eye with a similar name called A Garden of Beasts: A Novel of Berlin 1936 by Jeffery Deaver which was an interesting detective story with a great deal of period detail. I do recommend it if you like that sort of thing and that period.

Shirer is an interesting person. He is the camera that Isherwood thought himself to be, and was not, because he was at heart an artist interpreting reality and searching for his own identity.

Shirer is almost homespun and a typically Midwestern thinker and writer, which is what one might expect from a very good reporter whose purpose is to relay the events, rather than showcase himself. His books are still worth reading.

I recently came across this relatively rare piece of introspection by Shirer and thought I would share it with you.

"It’s rather difficult in these noisy, confusing, nerve-racking days to achieve the peace of mind in which to pause for a moment to reflect on what you believe in. There’s so little time and opportunity to give it much thought—though it is the thing we live by; and without it, without beliefs, human existence today would hardly be bearable.

My own view of life, like everyone else’s, is conditioned by personal experience. In my own case, there were two experiences, in particular, which helped to shape my beliefs: years of life and work under a totalitarian regime, and a glimpse of war.

Living in a totalitarian land taught me to value highly—and fiercely—the very things the dictators denied: tolerance, respect for others and, above all, the freedom of the human spirit.

A glimpse of war filled me with wonder not only at man’s courage and capacity for self-sacrifice, but at his stubborn, marvelous will to preserve, to endure, to prevail—amidst the most incredible savagery and suffering. When you saw people—civilians—who where bombed out, or who, worse, had been hounded in the concentration camps or worked to a frazzle in the slave-labor gangs—when you saw them come out of these ordeals of horror and torture, still intact as human beings, with a will to go on, with a faith still in themselves, in their fellow man, and in God, you realized that man was indestructible. You appreciated, too, that despite the corruption and cruelty of life, man somehow managed to retain great virtues: love, honor, courage, self-sacrifice, compassion.

It filled you with a certain pride just to be a member of the human race. It renewed your belief in your fellow men.

Of course, there are many days in this age of anxiety when a human being feels awfully low and discouraged. I myself find consolation at such moments by two means: trying to develop a sense of history, and renewing the quest for inner life.

I go back, for example, to reading Plutarch. He reminds you that even in the golden days of Greece and Rome, from which so much that is splendid in our own civilization derives, there was a great deal of what we find so loathsome in life today: war, strife, corruption, treason, double-crossing, intolerance, tyranny, rabble-rousing. Reading history thus gives you perspective. It enables you to see your troubles relatively. You don’t take them so seriously then.

Finally, I find that most true happiness comes from one’s inner life; from the disposition of the mind and soul. Admittedly, a good inner life is difficult to achieve, especially in these trying times. It takes reflection and contemplation. And self-discipline. One must be honest with oneself, and that’s not easy. You have to have patience and understanding. And, when you can, seek God.

But the reward of having an inner life, which no outside storm or evil turn of fortune can touch, is, it seems to me, a very great one."

William L. Shirer, A Reporter Quotes His Sources from This I Believe

Foreign correspondent William L. Shirer wrote the acclaimed World War II histories “The Rise and Fall of the Third Reich” and “Berlin Diary.” Shirer reported from numerous European cities including Paris, Vienna and Rome, and had the distinction of being bombed in Berlin by the British and bombed in London by the Germans.

And in addition, here is a famous piece of broadcast journalism by Shirer's colleague, Edward R. Murrow, on one of the episodes that reverberated throughout my early life, the demagogic phenomenon of Wisconsin Senator Joseph R. McCarthy.

"Those who cannot remember the past are condemned to repeat it." George Santayana

US Government Current Expenditures - Corporatism

Here is a review of the US government's current expenditures.

I suspect that these charts might induce cognitive dissonance in some, and I am sorry for that.  But these are things are they are. 

The sharp increase in debt under Obama is not because of increased spending, which had already increased significantly with Bush's unfunded wars, but was precipitated primarily by a very sharp decrease in receipts, because of the tax cuts, organized tax avoidance in the predominant financial sector, and most of all the sharp falloff in economic activity from the deepest dive in employment in post war history.

Yes, there are longer term issues with which one must deal.  But to provide a medical analogy, when one has been hit by a bus and is in hospital, perhaps that is not the most opportune time to consider going on that long deferred diet and exercise program that you have been considering.  The time to undertake that is after you have recovered, or when you are in good health and normal condition.   Otherwise you might just end up back in hospital as the cure is worse than the malady, given the circumstances.

Now, I am not saying that stimulus is called for, or that Obama is doing a fine job, or that the economy is back to normal.  Anyone who has read this blog regularly should know exactly what I think about the imperative to reform the financial system and the political campaign funding process, which I consider the sine qua non to any sustainable recovery.

But I think it is important to note that what preceded Obama was also not working, not working at all.  Those policies led to a massive credit bubble, and a yawning problem in the economy that exploded roughly at the end of Bush' second term.  That is not to say that the phony surplus under Clinton was any better, and his own policies as articulated by Robert Rubin and Alan Greenspan that led to the first of the bubbles in tech.

A return to those policies of unfunded wars, tax cuts for the wealthy, privatization and deregulation for ideology's sake, the trickle down economic theory of packing the 'job creators' with excess wealth, and allowing fraud and the shadow banking system to run wild under the guise of efficient markets freedom, will lead to a similar result, of bubble and bust, and a growing inequality of power and wealth that will destabilise the political fabric of society.

The truth is often less comfortable than the oft-repeated lie, which is simpler and easier to understand, and more comforting in its reliance on reflexive primitive emotions. But the lie is always a trap and a snare, and a major impediment to improvement and well being.

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained growth and recovery.

And for the love of God, corporations are NOT people, and do not deserve primacy of the peoples' Bill of Rights. When a corporation can shoulder a rifle, or even offer a son or daughter to fight and perhaps die on a battlefield, and spill out its last measure of devotion for its country, then perhaps one might make such a thing equal in rights and protections to a living human being.

But since it is not a life, but an artificial construct, to give corporations equality, much less supremacy of place due to their collective power and wealth, over a living breathing person, is the act of a Frankenstein, and not of a thoughtful and sustainable democracy, but corporatism in its rawest form.

Federal current expenditures are general government final consumption expenditure and includes all government current expenditures for purchases of goods and services (including compensation of employees). It also includes most expenditures on national defense and security, but excludes government military expenditures that are part of government capital formation. Data are in current U.S. dollars.

It should be noted that in the latest quarterly update, which is not yet included in this table, the level of government expenditures has stabilized and is no longer in a sharp decline in relative growth.

"US Federal Government Current Expenditures is at a current level of 3.71T, up from 3.708T last quarter. This represents a quarterly annualized growth rate of 0.24%, compared to a long term average annualized growth rate of 7.27%."