Machiavelli's Window

PAX AMERICANA

2011-05-04T08:27:00.001-06:00

When the great Roman general, Pompey, was asked to clear the Mediterranean of pirates he told the Roman Senate that he had to have permission to follow them wherever they landed. He hunted and killed them and established a garrison on each quadrant of the Med. The greatest trade in the history of Rome and 500 years of Pax Romana followed.

The United States under the order from President Obama who ordered the US NAVY SEAL mission to kill Osama Bin Laden ignored the sovereign border of Pakistan; hunted a criminal and killed him and his "army" right under the noses of those who were harboring them. Let's put this in the context of current events.

Gadaffi has continued his reign of terror in Libya, threatening the flow of oil much like the pirates of 40 BC threatened the flow of grain to Rome in the Mediterranean sea. The negotiations right now must be intense, Gadaffi will see that exile with a ton of his ill-gotten cash is better than the deal that we gave Bin Laden.

Further, while we took out Saddam Hussein for arguably the wrong reasons; there is no denying that having inserted a democratic state between the terrorist factions of Syria and Iran with American logistics (boots) on the ground; ships patrolling the shipping lanes; phenomenal air superiority; communications control, etc. Has allowed the US and its allies the ability to act with total impunity with drones, special team strikes and laser guided precision.

All of this has lead to a rising up of the most oppressed peoples in the world. They're emboldened by a sense that their religious, political and business leaders have enslaved them whether by dogma, embezzlement or sword. In some places one could argue all three.

The killing of Bin Laden, therefore is a water mark in history. It's the continuation of the doctrine first proposed, but abandoned by Clinton after terrorism became the modern form of warfare. The prosecution, invasion and occupation of Iraq by Bush effectively putting a wedge between Iraq and Syria; preventing their literal partners-in- crime alliance against the west. As well as the effort in Afghanistan, which logistically meant that we have the bastards surrounded, has perhaps unwittingly all served to create an opportunity for the US and its Allies to chase them across the borders and kill them.

Some things need killing or one can't have a nice garden.

The markets have reacted. Be aware that it has nothing to do with killing one man and everything to do with killing one man. By that I mean simply that the world just changed. When that happens rules change. When rules change then investments and investors by nature react.

The entire world has seen a continuing total annihilation of debt formation and demand for debt. Sovereign debt, public debt and private debt, which all grew exponentially through the 1990's and 2,000's are now contracting at a rate that can't be 'pumped up' through central banks policies of increasing the money supply. It's as effective as throwing water on a counter-top in an attempt to serve everyone at the table a drink.

The only things inflating right now are those commodities that have speculative markets. What I mean is that the grain complex, the metal complex, the meats, the softs, the energy markets have all exploded. At the same time, the old definition of inflation, "too much money chasing too few goods and services." Has been supplanted with, "too little jobs, inability to qualify for credit, lack of job creation, declining consumer spending, declining public tax revenues, deficit federal, state and local budgets forcing cuts, declining pension benefits, and hedge fund monies chasing momentum models for risk trade returns."

Obama will now claim victory in the War on Terror and establish this victory as his doctrine to continue the hunt using all the intel gained from water-boarding to clandestine missions. I don't blame him, it's how the powerful put a flag in their legacies. But, make no mistake, "if it can't happen then it won't happen" is at full operation here and now. That is, we can't keep spending TRILLIONS chasing every jerk-off in the old war model of assault/ beach-head/ invasions and occupations. It's way cheaper to send the SEALS (hooo-ah) and bring the rest of them home. Well, most of them will come home. Like Pompey and Rome, we'll continue to keep garrisons where they serve us and our allies.

Obama will now say that we must fortify our own borders. That our national security is our top agenda even while we maintain a 'presence' in the Middle East, Afghanistan, etc. And that our allies will be more looked to for support as we did in Libya. These are all good things. Much as I don't like most of his domestic agenda, maybe this dividend alone will save an otherwise depressing Presidency.

Continuing to move to the center, the United States can no longer afford to give politicians a blank check on the futures of our children and grand-children. They can't be trusted with it. Rather than fighting incessantly about debt ceilings an budgets he will be forced by the GOP and members of his own party to adopt (and may even preemptively suggest) a balanced budget amendment.

What an incredible platform for an almost disastrously lost President to be able to run for re-election on! WOW! He would have placated his base by doing as he promised to bring the troops home and at the same time STOLEN the right's best issue against him. He can then claim victory on two fronts and blame it all on Bush in the process. In fairness, Bush was caught flat-footed in his last term by the stare down with Ahmadenijad. He lacked the vision or the balls or the timing to do both things himself even as the fruit dangled in front of him.

Unfortunately this won't bode as well for our markets as rule changes never happen in a clean manner. The hedge funds are all loaded in silver, gold, corn, meat, defense contractors, energy etc, etc, etc. And they've paid a tidy premium for them all through the new derivative ETF markets. There will be some dislocations that scare the be-jesus out of the orderly markets. Markets don't like surprises and volatility will once again be the assassin that kills your retirement portfolio, kids education, 401k. etc. WHY?

Because as always you will hold on thinking, "I am almost even and now I'll wait until it comes back." Singing the "Bag- holders blues", again. This will take 10 years to work out. In the meantime, while interest rates are low... they'll go lower as US T-bonds/ notes and bills become a sanctuary as safety is once again worth a premium. In the words of my old mentor, "Screw return 'ON' my money. Let's first talk about return 'OF' my money.

And the mania of metals and commodities represented by the new derivative "ETF's" is the spider that delivers another surprise.

How Do You Do Christmas?

2010-12-22T11:48:00.001-07:00

I'm so sad and so excited all at the same time this Christmas. Yeah, the boys usually spend the Day at their mother's. This year that is in Cally. Sometimes one or two will stay with me then go. But, now that their mom is transferred to Seattle: They're all in Cally where the house hasn't yet sold.

They're men now. I used to play guitar and sing them to sleep. "FUNDER ROES" DAD! would come a call from out from under the covers in the dark. A tiny voice calling out to request the Garth Brooks "Thunder Rolls" classic . Now the request is more like, "Can I borrow the truck and trailer to move my gear to California? Oh yeah, and a VISA for gas?"

I know, I know... it's the natural order of things. I'm proud as can be that their mother and I managed to somehow raise three competent, healthy, funny, able hands. How we educated them is anyone's guess. But, we did. How they rose above our divorce 12 years ago; graduated college; stayed alive through the teenage years; didn't get anyone pregnant... whew! Glad I don't have to live through that again for a while. I'm sure that someday there will be grandkids. It will be great to hear my "shit" come through their adult mouths.

Sutton just got a career job at Royal Bank of Canada Wealth Management in San Francisco. Training starts on 10 January there. He left Loveland this morning at 3 am. He sold everything he owned except his two motorcycles, tools, guns and clothes. I wonder where he got his priorities? Lucky boy, he fits my tailor made Wall Street days suits and shoes perfectly. I sent about $20,000 worth of it from 30 years of storage with him.

His younger brother, Beau, precedes Sutton in San Francisco. He got a career job at Adroll.com. It's an internet startup growing gangbusters. Beau can win the world with his smile and people skills. He's rockin' it, just got a raise, stock and the biggest paycheck he's ever had to date. Beau is the best shooter of the crew of three and I sent him a competition skeet/trap gun with vests and bag to his office. Today you can be a tranny hooker working the corner of Bush and Taylor and no one will bother you. But, recieve a cased, boxed, broken down, unloaded shotgun? "NO"! He had to take it home in a cab since he sold his car and moved to the city. I started shooting at the Pacific Rod and Gun Club (since 1928) when I worked downtown. Now he will, too.

Brannon, "Poot", the youngest is a pretty typical college boy attending an Ivy League college in New Hampshire. They practically converted him to Liberal at Thacher School in Ojai, CA where he attended high school. He rocked it there. What? You wouldn't let your kid go away to a high school where they HAVE to have a horse? Since 1889- one of the top 10 prep schools in the world. And for him, a ticket to doing very well academically, now a junior at Dartmouth. He's majoring in Mechanical Engineering/ Astro Physics and after 5 years of Chinese language has had enough to be conversant. Mostly he talks to rocks because he eats, breathes, and shits rock climbing. I sent him all the gear that applies from tele-skis/poles to harnesses, jumars, etc. He won't be able to find them on the floor of his room by the next day.

After it all, I just had the chance to tell their mother, Karen Ashworth McFarlane, who is married to a great guy, Scott, that I am thankful that she has been such a great mother to our sons. They became men when we were being worried about whether or not they brushed their teeth today. Somehow they learned the difference between right and wrong. I say it was the pushups, but she'll say it was the love. Somehow they learned to value hard work. I say it was the chores, but she'll say it was the love. Somehow they learned to have a sense of something larger than they, I say it was the daily practice, but she'll say it was the love. Somehow they learned to treat people with respect and compassion. I say it was the love.

Merry Christmas to you, however you do Christmas: pagain, Catholic, Baptist, Buddhist, whatever... 'tis the Season to celebrate the dawn of longer days, the birth of Christ, the wonder of our Universe. I hope that you celebrate something besides a higher VISA limit.

Happy New Year! 2010 is almost gone. So many changes for us all that one has to wonder if 2011 should be celebrated or sneaked up on.

No matter- Blessings to you and your whole outfit. BRING IT!

We Didn't Survive Pearl Harbor

2010-12-07T08:27:00.003-07:00

Today has always been a special day for us. The five of us, my mom, me, my brother and twin younger sisters have known about the Japanese bombing of Pearl Harbor like we know each other. Dad, King the Most, survived the bombing at Hickam Field where the US Air Force was hit first by the bombers before continuing run after run on the US Navy side of the harbor.

My very earliest memory is of the ol' man walking me and my brother out on the pier that comes into view just to the right of where the USS Arizona Memorial is now. I was four or five. My brother was two or three and he carried him out as I walked beside them. If he put my brother down I was sure that he would have to retrieve him from the water. I remember it was a long walk out onto the pier on a sunny day in Hawaii.

I remember him standing there and pointing into the water, "There's the Arizona," he proclaimed. I was born in Arizona, Davis Monthan Air Force Base. We had lived in Arizona all of about six weeks. We were military and this duty station, Hawaii, the island of Oahu was where I would start school on base. We lived in on base housing. On the enlisted side and across the harbor from the Navy side where we were standing.

The proclamation sort of confused me. I remember to this day being confused as to how I could have been born on top of the water so I had asked about it. There was no ship to be seen. Dad put my brother down and commanded him to stay still. Then he lifted me up for a better angle to view it. All I could see was a rusted-out turret... and then I saw it... the ghostly image of the USS Arizona sunk right before me.

He told me that when the planes came in he was asleep in his bunk. The barracks he said, "Lifted on one end... everything slid and bullet holes began appearing in the walls." He also told me that he was scared. My ol' man wasn't skeert of anything that I can ever remember. He was a tough old son of a bitch sergeant. He said that he had dived out of his bunk and got under it for while. I remember that scared me. It still scares me.

The ship ghosted in and out of view in the little chop of the water. I remember the wind was calm and soothing, but then he told me that the sailors were all still on board the USS Arizona. They were trapped and died in that ship... the ones that weren't killed or wounded in the bombing, explosions, and gun fire. "They are all still in that ship."

I imagined them pounding on the hull until it got quiet.

My brother was now running wildly in some inappropriate direction and Dad put me down to chase him. We got back to the car. For a while I watched the mirages forming over the little two lane road with no curbs that ran seemingly forever to a motion sick kid in the back seat.

The Bend In The End

2010-11-16T08:41:00.001-07:00

Once again I'm coming to you as the herald, the messenger, the cryer whose fate is most certainly chronicled in history as the one first shot. After all, who wants to hear it? No one does. And worse, who would actually do something having heard? Only the believer would. I'm afraid that there is a slight chance that we're too early, the boats have only just landed; the enemy formed on the beach and a few villages have been burned. But, surely your warm ego protests, surely they'll stop there once they've had their fill of looting, rape and mayhem.

Markets are like that- assassins of the marauding kind. What makes "the trend is your friend until the bend at the end" can also be the undoing. The letter below will save you about $30 as a review of Dr. A. Gary Shilling's new book, The Age of Deleveraging: Investment strategies for a decade of slow growth and deflation.

It was my fortune as a young man to have heard Dr. Shilling speak in 1982 in San Francisco in a room of about 50 when he first predicted the longest bond market run in history. People left laughing and slapping each other on the back thinking that they had just heard a mad man.

Had I only been brave enough to have followed my instincts in 1985 when my dear friend Mike Hargis and I concocted a scheme to buy the zero T-bonds on margin. The plan would have been everything I could beg, borrow and steal beyond the rent, payroll and inventory; a bet I couldn't bring myself to make knowing that I'd wake to an empty home and bankrupt business if I lost it.

The thing is that markets don't go in a straight line anymore than trees grow to the sky. Even if you're right, but too early...well, the grave yards of Wall Street are filled with the bodies of those who are too early. It happens that the assassin moves like the Ninja hiding until you're sure that the sound you heard in the darkness was only the wind.

Then you H.O.P.E. that it's going to be all's well. My old friend and mentor Gene Kaplan at Cowen & Co. in 1980, Houston would always say having heard someone utter the word "HOPE", "When you use H.O.P.E. in the same sentence as "MONEY" it is a Yiddish acronym for 'YOU'RE SCREWED'."

So hear this message, on the back of Jerry Grantham's warning in the video I sent last week. Hear it as you might having had the chance to have heard two of the most brilliant minds in the investment business; two who have been absolutely accurate for two decades even as they've been ridiculed by peer, pundits and public. All the while their performance has been beyond all criticsm. Then hear it having also seen the work of Robert Prechter who has had to watch his credibility reduced to rubble as the assassin made folly of his warnings all year.
It's the nature of the beast. It's why the brave give up and the fool utters the fateful, most dangerous 5 words in history, "It's different this time." You only HOPE that it is. In my view the only thing different is the direction of the trend.... we're now at the bend in the end.
The Age of Deleveraging

In his new book, The Age of Deleveraging: Investment strategies for a decade of slow growth and deflation, published by John Wiley & Sons, Dr. A. Gary Shilling makes the case for slow economic growth and deflation for many years ahead as well as lays out the investment strategies that flow from this forecast—12 sectors to sell or avoid and 10 to buy.

This new age of deleveraging was sired by the back-to-back collapses of the housing and financial bubbles in 2007 and 2008, both of which he had been forecasting since early in the 2000s. He begins his new book with a look at how both of those bubbles were created, how they grew and how he was lucky enough to have spotted them in their infancies. Gary loves to be among the few to spot them and predict their demises. He also reviews the five other Great Calls he's made in his 40-year forecasting career, including the 19691970 recession, the early 1970s inventory bubble and 1973-1975 recession, disinflation starting in the early 1980s, the demise of Japan’s 1980s bubble and the dot com blowoff in 2000.

After four decades of leveraging up by the global financial sector and a three-decade borrowing-and-spending binge by U.S. consumers, deleveraging is underway. The good life and rapid growth that started in the early 1980s was fueled by massive financial leveraging and excessive debt, first in the global financial sector, starting in the 1970s, and later among U.S. consumers (Chart 1). That leverage propelled the dot-com stock bubble in the late 1990s and then the housing bubble. But now those two sectors are being forced to delever and, in the process, are transferring their debts to governments and central banks. The federal budget deficit leaped from $187 billion in the 12 months ending December 2007 to $1.3 trillion in the 12 months ending August 2010, but it had little net effect on the economy as private sector retrenchment more than offset the deficit jump (Chart 2 ). Federal borrowing relative to GDP leaped from 3.0% in the third quarter of 2007 to 10.7% in the second quarter of 2010, a 7.7-percentage point climb, but private borrowing fell from 15.2% to a negative 3.4%, a drop of 18.6 percentage points, or more than twice as much.

This deleveraging will probably take a decade or more to complete—and that’s the good news. The ground to cover is so great that if it were traversed in a year or two, major economies would experience depressions worse than in the 1930s. This deleveraging and other forces will result in slow economic growth and probably deflation for many years. And as Japan has shown, these are difficult conditions to offset with monetary and fiscal policies.

Insidious
The insidious reality is that this deleveraging doesn’t occur in a straight line, but is highlighted by a series of seemingly isolated events. After each, the feeling is that it’s over, all may be well, but then follows the next crisis. When the subprime residential mortgage market started to collapse in February 2007, most thought it was a small, isolated sector. After all, new subprime mortgages were only about 20% of total residential mortgages issued even at their peak in 2006, and those subprime loans were made to people that, luckily, we never have to meet. And at its top in fourth quarter of 2005, total residential construction was a mere 6.3% of GDP.

But then the “subprime slime,” as he dubbed it, spread to Wall Street in June of that year with the implosion of two big Bear Stearns subprime-laden hedge funds. Most hoped the Fed actions that August had ended the crisis and, indeed, stocks reached their all-time highs in October 2007. But as the financial woes spread, Bear Stearns was forced to sell for next to nothing to JP Morgan Chase bank, Merrill Lynch suffered a shotgun wedding with Bank of America, major banks like Citigroup and Bank of America itself were on government life support, and Lehman Bros. went bankrupt in September 2008.

Then the third phase struck as U.S. consumers stopped buying in the fall of 2008 (Chart 3 ) and the fourth, the global recession, coincided. Falling house prices and earlier home equity withdrawal wiped out the home equity that many had used to finance oversized consumer spending and the availability of loans in general became as scarce as hens teeth amidst the financial panic.

The optimists hoped the $862 billion fiscal stimulus package in the U.S. and similar fiscal bailouts abroad would take care of all those problems, but were surprised by the eurozone crisis in late 2009 and early 2010 and the drop it sired in the euro against the greenback (Chart 4). Nevertheless, that’s just the fifth step in global deleveraging. The combination of the Teutonic north and the Club Med south under the common euro currency only worked with strong global growth driven by the debt explosion—but now that’s over.

More Traumas Ahead

Further traumas on this deleveraging side of the long cycle lie ahead. Another sovereign debt crisis in Europe may be in the cards with Ireland replacing Greece as the focus. A further 20% drop in U.S. house prices due to huge excess inventories of over 2 million and foreclosure delays may push underwater homeowners from 23% of mortgagors to 40% and precipitate a self-feeding spiral of walkaway homeowners and nosedive in consumer spending.

Other roadblocks on the deleveraging highway may include a crisis in U.S. commercial real estate (Chart 5) that could exceed the earlier one in housing. Then there’s a possible hard landing in China that exceeds the 2008 weakness (Chart 6) as the government’s measures to cool the red hot property market and economy in general take hold. A slow-motion train wreck in Japan will probably occur sooner or later as her all-important exports fall along with weakening U.S. consumer willingness to buy them, and as her already subdued domestic sector suffers from her rapidly aging population.

Nine Causes of Global Slow Growth

In The Age of Deleveraging, Gary notes that with deleveraging comes slow economic growth, and he details nine reasons why real GDP will rise only about 2% annually in the years ahead— far below the 3.3% growth it takes just to keep the unemployment rate stable. Those nine reasons include:

1. U.S. consumers will shift from a 25year borrowing-and-spending binge to a saving spree. This will spread abroad as American consumers curtail the imports of the goods and services many foreign nations depend on for economic growth.
2. Financial deleveraging will reverse the trend that financed much global growth in recent years.

3. Increased government regulation and involvement in major economies will stifle innovation and reduce efficiency.

4. Low commodity prices will limit spending by commodity-producing lands.

5. Developed countries are moving toward fiscal restraint.

6. Rising protectionism will slow, even eliminate global growth.

7. The housing market will be weak due to excess inventories and loss of investment appeal.

8. Deflation will curtail spending as buyers anticipate lower prices.

9. State and local governments will contract.

2.0% Growth May Be High

Please note that these nine economic growth-slowing forces make 2.0% annual advances in real GDP in coming years reasonable, maybe even optimistic. The switch from a quarter-century-long consumer borrowing-and-spending binge to a saving spree will cut 1.5 percentage points off the 3.7% GDP growth rate of the lush 1982–2000 years. That alone brings growth down to 2.2%, and the eight other forces can easily reduce growth by another 0.2 percentage points.

Deflationary Expectations

And the deflationary environment Dr. Shilling foresees will feature both good deflation of excess supply resulting from rising globalization and the increasing economic dominance of productivity-soaked new technologies as well as the weak economic growth-inspired bad deflation of deficient demand. Good deflation will amount to about 1% to 2% while the bad deflation will run about 1%, making for annual deflation rates of 2%-3% per year.

Deflation is self-feeding and a key, but by no means the only, self-perpetuating mechanism is the anticipation of lower prices. But how much deflation does it take for consumers and businesses to wait for lower prices before buying? There is no simple answer, but it depends on at least four factors:

1. The breadth of deflation. Declining prices have to spread across a wide spectrum of goods and services to be convincing. The declines in energy prices in 2009 were too narrow to be convincing.

2. The chronic nature of deflation.The consumer price index (CPI) and producer price index (PPI) dropped year over year in 2009, but only for a few months due to declining energy prices. Furthermore, against the background of nonstop inflation since World War II, that experience was not long-standing enough to convince people that it would persist.

3. Decelerating prices, at least in the short run. Few Americans expect deflation, and most regard a return to significant inflation as inevitable. This probably means that it will take a pattern of smaller and smaller rates of inflation turning into bigger and bigger rates of deflation to be convincing. Inflation rates have fallen from double digits to essentially zero in the past 25 years. If deflation sets in, but at a steady rate of, say, 1% per year, it will probably take a number of years before people believe in its permanence. More immediately convincing would be 1% deflation followed by a 2% decline in general prices the next year and 3% the following year.

4. The amount of deflation. Of course, the deeper the deflation, the more convincing it becomes. Deep deflation would be a big persuader as it promotes big drops in interest rates and tangible asset and commodity prices, and unbelievable consumer bargains, but also job losses in firms that don’t cut their costs and prices. Those living on fixed incomes would feel like kings as their purchasing power grows while highly leveraged individuals and corporations would fail.

Furthermore, deflation must be significant enough to spur action. Even if you are convinced that a decline in shoe prices is in the offing, it may not be big enough to make you wait to buy. Waiting could entail another trip to the shoe store to check prices, and besides, if you buy a pair now, you get the use of them in the meanwhile.

In addition, the cost and discretionary nature of a good or service influences the sensitivity to deflation. An expected 5% decline in car prices next year may make you wait. If you’re spending $30,000, that’s a cool $1,500 in your pocket, and you can probably nurse your old bus along for another year anyway. Recall how rebate programs have pushed vehicle sales up and down like ping-pong balls. But a guaranteed 10% drop in toothpaste prices next month may not make you get out the pliers so you can, by vigorous squeezing, make the old tube last until the lower price is in effect—or to brush your teeth with Ajax while waiting for that price drop.

Trigger Point For Deflationary Expectations

Taking these four factors into account, what would it take to trigger deflationary expectations? Probably not as big a decline in prices as the 3% inflation rate level that seemed to touch off inflationary expectations in the 1970s. Even before that decade, folks had gained familiarity with rising prices throughout the postwar era and were relatively insensitive to the inflationary beast. Been there, done that.

Deflation, however, is a different animal, not seen since the 1930s, and few of us today have had first-hand experience with it. Widespread and chronic falling prices would be such a shock to most that it would probably take less deflation today than it took inflation earlier to get people’s attention. Our judgment is that declines in the prices of most goods and a fair number of services, averaging 1% to 2% and lasting for several years, would do the job. Then, anticipation of lower prices by buyers and all of the other self-feeding aspects of deflation would kick in. As noted earlier, Gary believes that annual declines in general price indexes of 2% to 3% are likely. If he's right, the world will be quite different than with the 2% to 3% annual inflation rates that most investors currently expect.

My Investment Themes

In The Age of Deleveraging, Gary discusses 12 investment areas to sell or avoid in the long run. Included are expensive consumer discretionary purchases like motor vehicles, appliances, airline trips and ocean cruises. These will be hurt by consumers' zeal to save and by the self-feeding downward spiral of deflationary expectations. The latter has locked automakers into profit-killing rebates. Similarly, credit card and other consumer lenders will suffer from the household shift from borrowing to debt retirement. Conventional homebuilders and their suppliers will be pressured as more than 2 million excess house inventories drive prices down another 20%.

The 10 investment sectors he favors include Treasury bonds. Back in the early 1980s, when the 30-year Treasury yielded 15.25%, he said we were entering "the bond rally of a lifetime.” He believes that rally is still intact as 30-year yields head for 3% and 10-year yields for 2% amidst slow economic growth, deflation and Treasurys’ global appeal as safe havens. Dr. Shilling also likes securities with high, reliable and growing cash returns such as stocks that pay significant dividends.

As households increasingly separate their abodes from their investments, they’ll favor small single-family houses, especially the cost-effective homes built in factories. Rental apartments will also be attractive as younger couples stay in them until their children are old enough to need single-family houses, and empty-nesters will prefer rentals to condos when they sell their suburban money pits. Our nation has decided to reduce its dependence on unreliable foreign energy sources, so he likes conventional North American energy suppliers such as coal, nuclear, natural gas, oil sands and related industries, but no government subsidy-dependent renewal energy such as ethanol, wind, solar and geothermal.

The Age of Deleveraging
Dr. Shilling believes the deleveraging process has years to go and that economic and financial markets have not returned to business as usual, at least not to the world of rapid growth supported by oversized and growing debt.

During the last fascinating decade, he played three roles. First, as an eyewitness to history, watching speculation survive the Internet bubble collapse in the early 2000s due to massive monetary and fiscal stimuli, and then spreading to commodities, foreign currencies, emerging market stocks and bonds, hedge funds and private equity, and especially housing. Gary saw the housing and financial bubbles expand and then explode. He watched the fears of financial meltdown spur gigantic monetary and fiscal bailouts. He experienced the witch hunts that followed, the inevitable result of widespread losses and high unemployment.

Second, he's been a participant in this drama, not only chronicling it in his monthly Insight newsletter, but also continually warning of the impending collapses in the housing and financial bubbles. And he was involved through a very profitable year in 2008 for the portfolios his firm manages when all 13 of his investment strategies worked—most gratifying in contrast to those who never acknowledged that those bubbles existed, much less could burst.

Third, Gary participated as a forecaster in successfully foreseeing the expansion and then collapse of the housing and financial bubbles. More recently, his forecasts have focused on the continuing deleveraging that the bursting of those two bubbles commenced, and the resulting investment strategies for the next decade.

The Age of Deleveraging describes all three of these roles, and I hope you find it enlightening, provocative, instructive, and at times amusing. It's available via amazon.com and barnesandnoble.com as well as at your local bookseller.

John F. Mauldin

johnmauldin@investorsinsight.com

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Barack Obama has awakened a sleeping nation

2010-03-30T17:30:00.000-06:00

Gary Hubbell
Aspen Times Weekly

Barack Obama is the best thing that has happened to America in the last 100 years. Truly, he is the savior of America 's future. He is the best thing ever.

Despite the fact that he has some of the lowest approval ratings among recent presidents, history will see Barack Obama as the source of America 's resurrection. Barack Obama has plunged the country into levels of debt that we could not have previously imagined; his efforts to nationalize health care have been met with fierce resistance nationwide; TARP bailouts and stimulus spending have shown little positive effect on the national economy; unemployment is unacceptably high and looks to remain that way for most of a decade; legacy entitlement programs have ballooned to unsustainable levels, and there is a seething anger in the populace.
That's why Barack Obama is such a good thing for America .

Obama is the symbol of a creeping liberalism that has infected our society like a cancer for the last 100 years. Just as Hitler is the face of fascism, Obama will go down in history as the face of unchecked liberalism. The cancer metastasized to the point where it could no longer be ignored.

Average Americans who have quietly gone about their lives, earning a paycheck, contributing to their favorite charities, going to high school football games on Friday night, spending their weekends at the beach or on hunting trips — they've gotten off the fence. They've woken up. There is a level of political activism in this country that we haven't seen since the American Revolution, and Barack Obama has been the catalyst that has sparked a restructuring of the American political and social consciousness.

Think of the crap we've slowly learned to tolerate over the past 50 years as liberalism sought to re-structure the America that was the symbol of freedom and liberty to all the people of the world. Immigration laws were ignored on the basis of compassion. Welfare policies encouraged irresponsibility, the fracturing of families, and a cycle of generations of dependency. Debt was regarded as a tonic to lubricate the economy. Our children left school having been taught that they are exceptional and special, while great numbers of them cannot perform basic functions of mathematics and literacy. Legislators decided that people could not be trusted to defend their own homes, and stripped citizens of their rights to own firearms. Productive members of society have been penalized with a heavy burden of taxes in order to support legions of do-nothings who loll around, reveling in their addictions, obesity, indolence, ignorance and “disabilities.” Criminals have been arrested and re-arrested, coddled and set free to pillage the citizenry yet again. Lawyers routinely extort fortunes from doctors, contractors and business people with dubious torts.

We slowly learned to tolerate these outrages, shaking our heads in disbelief, and we went on with our lives.

But Barack Obama has ripped the lid off a seething cauldron of dissatisfaction and unrest.

In the time of Barack Obama, Black Panther members stand outside polling places in black commando uniforms, slapping truncheons into their palms. ACORN — a taxpayer-supported organization — is given a role in taking the census, even after its members were caught on tape offering advice to set up child prostitution rings. A former Communist is given a paid government position in the White House as an advisor to the president. Auto companies are taken over by the government, and the auto workers' union — whose contracts are completely insupportable in any economic sense — is rewarded with a stake in the company. Government bails out Wall Street investment bankers and insurance companies, who pay their executives outrageous bonuses as thanks for the public support. Terrorists are read their Miranda rights and given free lawyers. And, despite overwhelming public disapproval, Barack Obama has pushed forward with a health care plan that would re-structure one-sixth of the American economy.

I don't know about you, but the other day I was at the courthouse doing some business, and I stepped into the court clerk's office and changed my voter affiliation from “Independent” to “Republican.” I am under no illusion that the Republican party is perfect, but at least they're starting to awaken to the fact that we cannot sustain massive levels of debt; we cannot afford to hand out billions of dollars in corporate subsidies; we have to somehow trim our massive entitlement programs; we can no longer be the world's policeman and dole out billions in aid to countries whose citizens seek to harm us.

Literally millions of Americans have had enough. They're organizing, they're studying the Constitution and the Federalist Papers, they're reading history and case law, they're showing up at rallies and meetings, and a slew of conservative candidates are throwing their hats into the ring. Is there a revolution brewing? Yes, in the sense that there is a keen awareness that our priorities and sensibilities must be radically re-structured. Will it be a violent revolution? No. It will be done through the interpretation of the original document that has guided us for 220 years — the Constitution. Just as the pendulum swung to embrace political correctness and liberalism, there will be a backlash, a complete repudiation of a hundred years of nonsense. A hundred years from now, history will perceive the year 2010 as the time when America got back on the right track. And for that, we can thank Barack Hussein Obama.

Gary Hubbell is a hunter, rancher, and former hunting and fly-fishing guide. Gary works as a Colorado ranch real estate broker. He can be reached through his website, aspenranchrealestate.com.

CANDID EXCHANGE

2010-02-01T14:51:00.001-07:00

--------------------------------------------------------------------------------

From: Cameron Hunt [mailto:nwtfhunter@hotmail.com]
Sent: Monday, January 04, 2010 2:22 PM
To: King Cavalier
Subject: Clothing

Dear Sir or Madam,
I recently found an advertisement on a bulletin board containing your products. The members of the forum were discussing why the price of one of your shirts was $325.00. The title of the post was "What the ......" and not one person there said they could see why anyone would purchase your shirt. So that prompted me to write this mail, to understand why they are so high priced.

Thank you for any reply you may send, and best of luck with your products.

Cameron Hunt
--------------------------------------------------------------------------------
From: King Cavalier
Sent: Monday, January 04, 2010 2:53 PM
To: 'Cameron Hunt'
Cc: Sutton Cavalier

Subject: RE: Clothing

Cameron:

Thanks for your candid email. After 28 years of selling the highest priced hunting clothing and gear there is no day that we don't have to 'explain' why it is that our gear is 'worth it'. You can go on EBAY and see day after day, auction after auction of our gear that is 10, 15, 20 years old and selling for more than it sold for NEW. That's not the reason.

You can log onto our website, go to the bottom of the page and click "Testimonials" and read literally 100's of people telling hunt story after hunt story. You can also see literally 100's of pictures of them with this year's critter. That's not the reason.

I could tell you all the benefits: radiant fabric that generates it's own low-level infrared heat; more scent suppressant than any other natural fiber; more fire retardant and ARC FLASH suppressant than Dupont's NOMEX oz/oz; more durable than any garment you own; keeps you warmer, more comfortable in all seasons; has been used to kill the baddest, biggest, meanest, toughest on every continent and weather condition known to man (yes, both two legged and four legged); has the highest temperature range of any garment; highest resale; lowest cost long term; highest value. Those aren't the reason.

It could be then that it's because we make the fabric right here in the USA. And it's the only patent pending fabric of its kind in the history of the US Patent Office going back to its founding- almost 200 years. That's not the reason.
We could spout story after story of completed missions; crashed float planes through the ice (many); days spent in snow caves (100's); nailed down by enemy fire and wounded (too many); all my buddies froze their ass off (God only knows). Those aren't the reason.

We could talk about it in terms of lives saved in the last almost 30 years. That's not the reason.

We could point to all the press reports. So what? The press will say what you pay them to say and everyone knows it. So that can't be the reason.

How about all the lives that have been blessed by all the game that gave its life? Nope, don't think so.
There are zillions of competing products out there with a nice camo pattern- they all promise that they'll make you invisible. Our does, too.... so what... we all know that the deer, turkey, elk an Taliban really don't care. It all works more or less anyway. Want proof? Look at the pictures of some genius hunting sheep in AK wearing Mossy Oak or Real Tree! So that ain't it.

Shit, now that I think about it all, I'm wondering how we can justify making a living at all for the last 30 years...since 1981 anyway... please pardon the exaggeration. It's put my kids through college- one left to go! My truck is only 3 years old.. and I live in a decent house. No partners or shareholders and I get to do pretty much what I want, when I want. But, obviously that's not the reason either.

In the end I'd guess that after you sift through it all, the only 'reason' is our customer's reason. It's the only one that matters. Whether you called us from a satellite phone from Afghanistan; gave us your VISA and shipped it to your mom so she could send it on to you to save you from another freezing night of looking through a scope laying on a windy, wet hill or just wanted to go to Alberta and sit dark to dark at 30 below zero waiting for a big whitetail- we'd make you the shirt you ordered. We'd also know for sure- beyond a shadow of a doubt in our mind that you'd be getting what you paid for. We'd know because OmnithermR and OmniliteR aren't some ad genius' fuckin' experiment.

You go read all the labels in all the clothing you've ever bought. I'll bet you my net worth that they all say, "Wool or Cotton or Polyester or Polypropylene" . The label is the only place that the manufacturer can't lie to you. So what's the difference between them? Nothing. That 100% polyester that you bought 2 years ago isn't any warmer and won't perform any better than that 100% polyester you are looking at right now.

Omnitherm and Omnilite are different than anything else you own now; have ever purchased; and will ever buy. The rest comes with it. Don't know anyone else that can send all that to you but King of the Mountain, Inc.

That's our reason.

You asked a candid question and I thought you deserved a candid reply.
Happy New Year!

King

A 20- Year Bear Market?

2009-06-30T08:18:00.002-06:00

A 20-Year Bear Market?
By David Galland, Casey Research
In November of 1997, my partner and co-editor of The Casey Report, Doug Casey, wrote an article titled "Foundations of Crisis," which leaned heavily on the research of Neil Howe and the late William Strauss.
Howe and Strauss have written many books on how generations determine the course of history and how they will shape America's future. Their forecasts on a wide variety of indicators have turned out to be amazingly accurate. They were among the first to predict (back in the late 1980s) the rise of Boomer-driven culture wars and the simultaneous rise of Gen-X-driven free agency and distrust of government. And they were completely alone back then in predicting, for the post-X "Millennial Generation" (a label they coined), a decline in youth crime and risk taking and an increase in youth civic engagement that would first become apparent around the year 2000. Guess what? For the last ten years, everyone has been noticing exactly these trends among teens and 20somethings.
Howe and Strauss also made extensive predictions, based on generational aging, on how America's entire social mood would likely change, in dramatic fashion, during our current 2000-2010 decade. To quote Doug's prescient 1997 article, which was reprinted in Outside the Box late last year...
"... an excellent case can be made the U.S. is approaching another time of secular crisis, a Fourth Turning, with an expected due date of 2005 – seven years from now – plus or minus a few years in either direction.
The Stamp Acts catalyzed the American Revolution, the election of Lincoln catalyzed the Civil War, the Crash of '29 catalyzed the Depression/WW II era. What might precipitate the elements now floating in solution? The answer is practically any random event that's sufficiently traumatic. Any of the theses of current disaster/action novels and movies will do nicely. Perhaps the accidental or intentional release of a super plague vector. The crashing of an airliner into the Capitol during a joint session. An all-out assault on the IRS computers by an armed group – or perhaps the computers just melting down due to the Year 2000 Problem. Perhaps a financial disaster that cascades into the Greater Depression. In any of these, or a hundred other scenarios, the federal government would almost certainly act precipitously and with a heavy hand, which would bring on a whole other set of consequences.
There's no way of telling where the Crisis will lead, or how it will end. That's going to depend not only on exactly who's in control, but what they do, who they're up against, and a hundred other variables we can't even anticipate.
One thing that seems certain is that real crisis brings out strong leadership. Because of its age and size, it will come from the Boomer generation, and it will be in the mold of Roosevelt or Lincoln – both very dangerous precedents. The boomers in elderhood will be dogmatic, harsh, puritanical, and quite willing to burn down the barn in order to destroy whatever rats they see. Admix that attitude to a time resembling the Revolution, the Civil War, or WW II, overlain with today's ethnic strife, urbanization, financial overextension, and powerful, compact new weaponry in the hands of foreign fanatics out to teach the Great Satan a lesson and it's a real witch's brew.
As eye-opening as Doug's predictions were, they brought us only to the onset of the current crisis. Consequently, we thought it both timely and important to check back with the source of much of the research he relied on. And so it was that I spent several hours talking with Neil Howe, co-author of the seminal work on generational cycles, The Fourth Turning, and, just recently, the subject of the DVD "The Winter of History." Howe is not just an historian, but also a Washington DC-based economist and demographer. While our conversation covered a great many topics, the overriding focus was on how things are likely to unfold from here.
Many bullish readers won't be thrilled to hear Howe's latest findings about the future, but given his predictive track record, dismissing them out of hand could be a costly mistake.
The summary outlook, according to Howe, is that we are in the very early stages of a 20-year period of economic and institutional upheaval – an era denominated by a crisis during which we'll likely witness the tearing down and reconstruction of many aspects of society as we know it.
As individuals, understanding Howe's views and taking some reasonable precautions makes a lot of sense. As investors, those views also have the potential to make us a lot of money.
Following is my high-level recap of my long conversation with Neil Howe, along with some general thoughts on the investment implications of a 20-year bear market.
Remember the Sixties?
If you're old enough -- or possess even a rudimentary sense of history -- think back to the 1950s, with roller-skating waitresses, crew cuts, and nuclear families of the sort represented by the iconic Leave it to Beaver. Fathers worked, while many mothers stayed home. Life had a certain predictable quality and, as far as anyone knew, would continue along the same lines for time immemorial.
But then something happened... the 1960s. Literally no one saw it coming. It was as if someone had flipped a switch that electrified America and, quickly, the world. Most everything changed, and a society accustomed to conformity was blown away with a fierce individualism expressed with long hair, sex, drugs, and rock and roll, topped off with civil disobedience and bloody riots in the streets.
What happened?
According to Neil Howe, in the mid-1960s, generational change pushed society around a dramatic corner as idealistic, individualistic young Baby Boomers (born 1943 to 1960) rebelled against the midlife leadership of their G.I. Generation parents (born 1901 to 1924).
These periods of transitions are part of a larger cyclical pattern made up of four distinct eras, or "Turnings," each lasting approximately 20 years. It can be helpful to think of the four turnings as you might think of the four seasons, repeating predictably in their own natural rhythm. A full cycle of turnings takes place over a period of about 80 to 90 years -- roughly the span of a long human life. A new turning begins as a new youth generation comes of age, bringing a new social ethic that compensates for the excesses of the midlife generation then in power.
While we don't have the space here to go into the full details of Howe's research, it's important to the topic at hand that we quickly recap the Four Turnings.
The First Turning is referred to by Howe as a High. As this follows a period of crisis, one of the hallmarks of a First Turning is a heightened sense of community and collective optimism, driven in part by the fact that the society has just come through a difficult and challenging time. Consequently, during First Turnings, societal institutions tend to be strong while individualism is weak. The post-World War II "High" of the mid-1940s through early '60s is the most recent example of a First Turning.
The Second Turning, called an Awakening, typically starts out feeling like the high tide of a High, with signs of progress and prosperity everywhere. But just as everything seems to be going along swimmingly, large swaths of society begin to chaff under the social conformity of the High, beginning to gravitate to more individualistic pursuits and demanding that their personal interests come first. You may recognize the "Consciousness Revolution" of the mid-1960s through early 1980s, correctly, as the Second Turning.
Next up, the Third Turning, which Howe calls an Unraveling, is much the opposite of a High. To wit, individualism dominates, while institutions are increasingly weak and discredited. Quoting Howe on the Unraveling...
"This is a time when social authority feels inconsequential, the culture feels exhausted, and people feel bewildered by the number of options available to them. It is a time of celebrity circuses and a tremendous amount of freedom and creativity in our personal lives, but very little sense of public purpose.
The most recent Third Turning began in the mid-'80s with Morning in America, and continued through the '90s. Previous periods of Unraveling in American history were also decades of cynicism and bad manners. Think of the 1920s, the 1850s, the 1760s. And history teaches us that the Third Turnings inevitably end in Fourth Turnings.
Finally, there is the Fourth Turning, called a Crisis. The recent Third Turning appears to be winding down, and we are currently on the cusp of a Fourth Turning. This is a time of great turmoil, when society's basic institutions are torn down and rebuilt, and seemingly insurmountable problems are addressed. During Fourth Turnings, America engages in a struggle for its very survival and redefines its identity as a nation. Large wars are often a part of this process. The American Revolution, Civil War, Great Depression, and World War II were all features of past Fourth Turnings.
In sum, Howe's research has shown that, with remarkable predictability, history is not a straight line extending toward a better and brighter (or increasingly awful) future, but rather a repeating cycle of the four distinct social eras. These four turnings have recurred with remarkable consistency throughout Anglo-American history, as Neil Howe outlines at length in Generations and The Fourth Turning. It is therefore no accident that America has experienced great cataclysms or "Crises" about every 80 years. Travel back eighty years from Pearl Harbor Day, and you land in the middle of the Civil War. Eighty years before that takes you to the Revolutionary War. If the rhythms of history hold, America is now poised to enter another Fourth Turning.
Bad News, Potentially Good News
You don't need me to tell you that the United States and in fact the world are now facing a plethora of intractable problems. The world's former powerhouse economy, the U.S., is now the world's largest debtor nation – and by a wide margin. The nation has trillions in unpayable liabilities coming due on Social Security and Medicare, to name just two of many broken government programs weighing on the country. And our much vaunted democracy is increasingly dysfunctional – rotten to the core, truth be known – thanks largely to entrenched special interests and a voting public clamoring for their own piece of the pie, while trying to hand the bill off to somebody else.
Meanwhile, the economy – despite rigorous jawboning by the government and its many friends in the large banking institutions -- is in serious trouble, with the housing market buffeted by tsunami-like waves of defaults, foreclosures, overvaluations, historic levels of personal debt, and tight credit that has left the U.S. government as the sole lender in many markets.
Bernanke and his ilk may see green shoots, but what they're really seeing is the deep, green sea rising up once again to bury the economy.
That's the bad news.
The potentially good news, if you credit Howe's research, is that the Crisis we're now entering will change pretty much everything. While this change will entail a great deal of pain and a reduced standard of living for a large number of people, by the time the Crisis subsides, society will have pretty much remade itself in ways that no one can predict at this point.
Put another way, today's intractable problems will be solved... one way or another.
What's Next
When discussing what's likely to follow next, Neil Howe turns to his generational profiles and points out that the rising societal power today belongs to the generation he calls the Millennials, individuals born between 1982 and 2004. They are a "Hero" generation, just like the G.I. Generation that coped so well with the turmoil of the Great Depression and World War II -- the last Fourth Turning. Coddled as children, the G.I.s were ultimately called upon to help society through a dark and dangerous period and rose to the occasion. Again, quoting Howe on the Millennials...
"These are today's young people, who are just beginning to be well known to most Americans. They fill K-12 schools, colleges, graduate schools, and have recently begun entering the workplace. We associate them with dramatic improvements in youth behaviors, which are often underreported by the media. Since Millennials have come along, we've seen huge declines in violent crime, teen pregnancy, and the most damaging forms of drug abuse, as well as higher rates of community service and volunteering. This is a generation that reminds us in many respects of the young G.I.s nearly a century ago, back when they were the first boy scouts and girl scouts between 1910 and 1920.
Unlike the Baby Boomers, who are largely individualistic and anti-establishment, the Millennials are good team players. We hear a lot these days about working together for a common cause, volunteerism, and the need for stronger government institutions, largely because these are the new priorities of the Millennial Generation.
As you may recall, out of the devastation of World War II, a spate of transnational political and economic institutions were born, including the United Nations, the World Bank, the World Health Organization, and the International Monetary Fund. By the time the current Fourth Turning is over, expect more of the same -- but probably even bigger and more ambitious.
What Does This Mean to You?
Most importantly, if Howe is right, this crisis is far from over. In fact, when I asked him where we are today on a scale from 1 to 10 -- with 10 representing as bad as the crisis will get -- he replied that we are at either 2 or 3. In other words, the worst is very much yet to come. And, per above, he expects this period of turmoil to take 20 years to play out. Thus, if nothing else, you may want to continue approaching matters of personal finance cautiously.
Secondly, if you're the type of individual that tends to get steamed up by larger and more intrusive government programs, you may want to take a few deep breaths and resolve yourself to the fact that this phenomenon is likely to get far worse before we see a return to celebration of individual rights. (And the cycle shows that we will see such a return -- about 40 to 50 years from now, when the next Second Turning comes around.)
If it is any consolation, the Millennial Generation places a great deal of weight on teamwork and the notion of doing things "smart." That doesn't mean, of course, that the various programs that are kicked off in an attempt to fix the many problems now confronting society will in fact turn out to be technically smart. But they will almost certainly be better thought out than some of the numbskull initiatives we've seen over the last 20 years.
You can also take some comfort in the fact that Millennials are builders, not destroyers. By contrast, the individualistic Boomers that dominate today's aging political class are world-class dissenters, radio talk show aficionados always ready to scrap it out for their beliefs. Millennials want to skip the philosophical debate and get straight to fixing things.
Other insights about Fourth Turning periods gained from my conversation with Neil Howe...
Government grows powerful, and sweeping new legislation is enacted. The old 1990s rule was: just compete and stay off the state's radar screen. The new 2010s rule will be: better have a presence in Washington so you're not dealt out of the "new" new deal. One political party tends to dominate. The Democrats under FDR during the last Fourth Turning offer a good example. While Neil Howe doesn't think it will necessarily be the Democrats this time around, they are certainly in the pole position at this point.
While public history speeds up, personal life slows down. Families will spend more time together, like in the old Frank Capra movies. Ever more households will be multi-generational, a trend now spurred by Boomers with large, empty McMansions and Millennials without jobs. There will be a blanding of the pop culture, with the entertainment of the young (put Miley Cyrus or "High School Musical" on fast forward) increasingly regarded as tamer than the entertainment of the old.
Innovation tends to stagnate, while a few new technologies will be chosen to be adopted on a large scale. We will see the equivalent of canals or railroads or interstates being built across America. To borrow from Carlotta Perez' four-stage description of technological revolutions, we are moving from the "innovation" to the "implementation" stage.
New laws and regulations will do less to referee a free market and more to pursue one or another national priority. They will increasingly favor the large producer over the retail buyer, investment over consumption, planning over risk, debt over equity. Businesses will hustle to reposition themselves. Anti-trust legislation will weaken.
The authority and obligations of community will strengthen at all levels, from local to national and possibly beyond (if our alliances prove durable). Personal reputation and membership will matter more. A "new localism" will reshape town and urban planning. A global slide toward national or regional protectionism will loom as a real danger.
It is too early to tell whether the crisis will ultimately be inflationary or deflationary, though we at Casey Research come down on the side of inflation for the simple reason that the government possesses the means to inflate. Due to the gold standard, that was not the case early in the Great Depression.
In the past, Fourth Turning periods have always resulted in the nation redefining who we are in some essential way. That was certainly the case during the American Revolution, when we transitioned from a British colony into a collection of independent states -- and the Civil War, when those states were hammered into a single nation. And, again, after World War II, when the U.S. went from being a relatively isolated nation to a global empire. A wild card, for instance a terrorist nuke going off in a city anywhere on the planet, could similarly take the country, and the world, into unforeseeable new directions.
Baby Boomers will continue to be respected for their cultural achievements (it's not a fluke of history that Boomer music and other entertainments are still wildly popular among the young), but will be increasingly ignored in the political debate. The term "senior citizen," already in decline, will disappear entirely. And if push comes to shove, Boomer's financial interests – including Social Security – will be subjugated "for the greater good."
There will be a growing push to rebuild the middle class. The wealthy and the impoverished alike will both come under pressure thanks to new pro-middle class initiatives. If you are a high-income earner, it's a certainty your taxes are going up, and likely by a lot. If you want to make a fortune, don't pursue the niche or the "long tail." Invent the next big brand that will appeal to Everyman.
Don't Worry, Be Happy
That is, at best, a sketch of my long conversation with Neil Howe and doesn't do justice to his research. If nothing else, however, I hope I've succeeded in giving you at least some sense of the man and his unique research and encouraged you to think outside the box about the nature of today's crisis.
A couple of final observations.
First, Neil Howe is not a negative person, nor a professional doomsayer. Rather, he is a social scientist and historian with decades of experience in the social sciences. As you speak to him, you get the sense that he doesn't view the world through any particular philosophical bias, but rather is simply reporting what his research is telling him about the current players on the global stage, and which act we are currently in.
Secondly, speaking as a Baby Boomer and someone with a lifelong distrust of government and its meddling institutions, talking to Neil left me feeling oddly relaxed -- letting go, if you will, of some of the frustration that has been building within me as I watch the nanny state grow more and more bloated.
That is not to say we won't continue to speak out against government waste and prolificacy. We will. But it seems increasingly clear that we're now caught up in a powerful trend toward bigger, not smaller, societal institutions -- and that these institutions will, over the period ahead, change the world as we know it.
Of course, being active investors, at the same time we raise our voices in protest, we'll deal with the reality of the situation by strategically positioning our portfolios to profit from the coming changes.
And so, like the Rockefellers and J.P. Morgan during the Great Depression, we'll make the trend -- to matter how negative -- our friend. You may want to consider doing so yourself.
Making the trend your friend is more important than ever, if your assets are to make it through the Fourth Turning intact. The Casey Report discovers and analyzes budding economic trends and turns them into hands-on, actionable recommendations for its subscribers. Read the latest report from Casey Chief Economist Bud Conrad about our favorite investment of 2009... a play on an all but inevitable economic development. Click here to read more.
John F. Mauldin johnmauldin@investorsinsight.com
If you would like to reproduce any of John Mauldin's E-Letters or commentary, you must include the source of your quote and the following email address: JohnMauldin@InvestorsInsight.com.

This Time of Year

2009-05-06T13:29:00.001-06:00

I’m leaving Saturday for my tenth consecutive year of riding my motorcycle from California to Washington, DC for Memorial Day weekend. In years past including the year I started the ride, 2000- the year my father died: I rode partly to be in DC to honor him and to ride in the longest running protest against the United States of America ever held. It’s now in its 22nd year. It’s called Rolling Thunder, Inc. Ride for Freedom. Maybe you had to be somehow affected by the Vietnam era to understand the deep fire that still burns in the hearts of military families and those who served during that era to fully appreciate the meaning that the POW/MIA issue holds for those of us who participate there.

Although it has become a party for many of the 500,000 motorcyclists who gather in the Pentagon parking lot for the demonstration; the POW/MIA issue is the watermark of the betrayal that is a fact of life for all who have ever served or are proudly serving now in the US military as well as their families who wait.

The truth is that betrayal of soldiers, sailors, marines and airmen is really nothing new. Everyone knows that the English navy defeated the Spanish Armada. No one knows that the Queen ordered all the ships to stay at sea rather than allow a seaman to touch shore in England for having done so English law would demand that they be paid. Few know that over 50% of the sailors in the navy that defeated mighty Spain died aboard ship from disease and starvation rather than be paid the wages which were due to them. Not much has changed.

They say that all politics are local; well I say that all causes are personal. When my father retired as an E-8 (Senior Master Sergeant) after 29 ½ years of service in the United States Air Force he had served at Pearl Harbor, World War II in the Pacific, Korea and Vietnam. He came home from Vietnam when I was 16. I know better than most as it has been in the conversation my whole life, what concurrent pay, disability ratings, and long waits for health care and endless forms for benefits mean to a military family. I also know now what it means to have been raised by someone who is afflicted with Post Traumatic Stress Disorder. PTSD is the gift that keeps on giving, generation to generation.

Easily defined, difficult to diagnose perhaps, simply PTSD is the continuing effect of trauma not expressed in a timely manner. Being raised by someone so affected by uncontrollable anger has its own consequences on a family and on that family’s children. The kids most often begin to act out their own PTSD.

For my father, who we absolutely knew loved us enough to unleash one hell of an ass whupping if he was angered, PTSD was controlled by staying in the club. After WWII he just stayed in the military where everyone understood or at least tolerated an old sergeant and expected nothing less. For the rest of us, though, life has been a series of difficult choices.

After retirement the old man then fought the VA Medical system for 32 more years for 100% service related disability. They finally granted it to him 6 months before his death at the age of 90. I’m quite sure that it was an accomplishment about which he was most proud. He was certainly more proud of having finally won that war than he was of any medal he ever received.

The rest of us grew weary of the constant updates of his battle with the VA, much like hearing a list of new medicines and treatments from someone elderly, but not really listening. I suppose we should have listened more closely. In the end they killed him by treating his heart disease for 9 months with allergy medicine. And I went to DC with the rubbing from his marker on my bike. That year I found the group Rolling Thunder and discovered that I’m a Blue Star son.

What I was not prepared for having found some like minded in the group run by an old sergeant with his own PTSD issues, is that upon studying the POW/MIA issue I found that the shoddy medical care and all out war my father fought for his benefits after retirement really goes all the way back to the seed of that betrayal. I’ve always wondered, “Why?” How can a country that owes so much to its fighting men and women virtually turn a blind eye to them all the while exclaiming, “We Support the Troops”?

To be fair, most people had no idea how shoddy the facilities are at Walter Reed until they were recently exposed. All were quick to point the blame, but really is it the fault of a government run health care program or is it our fault? Yes, the VA Medical System is the only real government health care program in the US. And it sucks- ask almost any military family member that has driven hours only to be told to make another appointment- 12 months from now.

VA Med is overburdened, understaffed, underpaid, under funded and in some cases dealing with ancient facilities. Has it improved? Gosh yes, just ask anyone lucky enough to have survived their care long term. Is it good enough? That’s so tragic as to be almost humorous. The VA Med can’t possibly serve a country at war let alone a country with a history of continuous wars, conflicts, and police actions all over the globe, all of the time.

What the system is now trying to contend with shouldn’t be a surprise when you stop to realize that we have veterans who have served on our orders and deserve the benefits we promised them from World War II, Korea, Vietnam, the Cold War, Somalia, Grenada, the Gulf War, the War on Terror to just name a few favorites spanning almost 75 years. That’s a lot of people vying for benefits in a system that is fatally flawed: it’s government run, single payer health care. It just doesn’t work unless you don’t expect much for care.

How will the VA Medical system then provide for the now 1,000,000 children that have been affected by deployment, disability or loss of a parent or parents serving in Iraq, Afghanistan or any number of police actions anywhere in the world? These are abandoned kids in many cases; high risk of acting out the trauma they have no way of expressing because they are alone with the ghosts that hide in their minds.

Think about the impact on a family of deployment after deployment after deployment that stretch years not days or weeks. Think about the impact of disability. Think about the shear terror of waiting days, weeks, months and then doing it again with your dad in harms way and mom sitting glued to 24/7 news feeds, websites all the while crying her eyes out once again. Do you really think that the kids are “adaptable”? Do you think that the terror they imagine in their not knowing is any less terrible than the terror that their mom or dad is dealing with ‘over there’? Yes? Then you would be wrong.

But, that view is often shared by vets who will tell me that no one can imagine the horror of war. My response is that yes you’re right; I can’t imagine that horror any more than you can imagine what is going on in the mind of a child attempting to fend off the horror of his imagination. How do you explain to a five year old that not everyone dies in war?

Do you know that family grief counseling is new to the VA Medical system? It’s available to any family member who wants to throw the kids in the car and drive to wherever the meeting is held. Try that sometime when you’re scared out of your mind and hoping against hope that the kids are ‘fine’. But, you may know a VA center nearby… right?

In the end we have now come full circle to the seed of the betrayal of the American POW/MIA issue and the consequences of the attitude that G.I’s are expendable. They are to quote a general speaking to the Blue Star and Gold Star families at one of our fundraisers, “Precious Resources.” He had no idea how crushed some of the Mom’s were on hearing that their sons are “Precious Resources’. One of them said to me, “He looks at my son like a fox looks at the chicken coop. Except for him it’s another star on his shoulder instead of a meal.”

It’s been quite a lesson to learn and we’re learning it too slowly. When we brought the torch to the Navajo and Hopi reservations to light it in honor of the Lady Warrior, Lori Piestewa for whom Squaw Peak in downtown Phoenix was renamed as Piestewa Peak: We were shocked at the reception. The people from both reservations lined the highways for miles. They still do every year when we return. There is an attitude of honoring the warrior in celebration and ceremony for their return and caring for their family in their absence that is shared by the entire Native community. We renew that spirit of honor, celebration and ceremony every year when our ride returns to the Navajo and Hopi Nations. As a country we have so much to learn from our Native people about honoring the warrior.

For 10 years now I have read every single book on the subject of the POW/MIA issue. I’ve given 15-20 speeches a year; ridden hundreds of thousands of miles, spoken to the experts in person and listened to them speak from Washington DC to the telephone in my office. One thing is clear: We left live prisoners after every single war we’ve ever fought. That mindset is finally changing, but the deep wound of betrayal can only be healed with the truth. That truth has been poignantly revealed by our unique experience in Vietnam. In the end our POW/MIA’s left in country at the end of the Vietnam conflict were deemed expendable. Demands by the new government in North Vietnam for the war reparations promised by Nixon/Kissinger at the Paris Peace Accords were finally refused by President Reagan. Reagan was followed of course by President George H.W. Bush who was Director of the Central Intelligence Agency in the years immediately following the end of the war in Vietnam and further negotiations for the release or our POW’s were moot.

Did Reagan do the right thing? Did Carter or did Bush I? Or for that matter did Eisenhower do the right thing and avoid further conflict with the Soviet Union after WWII? It’s above my pay grade, but the issue was put to rest publically and forever by Senators Kerry and McCain who ran the 1991 Senate Committee investigation on the POW/MIA issue during the Bush I years. All efforts by those who knew the truth were squashed in a political sleight of hand; confidential record declarations and debunk mindset. We simply refused to pay for our POW/MIA’s. Maybe we should never have agreed to have done so from the beginning. It was Watergate and the end of the Nixon era that derailed any chance we ever had of seeing them returned. Nixon/Kissinger promised, but Watergate and Nixon’s resignation sealed their fate.

So why do I say, then that this was a betrayal and that the betrayal of the fate of those who serve on our orders continues today? Because the benefits that are promised to those who serve our country in the Armed Forces of the United States exist in an unending labyrinth through the VA system; and it is subject to constant change. From the effects of Agent Orange exposure to Gulf War Syndrome to PTSD without Veteran Service Officer assistance a Veteran applying for benefits practically needs a Philadelphia lawyer to be successful and the VA has all the time in the world. The Vet is on the other hand mortal; often suffering and all too often denied the very benefits they were promised. My dad often said that his hole card was that he was too tough to die.

America is deaf to the suffering of military families. There is little to no provision to the effects of war on them and they are many. Throughout our history these families have suffered in virtual silence. Mothers have hoped in complete denial that their children are ‘fine’. Families have been afraid that loud, vocal in- your- face protests might jeopardize their loved one’s chances for earned and needed benefits. And the list of reasons goes on and on. Maybe, just maybe if we all had someone serving, and we enforced the law with regard to caring for them as well as their families we would finally come to the realization that in the end we just can’t afford to keep doing it the way we’ve always done it.

What’s needed now is the light of truth. This travesty has spanned every single administration. It is not a partisan issue. Eisenhower knew that the Soviets had grabbed all of the American POW’s held by Germany at the end of WWII. He knew that they used them as human guinea pigs in medical, drug and mind control experimentation, vivisection and other crimes too big and horrible to contemplate. The Kerry/McCain committee had eye witness testimony to it and what did they do? They classified it.

In a poetic, karmic piece of justice neither Kerry nor McCain who fell on their swords in the 1991 Senate Committee for the right of future political power; who used political maneuvering and bureaucratic sleight of hand to hide the truth in Vietnam was able to fulfill their lifelong ambition as Commander in Chief.

Of course none of the foregoing will ever be made up to a child whose father or mother began being deployed in 2003 and after five tours is no longer the person who left. The child then 5 is now almost 12 and the 10 year old is now almost 17. They and their families have quietly suffered with the pain of deployment, disability and the thought or the reality of the loss of one or more their parents in Iraq and Afghanistan for their entire childhoods. They will deal with it their entire lives unless something is done and done now.

But, to where and to whom do they turn for help? If the VA Med spent only $100 per child the $100,000,000 would swamp their budgets. Even the highest of risk kids are tough to identify unless families can drop the cloak of denial and actually seek help. What would we do if these kids had been exposed to tragedy at their schools? We’d send in a bus load of grief counselors and at least attempt to make sure that they had a chance to express what is going on in their heads. Right now we just hand out pamphlets.

That’s a travesty and it has to stop. When I started this charity run called Carry the Flame, I knew only that I was a Blue Star son and that war and warriors can have a tragic effect on the lives of those close to them. That someone somehow needed to reach out to our Blue Star and Gold Star families and let them know that their quiet trauma has not gone unnoticed and unappreciated. That was in 2002 before the beginning of the War on Terror and the tragedy of 9/11. That was before the size and scope of the trauma metastasized after 7 long years to include over 1,000,000 kids.

When we started we thought we could provide grief counseling courses to school counselors, now I’m sure that the problem is too huge to possibly begin to make a reasonable dint in the amount of money needed to help provide for them through private fundraising. What we can do now is support the organizations attempting to identify highest risk kids and use our visibility to raise the awareness in America that we have over 1,000,000 of our Precious Resources at severe risk of acting out a very angry PTSD of their own.

It’s time to put an end to the denial of the effects on these military families and their kids. It’s time to really put up or shut up about how you “Support the Troops”. If nothing else buy a magnetic bumper sticker from a Blue Star Mom and display it to tell others that you put your money where your mouth is. Do it not as a political statement, but as a statement of compassion.

Some time ago I realized that this betrayal is not a POW/MIA issue. This is an American families’ issue that knows deceit and betrayal- not political party or persuasion- all too well. After all, we may publically humiliate, detain and prosecute the American soldiers charged to guard the prisoners at Abu Ghraib; the lawyers who wrote in defense of ‘enhanced interrogation techniques’; contractors who unconscionably shot into crowds, etc. etc. etc. But, do you know that we have never, not one time ever arrested, investigated, prosecuted or sentenced anyone for crimes perpetrated on our POW/MIA’s under the laws provided under the Third Geneva Convention? So we’ll gladly use the laws against our own troops, but never apply the law on their behalf. “Betrayal”, you ask? “In broad daylight”, say I.

Saturday it will be raining here when I leave. That beats the last 3 years of snow by a country mile. I hope the Mojave Desert is warm, but not too hot and still winds so we miss the sand storm we rode through last year. I hope the Midwest hail and thunderstorms are ahead of our riders instead of barreling down on them as they did 4 years ago. I hope that the pollen count of the sweet smell of honeysuckle in the South is survivable without the antihistamine pills that may make our riders drowsy. I hope that the bikes run well and that each rider makes safe, sane decisions about risk. I hope that the Flame brings some tiny amount of healing and hope to the Gold Star and Blue Star families that will greet us on the way.

This year, having split from our association with Rolling Thunder, Carry the Flame Across America will hold its own ceremony at the World War II Memorial on Saturday, 23 May at 5:00pm. Volunteer Blue Star and Gold Star Moms and Wives will read the names of the fallen from Iraq and Afghanistan in unison from each of the 50 state posts of the WWII Memorial in unison. At the same time we will pass the Flame of Hope that will have been blessed in the name of every religion through the prayers and hands of thousands as it makes its way from Barstow, Ca to Washington, DC.

Marine SSgt Tim Chambers who for the last 6 years has held a salute while standing in the middle of the road on Constitution Avenue until the last motorcycle has left the Pentagon parking area (usually over 5 hours) will stand at salute before the upturned rifle, boots and helmet while the names are read and the Flame is passed.

Please consider this to be your invitation to join us. Please consider this letter a challenge to you to help us continue to spread the word that these kids and these American military families deserve much more. We know what is right; you know what is right, now get out your checkbook and do the right thing. You can go to www.carrytheflame.org for our route information and contact address.

Then get out your pen and write to your Senators and Congressman and tell them that while we’re spending billions to bail out spoiled bankers, incompetent business leaders and crooked politicians; you think it might be a really good idea to help these kids and these families with a resolve to provide the medical, educational and mental health benefits they and their parents have earned.

You know yourself that it is far easier to help a child than to attempt to fix an adult.

After all it was We The People who sent them there. Thank the Heavens for the men and women who fight on our side. They’re the best in the world, the fiercest the world has ever seen and they come in peace asking only what they have been promised in return for having risked their lives as well as the peace in the lives of their families who wait another day for news of their safe return.

Losing The War

2009-04-07T17:06:00.000-06:00

End the War on Drugs
by Ron Paul
We have recently heard many shocking stories of brutal killings and ruthless violence related to drug cartels warring with Mexican and US officials. It is approaching the fever pitch of a full-blown crisis. Unfortunately, the administration is not likely to waste this opportunity to further expand government. Hopefully, we can take a deep breath and look at history for the optimal way to deal with this dangerous situation, which is not unprecedented.Alcohol prohibition in the 1920’s brought similar violence, gangs, lawlessness, corruption and brutality.

The reason for the violence was not that making and selling alcohol was inherently dangerous. The violence came about because of the creation of a brutal black market which also drove profits through the roof. These profits enabled criminals like Al Capone to become incredibly wealthy, and militantly defensive of that wealth. Al Capone saw the repeal of Prohibition as a great threat, and indeed smuggling operations and gangland violence fell apart after repeal. Today, picking up a bottle of wine for dinner is a relatively benign transaction, and beer trucks travel openly and peacefully along their distribution routes.

Similarly today, the best way to fight violent drug cartels would be to pull the rug out from under their profits by bringing these transactions out into the sunlight. People who, unwisely, buy drugs would hardly opt for the back alley criminal dealer as a source, if a coffeehouse-style dispensary was an option. Moreover, a law-abiding dispensary is likely to check ID’s and refuse sale to minors, as bars and ABC stores tend to do very diligently. Think of all the time and resources law enforcement could save if they could instead focus on violent crimes, instead of this impossible nanny-state mandate of saving people from themselves!If these reasons don’t convince the drug warriors, I would urge them to go back to the Constitution and consider where there is any authority to prohibit private personal choices like this.

All of our freedoms – the freedom of religion and assembly, the freedom of speech, the right to bear arms, the right to be free from unnecessary government searches and seizures – stem from the precept that you own yourself and are responsible for your own choices. Prohibition laws negate self-ownership and are an absolute affront to the principles of freedom. I disagree vehemently with the recreational use of drugs, but at the same time, if people are only free to make good decisions, they are not truly free. In any case, states should decide for themselves how to handle these issues and the federal government should respect their choices.My great concern is that instead of dealing deliberatively with the actual problems, Congress will be pressed again to act quickly without much thought or debate. I can’t think of a single problem we haven’t made worse that way.

The panic generated by the looming crisis in Mexico should not be redirected into curtailing more rights, especially our second amendment rights, as seems to be in the works. Certainly, more gun laws in response to this violence will only serve to disarm lawful citizens. This is something to watch out for and stand up against. We have escalated the drug war enough to see it only escalates the violence and profits associated with drugs.

It is time to try freedom instead.

The Great Journey

2009-04-06T11:02:00.002-06:00

To be truly challenging, a voyage, like a life, must rest on a firm foundation of financial unrest. Otherwise, you are doomed to a routine traverse, the kind known to yachtsmen who play with their boats at sea... "cruising" it is called. Voyaging belongs to seamen, and to the wanderers of the world who cannot, or will not, fit in. If you are contemplating a voyage and you have the means, abandon the venture until your fortunes change. Only then will you know what the sea is all about.
"I've always wanted to sail to the South Seas, but I can't afford it." What these men can't afford is not to go. They are enmeshed in the cancerous discipline of "security." And in the worship of security we fling our lives beneath the wheels of routine - and before we know it our lives are gone.
What does a man need - really need? A few pounds of food each day, heat and shelter, six feet to lie down in - and some form of working activity that will yield a sense of accomplishment. That's all - in the material sense, and we know it. But we are brainwashed by our economic system until we end up in a tomb beneath a pyramid of time payments, mortgages, preposterous gadgetry, playthings that divert our attention for the sheer idiocy of the charade.
The years thunder by. The dreams of youth grow dim where they lie caked in dust on the shelves of patience. Before we know it, the tomb is sealed.
Where, then, lies the answer? In choice. Which shall it be: bankruptcy of purse or bankruptcy of life?
- Sterling Hayden (Wanderer, 1973)

Sent to me from:
-- Brian Cavalier http://www.briansredcoat.com/ One of the great wanderers of all time.

Socialism Fails Them All

2009-03-31T20:59:00.000-06:00

An economics professor at Texas Tech said he had never failed a single student before but had, once, failed an entire class. That class had insisted that socialism worked and that no one would be poor and no one would be rich, a great equalizer. The professor then said okay, we will have an experiment in this class on socialism.
All grades would be averaged and everyone would receive the same grade so no one would fail and no one would receive an A. After the first test the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. But, as the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too; so they studied little. The second test average was a D! No one was happy. When the 3rd test rolled around the average was an F.
The scores never increased as bickering, blame, name calling all resulted in hard feelings and no one would study for the benefit of anyone else. All failed, to their great surprise, and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great; but when government takes all the reward away; no one will try or want to succeed.
Could not be any simpler than that.... -- "I REFUSE TO PARTICIPATE IN THE RECESSION!".

HELL FROZEN OVER?

2009-03-27T10:22:00.001-06:00

Commentary: U.S. freedoms not to blame for Mexico's drug war
By Wayne LaPierreSpecial to CNN
Editor's note: Wayne LaPierre has served as the executive vice president and chief executive officer of the National Rifle Association of America since 1991. His latest book is "The Global War on Your Guns: Inside the U.N. Plan to Destroy the Bill of Rights."

Wayne LaPierre says the Mexican drug war isn't a reason to restrict gun ownership in the U.S.
(CNN) -- Here's a summary for the time- or attention-challenged: Never surrender freedom for laws that can't affect criminals; they disobey laws for a living.
Nobody is surprised that Attorney General Eric Holder wants to make good on his promise to ban guns. We just didn't know whose tragedy he'd seize to advance his agenda.
Now we do. It's the drug-driven death and violence in Mexico at the hands of ruthless criminal cartels.
Barely a month on the job, Holder cited the Mexican cartel killings as the excuse to resurrect the Clinton gun ban.
Though a new face to some, Holder is a rabid Second Amendment foe from the Clinton administration who helped orchestrate the 1994 Clinton gun ban.
America has made this mistake already. So let's learn the lies that led to their gun ban.
Even earthworms learn from experience
Ask any anti-gun politician to define an "assault weapon," and the honest answer is, "I know one when I see one."
When cosmetics alone can infringe constitutional freedoms, we're all in trouble. But that's precisely how the 1994 gun ban came about.
The gun-ban lobby and national media lied with lockstep conformity by playing endless footage of fully automatic machine gun fire. They fooled the American people and the U.S. Congress into thinking they were banning "high-powered," "rapid-fire," "battlefield-bred" guns designed to "spray fire from the hip."
None of that was true.
Then Sen. Dianne Feinstein convened anti-gun bureaucrats to conduct a firearm beauty pageant. They browsed photos of hundreds of perfectly legal semiautomatic rifles. They picked 19 they deemed most military looking. And they banned them.
But the guns aren't designed or used by the military. They're commonly owned semiautomatic rifles that fire one shot when the trigger is pulled.
They cannot "spray fire," nor are they designed to be fired "from the hip."
Nor are they the choice of terrorists in Afghanistan or drug gangs in Mexico. They prefer fully automatic machine guns, which our soldiers use.
Congress was so doubtful about the ban's effectiveness, they limited it to a 10-year experiment. So it expired in 2004, and for good reason. It was useless all along.
As the study mandated by that Congress found, "The banned weapons and magazines were never used in more than a modest fraction of all gun murders" in the first place. The ban had absolutely no effect on gun crime.
But what about Mexico?
Of course, everyone's rooting for Mexican President Felipe Calderon's government to crush the drug cartels' stranglehold. But our rights are not what's wrong.
Nobody can substantiate claims that U.S. guns cross the border "by the thousands" or "account for 95% of weapons used by Mexican drug gangs." Because it's not true.
Replying to Feinstein in subcommittee hearings last week, William Hoover, assistant director of field operations at the Bureau of Alcohol, Tobacco, Firearms and Explosives, said, "The investigations we have, that we see, for firearms flowing across the border don't show us individuals taking thousands of guns a day or at a time flowing into Mexico."
Yet reporter after politician after news anchor parrot the lie as readily as high schoolers gossip, and with equal disregard for truth.
That's how gun abolitionists claim Mexican gun laws are so strict that our "weak laws" (read: freedoms) are to blame for "fueling the violence" in Mexico.
Well, to believe that:
• You have to believe these butchers and beheaders break every Mexican law they want except Mexican gun laws, which they honor -- while they break America gun laws.
• You have to believe that Mexico's drug cartels, which possess the wealth and armies of nations, prefer American semiauto target and hunting rifles over fully automatic machine guns and any other military arms they want to crush opposition.
• You have to believe Mexican drug lords -- who make Forbes magazine's list of billionaires -- don't get large lots of weaponry on the transnational black market but instead choose to trifle with paperwork at U.S. gun stores.
• You have to believe that narco-terrorists who buy fragmentation grenades, grenade launchers, explosives, body armor, biometric security equipment, infrared surveillance technology and intelligence-grade reconnaissance gear will salute and obey a new American gun law -- if only we'd pass one.
Get real, get tough, but get away from our rights
Everything Mexico's murderous thugs are doing is already illegal. At issue is not the absence of law, but the absence of political will to enforce the laws that both nations already possess.
Even Immigration and Customs Enforcement said, "We have the laws we need. We just need to more effectively enforce them."
Those that make possible Mexico's colossal corruption wear the garb of not only drug lords and gun runners, but also of too many city mayors and police chiefs, state bureaucrats and military officers.
A $40 billion criminal enterprise could not exist without the complicity of these powerful co-conspirators. And these cartels are being abetted by American media and politicians who blame our freedoms for it.
We should seal the border. Punish the guilty. And use existing gun and drug laws against violent drug syndicates here and in Mexico.
But leave American freedoms alone.
The opinions expressed in this commentary are solely those of Wayne LaPierre.