Galt's Gulch Plan For Honduras Terminated

The Future Cities Development initiative to create two libertarian microstates in Honduras has been terminated. Last month, the Honduran Supreme Court ruled that the creation of microstates was unconstitutional, and, as such, Future Cities Development, Inc. has suspended operations and is returning funds to its investors. It's a shame that the world won't have a Galt's Gulch in Honduras.

Fed Refuses Gold Audit, Germany Considers Repatriating Its Holdings

I've been sitting on this story for a couple of days because I thought it was big enough that the MSM would surely pick it up. How naive I was. Since it's clear that the MSM won't do their job and report this important development, I guess it's my duty to: The Fed recently denied Germany its request for an audit and a physical inspection of its gold holdings in our central bank. As a result, many in Berlin have called to repatriate its holdings in the Federal Reserve.

This is a very big deal, folks. The U.S. and Germany have enjoyed an amicable relationship since WWII. So Berlin might let this slide. But what if China comes calling for its gold? Or Saudi Arabia? Dare we piss them off? And, the $60 trillion question: why on earth would the Fed deny Germany an audit and inspection of its possessions? It claims to have done so in the name of "national security". But is it really because it doesn't hold the amount of gold it claims and will have expatriate to Germany some product it's instead been holding for other nations? Or, is some of its gold counterfeit? Investigative journalists need to pick up this story ASAP. But they won't.

Mass Layoffs In Anticipation Of Recession

Obama's reelection is certainly bad news for job seekers and employees in that the certainty of the implementation of Obamacare will inexorably lead to reduced hiring and layoffs. However, while the conservative media are spinning the numerous post-election mass-layoff announcements as the private sector's reaction to the results from this past Tuesday, I offer a contrarian explanation: regardless of the outcome of the "fiscal cliff" negotiations, the country is likely going back into recession in a matter of months, and many of the announcements would have been made even if Romney had been elected. Even though December and January are known as the worst months for layoffs, November is a good time for non-retail companies to terminate employees if they foresee reduced business activity in the new year (or the prospect of a "fiscal cliff") because December is typically slow, and severing an employment arrangement is easier for both the employer and the employee when it's conducted before the holidays. But, regardless of the reasons behind the announcements, the size and scope of the layoffs is impressive. Some highlights:

Boeing: 30% of management staff

Vestas Wind Systems: 3,000 employees

Energizer: 1,500 employees

US Cellular: 980 employees

Husqvarna: 600 employees

Neal Boortz: Social Conservatism Cost GOP Election

Even though he's not ideologically pure, Neal Boortz, a self-described "libertarian", turned me on to libertarianism a decade ago. While I don't agree with Boortz's views on foreign policy (he's a warhawk), the Talkmaster and I are absolutely on the same page when it comes to domestic issues. Unlike most talk radio hosts, Boortz believes that it isn't the government's place to legislate morality. He loathes social conservatism (abortion politics in particular), and he recently wrote a brilliant piece about why the GOP got blown away on Tuesday:

For any freedom-loving conservative who wants to see a viable Republican Party thrive on the national stage once again, my rant from yesterday must be required listening.  Go ahead.  Click it.  Take a listen.  For you Republicans, it will make you mad.  You need to be mad.  You screwed up.  You screwed up just as I said – have been saying for years --  you would screw up.  You need to listen.  Click on the link.  When you listen you will know that I’m right.

It boils down to this …

The Republican Party needs an exorcism.  It needs to rid itself of these abortocentrist nutcases who are chasing away voters, particularly women.  This is about as clearly as I can say it: Abortion is NEVER going to be illegal.  Get over it!  The sooner you come to terms with this, the sooner you will be able to regain credibility with the voters.  Your boys Todd Aiken, Richard Mourdock and John Koster chased away millions of female voters with their idiotic remarks about abortion … and they cost us two seats in the Senate.  How bad was it?  Romney carried Mourdock’s home county in Indiana!  His opponent, Joe Donnelly, was the first Democrat to win a statewide race in Indiana in more than a decade!  Are you listening, Republicans?  Mourdock was a shoo-in!  Then he opened his yap about abortion, and women went screaming for the exits.  What did he say?  Well – simply put – the message to women was that if you’ve been raped, don’t worry your pretty little selves over whether or not you might be pregnant, because if you are it is, after all, a gift from God!
Now here’s the problem, dear GOP leaders.  Read this quote from Wayne Parke.  He’s the Chairman of the Vanderburgh County Republican Party.  That’s Murdock’s home country --- the one he lost:

"I was quite surprised and disappointed that Mourdock didn't carry his own county. But it's an indication that everything you say is so important and that debate comment he made just turned out to be disastrous."

Duhhhhhhh!  Really?  You’ve learned that lesson now, have you, Mr. Parke?  Could you please send some memos to the Republican National Headquarters?  Who knows --- if you and the GOP leaders had figured this out months ago, and if the word had gone out that GOP candidates needed to shut the hell up about abortion --- maybe things would look quite a bit different today.

The same goes for gay marriage.  If you can make the case that a married gay couple living down the street from you, or across town for that matter, is going to have any negative impact on your own life, then I would say that we need to have a debate on the subject.  Nobody has shown me that yet, so how about getting your GOP noses out of other people’s bedrooms?    I’ve been on the air for years and never in my 42 years of talk radio has anyone been able to tell me how Joe and Steve living down the block in wedded bliss will have any impact on their life.  Come into the 21^st century with me on this one and just leave the issue the hell alone.  If you’re so determined to defend the institution of marriage – the concept of committed couples living together in a dedicated relationship – then why don’t you turn your attention to Hollywood.  Forget about demonizing a gay couple that is every bit as much in love and committed as you are to your spouse.  Aim your derision on the Hollywood crowd that looks at marriage as not much more than a new car – something to be traded in on a new model in two years.

And when it comes to immigration, rounding up all the Mexicans in this country and sending them back to Mexico is never, ever going to happen.  Do you hear that?  It ISN’T going to happen!  Does it occur to you that these people come here because they WANT to work?  Do you really have such a huge problem with aspirational people?  So come up with a reasonable policy on immigration reform, and lock down the borders.  No problem with that.  But give up this asinine idea that those already here – those who have been here for years – are going to be loaded into railroad cars and sent back to Mexico.  Do you really want that?  Do you really want to depend on those Americans who would rather spend their days hanging around convenience store scratching goo off lottery tickets instead of putting in an honest days work?  Do you really want to pay $16 for a BLT?  Yeah .. that’s right.  Scare the folks with the actual work ethic away while pampering the moochers and leaches.  Yeah .. that works.  What do you think a Hispanic American citizen thinks when he sees a political party dedicate itself to the cause of taking a young female college student – a young lady who has lived here since her parents brought her here illegally when she was three – and deporting her to a country she has never known?  Do you think it’s likely that Hispanic citizen is going to vote for your candidate?  Tell me how that works.

Stop crying in your beer and listen up.  America is going to suffer another four years under Obama because of YOU.  The Republican party blew this one --- big time.  Abortion – gay marriage – immigration reform.  The perfect electoral storm, and you couldn’t have played it any worse.  Leave these issues alone!  Drop them!  If the GOP cannot turn loose of this mindless social conservatism, then you will be relegated to second class status (politically speaking) for the remaining days of this Republic, which may not be all that many.  The Republican Party as it currently stands needs to die.  Like a phoenix, it needs to burst into flames and from its ashes rebuild into a party focused on …

• Limited government
• Tax reform
• A strong military
• The rule of law
• Reducing regulations
• Promoting capitalism – especially small businesses
• Restoring self-reliance
• Honoring the Constitution

Did you see abortion or gay marriage on that list?  Didn’t think so.  The Republicans need to become more Libertarian and less religiously authoritarian or the Party is dead.  It’s amazing that these social conservatives have managed to screw this country they claim to love so much by handing Democrats victories this week thanks to these social issues.

I don't agree with Neal's idea of a "strong military" (profligate military spending and adventurism), and I'm not sure where the immigration bit came from (Romney positioned himself as "soft" on immigration), but I couldn't have said better what he said about abortion and gay marriage. The GOP must accept that modern Americans don't want the government preventing them from living their lives they way they see fit, whether that means getting an abortion, marrying someone of the same sex, or smoking pot. So end the "values" garbage, GOP. Otherwise, get used to sitting on the sidelines.

Imports, Exports, GDP Growth Suggest Q1 Recession

Q1 is typically the weakest quarter for GDP growth, and the trendlines of imports, exports, and GDP growth suggest that, regardless of the outcome of the so-called "fiscal cliff" negotiations, the economy will officially slip back into a "mild" recession in January. As I pointed out several months ago, if inflation were calculated as it was until food and energy were deleted from the calculation, we'd currently be back in recession. (In fact, the economy would have only had a brief stimulus-driven reprieve from the deep recession that began in 2007.) Investment guru "Dr. Doom" Marc Faber appears to agree with that premise and has gone on record saying that there is a 100% chance of recession in 2013. The direction of the trendlines is unmistakable, and, as of September, 20 states were already indicating recession. Batten down the hatches. Mass layoffs to come at the start of the new year.

More Econ Destruction From Obama And Bernanke

Investment guru "Dr. Doom" Marc Faber believes that Obama's reelection, in tandem with Bernanke's ongoing liquidity pumping, will ensure a continuation of the country's economic malaise for the foreseeable future. He also believes that the Fed won't be able to continue propping up the stock market with its money printing when the country slips back into recession next year. Speaking to Bloomberg TV today, he had this to say (h/t ZeroHedge):

On Obama’s reelection:

I think Mr. Obama is a disaster for business and a disaster for the United States. Not that Mr. Romney would be much better, but the Republicans understand the problem of excessive debt better than Mr. Obama who basically doesn't care about piling up debt. You also have in the background Mr. Bernanke, who with artificially low interest rates enables the debt to essentially escalate endlessly.

On where he sees the equity markets given Obama’s reelection:

You have offsetting factors. The problem with Mr. Obama is that you get more regulation and it’s disincentive for businessmen to hire people. You probably also get higher taxes, so in terms of the economy, he is very negative in my view. But you still have Mr. Bernanke, and you still have because of money printing very high corporate earnings. They are now coming down, but they are still at the elevated level. You have money printing supporting the market and on the other hand, you have an economic slowdown globally which will affect earnings negatively. It is difficult to tell where the market will go because we have so much manipulation. I think, minimum, it will drop 20%.

On how investors should protect their assets:

They should buy themselves a machine gun…I need to buy a tank. Joking aside, look, we have manipulated markets. Whenever you manipulate markets, you will get unintended consequences. i think the reelection is unintended consequence of money printing, that favors the so- called 0.25%. It was easy for the Democrats to attack the wealthy fat cats of Wall Street, the elite, and the privileged people to portray them as a profiteer of the system, which to some extent, they are. Not because they wanted to but because Mr. Bernanke enabled them to be profiteers. We have a situation where you have today Mr. Obama, I doubt he will stay at the presidency for another four years. I think there will be so many scandals, but that’s another story.

On why he believes Obama won’t make it another four years as president:

There is so much smoke. I suppose there is some fire. That is my observation. We don't know how the world will look in five years' time. I am pretty sure central banks will continue to print money and the standards of living for people in the western world, not just in America, will continue to decline because the cost of living increases will exceed income. The cost of living will also go up because all kinds of taxes will increase. Like Proposition 30 today in California is of course negative for the Californian economy. That is the state of the world. We have worsening economic conditions, but we have money printing.

On Speaker Boehner’s comments to Congress today on the fiscal cliff:

I am sure that they will solve it. They will increase cosmetically some taxes and they will cut cosmetically some spending and it will all be back loaded 10 years from now. So in reality, not much will happen. But the market tends to rally towards year-end, and i think from a low of around 1360, we could have a rally to January, but I think sometime next year will be again lower.

On whether he sees the U.S. in recession in 2013:

Yes, I think that if the figures were compiled properly. If nominal GDP was adjusted by a proper price deflator, we would probably already be in recession…But I would like to point out one thing about the economy. GDP is not a very relevant figure. It consists of many different sectors of the economy, so you can have some sectors that are improving like housing and others that are worsening.

On his dollar and euro positions:

This is the choice in life. You choose what is less bad. I don't particularly like Mr. Obama, but I think he is less bad for the world than Mr. Romney. It is a tragedy of life that both candidates did not lose the election. They would have deserved both to lose.

GOP: Time To Embrace Libertarianism

Even though 4 more years of Obama will be damaging to the nation, the Romney loss will be the catalyst for a renaissance in the GOP. The 2012 presidential election was the death knell of neoconservatism and social conservatism. Going forward, if the GOP ever wants to win another presidential election, it must jettison the neocons and social conservatives who have hijacked the party since the Nixon era. It must end the unattractive warmongering and Bible thumping and calibrate with the political beliefs of younger Americans, who are fiscally-conservative and socially-liberal. It must accept that America is no longer a white, Christian nation kowtowing to Israel. It must cease attempting to legislate morality and focus on what our country actually cares about: the economy and the FREEDOM to live one's life the way he sees fit.

Look at your wrinkly faces in the mirror, GOP. It's time to embrace the future. It's time to embrace libertarianism.

Whoever's Prez, The Fed Is Still In Charge

Here's a little fact that die-hard partisans of all stripes would rather ignore. When it comes down to it, the occupant of the Oval Office has significantly less influence over the economy than the occupant of the master office of the Eccles Building (headquarters of the Federal Reserve system). Throughout the decades, Fed chairmen have influenced the legacies of U.S. presidents by making or breaking the "free market" American economy. Here are a number of examples:

Although Jimmy Carter went down in history as the "inflationary president", the runaway inflation of the 1970's was primarily a result of Arthur Burns's expansion of the monetary supply (.pdf), which began while Carter was still growing peanuts in Georgia. (Burns's inflation helped Carter get elected in the first place by killing Gerald Ford's reelection chances.) Paul Volcker, who whipped Burns's inflation by raising interest rates to historically-high levels, made Ronald Reagan look like an economic savior. (He was actually a Keynesian with an affinity for military contractors.) The historic "prosperity" of Clinton's 2nd term was merely an Alan Greenspan bubble, which messily burst upon Slick Willie's departure. And my favorite example: Fed Chairman William Harding's laissez faire approach to central banking (the correct approach) enabled the U.S. to quickly recover from the forgotten depression of 1920, giving über-crony capitalist President Warren Harding the reputation of being a "friend" of the free market!

As you cast your ballot today, keep in mind that whoever occupies the Oval Office in January will ultimately be at the whims of Ben Bernanke and the Board of Governors of the Federal Reserve System, who helped lead us into this economic depression.

Considering Economy, Romney Performance Sad

The Great Depression is the only historical comparison for this period of economic history of the United States. The depth of this depression is impressive:

• there have been more than 27 million unemployed or underemployed Americans since Q4 2008
• median household incomes are down 8.2% since 2009, and down 24% when adjusting for inflation
• there are 16 million more Americans on food stamps than there were in 2008

But, despite these grim statistics, the incumbent president has a chance of winning. This is unfathomable. With the notable exception of FDR, no incumbent president has survived an election in an economy anywhere near as bad as this one. Moderate inflation ruined Gerald Ford's reelection campaign in 1976, and the mild early 1990's recession destroyed George H.W. Bush's reelection chances in 1992. The fact that Romney's best hope is to squeak out a victory is an indictment on his campaign and his party, which refuse to embrace America's future as a fiscally-conservative and socially-liberal nation.

Demographic Turmoil Within The GOP

Whether or not Romney wins the presidency (according to this excellent poll analysis, it appears that he will), there's looming demographic turmoil within the GOP. Whites are rapidly becoming a minority in this country (see chart below), and the population of conservative white males, the party's prime demographic, is shrinking in real terms. Under the party's current socially-conservative platform, the GOP can't count on younger white males to replace their elder counterparts, as their politics are significantly more socially-liberal. The party can't solely rely on the next generation of white males anyway, as the party's Democrat rivals' prime demographics, minorities and the poor, are growing significantly faster than the white population. Therefore, if the GOP wishes to remain a relevant party, it must expand its appeal by jettisoning its white male-centric, socially-conservative platform. While more than half the country self-identifies as fiscally-conservative, only 1/3 identifies itself as socially-conservative (and that proportion has been getting smaller and smaller). Therein lie the seeds of conflict: establishment Republicans, who treated Ron Paul supporters like garbage during this election cycle, would undoubtedly fight tooth-and-nail any shift toward libertarianism. A President Romney would not only have to face a recessionary economy and a possible bursting student loan bubble, but he'd face the prospect of turmoil within his own party.

From U.S. Census Bureau estimates:

Obama Job Creation: -2.5 Mil For Workers 16-55

The media have been busily promoting the false narrative that there has been job creation under Obama. I recently pointed out that the median household income is down 24% since Obama has been president, and the majority of jobs created since the official "end" of the recession in 2009 have been part-time, low-wage positions filled by seniors. Today, I present an accurate portrait of job creation during the Obama presidency. As you can clearly see from the following charts, older Americans, who are unfortunately having difficulty retiring amid record-low savings rates and high inflation, are filling the few part-time, low-wage McJobs that are available, while there are some 2.5 million fewer jobs for Americans of prime working wage (16-55).

Notice in this 2nd chart that job destruction during the Obama presidency has been worst for people in the middle of their careers (25-54)!