Category Archives: Politics

Government spending, Health Care reform, and the Fair share

4/4/2013 Portland, Oregon – Pop in your mints…

We were fortunate, or not, depending upon one’s view of mainstream economics, to attend the annual Economic Breakfast put on by US Bank.  The annual address is attended by roughly 1,000 and has been given for as long as we can remember by one John Mitchell.

Mr. Mitchell is the retired head economist for US Bank, and today pledged to give the address next year should he be “alive and taking nourishment.”  For his sake, we pray that he will be.  His talks are heavy on data, observations, and are concluded with a poem, yes, a poem which sums up his talk.  Between Mitchell’s wit and the English breakfast, it is time well spent.

Mitchell was interesting as always.  He interjected speculations that the health care reform, which is set to turn the health care industry on its head, and take a few others with it, will have some “unintended consequences.”

First, he speculated that there may be an emergence of 49 person firms to duck the 50 employee threshold at which a slew of obligations are heaped on the employers.  He also speculated that health insurance rates for the young would skyrocket, as rates for the aged in the population are legally bound to be no more than three times the younger persons’ premiums.  Finally, he speculated that in response to the premium jumps experienced by the young and healthy, they would increasingly forgo paying health insurance and pay the famous $95 fine, which has been vehemently haggled in court, and then pick up insurance should they become ill, which of course will be their right under the health care reform.

The point that people will get creative is well taken.

He also made a couple of interesting points about the current recovery.  Both related to government spending.  First, he observed that this is the first recovery that has not seen an increase in government employment.  Second, he presented a graph which mapped the trajectory of Federal spending from 2014 through 2023.  It revealed how both interest payments and mandatory spending would begin to crowd out the part that everyone bickers about, discretionary spending.

Federal discretionary spending is where much of direct government employment flows from.  Mitchell also observed that the spending sequester that was phased in on March 1 was simply a warm up, implying that the Federal government was entering a period of permanent sequestration.

In other words, the Federal government’s days of stimulating the economy in any meaningful way are done, unless a wide scale armed conflict give cause to throw fiscal caution to the wind, an outcome we expect but pray does not occur.

Near the conclusion of his remarks, Mitchell provided an appropriate anecdote for the fiscal situation in the United States via two metaphors.  The first is the meteor, which he presented this way:  Imagine that tomorrow we receive news that a meteor will strike the earth causing catastrophic damage in exactly 15 years.  Further imagine that there is a chance to avert the disaster if all of the resources in the country were to be organized focused on the sole task of building a shield that could withstand the blast.  The only catch is that work must start immediately to be completed by the time the meteor arrives.

Would Congress be able to act fast enough?  Such is the Fiscal state of the US Government.  The entitlement and interest burdens must be dealt with, but the government must start immediately.

We wouldn’t hold our breath.

In Mitchell’s second metaphor, he sums up the government’s current response by reminding us that there is “no fiscal tooth fairy.”

Here at The Mint, we see two outcomes, both equally disturbing.  First, the Federal Reserve has been left to print the US out of the fiscal bind that it is in.  Even if inflation rears its ugly head, don’t expect the Fed to be on top of it.  Plan accordingly and muster real world goods while there is time to do so.

Second, there will be more talk of American’s contributing their “fair share” to the nation’s finances.  The fair share, is the kind and gentle collectivist way for saying “we have run out of money so we are taking yours by force of law.”

The situation in Cyprus has shown that the governments will choose what the “fair share” at their pleasure, and the rush into Bitcoins has shown that people will increasingly shift their material wealth so that tit will not be on the radar when the government moves to collect its “fair share.”

{Editor’s Note:  Beyond Bitcoins, it appears that the fleecing of depositors in Cyprus has given rise to another stream of revenue that banks can offer their customers:  Private deposit insurance.  Who says the government cannot stimulate the economy?}

There are numerous problems with the concept of the “fair share,” but at its base, when a government, or any entity reverts to this type of rhetoric, it seats itself as judge, jury, and jailer when it comes to everyone’s finances.  However, the brutal irony is that the very fact that it must ask and determine what is everyone’s “fair share” should be means that it has fundamentally failed in its stated mission.

To serve its population.

We leave you to ponder this and Mr. Mitchell’s illuminating speech with a word of warning.  Anyone claims that they can accurately determine what exactly everyone’s “fair share” should be must be summarily dismissed.  For we can assure you of this:

That person is wrong, and likely a sociopath.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint


Key Indicators for April 4, 2013

Copper Price per Lb: $3.38
Oil Price per Barrel:  $93.42
Corn Price per Bushel:  $6.30
10 Yr US Treasury Bond:  1.76%
Mt Gox Bitcoin price in US:  $132.00
Gold Price Per Ounce:  $1,553 THE GOLD RUSH IS STILL ON!
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.7%
Inflation Rate (CPI):  0.7%
Dow Jones Industrial Average:  14,606
M1 Monetary Base:  $2,534,800,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base:  $10,501,300,000,000

Cyprus – The Waterloo of Eurocratic management or the ultimate catalyst for Euro zone growth?

3/18/2013 Portland, Oregon – Pop in your mints…

While the management of the ongoing banking crises on this side of the Atlantic has been dishonest, the management on the other side of the pond, or in today’s case, sea, has been an unmitigated disaster.  Or so it would seem.

We are talking about Cyprus.  For those who have yet to hear about Cyprus, it is an island nation located in the far eastern Mediterranean Sea, just below Turkey.  It is currently inhabited by a fiery mix of Greeks and Turks, who have lived in an uneasy peace with each other for some 40 years after the events that took place during the summer of 1974.

Like many island nations, Cyprus has been able to find common ground with those who have been unable to find common ground on the mainland.  It has found that it can leverage its sovereignty and willingness to bend the rules to offer banking services without the nagging regulations which increasingly plague banks and their clients in the Western nations on the mainland.

Now that the government of Cyprus is bankrupt and in need of a bailout, showing that even a tax and banking paradise can be poisoned by a bad currency, they have gone hat in hand to Belgium, a strange country in the north with absolutely nothing in common with Cyprus, save the currency in question.

The Eurocratic apparatus in Belgium, either on its own or at the behest of the global banking giants in Cyprus, has decided that the terms of the bailout, or “bail in”, which is the Euro friendly way to say “Corralito,” {Editor’s Note:  Corralito is the Argentinean term for when the Government decides to unilaterally make use of the funds in its country’s banks to fund the government because there is literally no one willing to lend them currency on any terms}, would be the direct confiscation of funds from depositors bank accounts in the form of a tax, in this case between 3 and 9.9% (because 10% just looks bad in print) to ultimately pay back the countries who have been generous enough to provide the funds, which, despite the technicalities involved, for most Europeans means Germany.

Predictably, the people of Cyprus, who caught wind of the confirmation of the rumors on Friday and awoke Monday to find that their government had declared what is, at this writing, an indefinite banking holiday (meaning banks and ATMs are closed) to prevent anyone who did not want to participate in the bail in from withdrawing their funds from the country’s banks, are channeling their anger at the German Embassy, quite naturally:

Henry Blodget has written a decent analysis on the details of the Cyprus bail in over at the Daily Ticker.  Blodget does a good job of analyzing the events up until the point where He presumes:

“…the moment depositors think that there is risk to their savings, they rush to banks to yank their money out.

That’s called a run on the bank.

And since no bank anywhere has enough cash on hand to pay off all its depositors at once, runs on the bank cause banks to go bust.

That’s what happened to hundreds of banks in the Great Depression.

And it’s what happened to Bear Stearns, Lehman Brothers, and other huge banks during the financial crisis (though, with Bear and Lehman, the folks who yanked their money out weren’t mom and pop depositors but other big financial institutions). It’s what threatened to bring the entire U.S. financial system to its knees. And it’s why the U.S. and European governments have been frantically bailing out banks ever since.

But now, thanks to the eurozone’s bizarre decision in Cyprus, the illusion that depositors don’t need to yank their money out of threatened banks because they’ll be protected has been shattered.”

What Blodget presumes is that a bank run is bad for the bank.  Here at The Mint, we postulate that this tax on depositors is taken precisely for the benefit of the Cypriot banks.  Further, it has been taken not only for the benefit of the banks in Cypriot, but to serve as the catalyst for the Euro zone to return to growth, or the activities which pass as economic growth circa 2013.

How can this be?  To understand this will take a basic understanding of the banking revenue model.

Ever since 2008, the Federal Reserve and the ECB have been underwriting the banking sector by providing cheap cash to banks and, indirectly, the governments and people’s of their respective countries.  This is where Blodget’s parallel of today’s bank runs and those that occurred during the Great Depression falls apart.  For all of the mistakes that Ben Bernanke has made, the unconditional guarantee of liquidity in the banking system is the one that he will never relinquish, despite appeals to reason, for he mysteriously sees it as his life’s calling.

However, in an effort to stem the fall in asset prices, which is largely a product of the insane “jack the rate 25 basis points every month or so” policy that the Greenspan and Bernanke Fed followed from June 2004 until June 2006, the policy that caused markets to seize up like a car engine losing oil as they accelerated to record speeds, the Feds and the ECB have largely ignited an increase not in economic growth, but in bank deposits.

Bank deposits, far from being a boon to the receiving bank, are a huge problem when market conditions force them to reinvest (read lend out) those funds for rates that are unconscionably low (3.75% to consumers for 30 years, in a fiat currency system, are you out of your mind?).  Making matters worse, the consumers have been slow to take the bait, resulting in a big time squeeze on the traditional banking revenue model.

Enter Cyprus, an island that holds a disproportionate amount of bank deposits.  As a thinking Eurocrat, of which we suspect there are few, save Nile Farage, who is hunting for a way to both ensure that the banking revenue model continues to function, the government of Cyprus retains legitimacy, and that economic activity in the Euro zone will increase, the pile of Euros in Cypriot banks looks like a great target not to loot, as most analysis of the situation will paint this move as, but to force billions of Euros out of the digital vaults of the banking system to wash from the shores of Cyprus outwards into the other Euro zone countries in search of real goods, not simply another cash warehouse.

One sees the Eurocratic genius in the move at the moment one (again, that is you and I, fellow taxpayer) understands that the mere threat of a unilateral tax on deposits as a condition for a Euro zone bailout is causing lines to form at ATMs from Andalu to Cataluña, across the border into Torino and down to the lonely parts of Sicily.

Cyprus Flag
Will the Cyprus Misadventure by the catalyst for elusive economic growth in the Euro zone?

Within a matter of days, billions of Euros which were locked up in the accounts of villainous savers and otherwise useless to the European economy will be running around the Spanish and Italian streets in a desperate attempt to purchase anything real in which to hold said savings.

With what appears to have been a typically boneheaded Eurocratic move, the Eurocrats may have managed to do what Ben Bernanke and all of the helicopters in the world could not have done to the club Med economies:  Shower them with foolishly spent cash while at the same time bailing out both the banks and the governments as a grotesque side effect.

To be sure, it is a short term fix and will leave the Euro zone further down the scorched earth economy path in a matter of years.  Even so, you have to give the Eurocrats some credit for pulling out all the stops, even if they did stumble upon their ultimate stimulus, which relies upon their own stupidity to function, completely by accident.

Meanwhile in Cyprus, the latest is that the government wants to “think over” the terms of the bailout.  The formal vote has been postponed until Friday, and we presume that the banking holiday will remain in effect until after the vote is taken and any taxes are skimmed.

It is a hard assignment, and we do not envy them nor blame them for thinking it over.  The decision before Cyprus’ government officials is simple.  Should they accept the bailout, they face being blamed by their countrymen for sacrificing their parched island on the Eurocratic altar as well as spending the rest of their lives dodging the hit men of any oligarch’s who did not have sufficient forewarning of the move.

Should they reject the bailout, their government may even find a few contributions from said oligarchs to keep operating, and the only cost will be a few less German tourists on their shores, which, given the alternative, seems a small price to pay.

In the end, if our hunch is correct, the mere threat of corallito should be enough to stimulate the Euro zone.

Were we in their shoes, and we are glad we are not, we would reject the bailout.  Either way, it is a strong argument for exiting the formal banking system or becoming a large net creditor.  It is much easier for “crats” of any stripe to confiscate assets with a few keystrokes than for them to lift a finger to grab something in the real world.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint


Key Indicators for March 18, 2013 (PM)

Copper Price per Lb: $3.43
Oil Price per Barrel:  $93.79
Corn Price per Bushel:  $7.20
10 Yr US Treasury Bond:  1.96%
Gold Price Per Ounce:  $1,606 THE GOLD RUSH IS STILL ON!
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.7%
Inflation Rate (CPI):  0.7%
Dow Jones Industrial Average:  14,452
M1 Monetary Base:  $2,466,100,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base:  $10,499,300,000,000

What is Truth?

3/15/2013 Portland, Oregon – Pop in your mints…

Our latest E-book in the “Why what we use as Money Matters” series: What is Truth?  On the Nature of Empire, has now shipped and will soon arrive on digital shelves across the Internet.

What is Truth?  On the Nature of EmpireIn the twenty first century, it has become clear to most that there is no divine right or imperative for the existence of an Empire on the earth. As such, an ever-increasing number of peoples have thrown off the yoke of Empire in favor of what has become known as a democratic model of collective governance. Yet simply changing the rules of governance has not put an end to the core ideals of Empire, and governments today that are elected democratically have largely retained the hallmarks of Imperial rule, namely the tendencies toward a central monopoly on the use of force and the right to demand tribute. How can this be?

The purpose of this volume is to gain an understanding of the true nature of Empire and, to convince the reader that Empire, and by extension large scale government, is not only unnecessary, but a great hindrance to human progress. This volume also explores why the Imperial model virtually ensures that the worst elements of humanity will rise to power, where they will ultimately impose their will on their fellow humans by violence. For the violent outcomes that Empires invariably produce are not exceptions to the rule, nor are they merely the norm.

They are literally guaranteed by design.

Once we have grasped the true nature of Empire, we will then will explore the only known antidote to Empire and the only possible means for mankind to rid itself of the lethal effects of Empire on the earth. And it is probably like anything you have imagined.

It is now available and can be enjoyed on SmashwordsAmazon’s Kindle, and Google Books.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint


Key Indicators for March 15, 2013

Copper Price per Lb: $3.51
Oil Price per Barrel: $93.21
Corn Price per Bushel: $7.16
10 Yr US Treasury Bond: 2.01%
Gold Price Per Ounce: $1,596 THE GOLD RUSH IS STILL ON!
MINT Perceived Target Rate*: 0.25%
Unemployment Rate: 7.7%
Inflation Rate (CPI): 0.7%
Dow Jones Industrial Average: 14,481
M1 Monetary Base: $2,466,100,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base: $10,499,300,000,000

On the Nature of Empire

3/8/2013 Portland, Oregon – Pop in your mints…

In today’s Mint we submit to you, fellow taxpayer, an excerpt of our upcoming E-book release:  On the Nature of Empire.  Enjoy!

Empire:  An Introduction

empire -/’empī(ə)r/- noun -1. An extensive group of states or countries under a single supreme authority or oligarchy.

Derived from the Latin imperium, the word Empire has come to embody the concept of dominance on a grand scale.  From the time of the original Akkadian, Mayan, and Egyptian Empires to the more recent Greek, Roman, and British versions, the ignoble goal of all Imperial activities has been to establish and maintain primacy in the affairs of men and women throughout the entire known world.

Proof of this is found in the nearly invariable behavior of the heads of Empire, known as emperors and empresses, who come to embody the ultimate conceit of the imperial mindset by attempting to establish themselves as a deity.  The conceit is always fatal, for this ridiculous presumption has the nasty side-affect of destroying any shred of legitimacy that the head of Empire may have previously established.  However, whether or not the emperor publically manifests a claim to deity by demanding reverence reserved for the truly divine or, at the opposite end of the spectrum of possible outcomes, they make a demand for reverence that goes largely unchallenged, those who have reigned in the emperor’s chair have invariably come to assume that they had, at their disposal, the divine right to liquidate any and all threats to their claim to the ultimate power over their fellow mortals.

In the twenty first century, it has become clear to most that there is no divine right or imperative for the existence of an Empire on the earth.  As such, an ever increasing number of peoples have thrown off the yoke of Empire in favor of a what has become known as a democratic model of collective governance.  Yet simply changing the rules of governance has not put an end to the core ideals of Empire, and the hallmarks of Imperial rule, namely the tendencies towards a central monopoly on the use of force and the right to demand tribute, have been largely retained by governments today that are elected democratically.  How can this be?

The concept of Empire is a construction of men, and is largely a result of a tolerance by the many of what is nothing more than antisocial behavior by a few.  As we have stated above, an Empire, at its base, is a monopoly on the use of force which evolves into a monopoly on the right to demand tribute.  Living under Imperial rule is not man’s natural state, and it will eventually come into conflict with mankind’s natural disposition for autonomy, commonly known as freedom or the right to self determination.

Why do the many tolerate the antisocial behavior by a few that ultimately leads to Imperial rule?  The answer is that Empires do not appear overnight.  They emerge over relatively long time horizons and, until they approach their blow off phase, may appear to have many benefits.  However, these benefits always come at a great human cost, a cost that is almost always obscured from those who receive them.

It should come as no surprise, then, that there is no historical evidence of an Empire spontaneously arising by mutual consent.  On the contrary, Empires are created and expanded by subjugating a territory and the peoples that inhabit it via either the threat or actual use of military force.  Once subjugated, the Empire attempts to consolidate its control of the territory by exacting tribute from its subject.  From ancient times up to today, an Empire’s demand for tribute ultimately manifests itself in taking control over the food supply.

Joseph and His Brethren Welcomed by Pharaoh, watercolor by James Tissot 1836-1902
Painting “Joseph and His Brethren Welcomed by Pharaoh”, watercolor by James Tissot 1836-1902

One of the more poignant historical examples of this can be found in the Biblical book of Genesis, where Joseph advises the emperor of Egypt at the time, Pharaoh, to store up the Egyptian grain production for a time in anticipation of a seven year famine.  The Pharaoh then sold the grain back to the Egyptians and foreigners during the famine.  While the story generally has a happy ending, it is a stark example of the Imperial prerogative to confiscate property via taxation.

Given this example, it is no surprise that the first known system of taxation was in Ancient Egypt around 3000 BCE – 2800 BCE.

Paradoxically, the subjects of Empire, who could just as easily eat from the foodstuffs they produce and store up their own rainy day funds, find themselves rendering their harvests to the representatives of the Empire, in the case of the Pharaohs, a full 20% of their production, only to be forced to beg them back at a future date when the need arises.  The Paradox is furthered in that the Empire, in attempting to maintain primacy via various forms of taxation, ultimately ensures its demise, as the inherent waste in the Imperial model overwhelm its ability to extract further tribute from its subjects.

The mechanism of taxation itself causes the Empire to weaken, as it indirectly encourages sub optimum activity and in the worst case, inactivity and waste by those who receive the benefits of the proceeds of the taxes.

Long before the Empire becomes aware of its weakened state, the subjects themselves are often the first to realize that the Emperor is wearing no clothes, to borrow Mr. Andersen’s metaphor.  Those with the means and the initiative will move to escape the withering grasp of the Empire.  Those who do not leave are often left to perish in a futile effort to either defend the Empire or oppose it through the same force of arms by which the Empire came to their lands.  For an Empire must ultimately demand allegiance from its subjects, and an intolerance for dissention will tend to increase in direct proportion to the level of weakness of the Empire.

As such, for an Empire to perpetuate itself, it must rely entirely on the force of arms when necessary and coercive propaganda at all times in an ultimately futile attempt to assure it retains the primitive right to meddle in the affairs of others.  In the final blow off phase, which is marked by civil wars such as the one currently playing out in Syria, the Empire will resort almost exclusively to the use of arms to squash dissention.

Yet the maintenance of Empire, like the air travel industry, is in every case a losing proposition.  It is an utter and complete waste of time and money.  To maintain an Empire requires an ever increasing amount of human and intellectual capital which are depleted in ever increasing quantities as the Empire slides into history’s dustbin, where it will simply attach itself to the long list of Empires that were.

The concept of Empire has always been lethal to human existence and prosperity.  However, for some reason it is romanticized in the human psyche.  The purpose of this volume is to gain an understanding of the true nature of Empire and, to convince the reader that not only is Empire, and by extension large scale government, unnecessary, but it is a hindrance to human progress and virtually ensures that the worst elements of humanity will rise to power, where they will ultimately impose their will on the rest of us by violence.  For the violent outcomes the Empires invariably produce are not exceptions to the rule, nor are they merely the norm.

They are literally guaranteed.

Finally, we address Pontius Pilate’s infamous inquiry, to Jesus of Nazareth before His public trial:

“What is truth?”

It is a question that has been left to humanity for two millennia, and it is time that it be answered, for in the answer lies our common fate.

Intrigued?  Stay tuned to The Mint for the book’s release.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint


Key Indicators for March 8, 2013

Copper Price per Lb: $3.51
Oil Price per Barrel:  $91.95
Corn Price per Bushel:  $7.25
10 Yr US Treasury Bond:  2.06%
Gold Price Per Ounce:  $1,585 THE GOLD RUSH IS STILL ON!
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.7%
Inflation Rate (CPI):  0.0%
Dow Jones Industrial Average:  14,397
M1 Monetary Base:  $2,481,500,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base:  $10,377,900,000,000

The Sequester – Deflation’s last gasp

2/26/2013 Portland, Oregon – Pop in your mints…

As the clock ticks down once again on another fiscal deadline, it would appear that the US and global economy are in for a brief bout with a familiar friend, uncertainty.  In the face of uncertainty, it is important to review one’s basic premises to be assured that they still hold.  Here at The Mint, we perform this analysis by way of presenting a list of Key Indicators at the end of each segment.

Most days, it hardly seems worth doing.  The data we track tends to stay in a fairly tight range.  However, were one to read The Mint say, two months ago, there may be a noticeable difference in the data points which would tell us something.  That something, for the past two years, has been that come what may, be it TARP, Debt ceiling votes, Euro zone crises, Fiscal Cliffs, or the latest version, the Sequester, our key indicators have consistently returned one answer as to what lies beyond the speed bump:  Inflation.

However, the drama that unfolds in the lead up to what can only be described as a failure to properly sends jitters through the most vulnerable parts of the financial markets, which circa 2013 are literally all financial assets.  The jitters are caused by a Pavlovian reflex that the markets have ingrained in their psyche at the hint of the POMO (the Fed’s Permanent Open Market Operations) running dry.

The POMO, for the initiated, is where the magic of QE and other monetary alchemy takes place.  It is where the FED exchanges wine for sewage, and it is increasingly difficult to say who is providing what.  In the end, it will all turn to sewage, and the end is always nigh, hence the Pavlovian response.

To illustrate the point, we offer an incident from our youth as an example of how the Pavlovian response of market exits (or risk off trading) works.  Though no animals were injured in the incident that follows, if you are a member or PETA or are sensitive to animal cruelty, you may want to jump below the graphic to continue reading.

When we were a young boy in Colorado, we had a dog that we would come to call the Rock long before an aspiring professional wrestler adopted the nickname and made it famous.

The Rock was an extremely lively dog and, while fun to be around and play with, he, like all young pups, wanted to get out and see the world.  To accomplish this goal, The Rock would dig holes under the fence and wriggle through them.  More often than not, the family would spend the better part of the afternoon patrolling the neighborhood in search of our four legged explorer.

Our Uncle, who lives in Nebraska and is a farmer turned banker, but was a farmer at the time, offered some advice on the matter.  As most people are aware, cattle and other livestock can be coaxed into staying in an enclosed area by running an electrified wire around the perimeter.  The trick is that the perimeter fence does not need to be live for the livestock in question to respect it as a boundary.

The reason for this is that the livestock are trained to have a Pavlovian response to the mere sight of the wire.  When the fence is installed or new livestock are moved to the enclosure, the wire is turned on and the electric current runs through the wire.  The initiated livestock stay clear of the wire and search for a good view as the new livestock, who are unaware of the fence’s magic powers, bump into the wire unaware and are promptly shocked, or as the farmer thinks of it, “conditioned,” to stay away from the wire.

We now return to The Rock.  Our Uncle, after hearing of our plight, offered to lend us one of the electric wire fences so that The Rock could be trained to stay within his confines.

We set up the fence.  The Rock watched the installation with interest.  We put the final length in place and then turned to The Rock for what we imagined would be a brief round of “conditioning.”

We stared by placing his paw upon the live wire.  There was no Pavlovian response on the Rock’s part, just the usual excited stare and panting.  Next, we tried the top of his foot, which was covered in hair.  Again, nothing.

We quickly touched the wire ourselves and satisfied ourselves that it had been turned on.  How could we get The Rock to understand that the wire was a force to be reckoned with?

Again, readers with PETA affiliations, if they have read to this point are encouraged to jump to the graphic.  This is the final warning.

It began to dawn on us that the reason that The Rock had avoided the shock to this point was that there was no moisture on his paw or hair (it was a fine summer day in an arid climate, after all).  All that was needed to get the current running was a bit of moisture.

It did not occur to us to grab a spray bottle to lightly moisten the dog and retry the relatively innate area of the paw that we had focused on up to that point.  What did occur to us was to grab a piece of raw meat and hang it over the wire.

What happened next remains permanently etched in the memory of all who witnessed it.

The Rock, delighted at the offering, immediately extended his tongue to retrieve the meat from the wire, the way he would have any food morsel that he was offered.  Naturally, he was shocked as his tongue made solid contact with the wire.

The Rock did not retreat at that point, rather, between yelps of both pain and pleasure, continued what was a vain attempt to remove the meat from its perch.

After about the third attempt, a shock of sufficient strength was delivered by the fence and The Rock abruptly turned and ran 180 degrees into the house.  We were standing at the door in disbelief as The Rock hit cheetah type speeds as he encountered us at the door.

We do not remember exactly how we ended up on our back, but we suspect we completed at least one full, albeit involuntary, rotation in the air before we arrived there.

In the background we heard uncontrollable laughter, and The Rock didn’t leave his hiding place under the bed for the rest of the day.

Strangely, the incident did not change The Rock’s attitude towards digging under the fence, and he managed to escape whether or not the electrical perimeter wire was on or off.

The Pavlovian response, which was so evident in his cheetah like retreat that day, had been completely forgotten.  It wasn’t until he was hit by a car and had his hip shattered some time later that He finally gave up carousing.

We take a brief break from our tale to welcome back PETA members and animal sympathizers and to provide the following graphic, which was created by Wells Fargo’s Mark Vittner and Michael Brown and comes to us via the Money Game.  The graphic looks at which states stand to lose the most income, on a relative basis, should the Sequester become a reality.  By extension, it shows which is most dependent on Federal government spending.  Not surprisingly, the noise attributed to the Sequester threat comes from the fact that those populations most affected on a relative basis reside near Washington DC.

Federal Spending as percentage of GDP by State
Federal Spending as percentage of GDP by State via Business Insider’s The Money Game

Those closest to Rome are the ones who will get scorched as it burns.  However, thanks to the Fiscal fire hoses provided by the POMO of the FED, the Sequester will barely register as a spark

So it is with government finances when the monetary premium is removed from goods in the natural realm.  The above mentioned TARP, Debt ceiling votes, Euro zone crises, Fiscal Cliffs have proved to be nothing more than the meat hanging on the electrified wire for the governments of the west.  The latest version, known as the Sequester, which is essentially the spawn of the August 2010 debt ceiling debacle, is simply more meat on the wire.

Traders will yelp and make a dramatic retreat, and then return to digging under the fence the next day.  They will continue to roam farther and farther afield until they are hit by a car, which will come when the FED is the only customer for US Treasury debt, and the incestuous feedback look of the money supply overlords and government debt and spending collapses upon itself.

At that point, analysis will be useless, as the entire system upon which present analytical tools base their assumptions will cease to exist.

While the moronic Sequester is important for doctors and those who make armaments for a living, (many of whom live very close to Washington DC, making for a vocal and visible constituency that will be impacted) it is meaningless, both in terms of reigning in government spending or slowing down, let alone stopping, the t

A Brief Reminder of the Function of Central Banks circa 2013

An economist explains quantitative easing for the uninitiated, brought to our attention via Zerohedge:

Just in case you missed it earlier, the sovereign bailouts explained:

That pretty well sums up the political and banking sector’s strategy for dealing with the present crisis.
To quote Alfred E. Neuman:
“What, me worry?”

On Debt Jubilees and the Fed’s Inflationary Crazy Train

2/21/2013 Portland, Oregon – Pop in your mints…

It has been an exciting couple of days in the financial markets.  We almost can’t bear to watch.  From what little we can tell, the out-sized effects of short-term funds, which are jittery in nature, are determined to drive anyone who is taking a long view on the market mad.

Most of what passes as equity investing today is done with short-term funding provided by the Federal Reserve.  No matter how much propaganda the Fed puts out promising to maintain their QE programs in full force or keep the pedal to the metal on ZIRP, it is an inescapable fact that funds at many of the Primary Dealers are short-term and can be pulled by the Fed on a whim.

Lately, between the sequester threat and the Federal Reserve meeting notes which can only be described as anti-inflationary propaganda, the short-term funds have been taking flight.  How long this will last is anyone’s guess, but it is and always has been the Fed’s prerogative.  Whatever market participants anticipate that they will do with the regards to the money supply flashes through the equity markets, as equities are essentially on the margin of visible economic activity.

Today we wish to bring two things to the attention of our fellow taxpayers, unfortunately both of them are somewhat ominous.  They are nothing new, mind you, but as the warning signals of the next crisis and its probable outcome begin to appear on the horizon, we thought it best to keep interested readers informed.

First, Lee Adler over at the Wall Street Examiner, who performs a great service to the economic world by slicing through the economic propaganda to analyze the true data, shared this piece which is worthy of reading.  It explains how the mountains of customer deposits are piling up at Commercial banks.  If, and more probably when these deposits begin to be deployed in the real world, asset bubbles and inflation will begin to pop up in the US economy like lava flowing down the side of a volcano.

His article can be read here:

Bloomberg Reports Biggest Story of All Backwards As Fed Blows Dangerous Deposit Bubble

If Mr. Adler is correct, the Fed’s inflationary crazy train may be about to leave the station.

We are compelled to warn you that the next quote, from a piece by Jeff Neilson at, may be enough to make your blood boil if you are not one of the privileged classes (in other words, most of us) that he believes will likely benefit from the upcoming “Debt Jubilee,”

So what will our 21st century Debt Jubilee look like? With History’s most-corrupt governments, expect the most-corrupt “solution.” The debts of our governments, the Big Banks, and the wealthiest Oligarchs will be totally erased. We will be told they are doing this to “save us” from drowning in their (reckless/fraudulent) debts.

However, the Little People will face a somewhat different future. Their debts will be maintained at 100-cents-on-the-dollar. The bankers, politicians and Oligarchs (via their Corporate Media) will tell us that this is necessary to “protect the integrity of the System” (their System).

Think this level of perversity/injustice is impossible? We already have precedent. After the Wall Street banks had caused (created?) the Crash of ’08 (with their reckless fraud/gambling); and after they took their $15+ trillion from the U.S. government in assorted hand-outs, 0% loans, tax-breaks, and “loss guarantees” (i.e. more hand-outs); the Wall Street banksters kept their massive bonuses.

We were told this was because of “the sanctity of contracts.”

Then after this massive give-away; various U.S. governments began unilaterally hacking-and-slashing the wages, pensions, and benefits of their own workers – which had been freely/fairly negotiated in their own contracts. The reason? After giving $trillions to the bankers; the workers were told the government “couldn’t afford” to honor their contracts.

The sanctity of contracts is important, as all that men and women ultimately have in this world is their word.  Unfortunately for most of us, we may soon find out just how much the government’s word is worth.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint


Key Indicators for February 21, 2013

Copper Price per Lb: $3.55
Oil Price per Barrel:  $93.03
Corn Price per Bushel:  $6.90
10 Yr US Treasury Bond:  1.98%
Gold Price Per Ounce:  $1,577 THE GOLD RUSH IS ON!
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.9%
Inflation Rate (CPI):  0.0%
Dow Jones Industrial Average:  13,881
M1 Monetary Base:  $2,384,300,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base:  $10,419,300,000,000

On the myth of overpopulation

A series of videos refuting the myth of overpopulation:

We must all do what we can: Moments I’ve gotten choked up at the idea of America

We were privileged today to witness an oath ceremony which is taken by residents of the United States who have chosen to become naturalized citizens.  What we thought would be a mildly interesting event, which for those taking the oath serves as the final step towards becoming a full-fledged American citizen, moved us to tears.

The ceremony, far from being a bureaucratic event with little more to offer congratulatory remarks and an official seal affixed to a document, is a veritable celebration of the idea of America.

What is moving about the ceremony, at least for us, is a video segment which shows still shots of immigrants of the past, all of whom have come to America’s shores to escape oppression,  seek opportunity, or both.  It is very powerful.

After the ceremony, they show a brief video address by President Obama, where he welcomes the immigrants to America by inviting them to become part of the great American story which is now their story as well.  He encourages them to do good both in their communities and throughout the world.

The ceremony is a celebration of the American idea, that all men and women are free, and that with this freedom comes the obligation to protect it and to share it with others.  To use it for the betterment of mankind.

It chokes us up to think about it.  We have only been brought to tears at the idea of America three times:  First, in 1992, watching Carl Lewis anchor the 4 x 100 relay in Barcelona, where he covered 100 meters faster than any human being before or since.  Second, while watching the movie Seabiscuit.  And third, today, at the citizenship oath ceremony.

Despite the faults that are inherent in self-government, we will always be inspired by the idea of America and have a profound respect for immigrants, both legal and illegal, for they are the embodiment of this ideal.

In closing, we echo the President’s exhortation, both in the State of the Union and in his video message welcoming new US citizens, that we must all do what is within our power to better the lot of our fellow-man and woman, for to better their lot is to better our own.

Worldwide Gun ownership and homicide rate info-graphic and the purpose of bad news

2/12/2013 Portland, Oregon – Pop in your mints…

Tonight’s State of the Union address by President Obama will once again draw a sharp focus on gun control, or lack thereof in the United States.  The theory held out by gun control advocates is that restricting access to guns will serve as a deterrent to violence.  Unfortunately, the statistics on a national and global scale argue firmly against this cause/effect relationship, as the following info-graphic illustrates:


Contrary to Utopian logic, an increase in overall gun ownership serves to decrease the rate of intentional homicides, not the reverse.

If a higher incidence of gun ownership paradoxically produces a lower intentional homicide rate, why would the idea of gun control be floated by the leader of the “Free” world at all, especially when such ideas are in clear contradiction with the document which He has sworn to uphold?

The Benefits of bad news

Mr. Obama and the rest of the well-meaning individuals who are at the head of the rallying cry for increased gun control have one thing in mind when they float such ideas:


Columbine, Sandy Hook, and innumerable other mass shootings in recent history have cast a stigma over gun ownership that world improvers, our pet name for those who believe that they and only they know what is best for humanity, have latched on to as evidence that only certain persons should be allowed to possess firearms.

Clearly, mass shootings are horrific tragedies and attempts to avoid them should be made at all costs.   Again, paradoxically, they seem to occur in environments when the instigator(s) are the only ones in possession of a firearm.  However, while they race to the top of the news feeds when they occur, mass shootings are generally outliers to the human experience.  As such, while they are horrific tragedies, they are not as common as one would think.

It is for these reasons, both that they are uncommon and that they are horrific, that the national psyche attaches to them and examines them the way one would rise to investigate an unexpected sound in the night.  For it is our rightly held belief as human beings that these things should not be, and if they have occurred, then something must be wrong.  The glory of free societies is the indomitable belief that if something is wrong, we, the people, can work to make it right.

In this sense, while we cringe at the many headlines that announce a mass shooting, or any act of violence, for that matter, we have trained ourselves to breathe a sigh of relief.  For the very fact that they are being reported on means that an investigation of their root causes will rise to a level of national debate.  This reporting and national debate is one of the healthiest expressions of free speech that can occur.

While we do not believe that gun control will serve to mitigate tragedies, we are pleased that the debate rages on, for the answers are out there, and it gives us hope for all of mankind that we are diligently searching for it.

After you are shocked by the next tragic headline that comes your way, remember to give thanks for your reaction.  For this reaction, at its core, is an inkling of the hope for the betterment of all mankind that is alive and well within you.

So carry on, Mr. President, as Free men and women, we are privileged to hear you out, as well as disagree on solutions.  We share your sorrow at these events, and will work to make a better world for ourselves and our posterity.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint


Key Indicators for February 12, 2013

Copper Price per Lb: $3.72
Oil Price per Barrel:  $97.59
Corn Price per Bushel:  $6.96
10 Yr US Treasury Bond:  1.98%
Gold Price Per Ounce:  $1,651 THE GOLD RUSH IS ON!
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.9%
Inflation Rate (CPI):  0.0%
Dow Jones Industrial Average:  14,019
M1 Monetary Base:  $2,522,600,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base:  $10,334,600,000,000

Anarchy is an Ultimate Given

2/7/2013 Portland, Oregon – Pop in your mints…

We are taking a brief break from Old Jules and our “To Build up the Land” series to present the introduction to our soon to be released e-book, the latest volume in the Why what we use as Money Matters series.  Enjoy!

Anarchy is an Ultimate Given

An∙ar∙chy – noun – ‘anərkē

The definition of anarchy, according to the Merriam-webster Dictionary:

1.a:  absence of government

  b:  a state of lawlessness or political disorder due to the absence of governmental authority

  c:  a utopian society of individuals who enjoy complete freedom without government

2.a:  absence or denial of any authority or established order

  b:  absence of order

Disarming the State is as simple as changing and then using one's mind
Disarming the State is as simple as changing and then using one’s mind

Anarchy.  The word strikes fear in the hearts general public, who have been trained to conjure images from fraternity house shenanigans to rioting and looting on the streets of important cities at its mention.  For most civilized persons, with these mental images close at hand, anarchy is something to be avoided at all costs.  How can civilized society carry on with the threat of bombs and looting effectively slamming the brakes on human progress?

In this volume, we seek to free the concept of anarchy from these negative connotations.  For anarchy, far from being the greater evil in the choice amongst evils when it comes to man’s state in this world, is really not a choice at all.  Rather, anarchy is something that every human being and animal on the planet is born into.  It is the basic state of man in this world.  It is an ultimate given.

As an ultimate given, it is futile, nay, self-destructive for men and women to live their lives fretting about falling from a state of order into one of anarchy.  The line of thinking is debilitating and counterproductive to what must be mankind’s highest and most urgent calling in the physical realm:  How best to respond to the state of anarchy in which they live.

For it is not anarchy itself that causes disorder and the other maladies which the mere mention of the word bring to mind, but mankind’s failed responses to this ultimate given under which they labor and cause others to labor on their behalf.  The only thing more dangerous than confusing anarchy for the disorder which arises from the collapse of a failed response to it, is to spend ones life’s toils aiding another person’s failed response to his or her inherently anarchic surroundings.

Further, this volume seeks to give the reader a sufficient level of awareness to step back, if even for a moment, to evaluate the response to anarchy under which they are currently laboring and make a sober evaluation as to whether they are truly laboring in alignment with their own best interests.

Too many lives have been wasted laboring under a mistaken fear and avoidance of anarchy, and we hope this volume will steer the reader away from this fate.  It may not change the way you think or what you do at all, and that is good.  For to personally validate ones own course in life with a firmer grasp of the facts has caused harm to no one.  In fact, it should cause one to carry on with a renewed sense of pride and purpose.  We only encourage you, then, to offer others the chance to give their own lives a sober evaluation, and respect their decision to change once they truly understand the wonderful anarchy into which we are all born.

The book is now available on Kindle and will be available on Smashwords in early May.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint


Key Indicators for February 7, 2013

Copper Price per Lb: $3.73
Oil Price per Barrel:  $96.11
Corn Price per Bushel:  $7.11
10 Yr US Treasury Bond:  1.95%
Gold Price Per Ounce:  $1,671 THE GOLD RUSH IS ON!
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.9%
Inflation Rate (CPI):  0.0%
Dow Jones Industrial Average:  13,944
M1 Monetary Base:  $2,522,600,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base:  $10,334,600,000,000

3D Printer manufactures a HI-CAP

3D printing has come a long ways, but few imagined it would coincide with the national gun control debate. The technology, on the surface, allows one to create a plastic prototype of nearly anything that will fit into its print area.

While the national gun control debate rages on, these guys are using 3D print technology to great a ban that does not, as of yet, exist.  Moral judgments aside, we present it of as an example that control, in this case control over the manufacture of high capacity magazines, is an illusion or delusion, the line between the two is determined by how much control a group of people think they have over another.

Without voluntary compliance, laws are impossible to enforce, and unjust laws are the first to be ignored. We are all subject to natural law, and must answer to it. In the meantime, we imagine that, while a novelty, those who have use for a HI-CAP, most of whom wear a military uniform, will opt to get them from a mass producer.

Despite Piers Morgan’s Anti-gun Argument, Britain is a much more violent society than the US via Reality check

While much of the focus of the policy response to the recent tragedies in the US has focused on some form of gun control, it is important to recognize the limits of gun control as a means of diminishing violence.

As the video above suggests, removing guns from a society may have either no effect on violent crime rates or, in the worst case scenario, actually backfire and increase the rate of violent crime.

Yes, you read correctly, that imposing restrictions on gun ownership by the populace may actually increase violent crime rates.  Prominent examples of this phenomenon can be found in Piers Morgan’s jolly old England, which, while having a lower incidence of gun crime, boasts a violent crime rate which is substantially higher than the United States and even South Africa.  They can also be found in Chicago, which, despite the most restrictive gun laws in the US, lamentably has the highest student death toll by firearms.

How can this be?  To understand the answer, one must understand something about Contrarian thought as well as game theory.

First, Contrarian thought.  This logic is detestable and unacceptable for anyone in the anti-gun control, “if it even saves one life,” crowd.  Likewise, it will be unpalatable for those who see capital punishment as repaying evil with evil.  None the less, the following logic is compelling.

Permitting gun ownership by citizens serves as a tacit deterrent to perpetrators of gun crimes who, if they are carrying a gun in a zone where gun ownership is illegal or legally restricted, can assume that a great majority of the population that they will encounter in that zone will not be carrying a firearm, a fact that puts the criminal perpetrator at a great advantage and the peaceful citizens at a great disadvantage.  The anti-gun control argument falls apart once the inescapable fact that it is impossible to guarantee 100% compliance with such laws.

On the other hand, if the perpetrator approaches an individual or crowd with no way of knowing whether or not they can defend themselves, this element of uncertainty may serve as a deterrent to any number of gun crimes which are not permitted.  This is a data point that, by definition, is silent in the statistics, how many violent crimes have been deterred or aborted in the planning stages due to the perceived probability of the victims being armed.

The same argument holds in theory for capital punishment.  If perpetrators of violent crimes knew that their violent act was likely to be punished by death, it follows that this ever present deterrent would be taken into account, and an unknown number of potential violent crimes would be deterred or aborted in the planning phase.

While gun control may serve as a deterrent for impulsive violence, it is just as likely to invite a number of premeditated acts of violence, where the perpetrator can operate with a high degree of certainty that they will not, at least at first, be challenged by an adversary that can harm them in self defense, thereby thwarting their plan.

The understanding of game theory is important in this analysis as well with regards to the assumption on the part of perpetrators of violent crimes as to whether or not their victims can defend themselves and repel an armed assault in kind.

In his famous book, The Strategy of Conflict, Thomas C. Schelling goes to great pains to prove that two individuals who have the ability to destroy each other will tacitly gravitate to living in an uneasy peace with one another, mostly owed to the perception that any act of aggression taken will cause the instigator to suffer in-kind retaliation from the other party. Given the assumption that both parties possess the same capabilities when it comes to weaponry, they are more likely to tacitly choose to peacefully coexist than to instigate violence in hopes of gaining what in game theory is called the “first strike advantage.”

Schelling used the US and the USSR’s offsetting nuclear capabilities to prove this theory, and, in theory, the same tacit decision to peacefully coexistence would be reached among those who live in an armed population.  If this theory is correct, the right to bear arms, which on the surface appears to be the cause of a great deal of violent crime, may actually serve as the best deterrent to an increase in violent crime in a population, while having the side effect of discouraging foreign invasion.

While the cry for gun control rings loud and clear throughout the land, it is proper for all citizens to be appalled at the heinous acts which have been committed.  However, as in the game of Clue, the weapon is only one piece of the mystery, and the violent crime rates in England suggest that, were the revolver removed from the game, the rate of homicide inside the mansion would scarcely decrease.

JFK on peace

Federal Reserve Effectively Forgives US National Debt

12/11/2012 Portland, Oregon – Pop in your mints…

Last week, we made a vague promise to provide data to back a claim that the US Debt at the FED had already been largely cancelled via the various quantitative easing (QE) operations that have been realized over the past several years.  This fact makes any talk of solving the moronic “Fiscal Cliff” via extreme methods such as minting platinum coins with $1 Trillion face value unnecessary.

In an attempt to illustrate what amounts to an effective forgiveness of a portion of the US National Debt by the Federal Reserve, we offer the following graph, which plots the both the official US National debt as well as the official US National debt net of the Federal Reserve’s holdings as a percentage of GDP.

US Debt GDP QE Graph


As you can see, the real US National debt to GDP is closer to 94% rather than the projected 105% which the official US National debt figures would suggest.  The Federal Reserve, at last count, holds roughly $1.6 Trillion of US Treasury debt.  While this debt is still theoretically on the books, it can essentially be removed from consideration when arguing about the need to solve the debt problem, vis-a-vis the moronic Fiscal Cliff debacle that is playing out in Washington.

94% is an alarming level, but according to our projections, the current US Government current account deficit cycle is about to end as the waves of new currency released into the global economy by the Federal Reserve and other central banks begins to run through the coffers of the US Government.

Despite the desperate proclamations by Congress that it will be difficult to solve their (yes, this is their problem) impasse, indicators such as an EFT that tracks the Defense industry, XAR, which would theoretically be the hardest hit were the US to fail to address portions of the Fiscal cliff such as suspending the sequestered spending cuts agreed upon as a result of the infamous Debt ceiling debacle, are not showing any signs of trouble.

In other words, the financial markets are assuming that the US Congress and Executive, when push comes to shove, will wind up and kick the can a mile down the road, as they did when the debt ceiling was bearing down on them.

According to our projections, there is no debate, the Fiscal Cliff does not even exist, rather, it is a figment of the collective imagination.

We do not believe in money, at least not in the form of money that is currently used in America today, and it appears that the US Congress is beginning to come around to our point of view.  If the Federal Reserve will simply finance deficits ad infinitum, why even bother with the Fiscal Cliff charade?  We are still working to answer that question, and leave it for you, fellow taxpayer, to ponder along with us.

The real question, the one which we wrestle with every day here at The Mint, is when will the faith in the Federal Reserve be destroyed?  With the advent of the various QEs beginning in 2008, the Federal Reserve system effectively collapsed.  The creation of credit was no longer self sustaining in the economy.  The FED has been living on borrowed time.

As December 21 approaches and those who have misinterpreted the Mayan calendar wonder if December 22nd will come, we look forward to the 22nd of December, when the Federal Reserve’s charter is rumored to expire, and YouTube’s “Man of Truth” famously prophesied that the Federal Reserve would go bankrupt. Technically, he said “December 2012”, but, after 99 years, why split hairs?

Chances are that the world will wake up on December 22nd and carry on.  However, if you see the words “Force Majeure” in the financial headlines, get ready to calculate prices in a new currency for 2013.  For the US may swerve to avoid the Fiscal Cliff, but sooner or later it will drop off the currency cliff.

That is when things will get very interesting indeed.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint


Key Indicators for December 11 2012

Copper Price per Lb: $3.65
Oil Price per Barrel:  $85.84
Corn Price per Bushel:  $7.24
10 Yr US Treasury Bond:  1.65%
Gold Price Per Ounce:  $1,710 THE GOLD RUSH IS ON!
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.7%
Inflation Rate (CPI):  0.1%
Dow Jones Industrial Average:  13,284
M1 Monetary Base:  $2,457,800,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base:  $10,275,200,000,000

Escalation of Hostilities in Gaza as Israel prepares a ground campaign

11/15/2012 Portland, Oregon – Pop in your mints…

While politicians and bureaucrats in the US continue to posture and dig up dirt on one another in an attempt to place the blame on the “other guys” as the US goes off the Fiscal Cliff, something entirely more important is unfolding half a world away.

What happens in the Middle East is important for a variety of reasons, and it is important to pray for the peace of Jerusalem, not only for Jerusalem’s sake, but so that there will also be peace in our hearts.  We must leave pondering this truth for another time as we endeavor to bring you the latest on the events developing in the Holy Land, namely the recent escalation of hostilities between Hamas and Israel.

As always, Stratfor is on the case, providing on the ground intelligence and analysis to help the layman understand what is occurring, why it is important, and most importantly, what is likely to occur as a result.  Without further adieu, we turn to “Considering an Israeli Ground Assault in Gaza,” an insightful report, republished here with permission of Stratfor:

Considering an Israeli Ground Assault in Gaza

The Israeli air force continues to bombard targets within the Gaza Strip, but thus far ground forces have not yet begun an incursion into the territory. Whether the current air campaign escalates to a ground assault will largely depend on the mission that the Israeli military is trying to accomplish.

Israeli soldiers on the Israel-Gaza border on Nov. 15
Jack Guez/AFP/Getty Images

Israel Defense Forces’ official statements have emphasized that the goal is the severe degradation of Gaza militants’ ability to launch rocket strikes, particularly the new Fajr-5 rockets that are purportedly capable of striking Tel Aviv. Halting rocket attacks was also the mission during Operation Cast Lead, Israel’s most recent large-scale military operation involving Gaza, which took place in late 2008 and early 2009 and consisted of an air campaign similar to the current one followed by a ground invasion. Examining how Operation Cast Lead developed could provide useful context for how an Israeli ground invasion of Gaza could unfold.


Operation Cast Lead can be separated into two distinct phases: air and ground. The air phase lasted for about one week and targeted suspected rocket smuggling routes, storage locations and firing positions, as well as targets of opportunity that emerged as hostilities progressed. This is very similar to what the IDF is doing currently, primarily with air assets but also assisted by naval and land assets capable of attacking from a distance.

The second phase was the ground attack. This phase consisted primarily of two distinct geographic theaters within Gaza. In the southern theater, Israeli units moved in and set up blocking positions near Rafah and Highway 4 in order to cut Hamas’ logistical supply lines running north toward Gaza City. Air and naval strikes were also used to enforce the border between Gaza and Egypt, where a strategically significant road known as the Philadelphi route is located. In the north, Israeli forces penetrated into the Gaza Strip to the north, northeast and slightly southeast of Gaza City itself. This served to isolate Gaza City and clear out initial rocket firing positions as well as defensive positions located in the immediate rural regions. After this initial move, follow-on forces were brought in to thoroughly search and clear identified enemy rocket launching sites, logistical hubs and command and control structures. Notably, Israeli forces did not venture deep into major population centers such as Gaza City and Rafah City to avoid the potentially higher casualties and more serious infrastructural damage associated with urban combat.


A ground operation now would likely look very similar to Cast Lead in design and tactics, since Cast Lead was considered an operational success and its mission was similar to the current one. However, there are two notable differences. First, in the southern theater during Cast Lead, Egyptian security forces worked to secure the Rafah crossing from their end and allowed Israeli forces to engage the Philadelphi route. Egypt now has a very different government, which brings into question its willingness to support a ground operation. Cairo has already announced that the Rafah Crossing will remain open. This creates an even more serious imperative for Israeli units to cut the supply lines in the south of the Gaza Strip to Gaza City. Israeli ground forces may need to physically occupy the Egypt-Gaza border because naval strikes and airstrikes may not accomplish the mission. This would be a slight expansion on the action taken in 2008-2009 and could bring Israeli forces into uncomfortably close contact with Egyptian forces.

Second, in the north, the potential range of the Fajr-5 missile expands the potential firing zone that needs to be cleared. As stated earlier, Cast Lead focused on Gaza City and its surrounding areas in clearing operations. In order to degrade militants’ abilities to reach Tel Aviv with the Fajr-5’s expanded range, the IDF will need to clear all potential firing areas to just south of Nusayrat. In theory, this would require the isolation of a larger area and the potential use of more forces or require more time to accomplish.

Visit our Israel page for related analysis, videos, situation reports and maps.

Tactically, IDF troops entered the Gaza Strip during Cast Lead by operating at night and creating their own crossing points as opposed to using previously established points. They also relied heavily upon combat engineers, armored construction equipment including unmanned D9 bulldozers, and dog teams to establish their own avenues of approach instead of using common routes through Gaza. Ground units also worked in heavy conjunction with air assets for reconnaissance and close air support, and had access to comprehensive artillery support. This allowed them to avoid improvised explosive devices, heavily mined primary access routes, ambushes and counterattacks militants had planned near the assumed IDF approaches.

In a likely ground incursion, we can expect IDF to use similar tactics that have been refined even further over the past four years, but we must assume that militants in Gaza will not make the same mistakes twice and will use different tactics in order to inflict more damage on ground forces. Already in this round of fighting, unconfirmed reports have emerged saying that militants are using MANPADS. If these rumors are true, it could force a more limited role for rotary-wing air support as well as anti-tank guided missiles and thus seriously hamper the firepower, cover and protection provided by armor.

Many of the conditions, geographic settings and stated goals of the current mission are similar to Operation Cast Lead, so one can assume that the potential upcoming ground phase would be similar as well. That being said, some differences have emerged that would likely force an expanded role for ground forces, and the mission stays the same only until the first exchanges of fire happen, as militants and other political actors would also be able to influence how events unfold. With the evolution of the battle, a ground operation is becoming increasingly likely and with the transition to the ground phase of operations casualties, tensions, and political ramifications will only intensify.

It is worth reiterating that Egypt has a completely different government than the one which was friendly to the Israeli cause during their 2008-2009 operations.  Iran’s further isolation also make it likely to engage on some level against Israel if and when the ground offensive begins.

Again, pray for the peace of Jerusalem, Gaza, and all of Palestine, for hostilities there can throw the entire world out of balance.  If you need proof, just watch the Western stock markets react as events unfold.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint


Key Indicators for November 15, 2012

Copper Price per Lb: $3.46
Oil Price per Barrel:  $84.50
Corn Price per Bushel:  $7.21
10 Yr US Treasury Bond:  1.59%
Gold Price Per Ounce:  $1,716 THE GOLD RUSH IS ON!
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.9%
Inflation Rate (CPI):  0.1%
Dow Jones Industrial Average:  12,542
M1 Monetary Base:  $2,458,800,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base:  $10,333,800,000,000

Ron Paul secedes from Congress

11/14/2012 Portland, Oregon – Pop in your mints…

Ron Paul may not be perfect, but He is one of the few persons in Congress who has actually read the Constitution and understandibly watches in utter disbelief at the machinations which pass as the operation of the Federal Government today.

Mr. Paul has inspired a generation to take hold of real freedom to the extent that it can be secured here on earth.  In honor of Mr. Paul, we present to you, courtesy of CSPAN, his farewell address to the House of Representatives, where he has served for the State of Texas for over 30 years.  May we count ourselves amongst the the virtuous and moral people who are capable of living in a free society.

Farewell and Godspeed, Mr. Paul, your voice of reason and wisdom will be missed more than you can imagine.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint


Key Indicators for November 14, 2012

Copper Price per Lb: $3.44
Oil Price per Barrel:  $86.20
Corn Price per Bushel:  $7.26
10 Yr US Treasury Bond:  1.59%
Gold Price Per Ounce:  $1,728 THE GOLD RUSH IS ON!
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.9%
Inflation Rate (CPI):  0.6%
Dow Jones Industrial Average:  12,571
M1 Monetary Base:  $2,517,800,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base:  $10,182,700,000,000