Financial Xenophobia

I must be one big heartless, grouchy, mean, tight-wad SOB.

One of the quickest ways to get my boxers in a bunch is to talk about how some group is under-served.  Or disadvantaged.  Or distressed.  Or some other Statist-speak phrase that indicates the "demographic" isn't consuming adequate amounts of redistributed wealth  - as defined by some bureaucrat in DC or a state capital.

After all, they wouldn't be in the piss-poor situation they find themselves in if only more money were thrown their way, right?

When I get pissy over this topic, I get gasping, horrified protestations that I want to take food from the mouths of babes I didn't sire.  Or have my sanity questioned about how could I be so stupid to not want to "invest" in the higher education of some person I've never met.

I guess I'm just xenophobic when it comes to my pocketbook.
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What spun me off this time?  This [link] memo from the FDIC regarding the Community Reinvestment Act (CRA).

The federal bank and thrift regulatory agencies today announced the availability of the 2012 list of distressed or underserved nonmetropolitan middle-income geographies where revitalization or stabilization activities will receive Community Reinvestment Act (CRA) consideration as "community development."

You know that the CRA is the core cancer of our current financial woes, don't you?  In my old banking days, I used to be the contact person when the CRA did their audits.  I know this cancer inside and out.  Since you insist, I'll give you the condensed version of how we got here:

In 1999, Clinton passed legislation that gutted the Glass-Steagall act.  Glass-Steagall is the Depression-era law that had prevented commercial banks from owning investment banks (and vice versa).  The former being financially conservative institutions that brought in deposits, made loans, and made their profits on the interest rate spread.  The latter type of bank are high-risk (and potentially high-return) gamblers.


In return for taking the ownership handcuffs off of the Republican-sponsored banks, the banks agreed to a more expansive version of the Democrat-sponsored CRA.  You wanna play, you gotta pay.


The banks could either give money directly to "disadvantaged" groups, or they could make them loans.  Figuring they at least had a chance to get some money back from a loan, they mostly took (and still take) that path.


But it still wasn't enough.  Destroyers Of The Realm, Mssrs. Frank and Dodd, pushed for still lower credit standards for people financially unable to own a home (you're considered underserved if you don't have any money or a house - at least this way, Frank and Dodd could give you a house).


Things "progressed" but still not quickly enough.  Frank and Dodd got Freddie Mac and Fannie Mae to guarantee these shoddy home loans.  The banks went nuts.  Who wouldn't?  I'd make a loan to a corpse if the federal government guaranteed repayment!


The debt contagion really spread now.  Since the "paper" was federally guaranteed, it could be securitized - bundled into huge chunks of loans and sold as investment grade paper to insurance companies, REITs, investment houses, foreign governments - you name it.


The bubble burst and all of this "wealth" evaporated.  It never was real wealth, it was debt masquerading as wealth.

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So now, the brain trust in the CRA is looking to find other wealth-sinks.  They've scoured the nation and found new places for banks to dump invest money - distressed or underserved nonmetropolitan middle-income geographies.

Gawd, I just want to projectile vomit.  Throw money at a problem and the problem is fixed.  No consideration for "natural" economic cycles of growth and contraction, because contraction means someone will lose, and we just can't have THAT.

Expect another bubble, folks.  While this isn't directly your money, it is indirectly.  Banks will pay for this with new fees, higher borrowing rates, lower (if possible) deposit rates and essentially "free" loans from the Federal Reserve.

One way or the other, you're payin'.

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I'm really not a monster.  I feel a moral obligation to help those in my community that are having a tough go of it.

And I meet that obligation.  Where I choose.

What I can't live with is when someone else decides where my money goes.

For instance, could someone please explain to me the societal benefits of spending tax dollars on Low Income Housing?

This horrific social engineering scheme gives a financial incentive to people who are unable to afford to live in a given town, neighborhood, or state.  The authority that is providing this incentive is making the following statement:

We understand that you can't afford to live here.  We want to have you come to our town, and we'll help pay for your housing.  Since you can't afford the rent, chances are you can't afford the food, utilities, medical and other living expenses.  No worries, they're on us.


Statistics in our state show that the crime rate in areas with subsidized housing (either in public housing or in Section 8 homes) is MUCH higher than it is for the general population, so we also acknowledge that you will consume more than your "fair share" of police and emergency medical services.  Again, no worries.  You're worth it!

Now, don't go gettin' all "self-reliant" on us!  You do realize that you'll be penalized - that means 'cut off' - if you go out and make too much money to qualify for our tax dollars, right?  Just stay under the radar and you'll be able to stay on the Gravy Train for your entire life.  

Be sure to teach your kids these lessons as well.

Welcome to our community!

I will happily give my money to support organizations that qualify and discriminate.  

How many times have you been here to use our limited resources?  Twice?  Well, sport, you're on your last leg.  Three times, and you're out.  We're gonna help you this one last time, so you'd better make it stick.  Otherwise, meet Mr. Gutter.  It will be your new home.

Why is this attitude of expecting people to care for themselves so foreign to us nowadays?  

Everyone, and I mean everyone, can find themselves in a situation where they are at the bottom of their barrel and need help. 

Back in the early 1990's, I found myself damned close, so I get it.  A series of events all happened at once, and I was caught by surprise.  I thankfully never had to ask for help, but it was so close we had the paperwork filled out.

Our first instinct wasn't to ask for help, it was to figure it out for ourselves.  I sold real estate and worked for a temp agency during the day, and in a warehouse at night.  It was horrible, insufficient pay, but it WAS some pay.  It let us bob and weave until another decent banking job came around.

I don't want to get all puffy-chested, but I had personal pride.  The last damned thing I would ever let happen was for someone else to pay for the food going into the mouths of my kids.  There would have to be no other options whatsoever before I'd succumb to that.

I guess I'm just some freak who is out-of-touch-with-reality.

Today, girls get knocked up and go straight for the TANF [link] and WIC [link].  They don't go after their baby's daddy 'cause that just ain't cool.  Let Uncle Sugar foot the bill.

There's no shame.  Since they don't feel the social or economic pain of their choice to spread their knees or seed, they continue their behavior unabated.  Why not?  They're rewarded for doing so.

Keep feedin' the beast.  See how well it's turned out?

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Copyright 2012 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com

Acclimate

ac·cli·mate/ˈakləˌmāt/

Verb:
1.Become accustomed to a new climate or to new conditions.
2.Respond physiologically or behaviorally to a change in a single environmental factor.

Most of the time, when we think of the term acclimate, we think about going from one type of climate to another.  Let's say your employer wants to move you from Hawaii to Alaska.  Your body, your psyche, your way of life dramatically changes, and it takes a while to get used to the new environs.   Going from winters with balmy 70 degree nights, to sub-zero temperatures - for weeks or months at a time - can be a shock.

You might very well tell your employer that you're not interested in making such a change.  You resist the move.  Not NO...  HELL NO!

Politicians and governments know this.  They understand that introducing dramatic change in a short period of time causes shock.  Shock can result in resistance.  So they make the changes gradually.

Instead of moving from Hawaii to Alaska, your company offers a move to San Diego.  It might not be quite as lush and warm as Hawaii, but you can pretty easily make the change.  It's still warm most of the time, plenty of eye-candy to check out, and there are even some benefits.  Gasoline and food are both cheaper.  And the pay raise and additional health benefits seal the deal.

Hey, maybe this isn't so bad after all!

In a couple of years, the company moves you to Northern California.  More money, more benefits.  Then to Washington state.  Pretty soon, you're living in Idaho, then Montana.  Before you know it, you're fully conversant on how to combat the bomber-sized mosquitoes in Alaska.

By this time - years down the road - you only have faint memories of the warm beaches.  You've gone from an idyllic life to one which presents a number of barriers to living your life as you see fit.  No more choosing to take a skinny-dip in the ocean at midnight.  If you don't follow the laws of nature in Alaska, you end up dead.  And you've consented to each and every step that brought you to this point.

You willingly gave up freedom for (financial) security.

In the early 1900's, you could exercise your unambiguous, enumerated right to keep and bear arms, and buy a gun from the Sears catalog.

Today, if someone directly sent you a handgun in the mail, the delivery man would be a federal agent - preparing to introduce you to the federal "justice" system.

Without the Constitution changing by one word or one comma, your ability to keep and bear arms has been infringed.  Regardless of where you live in America, it is more difficult to buy a gun nowadays.  In a few states, and in many more cities - for all intents and purposes - it is illegal to own a handgun.

This change didn't happen over night.  Politicians - whom we all elected into office - made these changes.  They gradually relocated us from Hawaii to Alaska, and we didn't even care.  Hell, most have embraced the move.

We've been acclimated to the change.

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Sometimes, the politicians need to quicken the pace of change.  They need something altered or recognize an opportunity to expand their powers, and they jump.

I've written a number of times about how you get a change to take hold.  The tactics are similar whether you're subverting the fourth amendment by conducting warrantless car stops in search of drunk drivers (and whatever else you might find), or whether you're bastardizing the "general welfare" clause by forcing Americans to pay into a retirement program that has unsurprisingly turned more Ponzi than protective.  From the Social Security website -

Justice Cardozo wrote the opinions in Helvering vs. Davis and Steward Machine. After giving the 1788 dictionary the consideration he thought it deserved, he made clear the Court's view on the scope of the government's spending authority: "There have been statesman in our history who have stood for other views. . .We will not resurrect the contest. It is now settled by decision. The conception of the spending power advocated by Hamilton . . .has prevailed over that of Madison. . ." Arguing that the unemployment compensation program provided for the general welfare, Cardozo observed: ". . .there is need to remind ourselves of facts as to the problem of unemployment that are now matters of common knowledge. . .the roll of the unemployed, itself formidable enough, was only a partial roll of the destitute or needy. The fact developed quickly that the states were unable to give the requisite relief. The problem had become national in area and dimensions. There was need of help from the nation if the people were not to starve. It is too late today for the argument to be heard with tolerance that in a crisis so extreme the use of the moneys of the nation to relieve the unemployed and their dependents is a use for any purpose [other] than the promotion of the general welfare."

And finally, he extended the reasoning to the old-age insurance program: "The purge of nation-wide calamity that began in 1929 has taught us many lessons. . . Spreading from state to state, unemployment is an ill not particular but general, which may be checked, if Congress so determines, by the resources of the nation. . . But the ill is all one or at least not greatly different whether men are thrown out of work because there is no longer work to do or because the disabilities of age make them incapable of doing it. Rescue becomes necessary irrespective of the cause. The hope behind this statute is to save men and women from the rigors of the poor house as well as from the haunting fear that such a lot awaits them when journey's end is near."

Getting the change to "stick" requires a compliant Congress to write the law, and a compliant SCOTUS to bless it. 

[Side note:  This Thursday will be interesting when the SCOTUS releases its ruling on ObamaCare.  Reading the precedence and logic of the constitutionality of Social Security, I don't see how ObamaCare couldn't be affirmed as constitutional.]

But you've got to first sell the idea to the public.  To affect this change, you take one of two courses.  The first is Public Safety.  Bring up a horrific incident or event, and use it as the foundation for usurping rights.  Drunk driving is a great example.  Some mother tragically lost a child to a drunk driver, and was able to touch the hearts of millions of Americans. 

Politicians across the nation jumped on this bandwagon.  Each positioned themselves the tougher champion of dead kids everywhere.  This morphed into warrantless car stops looking for drunk drivers.

When there would be push-back, the cry from MADD and the politicians was, "If just one child is saved.... if just one family is spared the pain and sorrow of losing a child before they had a chance to blossom, it's worth the sacrafice."

The SCOTUS blessed the warrantless searches in some broad, national safety guise.  Public safety trumps personal freedom.

We saw it happen again with 9/11.  Bush and Company saw the opportunity to designate the entire world - including the US - as a battlefield full of terrorists.  To keep us safe, we're told, required giving up a few rights.  Nothing that God-fearing Patriots wouldn't be willing to sacrifice.

Like personal and financial privacy.  Or freedom of movement.  Only terrorists need those things - not Real Americans.

The masses chug this line of "reasoning" like it is free beer at a frat house.  They can't get enough of it.  They'll even repeat the mantra of, "If you've done nothing wrong, you should have nothing to hide."

The result is the gradual, irretrievable loss of rights.  Poof!  No mas, baby.

Your persons, houses, papers, and effects can be searched at the whim of a government agent, and your fellow citizens think it's a good idea.
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The second course of attack is a bit more difficult, and usually takes more time to stick.  Again, some arm of government feels the need to expand its sphere of influence, or as in the following example, assert its supremecy over the population.  They want to flex muscles they don't legally possess.

They'll use the close cousin of safety (or lack thereof) - fear - as their tool.  What they'll do is make an overt power grab, fully expecting outrage from the population.  They take the spanking, giving back what they've taken.  Well, most of what they've taken.

Over the last few years, we've seen press reports of increased frequency of military units "training" on American soil.  The story is always, "Nuthin' to see here.  We're just doing this to get our boys prepared to maintain the peace in [insert name of some God forsaken country].  Doing our job overseas keeps the crazy bastards off of US soil.  Ooo rah!"

This is a specious argument, of course.  What the government is doing is projecting  a positive outcome (i.e., keeping the crazy bastards off of US soil) with a clearly unconstitutional action (US troops operating on US soil). 

The fear of shoe bombers, underwear bombers and other assorted terrorists is more than enough incentive for most Americans to give TPTB all the leeway they need.

In this case, it starts with a public training exercise.  People - seeing military vehicles passing through their town - are a bit worried, but mostly curious - and the press reports what's happening on the local military base.

The next time, they conduct a joint training exercise with local police agencies.  We're just training - just picking up good ideas to use elsewhere.

That progresses to acting in an active supporting role with local authorities [link],   No worries, we're just helpin' out.

Then, it's Game On.  The military just moves in, uninvited -

The Aug. 10 report says it does not appear the historic tradition of limiting direct military involvement in civilian law enforcement activities was analyzed or considered.

It says the intent was to be a good Army neighbor.

The Army earlier confirmed that 22 military police and an officer were sent to Samson after the mass slaying of 10 people on March 10.

Oh.  They're just being good neighbors.  We all like good neighbors, don't we?

I thought Good Fences made Good Neighbors.  I must have been mistaken.

They're acclimating us to the idea of US troops operating on US soil is a good thing.  Another board in our Constitutional Fence just got kicked over.
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Like the first course of action, they always wrap their actions in the warm blanket of safety, but they'll add a side dish of patriotism.  Yer either fer us or agin' us!

We saw Bush do this with the USA PATRIOT Act.  Personal privacy is now a distant memory.  Any local or federal official simply needs to whisper "terrorist" under their breath, and any semblance of personal freedom is vaporized.

Obama has followed this up with the NDAA and its teeny, tiny provision that, well, Americans can be snatched up anywhere in the world - including on US soil - and "disappeared".  No court.  No lawyer.  Habeas corpus?  Surely you jest.  You just don't show up for work on Monday, and no one knows anything about it.


Soon, America will be a Free Fly Zone with drones buzzing our airspace.

"Hey!  We'll only use the drones to catch America-hating terrorists, murderers, rapists and to find little children that have been snatched from their loving families.  Only terrorists, murders, rapists and perverted kidnappers could possibly be against this modern crime-fighting tool."


Personal safety.  Fear.  National Security.  Patriotism.  All wrapped up in a nice, neat package.

It's a bit chilly around here, but you get used to it.  Really.

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Copyright 2012 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com

Idaho Dreamin'

My wife and I are on a roadtrip looking for rural properties outside of The People's Republic of California. 

Although we've both lived in CA our entire lives, that's no longer enough justification for remaining.  We're leaving this festering boil on the ass of America.  We're taking our retirement monies, PM's, skills - and most importantly from the perspective of California - our taxes, and we're going to use them more productively elsewhere.

We're in Idaho right now.  This is our second trip to this fine state.  We both made a similar comment yesterday:  People are so nice.

We weren't talking about the people who are paid to be nice, such as hotel clerks.  We're talking about regular people you interact with while out living life.  "Hello," "Please,"  "Thank you,"  "Pardon me," are phrases nearly relegated to the history books in California.  They're commonplace here.

I like that.
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I have a Utah non-resident concealed carry permit.  As such, I'm able to carry concealed while in Idaho.

For those of you who are unaware, when you go to a state with another state's CCW, you must follow the laws of the state you're in, not the state that issued the CCW.  As such, I was reacquainting myself with Idaho's gun laws.

Man, I love this place.

In California, the summary of our gun laws runs 66 pages (the last time I checked).  Again, that's the summary, not all of the nitty-gritty legal crap that no one understands or can apply uniformly.

Idaho's gun laws - if I had to guess - run maybe 5 pages.  Perhaps a bit more.  Their summary fits neatly on a single web page [link].  I can summarize it in a couple of sentences.

As long as you're not a menace to society, you can exercise your constitutional right to protect yourself.  Here are the handful of place where you can't carry a gun.  If you act like an idiot with your gun, we'll take it, and your CCW away.  Act lik an adult, and we'll treat you like an adult.

Amazing.  A state that recognizes that it has no need or desire to micro manage every aspect of a citizen's life.  Especially when it comes to the most basic right of self-preservation. I think my wife and I are going to have to go to one of those Moonie Deprogramming-like workshops to clear the decades of Nanny State indoctrination to which we've been subjected.
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Sorry, but I can't find the link, but when I was getting reacquainted with Idaho's gun laws, I ran across a big Middle Digit Salute to the federal government.  The state legislature passed laws asserting that guns made in Idaho and which remain in Idaho are not subject to federal oversight or control.  Since they don't cross state borders - which would trigger the much abused Commerce Clause - the tenth amenment applies, which confers sovereign power to the states.

I had seen similar laws being drafted or passed in Montana and Wyoming (I believe) but hadn't heard about anything in Idaho.

I dig it.
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I'm going to be using my SmartCarry holster (link to my April review) while in Idaho.  I've worn it while at our PM shop, but never for a long period of time when I'm up-and-down and driving a lot.

I'll publish my additional thoughts in a later post.
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My wife has picked 4 years as the horizon for her retirement from her current position.  My dream would be to identify a property in the near-term and buy it now.  Many of the properties are currently producing cash crops.  Orchards, hay, even corn (none with that Idaho super-star - spuds).  Buy the property and let it pay for itself until we move and run it ourselves.

I've got a family friend who owns and operates orchards who can give me information on what to ask and look for when dealing with fruit.  Hay, that's another issue.

I've been looking at a number of sites with information on growing and marketing the stuff, but I can 't tell how you make a buck at it.  It looks like hay sells for about $200+/- a ton.  Is that how much the farmer gets after it is cut, baled, stacked and shipped?  That's what I'm guessing. 

That's before you factor in the cost of seed, water, cutting, baling, stacking and shipping.  How much does all of that mess cost?

Also, I've seen some info on yields per acre.  I saw one that said in Idaho, they were getting 4 tons per acre.  Does anyone know if that's per cutting or gross per year?  If it's the latter, I don't know how you make any money, unless you get on the Nanny State Farm Subsidy Train, or have a zillion acres to cut.

Any insight anyone has got would be much appreciated.

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Copyright 2012 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com

Tick, tick, tick...

I was talking to my wife, I believe, about the euro and the European Union (EU).  I made the comment that it's long been almost common knowledge that the EU was going to fail from the very beginning of its existence.

She looked at me with the, "Hey, a**hole, not everyone spent 30 years in banking" and would know this.

Oh.  Right.

OK, so, the problem from the get-go with the EU was that it was ONLY a financial arrangement.  The political portion is weak, at best.  Without politics and finance working in conjunction, you're doomed for failure.

As has happened, you can have one country that says, "We're going to set up a Social Security system that lets people retire at age 50 and get paid what they were getting paid when they were working.  We're going to give them 8 weeks of vacation, and make sure they're always happy and content, regardless of the cost."  Obviously, unless you have a massively growing tax base, the existing (or shrinking) tax base simply can't support the cost.  The tax base shrinking as the tax draw grows ain't a healthy economic model.

So you have to borrow to pay for your promises.

Here in the US where the Treasury Department is part of the US government, the govenment can tell the Treasury exactly how to behave.  In the EU, it's a different story.  The European Central Bank doesn't take it's orders directly from Germany, France or any of the other individual EU members.  They don't have direct control.

As we saw with the recent election in Greece, one of the candidates had run on the platform that if he were elected, he would reject the austerity program proposed by the EU.  That would be like Obama giving Geithner of the Treasury an order, and Geithner flipping him off.  Obama would just replace him, and put in a guy that would follow his orders.  The EU has no power to remove elected officials from the soverign nations that make up the EU.

The EU has a number of financial criteria that the members must maintain.  Debt ratios, GDP and the like.  Well, if a member doesn't meet these benchmarks, the EU can kick them out, but they never will.  As we saw with Greece, their threat to leave is what had everyone worried.  There was no talk of kicking them out.

When you have such an imbalance between the political and the financial, you have conflict.  The inability of the EU members to force austerity programs on their free-spending bretheren will ultimately result in the dissolution of the EU.
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I'm guessing you have seen the irony of what's going on here in the US.  We have our political and financial systems intertwined, so things should be hunky-dory.

They're not.

THAT'S because we don't have the political will to act like adults and cut our spending when tax receipt decrease.  Like Greece, we're making promises which we don't have the money to pay.  Unlike Greece - where the rest of the EU (for now) is paying for their largess - we are saddling our children, grand children and great grand children with the bill for our foolishness.
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The event that spawned the conversation with my wife this weekend was the aforementioned Greek election.  That ended up being a non-event.  For now.

What I found much more interesting - both in its outcome and its miniscule coverage here in the US - is the election that was also held last weekend in France.

They elected a Socialist majority to their parliment.  And they're going to reverse the austerity programs the previous right-of-center government had imposed on the country.

Just like what was going to happen in Greece.

France is the EU's second biggest economy - just behind Germany and just before Italy.  They have an economy that is almost 10 times larger than Greece, yet everyone had their panties in a wad over the tiny, economically insignificant island.

Pay no attention to the man behind the curtain....
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As a personal aside, I picked up a decent bit of gold last week.  My gut says it's getting close to systemic failure.  Or at least the start of the cascade.  I don't normally buy outside of my regular routine, but my Spidey Sense is a-tinglin'.

In unrelated news, I'm making another trip to Idaho this week to look at property.  Nope, not related at all...

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Copyright 2012 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com

Slick Barry

King Barry's edict:  It's pretty astounding, actually.  Unilaterally changing our immigration laws.

Obama's Talking Heads are all over the TV today, essentially saying, "Well, Congress wouldn't make the necessary changes to our immigration laws, so we're going to do it all on our own."

Let that sink in.  What's it called when a single person has the power to determine the Law Of The Land?

A Monarchy.

Oh, and to you Democrats/Socialists that are squealing in glee that King Barry has taken this unconstitutional grab of power, what he has really done is set a precedent.  If this doesn't get pushed back, the law will be that any president can make these unconstitutional power grabs as they see fit.  Including when some Republican/Fascist comes to power.

How does King Pat Buchanan grab you?  Or King Donald Trump?  Or King David Duke?

We have a Constitution and a process for a reason...
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A question to all citizens and legal residents that are in favor of King Barry's edict:  Do you know of anyone - including yourself - that is unemployed, or under-employed?  Yeah, I thought so.  You do understand that by having more people competing for the same number of jobs, that your chances of getting one goes down?  You get that, right?

On the flip-side, when employers have few or no applicants from which to choose for a given job (i.e., when illegal aliens aren't competing for our jobs) that THE PAY OFFERED TO WORKERS GOES UP.  The whole supply and demand thing.  What?  You didn't have an economics course when you were getting your Ethnic Studies or Applied Communism degree?
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Question to people of Hispanic ethnicity that have friends/relatives currently "in the queue" attempting to gain US citizenship:  How do YOU feel about King Barry giving a bunch of people that have not been following the rules, a "You Get To Cut To The Front Of The Line" card?

Uhm, perhaps, screwed, without so much as a peck on the cheek?  Like a slick playboy talkin' sweet and filling you full of promises of wild passion and a go-go lifestyle, his game is hollow.

He just wants to get into your pants, and will say whatever is necessary to get there.

You realize that King Barry is doing this because he wants to buy your votes, right?  But his actions will hurt you directly if you're looking for a new or better job.  If you have kids, they will be competing directly with these law-breakers for jobs.  Directly.  And it hurts your friends and relatives that are following the rules to gain legal residence in our country.

And he wants your vote as a big fat "thank you" for inflicting this pain upon you.

How stupid would you have to be if you gave him what he wants?  Slap his hand off your ass, and tell him to take his weak game somewhere else.

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Copyright 2012 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com

Tee-Ball And Other Socialist Traps

The first year of baseball for most kids is something called "Tee-Ball".  Instead of the opposing team pitching to the batter, the ball gets tee'd up and Junior gets to take a whack at it.

 This practice speeds up the game and is one of the first cuts for seeing if Junior has the requisite eye-to-hand coordination required for playing baseball.  By the end of the season, it is usually pretty clear who understands the concept of, "bat meets ball equals success" and who doesn't.

A million years ago, I coached my boys in Peanut League.  We had kids on the team that had no business - nor desire - being there.  They'd come up to bat and literally not take the bat off of their shoulder.  Most of the time, they'd strike out because the pitcher would see they weren't going to swing the bat and they'd just put the ball right down the pipe.

Junior would walk dejectedly back to the dugout, and mom would hit him with the, "Good Job, Junior!".  He knew it wasn't a good job.  His teammates knew it wasn't a good job.  The other team knew it wasn't a good job.

But mom still reinforced that his total, unequivocal lack of effort was acceptable.  This concept tends to stick with kids, as it's less painful than trying and failing.

Over the past few decades, youth sports have devolved into this soft, squishy pile of socialist-infused goo.  Regardless of the skill, work ethic, passion and (most importantly) performance of the players, everyone gets that same ubiquitous, "Good Job!" at the end of the game.  It no longer matters what you accomplished - you'll always get the pat on the head.

This cancer has spread throughout anything our kids do.  We lower the standards for graduating from fourth to fifth grade.  We can't "hold back" a kid who isn't ready to move on because it might bruise his psyche and injure his self-esteem.

This "trickles up" to middle and high school.  The ability to steam a mirror with your breath is all the effort required.  Simply being present is considered effort enough.

So, how's that working out?

We've got a society full of people walking around with their own personal tee-ball stand.  They don't know how to do anything without assistance.  Worse than that, we have ingrained in our youth the belief that they can't do anything without assistance.

Take a look at this article [link] from the online version of a local newspaper.  It's about what is perhaps the most dysfunctional welfare program in the nation - California's.  It so clearly lays bare the utter contempt we have for our citizens.

California is the national leader in welfare recipients (Woo hoo!  We're number 1!  .ed). About 3.8 percent of state residents were on welfare in 2010, the highest percentage in the country. In fact, California houses about a third of the nation’s welfare recipients, while only housing one-eighth of the national population.

For those of you who went to public schools and are math-challenged, that means that while we in California have about 12% of the overall population, we have about 33% of the welfare population. Nearly three times the amount we should have.

[UNDERSTATEMENT ALERT .ed] The state has traditionally held a relatively generous attitude toward welfare. For instance, CalWORKs gives cash grants to children even when their parents are ineligible for benefits for various reasons, such as being illegal immigrants, receiving disability, or failing to abide by the program’s rules.

Translation: Even if you're breaking the law, we'll still slip ya a wad-o-cash. Such a deal!  Now it's clear why we have 3-times our share of welfare recipients.

So, we've made it next to impossible to NOT qualify for some free money - a free tee-ball stand. What happens when the State threatens to take away the tee-ball stand?  Let the boo hoo hoo begin!

Sarah Smith, a 31-year-old divorced mother of four in Los Angeles County, had been a stay-at-home mother since the age of 18, only working sporadically between having children. She was forced to turn to CalWORKs a year ago after her husband stopped paying child support. She received $850 a month in cash aid and $700 in food stamps.

Poor thing is forced to take fifteen hundred and fifty dollars a month. Not taxed.

Wanna talk about force?  I'm being forced by threat of imprisonment (if I don't pay my taxes) to pay for her inability to chose a reliable baby-daddy.

Policymakers don’t realize that people need a chance to rebuild their lives, Smith said, adding that CalWORKs aid is far from enough to live on. “It’s still a juggling act,” she said. “People are trying to get jobs. No one really wants to be on welfare. Most people are trying to get off it.”

Uhm, excuse my language, but that's utter bullshit. Oh look, the program even admits as much.

Nearly half of CalWORKs families move off the program within two years (so that means that more than half DON'T move off the program that quickly  .ed), but about 18 percent are long-term. Those families are often have very young children and headed by parents who lack a high school diploma or job skills, or have a family member with a disability, according to a report by the Public Policy Institute of California.

We send them to school to get educated enough to better their lives, or to at least be able to fill out a job application to learn a trade. But because we can't hurt Junior feelings, we don't even give him those tools to succeed.
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Here's where it gets ugly, folks.  Junior has become attached to his tee-ball stand.  You might even say dependent.

He's got no real skills that the outside world needs.  His whole life, mom, dad, his teachers and all of the flashy Community Organizers have told him he's doing a Good Job.  His pinnacle achievement is a hollow high school diploma.  And now, no one seems to want to pay him a living wage to play video games or to make babies.

If you were Junior and someone came and took away your tee-ball stand, what would you do?  Do you think Junior is going to go to the Salvation Army for a cot and skills training, or do you think he'll bonk you over the head and take your stuff?

Whether he succeeds or not, I'm telling you, he's looking to bonk you on the head.
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I'm waiting for the wailing, and the, "It's for the children" chorus to start up.  With California being home to Hollywood, we should get some Oscar-worthy performances.

Seriously, I don't give a shit.

I am not responsible for your poor choices.  It's that simple.  It sounds heartless and cruel.  Trust me when I say that I'll get over it.

 ObamaCo has promised you Hope and Change.  Well, Hope takes no effort, so the change ain't gonna happen.  Wishing something to happen doesn't accomplish squat.  You've got to actually do something to better yourself.

Foreign concept, I know.

And Junior, choose your victims to bonk carefully.  Swing by my place or the homes of the 150+/- students I train each year, with the intention of enriching yourself at our expense, and you'll understand change.

Like going from 98.6 to room temperature.

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Copyright 2012 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com

Bank Holidays and What They Lead To

Most folks know about Bank Holidays.  It's Govermentspeak for shutting down a bank (or banks).  A government usually authorizes these "holidays" when there is a concern that there will be a run on a country's banks.

I heard about this on the radio yesterday, but the only online source I could find was a link in the Drudge Report [link] that is to an Italian site (translated).  It seems as though the Bank Of Italy has called a bank holiday -

Adiconsum Bank of Italy asks for an urgent meeting and the lifting of The Bank of Italy authorized the suspension of payments by Bank Network Investments SpA (BNI) without communicating anything to the depositors.

If you can't get access to your cash, or if your bank won't honor checks or debit card transactions, you're pretty much screwed.

Think for a second what has been going on in Europe as of late.  Greece, Spain, France and a handful of other countries have already limited the maximum amount that may be spent with physical cash.  They are supposedly doing this to catch tax cheats.

Here in the US, those Wascally Wabbits in the White House and Congress tried to bury in Obama Care the requirement for US companies to report - via 1099's - any cash any person receives each year in excess of $600.  What would have happened is that when you sold precious metals to a coin shop, or a lawn mower to a pawn shop or a used car to a car lot, for any value, your name, address and Social Security number would have had to have been recorded.

Why for any value?  The 1099 law requires that a cumulative $600 in payments must be reported.  If you receive payments of $50 for 12 straight months, it must be reported in the aggregate.  The only way that can be done is if ALL payments are recorded.

The 1099 requirement was rescinded because small business across the country when nuts.  The paperwork requirements for mom-and-pop shops were wildly unreasonable and expensive.  For now, it's been overturned, but I absolutely, positively guarantee you that it will be resurrected at some point in the future.  That big sucking sound emanating from DC must be fed.

Just like real estate in America, you don't really own your money.  Nanny let's you use it when she sees fit.  If she needs it more than you do, she'll just take it.
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To combat this, the rational person would say, "Hmm.  Since the government is limiting access to all of the things I need or want, I'm going to store all of those things up in advance."

That doesn't sit well with those in power.  Independently thinking and acting serfs tend to muddy the waters.  They throw sand into the gears.  This isn't in the best interest of Nanny.

TPTB can't make money, food or other goods strictly illegal.  They just want to control access.  What they can do is to demonize those that have More Than Their Fair Share.

Only drug dealers hoard cash.  When cops make huge drug busts, what is on the big press conference table?  Stacks of drugs and stacks of cash.  Cash = Drug Dealers.

Only terrorists hoard precious metals.  Osama bin Laden had gold Krugerrands sewn into the lining of his clothing.  Precious Metals = Terrorists.

Only Enemies Of The State hoard guns, ammo and food.  When Radical Extremists are arrested, their "cache" of guns and ammo are reported.  "Mr. Menace To Society had thousands of rounds of ammunition."  What they fail to mention is that Mr. Menace picked up a couple of bricks of .22 LR at Walmart the day before.  Anything more than one gun and one box of ammo is considered a cache.  And a cache is ominous.  Stored Goods = Whacko.

You demonize an act of self-interest as a threat to society.  And the sheeple slurp that slop up by the bucketful.
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Whatcha gonna do to protect your self-interest?  Hopefully, more of the same.  Store more cash outside of your bank.  Store more gold and silver (not in a safe deposit box).  Store more food, water, guns and ammo.

And keep your piehole shut about what you're doing, and where you keep your stores.  It's really that simple.

If the government keeps turning the screws, this demonization will only increase.  What it won't do is decrease the demand for these various goods.  As is happening in Europe, this "asset grab" by the State simply pushes more and more of the economy underground.  This results in even lower taxes being collected, so more self-preservation actions get demonized.

It's a self-perpetuating, vicious circle.
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To summarize:  Acquire, store, geographically disperse, and keep your mouth shut.


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Copyright 2012 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com

Quick Release Scope Mount Review

It's been a bit hectic lately.  Lots of balls in the air!

A product review:  I purchased an NC Star Quick Release Scope Mount from OpticsPlanet.com [link].  What these things do is, they allow you to mount your scope to the Mount, then attach the Mount to your Weaver rail.  The idea is, you then zero in your scope and you are able to then quickly remove the Mount when you're done.  The next time you need to use that gun/scope combination, you simply snap the Mount to your Weaver rail, and you're already pre-zeroed.

In theory.

A problem I've been having is storing my gun in its case.  If I have either of my scopes - red-dot or hunting - it won't fit into the case.  Sux.

So, I wanted to be able to quickly switch between scopes and not have to re-zero every time.

This Mount costs right around $35.  I'd seen them upwards of $400, and wasn't going to spend that kind of money, at least not until I'd given a cheap one a try.  Plus, I'd read dozens of favorable reviews about the NC Star mount.

NOTE:  The mount comes with NO INSTRUCTIONS.  Idiots.  Thankfully, a bunch of the reviews had noted this.  There is only one tricky thing you need to be worried about - it has to do with a set screw and nut.  Just go slowly, and you'll be fine.

Anyways, I got the bad boy mounted.  I was using my Kel-Tec SU-16CA (5.56mm) with a very inexpensive BSA 4x12 power scope (under $100).  At home, I chambered a "laser cartridge" to pre-zero the scope.  I wanted to at least be in the vicinity when I started sending real rounds down range.

[BTW, I got one of the NC Star AR Riser and Quick Release Weaver Mount [link] at the same time for my red-dot scope.  $25.]

I got to the range and initially set up at 50 yards.  The proverbial "broad side of a barn" was not at risk (more on that later).  Finally got it zeroed, and moved the target out to 100 yards.

The Kel-Tec has an integrated bi-pod, which I used.  I was seated at a table.  The rifle was then shouldered and supported by my forearms under the stock.

The first shot at at 100 yards was down at 5 o'clock in the 8 ring.  Adjusted the elevation and windage.  Second shot was at 10 o'clock, also in the 8 ring.  Elevation adjusment brought it down to the 9 o'clock position in the 9 ring.  Windage adjustment put me in the 10 ring (don't remember which shot).  Took 3 more shots, all in the 10 ring.

I then removed the Quick Release Mount, then re-attached it.  Four more shots in the 10 ring! [BTW, this is an 8" target, with the 10 ring having a diameter of 2 1/2 inches].

The mount worked as publicized.
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The target was one of three I had mounted on a 2-foot by 2-foot piece of cardboard.  The targets were placed in a evenly spaced diagonal row from the upper left hand corner down to the lower right hand corner.  The target shown above was in the lower right hand corner.

When I was trying to zero in at 50 yards, as I noted above, I couldn't find the target.  This, despite the fact that I had supposedly pre-zeroed the scope (at 15 yards) at home with the laser cartridge.

I was firing at the center target.  If you notice on the image above, I have one of the hole patches at about 10:30 in the 8 ring.  THAT was from my shots at the center target!

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Copyright 2012 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com

Emphasizing The "Self" in "Self-defense"

I've had guns on my mind lately.  Well, self-defense weaponry of all sorts, actually.

Next week, I'm giving a talk to a couple of local Neighborhood Watch groups in a city with a very high crime rate.  One of the highest in the SF Bay Area.

One of their representatives contacted me shortly after the Trayvon Martin shooting in Florida.  And they want to talk about guns.  I'm a bit apprehensive, to say the least.

I've been putting together a Power Point presentation that I'll use to guide me through the talk - which will cover knives, pepper spray, stun guns, Tazers, handguns, shotguns and rifles.

Part of what I'm going to discuss is crime statistics.  If you listen to the .GOV types, things are peachy-keen.  Crime is down to historic lows.  Yippee!

But you look at the local newspapers, and every day - without exception - there are multiple stories about local murders or shootings.  Reality doesn't foot back to the statistics.

I guess if they can fudge the economic data, they can fudge the crime data as well.

I ran across this piece by Thomas Sowell [link] that might explain some of it -

Similar episodes of unprovoked violence by young black gangs against white people chosen at random on beaches, in shopping malls or in other public places have occurred in Philadelphia, New York, Denver, Chicago, Cleveland, Washington, Los Angeles and other places across the country. 

Both the authorities and the media tend to try to sweep these episodes under the rug as well.

A specific example -

In Milwaukee, for example, an attack on whites at a public park a few years ago left many of the victims battered to the ground and bloody. But, when the police arrived on the scene, it became clear that the authorities wanted to keep this quiet. 

One 22-year-old woman, who had been robbed of her cellphone and debit card and had blood streaming down her face said: "About 20 of us stayed to give statements and make sure everyone was accounted for. The police wouldn't listen to us; they wouldn't take our names or statements. They told us to leave. It was completely infuriating."

An unreported crime is one that never officially happened.  I thought that choice was up to the victim, though, and not the police.

Oh, and for those of you who are unaware, Thomas Sowell isn't some jack-booted, black-hating, skin-head white supremacist.

He's a black man.
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Unlike the rest of the media, Sowell sees what's going on, and takes it head-on.  If there's a problem, let's address it.  You can't just click your ruby-heeled slippers and hope it all goes away.

Trying to keep the lid on is understandable. But a lot of pressure can build up under that lid. If and when that pressure leads to an explosion of white backlash, things could be a lot worse than if the truth had come out earlier and steps had been taken by both black and white leaders to deal with the hoodlums and with those who inflame the hoodlums.

This guy, for totally different reasons, sees what could be coming as well - VERY UNSAFE FOR WORK OR CHILDREN.  SERIOUSLY!




When was the last time you went to the range?  How about your spouse?  Your kids?

Confidence doesn't keep you alive and safe.  Skills do.
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I had a first on Saturday for my introductory gun class:  3 couples (I limit my intro class to 6 students).  I found that interesting in and of itself, but the after-class chat was revealing.

Two of the couples were white.  One in their early 60's and one in their late 40's/early 50's.  The other couple was Hispanic in their 20's.

I tell all of my students that I'll always stay after class as long as they need me to answer any questions they may have that aren't covered in the class.  Most that stick around want more specifics on how to select and purchase a handgun.

One of the white couples took off right after class.  The other white couple already owned a gun, asked a couple of questions, then took off.  The Hispanic couple stayed around for a half hour.

What caliber?  Handgun vs. shotgun?  Concealed vs nightstand gun?  Revolver vs semi-auto?  I asked them a number of questions to help them make their own decision.  They thanked me and left.

After I cleaned up my classroom, I popped out to the lobby of the gun range, and there they were.  They'd just finished taking the test for their Handgun Safety Certificate (required in CA before you can buy a handgun) and were plopping down some bucks for a gun.

I turned around and ran into another Hispanic woman who had taken my intro class a month ago.  With her husband and daughter.  The three of them, plus her uncle have signed up for one of my advanced Practical Defensive Pistol classes.  They, too, were buying guns.

My point?  I think Hispanics are taking this possible "race/economic justice/I want my fair share/gang banger" war threat a lot more seriously than a lot of whites. Especially whites at or reaching retirement age.

At least in my little corner of the gun training world, Hispanics are taking more of the advanced classes in comparison to their demographic representation in the SF Bay Area.
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One more thing to think about:  What if you find yourself in a shooting situation, where the object of the shooter isn't to steal something or to escape, but is just to shoot and kill?

This article [link] goes more into the specifics of this Active Shooter class attended by the author, but it's something to think about.

We talked about some of the differences between your average robbery and an active shooter. Fundamentally, the active shooter is there to shoot people. He's not using violence as a means to and [sic] end in the way that a robber is (the end being your money), the violence is an end in itself. He's also very likely to be suicidal, or at least willing, or planning, to die in the course of events. This means strategies that involve dissuading or deescalating the situation are unlikely to work and we're more likely to have to achieve physical incapacitation, rather than relying on pain or fear.

Irrational, crazy person with nothing to lose.   Just looking to inflict some pain and damage.  Doesn't care if he lives or dies.

I dunno, like if he can't find a job and his government payment days are coming to an end.  Or he's lost his house, his car, his family, his friends.  His dignity.  He might be listening to a black power or white power or la raza preacher, and figure he's "a chosen one" - "Preacher's talkin' to me!"

He could be wrapped up with some, "end of days" cult, or Mayan calendar sect.  He could be persuaded by a Muslim imam, a Baptist minister or a Catholic priest to help cleanse the world before the fiery end.

It takes all types.  It could be any or all of them.

Things seem to be wound up pretty tight in our world right now.  NATO protest, more Occupy (fill in the blank) protests, Canadian protests, Greek protests, French protests, German protests, Camp David protest.

Might be a good time for YOU to think how you'd handle such a situation.
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The neighborhood watch group will get much of the standard fare:  Situational awareness, distance from violence is your friend, and fight like a crazed banshee if you're forced into it - get out of there, THEN call the cops.

I'll talk a bit about how their city is basically broke, and police services have been cut to the bone.  Emphasize the "self" in "self-defense".

I will actually spend more time on the "non-lethal" pepper spray, stun guns and Tazers than on handguns and long guns.  Since virtually no mere citizen in this city has the ability to get a concealed carry permit, if someone in the Watch group has a handgun on them outside of their home, it's likely illegal.

Now, I won't encourage them to break the law, but I sure as hell won't say or imply I agree with our state's insane gun laws.  They've got to walk that path alone.

And I'll encourage them to have multiple back-up with them at all times.  Assume failure.  A twist on an old saying:  Walk softly and carry a big spare magazine.


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Copyright 2012 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com

Bites Of Elephant

Oy.  This is going to be a connect-the-dots article.  I'm going to try and feed you an elephant - one bite at a time.  The first couple of bites:

The US federal government spent $3.8 trillion in 2011.

They took in $2.2 trillion in tax receipts.

They borrowed the other $1.6 trillion.  This is equal to 40% of every dollar spent.  It's called the Federal Deficit.

Of the $1.6 trillion we borrowed, the Federal Reserve Bank (FRB) provided 62% of that, or $1 trillion.  This is called Monetizing Debt.

As Wikipedia explains:

Monetizing debt is thus a two-step process where the government issues debt to finance its spending and the central bank purchases the debt, leaving the system with an increased supply of base money.

The FRB literally created that $1 trillion out of thin air.  They simply pushed keys on a computer.

Again, Wikipedia -

In this latter case where bonds are placed with the central bank, the central bank will create the needed money by conducting an open market purchase, i.e. by increasing the monetary base through the money creation process.

When the FRB engages in this practice of creating money, it's called Quantitative Easing (or QE).


Sounds so civilized and proper.

Just like with any other item, if more of that item is introduced into the market, identical items that currently exist lose value.  With money, this process is called Inflation.  Each dollar has less value, thus it takes more of them to buy whatever you need.
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OK, let's digest some of that elephant.  Think of our federal government as a household.  It's in over its head - living beyond its means.  Like an enabling parent, it just can't say "No".  Whichever dead-beat kid asks for a couple of bucks, they get it.

There is no concept of, "Tough Love".  "Sorry, honey, you've got to make your own way in the world now.  You're going to have to get your own housing, your own food, your own condoms, you're own healthcare, your own education, your own clothing."

It sounds so harsh and heartless.  These are not emotions that politicians want associated with their re-election campaigns, so they buy the votes - with your money.  They provide MORE government housing, MORE government food, MORE government healthcare.

Instead of expenditures decreasing to meet revenue, they go in the opposite direction.

Each year that we have a Federal Deficit, that amount is added to the Federal Debt.  Our accumulated Federal Debt now stands at over $15.7 trillion.  That equals more than $138,000 per taxpayer.

But wait!  There's more!  We also have a much less discussed, but massively greater set of social service promises that are going to be damned near impossible to meet.  When you combine the unfunded liabilities (promises) made for Social Security, Prescription Drugs and Medicare, we have another debt of  $118.7 trillion.  Seriously.  That equals more than $1 million per taxpayer.

I believe they will accept personal checks for your portion....
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If you looked at the markets over the last couple of days, you'd see stocks and precious metals taking a beating.  Precious metals, in particular, move in the opposite direction of the dollar.  When the dollar gets weak, PMs get strong, and vice versa.  Something is causing the dollar to get stronger.  How can this be?  If the FRB is printing up all of this money, the dollar should be dropping, not rising.

Welcome to the world economy.

The European Union (EU) is crashing.  A number of countries over there are hurting.  Badly.  Collectively, they're called the PIIGS nations - Portugal, Italy, Ireland, Greece and Spain.

Many of you have heard of the riots, etc., going on in Greece.  The government tries to cut back on it's social services promises, and the people are pissed off.  Stuff gets broken and burned.

Over the past few days, we've seen changes in the governments in Greece and France.  Both countries voted in Socialist leaders.  The people have elected politicians that are saying they will not institute the harsh austerity programs needed to balance their budgets.  They'll balance them by taxing the rich (all this sound familiar?).

You may be saying to yourself, "BFD - let those idiots crash and burn.  I don't have anything to do with those European commie bastards!"

Ahh, but you do.
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Time to loosen your belt.  Some more bites of that elephant -

Like the US, the countries in the EU borrow to pay their bills.  This is called Sovereign Debt.

Many buyers/investors of this debt want to be assured that they will get all of their investment funds returned to them in case one of these countries defaults on their promise to repay.  To do this, certain companies - usually private banks - issue a sort of insurance policy called a Credit Default Swap (CDS).  If the sovereign debt is not paid as promised, the CDS policies make up the difference.

Worldwide, there are approximately $700 trillion in CDSs.  The 9 largest US banks hold about 1/3 of that balance - $228 trillion [link with awesome graphic].

None of these US banks has any reserves available to pay CDS claims should that become necessary (as it was when Greece defaulted on their debt earlier this year).

Uhm, YIKES!
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Soooooooo, if EU countries default, US banks will go teats up.

Well, they would if the FRB wasn't there to bail them out. Ever heard the term, Too Big To Fail?

The US government simply will not allow these banks to fail.  Ain't gonna happen.

We'll create more money, and pass it along to Europe.

As I noted back in November ("Why You Need To Care About The EU"), here's what I think will happen -

The third option would be to use a third-party bag man to deliver the cash. Oh, like maybe the International Monetary Fund (IMF). We'll dump buckets-o-fiat-currency into the IMF, and they'll pass it off to the EU countries that are gasping for breath.

Along the same lines, the Federal Reserve may open up a big-assed line of credit for the European Central Bank (ECB) to keep things afloat. Same thing as the IMF route, just using a different bag man.

Since we're not currently flush with excess cash to pay for all of this, Uncle Ben Bernanke will flip on his laptop, and just create the needed funds. Expect lots of commas and zeroes in the number.

This will exacerbate the inflationary effects of QE. It's a vicious, vicious circle.  Bad debt begets more debt.  We're trying to borrow our way out of an economy which can't fix itself because the government won't let the rotten parts die.
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The EU cratering also makes it likely PMs will still suffer for a while.  How far and how long is anybodies guess.  Personally, I don't think it's going to be much, as I think the market has already priced in the EU crashing.

I could be totally wrong - this could be 100% wishful thinking.

At least PMs (and land) have never been worth zero.  You can't say the same thing about fiat currencies.
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OK, Chief, the world is coming to an end.  Now what?  How can all of this debt get unwound?

The plan of the FRB was that by injecting all of this cash into the economy, it would stay afloat long enough for jobs to be created.  With jobs comes spending and taxes.  Sales tax and income tax.  The government would take those taxes, pay down the debt and all would be well again.

BUT, if jobs aren't created, the "plan" won't work.  It can't work.  Consumers make up 70% of our economy.  If you don't have a job, you ain't buyin' stuff.  No income or sales tax.

Our country is like a body wracked with diabetes.  We're over-weight and out of shape.  Some of our toes are losing circulation and need to be chopped off.  But we really, really like those toes.  Instead of changing our lifestyle to improve our circulation, we do something to reduce the pain.  A shot of this numbing drug, or a pill to "take the edge off".

The toes continue to rot.  You don't want to look at them.  They're getting pretty ugly, but you'll just ignore them, and things will get better.  Hey, you were actually able to move your big toe a couple of days ago - things are looking up!

The toes turn black with rot, and it moves up into the foot, calf and leg.  Soon enough radical surgery is needed to try and save what's left of the leg.  But you really like that leg, and just take more drugs.  Keep yourself numb enough, and you don't feel the pain.

The rot is starting to spread.  The other foot is looking gnarly.  Your fingers have lost all function.  More drugs to numb the pain.

And so it goes.  When do you make the decision to chop off the bad parts - and save the body?  Or do you just continue to let the rot spread to the whole?
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We've got to get all of this money that coursing through the world's economy, out of circulation.  One way you do this would be to restrict the money supply.  The FRB does this by raising interest rates.  But that's a dual-edged sword.

Raising rates extends to all facets of the economy.  The few qualified borrowers that are out there now would be further reduced.  If you don't have money to grow or maintain your company, you go out of business, or cut back.  Both result in lower taxes for the government.

Additionally, the US Treasury would now need more money to pay the higher rates on T-bills.  Since tax receipts would be reduced because of the tightening of the economy, they'd have to borrow MORE money, digging a deeper hole.

A "pay down" of the debt in this economy - or even a normal economy - will never happen.  We simply can't tax the country enough to make a dent.  I guess if we had enough lame duck members of congress and the White House, we might be able to come up with a budget where expenditures were less than revenues. 

Pigs will fly the same day that budget is passed.

We could nationalize all of the assets of the rich in the country.  As soon as that happened, people would "Go Galt" en masse and the economy would implode.

To pay it off, I can think of only one realistic option. The ONLY way the US Federal Debt will ever be paid off is if our economy goes absolutely crazy.  Unprecedented levels of productivity.  Something to spur the economy that has proven successful in the past.

Like if you had a war or something.  A big 'un.  Hmm.  I can just seem them now in DC:  "Hey, it's worked before.  What have we got to lose?"
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You folks know my plan is as much preps as I can store, with the rest in precious metals and productive land.  

If the government continues on its current path, this makes sense.  If we purposely start a massive world war, I've got no idea.  That's some elephant I need to digest...
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[Just as I was proof-reading this rather lengthy piece, I came across a "surprise" announcement from JP Morgan (Chase Bank).  It seems that they just took a $2 billion loss.

On CDSs gone bad [link].

Surprise. Looks like someone just burped up a chunk of elephant. ]

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