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Edited by Alfred Adask
Friday, February 5, AD 2016
 
MARKETS 
 
From Friday, January 29th,  A.D. 2016,
to Friday, February 5th, A.D. 2016, the bid prices for:
 
Gold rose 0.2 % from $1,170.80 to $1,173.50
Silver rose 5.4 % from $14.24 to $15.01
Platinum rose 4.7 % from $869 to $910
Palladium rose1.0 % from $497 to $502
Crude Oil fell 8.1 % from $33.74 to $31.02

US Dollar Index fell 2.6 % from 99.53 to 96.99

DJIA fell 1.6 % from 16,466.30 to 16,204.83
NASDAQ fell 5.4 % from 4,613.95 to 4,363.14
NYSE fell 2.5 % from 9,632.70 to 9,390.36
   
 
 

"Only buy something that you'd be perfectly happy to hold
if the market shut down for 10 years." --Warren Buffett 

"If the markets shut down for 10 years, what investment would you dare to hold-- 
other than gold"? --Alfred Adask

"Helicopter Money" Saves the World?

 
by Alfred Adask
 
We live in spectacularly "interesting times".
According to Zero Hedge.com ("Helicopter Money Arrives: Switzerland To Hand Out $2500 Monthly To All Citizens"),
 
"Citi Bank's chief economisthas recently proclaimed that, 'only helicopter money can save the world now'.
"The Finns are considering a 'basic monthly income' for the entire population.
"And soon, Swiss residents are to vote on a countrywide referendum about a radical plan to pay every single adult a guaranteed income of around $2500 per month, with authorities insisting that people will still want to find a job. . . . Under the proposed initiative . . . each child would also receive 625 francs ($750) a month."
 
 
First, by "Helicopter Money," they mean Quantitative Easing (QE) currency that's dispersed directly to the people rather than to "too-big-to-fail" banks.
So far, every attempt at QE by Japan, the EU and the US has failed. But, if QE can work under any circumstances, giving "Helicopter Money" directly to the people might be the way. Still, that "Helicopter Money" must come from some entity that is productive. The central banks can't simply spin currency out of thin air forever. They must ultimately spin it out of hot sweat. Somebody, or some thing, must actually work to produce something.
 
Second, it's probably more accurate to say that "some" or even "most" Swiss residents "will still want a job". Insofar as $2500/adult basically matches the Swiss poverty line and the people below that line already get by without working, what are the odds that people who already survive without jobs will choose to get jobs if they receive a free $2,500/month? It's possible that many of those who are already living in poverty do so because they don't want a job or lack the necessary attributes to get a job. It seems unlikely that, if the Swiss government gives them each $2,500/month, that they'll change their minds about getting jobs. Poverty will simply become a more attractive choice.
Implication: a "free" $2,500 a month is unlikely to make more people take jobs.
 
Third, what about the people who are working and living just above the poverty line? If you had a job making $3,000 a month and the government guaranteed you $2,500 without having to work, get up early in the morning, pay for gasoline to get you to work, etc., would you quit your job? A lot of people would answer Yes.
Implication: a "free" $2,500/month would increase the number of unemployed.
 
Fourth, where's the $2,500 coming from? One way or another, the Swiss government will have to extract an average of at least $2,500/month out of every Swiss adult in order to have the $2,500 it promises to provide to every adult.
Implication: "Helicopter Money" will provide the Swiss economy with no net gain. Given that government will charge something for handling all that "money," "Helicopter Money" will create a net loss for the economy.
 
The idea of handing out a free $2,500/month to everyone is irrational, even comical. In the end, this Helicopter Money scheme is merely an income redistribution program that will rob the productive and give it to the poor, those who choose not to work, and/or those who are inherently non-productive.
 

Economic Crack

Perhaps government economists promoting this "Helicopter Money" idea think they're magicians who can not only spin paper currency out of thin air, but can also "spin" public approval and support out of thin air. Like a pantheon of mythical Greek gods, economists seem to believe they can make economic reality in any form they please by simply speaking it into existence.
These government economists actually believe that they can pay people enough to live on without working/producing, and everyone will keep on working. They're crazy.
Q: What's the source of all this insanity? What's the economists' drug of choice?
A: Fiat currency; the idea that we can treat debt as if it were wealth and an asset. That fundamental idea is irrational. It's insane. But it's addictive. It's economic crack.
Once you accept the mad premise that debt is wealth, you'll be led to conclusions that are increasingly irrational-like negative interest rates and paying some people to "shop 'til they drop" while paying others to not produce anything.
"Helicopter Money" means that there'll be more money chasing fewer goods and services. Inevitably, paying people not to produce will cause serious inflation, even hyperinflation. Prices will rise.   When they rise high enough, they'll collapse the economy.
When the debt-based monetary system collapses, all of the existing debt will be cancelled-but so will virtually all of our paper capital. Where will we find the capital needed to build a new factory or shopping center and, more importantly, to lend to farmers so they can purchase seed to plant to grow next year's crop to feed the big cities' residents?
Without any recognizable "capital," there'll be chaos and people will die-in America, at least hundreds of thousands. Globally, maybe millions. Why? Because the whole world is addicted to fiat dollars. Take those dollars away and the world's addicts will go into shock.
 

The Economists in the Rubber Room who are gods

Fortunately, the economists do not yet actually rule the world-they only think they do. Even though the average voter doesn't have a PhD., he can still sense when the economists are pontificating under the influence of too many hits of economic crack. ("Martha-the damn economists are trippin' out, again!")
But get this:
 
"The initiative's backers say it aims to break the link between employment and income, with people entitled to guaranteed income regardless of whether they work."
 
"Break the link between employment and income"?!
What they're really proposing is to break the link between productivity and income.
How revolutionary is that?
There's been a link between productivity and income since Adam and Eve were bounced out of Eden. If you want to eat and survive, somebody's got to work. Somebody's got to produce something. Therefore, breaking the link between productivity and income seems irrational, fantastic and contrary to millennia of human history.
 

The Robots are Coming! The Robots are Coming!

Still, as much as I hate to say it, in an age of robots and increasing automation, the seemingly insane idea of breaking the link between productivity and income makes some sense. Robots have already replaced millions of workers around the world.
Six months ago, I saw a report that China's principle industrial province planned to replace all workers with robots within five years. Thus, robots are cheaper to own and operate than Chinese workers. If cheap Chinese labor can be replaced by robots, I guarantee that highly-priced American workers can and will also be replaced.
Just last week, I saw a report that claimed that robots working in a huge, American warehouse increased productivity by 800% as compared to employing people. There's no way that any business can resist the promise of an 800% increase in employee productivity. If a businessman won't install robots and his competitors do, he'll be run out of business.
The financial logic behind employing robots is irresistible. Robots will replace most of the laborers and blue collar workers in the world-maybe, most of the middle class-perhaps even the upper middle class.
But, what'll we do with all the people who are replaced by robots and become unemployed? Let them die? Kill them? Neuter them? Or sustain their lives with welfare, entitlements subsidies, and "Helicopter Money"-and just let 'em breed like rabbits and put more and more strain on Earth's limited resources?
The big question is: If we don't need people to work and produce things, why do need them at all? To wage needless war? To dance in topless bars?
 

Public Warnings

Those aren't questions for the distant future. Some people are already facing such dilemmas.
Most people reading this article have heard of the Georgia Guidestones. Whoever erected those monoliths is unknown to the public. However, among other things, those Guidestones have declared since A.D. 1990 that the earth's population must be reduced to 500 million people. That means that some person or institution is already planning to "eliminate" about 93% of the world's current population.
I'm not saying that the Georgia Guidestones are anything more than a curiosity.
I'm not saying that 93% of us are due to be "eliminated".
I am saying that, thanks to the growing multitude of robots, it may be wicked to consider eliminating 93% of the world's population, but it's not completely irrational. And we're being warned that plans to eliminate most of us are being considered, perhaps even implemented.
It may well be that 93% of us could be eliminated and replaced by robots that served . . . who? The richest and most intelligent 7%? The Illuminati? The Jews? The Jesuits? The Neo-conservatives? The Cummunists? Pick your favorite conspiracy-theory villain.
Given the growing numbers of robots, 93% of us could soon be non-productive and therefore expendable. Given the growing numbers of robots, a lot of those conspiracy theories about population reduction become rational and possible. Don't worry about being replaced by an illegal alien. Worry about being replaced by a robot.
The real villains here are profit and loss statements, fast-moving technology, economic competition and mathematics.

What to Do, What to Do?

So far, the number of American robots hasn't grown high enough to overtly raise unemployment rates.  
So far, thanks to its ability to borrow funds and go deeper into debt, our government has been able to avoid facing the permanent unemployment dilemma head on. We give welfare to people or can't or won't work and avoid facing the reality that, increasingly, there's no job they can do.
We talk about retraining the unemployed for new jobs in our high-tech world. But the truth is that many, perhaps most of the unemployed lack the intelligence, education and/or work ethic to ever be as productive as robots. Most can't be retrained. Most are not simply unemployed. They are unemployable.
Therefore, rather than "eliminate" them, governments are choosing to implement "Helicopter Money" programs to subsidize the unemployed and unemployable.
But there's a problem. There are so many unemployed/unemployable that government can't raise taxes enough to provide the Helicopter Money needed to subsidize the non-productive. Therefore, government has to borrow the funds needed keep providing QE.
But the day is coming when government won't be able to borrow enough additional currency to fully subsidize the non-productive poor on welfare, the non-productive rich on subsidies, and the non-productive government retirees on pensions. When that day arrives, we'll have to choose between:
 
1) Taking so much money from people who are still productive and/or from robotized corporations to support the non-workers, that the productive give up working (as they did in Ayn Rand's Atlas Shrugged); and,
2) Killing the non-productive or at least allowing them to starve and/or kill themselves (as is already seen in the "hood").
 
Within the next few years, the world's central question will be What are we going to do with the billions of people on this planet who can't produce enough to feed themselves?
What, indeed?
 

A Crazy Idea Whose Time Has Come

According to the ZeroHedge article on "Helicopter Money":
 
"Support is growing around the world for such spending to be funded by 'People's QE.' The idea behind 'People's QE' is that central banks would directly fund government spending . . . and even inject money directly into household bank accounts, if need be. And the idea is catching on . . . . and it won't be unpopular. Who will protest when the feds begin handing our money to 'mid- and low-income households.'"?
 
OK, OK. Lemme see if I've got this right. . . . Central banks will fund the government . . . and the government will fund non-productive people . . . but who will fund the central banks? The world can't go on just spinning currency out of thin air, can it? Somebody's got to actually work hard enough to produce enough to support themselves-and all the people who don't work.
That "someone" won't be you and me. Could that "someone" be the robots?
 
"Rather than buying assets, central banks will . . . credit our bank accounts! Indeed, 'helicopter money' can be seen as permanent QE, where the central bank commits to making the increase in the monetary base permanent."
 
Oops. My mistake. Apparently, the central banks don't plan to employ robots but do plan to simply spin the cash out of thin air. Forever.
But if economist choose to simply spin currency to feed the non-productive, wouldn't that on-going increase in the monetary supply be just as hyperinflationary as what we saw for 16 years in Zimbabwe?
 

Monetizing = Spinning

ZeroHedge:
 
"The monetizing of state debt by the central bank is the engine of helicopter money. When the central state issues $1 trillion in bonds and drops the money into household bank accounts, the central bank buys the new bonds and promptly buries them in the bank's balance sheet as an asset."
 
"Monetizing the state debt" means "spinning currency out of thin air".
Why "thin air"? Because government is non-productive. It produces nothing tangible and therefore has nothing of its own with which to redeem its proposed "Helicopter Money".
Ultimately, QE and "Helicopter Money" are based on a government's ability to borrow and go deeper into debt. However, when the productive creditors are all bankrupted by QE, ZIRP, NIRP and government regulations-who will government then borrow from (and/or rob) to support the non-productive?
Nobody.
When most of the producers and/or creditors are wiped out, the fiat monetary scheme must fail.
Ohh, there might still be a few bank accounts that could be looted, but after we lose our creditors and producers, the whole parasitical fiat monetary system will collapse.
It's already happening. Personal savings rates are miniscule. Government can't borrow from the American people because about half of them don't have enough savings to cope with a $500 emergency.
Why are Americans broke? Because, in the past, the depositors/creditors were largely producers. As government regulations, higher taxes, bigger government, shipping industries and jobs to third-world nations, and inviting illegal aliens to enter diminished the number of American producers, it also wiped out savings. Bank accounts and funds available for lending have withered. American creditors have been disappearing for years.
An increasingly impoverished, unemployed, and unemployable people can't be taxed to support government largesse. Government has been forced to borrow much of its currency from the Federal Reserve because the Fed doesn't have to be productive so long as it can still "spin" currency out of thin air.
The Fed's ability to essentially "spin" currency makes it the "lender of last resort". Why? Because there are no longer enough actual, producers/creditors who are able and willing to lend the billions government needs to subsidize the non-productive.
All by itself, QE is evidence that our productive creditors are broke and disappearing. If we had a free market and the banks were in danger, private sector creditors would've invested in banks. It's because the productive, private-sector creditors are disappearing that government is forced to "borrow" from the non-productive Fed in order to have enough funds to subsidize the growing ranks of non-productive and unemployable.
How long this necessity/insanity can continue is anybody's guess. It can't continue indefinitely. Sooner or later, government will be forced to stop subsidizing the non-productive.
Government probably won't completely stop all at once. They'll cut a little here and a little there until the non-productive finally riot and rampage.
When that happens, many of the non-productive will die and even the productive will be in peril. The madness of debt-based currency and "Helicopter Money" has put us on the road to chaos.

HEALTH
EVIDENT CHANGES IN MEDICINE
As the Affordable Care Act becomes more ingrained in the healthcare system, the changes are becoming more evident. There are reports of nurses suing their hospital for experimental treatment done on them during pandemics and there are doctors diagnosing patients with terminal diseases that are not evident. Emergency room physicians are complaining that they do not have drug supplies for pain, infection and poisoning or anti-venom drugs. Hospital budgets are strained to the point that some are working with a skeleton staff and patients are not getting the care they are paying for. Let's take a look to see how bad it really is.
 
PATIENT CARE UNDER ATTACK
It is horrible to think that the very healthcare system we are conditioned to rely on is in effect a crippled system of inefficient care. The ACA is so bogged down with administrative garbage that patient care is being sacrificed. For instance, the basic hospital bed can be a problem let alone requiring a bed with special pressure mattresses. Ill-trained hospital staff is unable to accurately fulfill the basic risk assessment for high risk patients. Hospitals have become a liability nightmare when the staff fails to get the proper consent forms completed or fail to inform family or next of kin regarding the patient's health. Hospital error reports are not uncommon for minor or major procedures. Patients complain that they are paying hundreds of dollars per day and staff can't manage IV drips, dressing changes or empty bedpans. Physicians and nurses fail to read patient records informing them of drug allergies, warnings by consultant MD's and changes in the patient's health. All this and more adds up to mistreatment. We mentioned the ER's have no pain meds and some hospitals have no pain medications at all. We were warned about the hospital conditions of third world countries and now it appears to be slowly developing in the US. American hospitals are failing to provide patients with adequate meals or other nourishment and proper sanitation. If hospitals are laying-off janitors expecting registered nurses to clean toilets, then it can become a problem.
 
HOSPITAL LAYOFFS 2013 to 2015
The downsizing of America's hospitals due to the socialized healthcare act is countrywide. Some may argue that it is just in the poor areas but that is not the case. Apparently some state supported hospitals are not getting the funds promised according to their legislature. Hospitals are not receiving the reimbursements and have to balance out their workforce. According to Becker's Hospital Review, the US will continue to see hospitals layoffs regardless of size or if they are for or non-profit hospitals. Here is a brief list:
  • Hawaii's public health system (includes the Veterans Memorial Hospital) - laid off 128 employees
  • Mississippi's University Medical Center - laid off 14 employees
  • Massachusetts Kindred Healthcare, Partners Healthcare Union Hospital & Springfield Baystate Health - laid off 150 employees.
  • North Carolina Winston-Salem Novant Healthcare - laid off 400 employees.
  • Connecticut Bristol & Hartford Hospital - laid off 378 employees.
  • California Escondido Hospital completely shut down - 300 unemployed. Burbank's St. Joseph laid off 34 employees & shut down its blood bank center.
  • Missouri Chesterfields Mercy Health (largest in US) - laid off 350 employees.
  • New York Mohawk Valley Health System - laid off 96 employees.
  • Colorado Denver Health - laid off 300 employees.
  • Indiana St. Vincent Health - laid off 865 & University Health laid off 800 employees.
  • Tennessee Nashville Vanderbilt University Medical Center - laid off 300 employees.
  • Louisiana Baton Rouge State University Healthcare Services - laid off 2,340 employees.
  • Other hospitals like the Cleveland Clinic in Ohio sent 3,000 home on early retirement.
 
SIGN OF WHITE FLAG
This means is that there is a dire financial future for US healthcare. At what point will private healthcare hoist the white flag and turn medicine over to the federal government can be real future event. How can I say that? Layoffs are usually not the first action businesses will take and is usually the last resort to stay afloat. Labor is usually the highest cost hospitals have and layoffs create a quick fix. If hospitals and other clinics are not receiving their reimbursements from insurance companies or Medicare and Medicaid; they operate in the red.
 
"I've done layoffs in my career. It's painful to give someone the news, and you can't help by worry about the future." Chris Van Gorder, CEO Scripps Health in San Diego, CA.
 
The Affordable Care Act has required healthcare to make adjustments in an attempt for it to reform itself. The government cut $9.9 million to Medicare in 2013. The Feds also refused to cover expanded Medicaid healthcare costs for the poor.
 
"Over simplified - the healthcare reform is the reason behind the cuts." Ron Stiver VP Indiana University Health
 
"Organizations have several other tools they could use to reduce costs, and that many businesses are blaming health reform for actions for which they don't want to take responsibility. US health costs have been the highest in the world, yet our quality measures were middling at best." NY (D) Congressman Charles Rangel
 
Well, Congressman Rangel was one of the sponsors for healthcare reform in the US. What are truly impacting US healthcare are the ACA's new requirements. Not only are they costing healthcare agencies more money to comply, it is also making it harder for them to get paid. According to US News Health, hospitals used to bill insurance companies and the government for reimbursement. Now they have to comply with federal mandates and demonstrate that the services they provided to the patient were necessary to keep the patient healthy. The government has put a huge cap on reimbursements. The federal government will not reimburse for services they feel was in error, neglectful or unnecessary. Hospitals have zero room for error or inefficiency and that includes hospital-acquired infections. If patients return to the hospital with 60 days of discharge, the hospital can face an invoice from government.
 
CAREER CHANGE
How many ads do you see colleges advertising for students to enter the nursing field when the Office of the Actuary for the Centers for Medicare & Medicaid Services state there will be a steady decline through 2019 for skilled nurses in hospitals, clinics and home health agencies. It is expected that healthcare agencies across the board will experience a 15% decrease in nursing staff.
 
COMPENSATION
How are US hospitals compensating for a delay in reimbursement or no reimbursement of their services? According to a study published in Penn Medicine News, hospitals are finding the loopholes in the ACA. One such loophole is not admitting patients but putting them "under observation", which can by-pass the government reimbursement garbage and seek the funds directly from the patient. The new insurance rules state that a patient must be admitted with a specified time frame by their physician for insurance to cover costs. This is a loophole especially exploited if the patient has Medicare. This shifts the hospital costs to the patient and out-of-pocket expense. The 'under observation' hospital status for patients is up 88% since 2010.
 
"The 'under observation' shifts the cumulative financial liability to the patient and may become more common in the future." David Grande, MD Professor of Medicine at Penn Medicine.
 
HEALTHCARE ON THIN ICE
So, the ACA has made patients the preverbal hockey puck between healthcare providers and insurance. It has also lowered the standards of care due to the cash-flow problems reimbursement is causing. Any program that present free benefits are prime for abuse and as we are seeing in Australia, New Zealand, UK and other countries with socialized healthcare it is threatening to collapse their system. Just as in these other countries, the money to float free healthcare will come from taxes. According to the WHO, in the UK the average annual healthcare tax is $2,500 per person compared to $6,000 in the US. More hospitals, more people and more free care would cost each American a whole lot more.  
 
HEALTHCARE INDEPENDENCE
The time grows short for Americans to become as healthcare independent as possible. It is worrisome that 3.2 million (1 out of 10) Americans is dependent on prescription medication for daily living. If ER's can't get drugs what if you can't get your drugs? What do you do then? Now is the time to strengthen any weak area of the body that is being propped up by drugs. Get off the drugs and do it the smart and safe way. If you would like to learn how you can limit your prescription drug liability call Apothecary Herbs for a free product catalog. Chances are there is a potent herb formula that can strengthen you and offer you drug independence. That means you eventually won't need the herbs either for daily living. I call that FREEDOM. Call Apothecary Herbs today 866-229-3663 International 704-885-0277 http://www.thepowerherbs.com, where your healthcare options just became endless.
 
Sources:

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