What changed, Alan?

“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.

Alan Greenspan (1966)

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Exposing the lies

Finally, a decent investment book. Half way through and while it’s clear he could have done a 68 page pamphlet as opposed to this 300 page book, what the heck, that’s the publishing business. Swedroe’s premise is a play on, “Wall Street services investors like Bonnie and Clyde serviced banks.” That the only thing actively managed funds are good at is taking your money. That no one has figured out how to guess the random movements of the market yet, and until they do, index funds win hands down.

The other worthwhile tip half way through is the importance of sector/asset diversification. That volatility eats away at returns. Smooth and steady will actually give you a better return even if it shows up a point or two lower on a chart. Raising the Sharpe Ratio smooths out the volatility and increases returns. Plus, the book just reads so nice.

And I almost forgot the coupe de Gracie! Swedroe exposes “chartists/technical analysis” for the poppycock it is! 

Using Vanguard’s funds as an example, a diversified 60/40 portfolio might look like this:

  • VOO S&P 500 index
  • VUG Blue Chip index
  • VBK Small cap growth index
  • VSS International small cap growth index
  • VCSH Short term corporate bond index
  • VGLT Long term government bond index

The four stock funds being 15% each of the portfolio, the two bond funds being 20% each. Speaking of bad investment books, I cross-referenced several “Top 10 List” of the best investment classics, and came up with a list of good ones:

⦁ The Intelligent Investor – Benjamin Graham
⦁ Security Analysis – Benjamin Graham
⦁ Dividend Growth Investing Machine – Andrew PC (?)
⦁ Common Stocks and Uncommon Profits – Phil Fisher
⦁ A Random Walk Down Wall Street – Burton Malkiel
⦁ Market Wizards – Jack Schwager
⦁ The Simple Path to Wealth – JL Collins
⦁ The Four Pillars of Investing – William Bernstein
⦁ The Single Best Investment: Creating Wealth With Dividend Growth – Lowell Miller

Jim Roach

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That joke known as an “election” takes place tomorrow

Put butter on us, we’re toast. Few things are more futile than the voting that will take place tomorrow. Or any day. Economic Law is kicking in that will make the election of this twit or that twit irrelevant. A nation with $21.5 trillion in current debt and well over $160 trillion in long-term obligations, will soon find out that it is not sustainable. Especially now that interest rates are rising. Gerald Celente, Greg Hunter, there are any number of people on YouTube that can explain it better than I can.

A “debt bomb” is waiting to go off. And there is going to be a lot of collateral damage. One of the saddest is what’s going to happen to retirees. “We must deal with entitlement reform!” is often the cry heard on business channels. Entitlements being the lions share of the national budget. When the bomb does go off retirees will be lucky if they keep 50% in SSA & Medicare benefits. The only pensions and benefits that won’t be touched are Congressional ones. Your IRA’s and 401K’s will be taxed. People will quickly learn what “negative interest rates” are when money starts being siphoned off their bank accounts.

So go ahead tomorrow and reelect the very people who put us in this mess. The Charles Grassley’s, the Steve King’s, the Kim Reynold’s. They broke things, they are undeniably incapable of fixing things. What’s really sick is the way people don’t see this coming. As we get to the point where it becomes impossible to even service the interest on the debt, let alone the debt itself! A bipartisan screw job will sail through Congress faster than you can say ‘Chapter 11’. And all the while Congress will act like, “Oh it was nobody’s fault really, it just happened.” Bullshit. This is 100% in Congress’s lap. Starting off in 1913 when they brought us this Keynesian nightmare known as the Federal Reserve.

Oh, and when the stock market crashes? Don’t sell at the bottom. Plow everything you have into it at the bottom.

Jim Roach

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Greg Hunter: USA Watchdog.com

Financial advisor  Catherine Austin Fitts says, “The establishment has stolen $50 trillion plus, and they want to keep it, and they want to invest it in the space based economy and not have to give it back to the pension funds.  One of the most important techniques they are going to use to do that is basically with digital control, with both of the currency, as well as the systems that do surveillance and control.  So,  (they think) if we can get 7 billion people on smart phones and 5G coming in from satellites or land, anyway you do it, and everybody has a digital currency, and if you don’t behave, you turn off their currency.   We are talking about ways of controlling people through the digital systems which are very, very invasive. . . . If you look at the policies going on, whether it’s the effort to bring in the guns or effort to force cashless, those who are centralizing control of the economy, they want to make sure they have control because when they invest that money, they want to make sure it makes their wealth go up and not the general population’s wealth go up.  They don’t want to have to refund those monies back into the pension funds or Social Security.  They want to be able to say, well, the money is gone, and we spent too much of it and did not balance the books and etcetera, etcetera.  So, this is what this is about.  This is about who is going to allocate what resources that are there, and are they going to be in a position to harvest and drain the American taxpayer.”

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Bill Buckley on pot

“Marijuana never kicks down your door in the middle of the night.
Marijuana never locks up sick and dying people,
does not suppress medical research,
does not peek in bedroom windows.
Even if one takes every reefer madness allegation
of the prohibitionists at face value,
marijuana prohibition has done far more harm
to far more people than marijuana ever could.”

— William F. Buckley, Jr.
(1925-2008) American author and journalist, founded ‘National Review’

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“The world is pretending that everything is okay”

Greg Hunter on YouTube is among a cadre sounding the alarm that the United States financial system is on the verge of collapse (The World Is Venezuela). 10 years after The Global Financial Crisis (GFC), our “leaders” have continued to kick the can down the road. This cadre understands that this fiscal malfeasance can only result in one of two things, death by panic or death by hyperinflation. Harry Figgie, Jr wrote about this 25 years ago in his book, ‘Bankruptcy 1995’. He wasn’t wrong, he just couldn’t imagine the Federal Reserve could get away with not paying savers interest on their money by taking interest rates to zero.

When it happens, it will happen over the weekend. A nation always devalues its currency or replaces its fiat money “Friday to Monday”. No one will see it coming and take steps to prepare. The resulting actions by Congress will be a bilateral screw job. For at least a year they have been floating the idea of “negative interest rates”. What’s THAT may you ask? That’s where the government is so broke, instead of paying bank savings account holders for the use of their money, they will be charging you. They will be taking money from your account. Negative interest.

If you try and hold cash (put it under you mattress), you won’t be able to get it exchanged for the new currency. And! The exchange rate for that new currency will only be at 65% or so. It will most likely be a North American currency. Europe already has the Euro, and Asia is not far behind with their own. They will declare that the dollars you hold are now worthless, and you only have 30 days (if that) to exchange them. Most of this is the result of ignoring the Austrian School of Economics.

In the 1930’s the Chicago School of Economics won out with FDR’s mismanagement of The Great Depression. That is when gold was actually made illegal for individuals to hold, and silver certificate money was removed from circulation (“Never let a crisis go to waste”). That is when the very people who caused the depression, were handed the keys to our entire banking system, the Federal Reserve. The mismanagement of the dot com bubble in ’01 and the lowering of interest rates, actually caused the popping of the housing bubble in ’08.

Hayek said repeatedly that only a liar or a fool thinks they can manage a market. The only thing that can honestly manage a market is market forces. Not bankers who have a vested interest in manipulating the currency. What amazes me, even though I know the answer, is how can people not see this coming? We have a nation of idiots because of government education. Who thinks this can continue? We are insolvent. Names like Peter Schiff, Lou Dobbs, Ray Dalio are some of the others speaking truth.

If what is being predicted does indeed turn out to be a hard crash, and not a soft landing, there’s no where to run to, no where to hide. Even those who are holding actual gold will be surprised when it is declared to be illegal. Those holding “paper” gold in ETF’s will be manipulated just like the rest of the market. Holding food, water, firearms, gasoline and land will help. Washington always operates in crisis mode. Paralysis keeps them from seeing any crisis coming and doing anything to prevent it. They never see past the next election.

The bottom line is we were somehow able to manage these mountains of debt as long as interest rates were zero. Now though the Federal Reserve is having trouble funding the debt, and is having to raise interest rates to entice people to buy this debt. As interest rates begin to climb, the American people are about to learn the concept of “exponential growth”. What happens to a $21 trillion dollar debt when compound interest is applied to it. Its not sustainable. As hunter points out, if we were on honest money, a gold standard, gold would have to be at $87,000 dollars an ounce. Not $1,300. Throw in all our debt obligations and gold would be twice that, $174,000 dollars an ounce.

The stock market is on a tear in inflation adjusted pricing, not in inherent wealth. This is a house of cards. – Jim Roach

Author Danielle DiMartino Booth and her book, ‘Fed Up’


“Renowned gold and financial expert Jim Sinclair and financial writer Bill Holter get ready for the reset in the price of everything including gold and silver. Sinclair also says, “It’s going to be a Friday to Monday event. There is going to be an explosion, and the explosion is a change. It may blow your mind, but the explosion would not be three or four months or a year in upticks in these items (gold and silver prices). Oh, they are going to uptick. That’s for sure. The finality of this is going to be the reset. . . . It is going to be something entirely new that doesn’t exist now. It may be engineered and not happening by natural causes. . . .You need to know who President Trump is, what he is a master of and what tools he has used effectively as part of his business. It’s not “The Art of the Deal,” it’s the science of bankruptcy.”

“How bad is it going to get? Holter sums it all up when he says, “The world is Venezuela.” – from Greg Hunter 

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Attention young person!

Having recently achieved my curmudgeon badge, I thought I’d pass on some retirement advice earned from a lifetime of making every mistake in the book. Oh what they don’t teach you in school… The first rule is to not have any vices. Vices is another word for taking your money and lighting it on fire. Poof! It would be less damaging to the body to get rid of your money that way as opposed to drinking, smoking or drugs. Another expensive addiction is gambling or being a shopaholic, don’t do that.

If you don’t throw your money away, it can do wonderful things for you. Especially when you are 24. I wouldn’t begin to expect to reach the 18 – 23 year old. So let’s start at age 24. As Charlie Brown’s Lucy would say, “All I really want is real-estate!” You would be surprised what little difference there is between a rent payment and a house payment. People who want to build wealth buy a home (s). Yes the agent and the bank are going to take an insultingly large cut, but its still better than renting.

You want to buy some silver or gold when you’re young? Stash it away in a safe deposit box? Go for it, I wouldn’t kill yourself though. Precious metals are a good place to get ripped off. Keep it simple. When I was a young man in the late 70’s there were incredible savings vehicles in Certificates of Deposit and Series EE Savings Bonds. You could get 10% with a CD! 6% with a EE Bond! 100% safe! It was incredible! You can only begin to touch it nowadays (4% – 6%) if you have $10,000 to put down on certain Treasuries, Bonds and CDs, out of range for most people. Hell, a bank savings account back then would pay 3.5%!

The Federal Reserve had to take the prime rate down to 0% in the mid-90’s or they would have blown the roof off the national debt. The only reason you see interest rates start to tick up now is they want to put the kibosh on Trump’s roaring economy. No-risk 2% – 3% you can earn now only with large sums of money still has you losing to inflation. That leaves you with the stock market.

The stock market is nothing more than gambling. Its a crappy situation but you got to deal with the hand they give you. Even an employer like Starbucks, Best Buy or Walmart has some sort of 401K or SEP with matching funds I would imagine. The first rule is to put in the amount required to nab those matching funds, a guaranteed doubling of your money. If you don’t have that or if you have some extra money afterwards, there are Vanguard ETF’s (exchange traded funds) that you can get in a ROTH IRA! (ROTH being the better choice 99% of the time over a Traditional IRA.)

In the 70’s mutual funds were few and far between. Actively managed funds that couldn’t beat the market on their best day. Often with astronomical front end ‘loads’ and fees. Today there are very efficient index mutual funds with very low expense ratios of 1%. But guess what? Vanguard came up with ETFs with expense ratios of .05% ! Incredible, that makes a 7% return on a mutual fund the equivalent of an 8% return on an ETF! They have various charts where they show over 30 years that savings in expense ratios amounts to numbers like $30,000 dollars.

ETFs trade in real time like a stock so you’re not waiting for the overnight crapshoot to see at what price you purchased a mutual fund at. And with Vanguard, there are ZERO commissions or fees on trades of Vanguard ETFs! Its hard to believe they can do that when the other brokerage houses aren’t even close. No per trade commissions and the lowest expense ratio in the business with the pioneer in index funds. Can’t beat it. And if this wasn’t enough, you can get into it for $50 dollars a share in the Vanguard ETFs! Unbelievable!

Historically with mutual funds you had minimum investments of $2,500 to $10,000 dollars, very difficult for a lot of people. Now with a Vanguard ETF in a ROTH IRA you can get into it for $50 bucks a share with no tax consequences ever! Incredible. Even the most careless 24 year old can get started in this. That money working for him for 40 years would work out to exactly… well a lot of money!

The last key to investing is the classic “buy low, sell high”. Right now on Labor Day 2018 most of the market is at its 52 week highs. There are only a couple of funds a sane person would buy right now if he were just getting in. If he had been buying the dips all along, it would be fine to buy the peaks now. That’s the key: incremental investing over time. As long as you buy the lows, it will work out to buy the highs. Below are a ‘Top 10’ list of Vanguard ETFs by their ticker symbol that really stand out. Some with 1 year earnings of 30%, 35% and even 40%! – Jim Roach

  • VUG
  • VTWG
  • VHT
  • VBK
  • BND
  • VTI
  • VSS
  • VOO
  • VYM
  • BNDX





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It ain’t Norman Rockwell

Corporate agriculture lobbyist Iowa Farm Bureau runs these commercials of these ridiculous scenes where they pretend that white farmers who own the land also work it. Poppycock. Few families work the land anymore, they rent it out to sharecroppers. Or corporate entities in Toronto who actually own the land hire Mexicans at minimum wage to do the work. They each pay the Iowa Legislature and Congress to keep the subsidies and tax breaks coming.

Just as you can drive down a residential street and spot the rentals immediately, you can also do that in the Iowa countryside. Renter’s have no long term stake in the business or the land. They don’t care for the land or the buildings in anyway similar to the way the actual owner/operators of my youth did 50 years ago. Those guys worked 12 hours a day/365. Not 2 weeks in the spring and 2 weeks at harvest like the modern operation.

Nowadays they keep these dilapidated eyesore structures on the land for a tax write-off. Our tax structure is so screwed up these falling apart 0netime buildings are considered an “improvement” on the land. The old farmer would have died of embarrassment to have these unpainted and falling apart monstrosities on THEIR land. 50 years ago when the owners were the operators farms were most often pieces of beauty, the protestant work ethic and all that.

Nowadays these rural welfare queens hire illegals to boost the bottom line. It manifests itself throughout the community, dragging the schools down with no tax base and English as a second language requirements. Local hospitals are stressed with  emergency rooms flooded with illegals expecting routine care with no expectation to pay.

Welfare rolls and subsidized housing are maxed out from these low wage workers. And when the only requirement is to pay the lowest wage possible, unsavory types who murder young women like Mollie Tibbetts are brought in. You can spot that by seeing where new jail referendums are put on the ballot. They match out with where big poultry facilities and packing plants are. Crime goes through the roof.

Corporate ag don’t care, their only goal is to milk the land and go. Iowans and the future be damned. – Jim Roach

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Political crossdressing

One of the greatest political crossdressers of all-time (if not the greatest) was Representative Jim Leach of Iowa. He made his living for 30 years masquerading as a Republican. He always held a conservative ranking of less than 25 (out of a 100 scale). But by God he’d take money from Republican donors! And he’d use Republican organization to get reelected and feather his nest.

On his way out the door in ’08, Leach denounced the Republican candidate for president and endorsed and voted for Barack Hussein Obama! They even had him speak at the Democrat Convention that year. Why would this lifelong Republican betray the party? What Republican firebrand was he trying to save the country from? What conservative dragon did he see that needed to be slain? Why none other then the recently deceased (and long overdue) John ‘Maverick’ McCain!

Looking back it was the perfect end for the double-crossing, backstabbing cheat Jim Leach.  If you couldn’t vote for the moderate John McCain, there ain’t no Republican you could vote for! Leach had sucked it up and supported Reagan through the dreadful 80’s when he still needed Republican money to complete the charade. But when he was headed out the door his true colors came out.

It just seemed rather appropriate at the passing of one Benedict Arnold, to be reminded of another. Those two old frauds deserved each other.

Jim Roach



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PepperBall VKS

This is PepperBall’s Variable Kinetic System (VKS) non-lethal launcher currently used for crowd control in Afghanistan when they don’t want to kill people. The bottom magazine holds 15 rounds of their extended-range VXR proprietary irritant projectiles that burst upon impact, producing a kinetic impact as well as affecting the eyes, nose and respiratory system. The upper hopper holds 180 standard round projectiles. These will put a man down.

It seemed appropriate on the eve of another school year to introduce yet another means of protecting children without the use of deadly force. We are now just months away from the 30th anniversary of when the modern school shootings began in Stockton, California on January 17, 1989. In many other posts on this blog about school shootings this is one more weapon that could be used against school shooters, but won’t be.

Our authorities instead have chosen to do nothing by and large. Oh a few districts here and there have taken steps. A few have armed teachers. A few have armed guards. One district in Pennsylvania put a bucket of rocks in each room so the students could stone the active shooter. A military grade weapon such as this with a 50 yard range is more than enough firepower for inside a school house.

Of special interest to me, is the civilian cop’s seeming love of shooting dead the classic “man with a knife” scenario. This weapon seems to be another of the half dozen or so non-lethal means of taking down a man with a knife. Instead of shooting him 14 times in the chest with their .40 S&W and killing him.

Jim Roach

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