My High Dividend Stocks Blog http://myhighdividendstocks.posterous.com Most recent posts at My High Dividend Stocks Blog posterous.com Sat, 08 Oct 2011 21:43:16 -0700 The Greatest Anitwar Ad Ever http://myhighdividendstocks.posterous.com/the-greatest-anitwar-ad-ever http://myhighdividendstocks.posterous.com/the-greatest-anitwar-ad-ever
The Greatest Antiwar Ad Ever
 
 
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Tue, 30 Aug 2011 16:07:05 -0700 Ron Paul's best interview to date. Economics in one interview. http://myhighdividendstocks.posterous.com/ron-pauls-best-interview-to-date-economics-in http://myhighdividendstocks.posterous.com/ron-pauls-best-interview-to-date-economics-in
I just finished watching CNBC's "Meeting of the Minds" show with some of the most elitist people I've ever seen.  The video link is not the one I just watched, but the posted videos are typical of the republocrat solutions.
 
They were all a bunch of republocrat hardcore Keynesian statists.  Even former General Electric CEO sounded like a 80% free market / 20% socialist.  They had no solutions because they don't understand Austrian economics.  They don't understand capitalism.  That means that they don't understand that the customers are in charge in a capitalist society because they hold the most desirable commodity - money.  Government regulation prevents producers from competing against one another to please customers.  Regulaton does this by creating barriers to entry more commonly know as liceansing and bureaucratic redtape.
 
None of the so-called "minds" had anything to say about the crux of the problem.  The problem is a lack of sound money and individual liberty.  Ron Paul explains this better than any economist at the Federal Reserve.  See the video below.
 
The people calling themselves the government and the Federal Reserve are destroying the environment for accumulating capital.  This is not good because our standard of living will worsen due to the policies since 1913 (the creation of the Federal Reserve).

The Best Ron Paul Interview Ever?
Ron Paul schools neocon Chris Wallace, who is suddenly respectful of his surge

Recently by Ron Paul: The Illusion of Safety

Ron Paul joins Chris Wallace on Fox News Sunday to discuss his rise in the mainstream presidental polls (to #3 on the latest Gallup) and the hot issues of the day. It is impossible not to notice how these interviews have changed. The normally belligerent neocon host was respectful as Ron smoothly and convincingly stated his positions.

Since this interview coincided with the media hysteria about Hurricane Irene, Wallace first asked Ron why he was opposed to FEMA. As the representative of a Gulf Coast district, Ron knows full-well the damage the weather can do. Indeed, he says: "It has the worst reputation for a bureaucracy ever. It hinders local people keeps people away from their homes. It's a system of central economic planning that is deeply flawed.....and it's broke."

Ron also rips the US intervention in Libya. He schools Wallace about the consequences of our destructive foreign policy. When asked about Gaddafi, Ron reminds him that "we've been very bad at picking dictators around the world. We may be delivering al-Qaida another prize."

Regarding Austrian economics – which Ron is actually asked about – he describes his solution for a healthy economy as, government “hands off, free markets, property rights, no bailouts, and sound money.” The Fed has caused endless problems with its policy of keeping interest rates artificially too low for too long. It has to stop monetizing debt.

When asked if he's in it to win it, Ron says Yes – but he wants to take a different approach – Not to seek power, but to seek to diminish it, to diminish dependency on government. People are waking up and saying "Ron Paul is right," he notes. Darn right!

See the Ron Paul File

August 30, 2011

Dr. Ron Paul is a Republican member of Congress from Texas.

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Sun, 31 Jul 2011 12:04:54 -0700 What is a dollar? http://myhighdividendstocks.posterous.com/what-is-a-dollar http://myhighdividendstocks.posterous.com/what-is-a-dollar
 
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Thu, 19 May 2011 13:42:01 -0700 Ron Paul: "Sell the Gold in Ft. Knox" http://myhighdividendstocks.posterous.com/ron-paul-sell-the-gold-in-ft-knox http://myhighdividendstocks.posterous.com/ron-paul-sell-the-gold-in-ft-knox

There are two types of gold standards: a government gold standard and a private gold coin standard.  The private gold coin standard is consistent with a truly free market.  The government gold standard (1933-1971) is statist and should be rejected in favor of a private gold coin standard.

I recommend that you possess 20-30% of you non-house net worth in physical gold coins.  This article will help you greatly understand both types of gold standards.  This topic will not go away until the US government goes broke.  The US Federal Reserve is inflating like Zimbabwe several years before their hyperinflation.

For example, the people calling themselves the government of Zimbabwe destroyed the Zimbabwe dollar through hyperinflation culminating in 2008.  Now the failed chief central bank president, Dr. Gedeon Gono, is talking about a return to “the gold standard”.  The question is which gold standard?  Keep that in mind as you read the excellent article below.

Zimbabwe's central bank president, Dr Gideon Gono, is calling for Zimbabwe to consider going on the gold standard.

Zimbabwe best known for their inflationary ways (their inflation rate reached 489 billion percent in September 2008) has possibly recognized that the former leader of the bankster world the arrested Dominique Strauss-Kahn is a bankster scam artist and that gold is the only real hard money.

“There is a need for us to begin thinking seriously and urgently about introducing a Gold-backed Zimbabwe currency which will not only be stable but internationally acceptable,” he said in an interview with state media, reports New Zimbabwe.

Click here for the rest of the article: http://www.lewrockwell.com/wenzel/wenzel106.html

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* * * * * * *

Ron Paul: "Sell the Gold in Ft. Knox"

Gary North
May 19, 2011

Ask a gold bug if he thinks that Franklin Roosevelt did the right thing in 1933 when he unilaterally confiscated the gold coins of all Americans. He will tell you "no." Why not? "Because it was a violation of property rights. The Federal government had no legal authority to do this."

But the Supreme Court authorized it, 5 to 4. The gold bug will tell you that the Supreme Court cannot be trusted.

Fast forward almost 70 years. Ron Paul announces at the Heritage Foundation that the government should sell its gold to reduce the national debt.

http://www.nysun.com/national/selling-gold-at-fort-knox-emerges-as-next-big/87350

No one comes to his defense.

Understandably, the Treasury Department got one of its staffers to write a critique. The government should sell no assets, she insists. Congress must raise the debt ceiling. There are not enough assets to sell. She ridiculed the suggestion of a balanced budget through asset sales. With a deficit of $125 billion a month, she said, a fire sale would do no good.

Then, amazingly, she admitted that gold is central to the perception if the U.S. government as solvent.

A "fire sale" of the Nation's gold to meet payment obligations would undercut confidence in the United States both here and abroad, and would be extremely destabilizing to the world financial system.

Treasury Secretaries from both parties have made it clear that they would not sell gold in order to buy time in a debt limit impasse. As then-Treasury Secretary James A. Baker said: "President [Reagan] and I are not prepared to take that step because it would undercut confidence here and abroad based on the widespread belief that the gold reserve is the foundation of our financial system, and because the Congress clearly has the power to prevent a default by assuming its responsibility with respect to the debt limit." When President Reagan was asked whether he would consider selling gold, he told his Budget Director, James Miller, "absolutely not." Similarly, Treasury Secretary Robert E. Rubin said, "We will not sell the nation's gold supply."

In short, gold is not a barbarous relic. Gold in the vault at Fort Knox and in the Federal Reserve Bank of New York (a private corporation) is basic to the world's confidence.

But what about gold in the hands of Americans? She did not say. The Treasury has had contempt for that idea ever since 1933.

That a salaried government bureaucrat would oppose the sale is understandable. But equally incensed are gold bugs. Only one came to his defense: the #1 scholar of the American gold standard, Dr. Edwin Vieira, author of Pieces of Eight, a 1600-page history of the gold standard in America. "Redeemable currency is an oxymoron." The government has no plans to restore a gold standard of any kind. "They don't need the gold. They've just been sitting on it since Roosevelt stole it."

Everyone else was critical of Paul's suggestion to restore gold to the private sector.

What's going on here? If it was immoral and illegal for the government to confiscate the gold at $20 an ounce in 1933, why is it a bad idea for the government to sell back the gold to the public at a market price today?

We see once again that people who say they believe that gold is the basis of freedom do not believe it. They believe in the United States government. They believe that the government has the right to hang onto its stolen gold. Why? Because the government will someday establish a gold standard. The gold belongs to the government.

But what is a gold standard? It is a system in which the government buys and sells gold at a foxed price. We have not had that system since 1933. The government did make the promise to foreign governments and central banks, but Nixon unilaterally broke the promise on August 15, 1971.

The gold bugs have now converted to Franklin Roosevelt's idea of a gold standard: a system in which the government has the right to steal property at one price, hike the price later, and sit on the wealth. The gold bugs honestly trust the Federal government to restore a gold standard someday. There has not been one since since 1933 that any government on earth will do this, but somehow, the gold bugs believe, it will do it in the future.

Fine. If the government sold all of its gold today, this would deplete the Federal Reserve of part of its monetary base. The public would have the gold. The FED could buy assets to replace the gold. That would restore the monetary base. The FED would have worthless IOUs, and the public would have the gold.

My preference would be for the gold to be sold as tenth-ounce American eagles. Sell it to American citizens, not foreign central banks. Get Americans used to holding small gold coins. The government stole the gold from Americans. It should sell it back to Americans.

But gold bugs see what is at stake. The price of gold would fall. They bought gold as an investment. They worry that they would lose money if the stolen gold were sold. Better to let the Federal government hang onto stolen goods than to let the public get its gold back.

They do not believe in the free market. They believe in a rigged market, one in which the government gets the right to hold onto stolen gold forever, or what is the equivalent of forever: the restoration of a gold standard.

But what kind of gold standard? The kind that existed under Bretton Woods system (1946-71)? One in which there is no legal right for common people to buy gold at a fixed price? That transferred power to Richard Nixon. How good a gold standard was that?

What kind of gold standard is a government-guaranteed gold standard? "Turn over your gold to us. You can get it back at any time." That was what banks around the world promised until August 1914. Then the central banks confiscated the gold held on deposit at commercial banks. The gold was never returned.

A government-guaranteed gold standard is not a gold standard. It is a government promise standard. It will be broken whenever politicians deem it convenient.

There are two kinds of gold standards. One is a government-guaranteed gold standard, which is preliminary to gold confiscation. The other is a gold coin standard. The difference is clear: the first is statist; the second is free market. As I wrote in 2003:

The State's gold standard is a preliminary to eventual confiscation or debasement. The State's promise of redemption on demand should not be trusted.

A gold coin standard by profit-seeking storage organizations can be trusted with less risk, but not if the storage is offered for free. There are no free lunches. Someone will eventually pay for free services. When it comes to fractional reserve banking, that someone is always the late-coming depositors.

This is why any call by conservatives for the State to adopt a gold standard is futile. No one will listen. Even if voters understood the case for a limited State, they would not be able to limit the State by a State-run gold standard. A State-run monetary system, with the exception only of Byzantium, becomes a debased standard.

This is why the free market is the only reliable source for the re-establishment of a gold standard. Honest money begins with these steps: (1) the revocation of legal tender laws that require people to accept the State's money; (2) the enforcement of contracts; (3) laws against fraud, which fractional reserve banking is. The free market can do the rest.

http://www.lewrockwell.com/north/north201.html

Ron Paul is correct. The government should sell the gold. I would add only this: the form of the gold should be in the form of American eagles, and sold only to Americans -- heirs of the victims of Roosevelt's confiscation. I want Americans to get used to seeing and owning gold coins again.

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Fri, 05 Nov 2010 18:40:44 -0700 How can the Federal Reserve be audited? http://myhighdividendstocks.posterous.com/how-can-the-federal-reserve-be-audited http://myhighdividendstocks.posterous.com/how-can-the-federal-reserve-be-audited
How can the Federal Reserve be audited?
 
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Central bankers hate the free market.  They want do not want the market to determine the rate of interest and they do not want to allow currency exchange rates to float.
 
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Tue, 24 Aug 2010 18:32:32 -0700 Fannie and Freddie http://myhighdividendstocks.posterous.com/fannie-and-freddie http://myhighdividendstocks.posterous.com/fannie-and-freddie

August 24th, 2010

You can listen to this article on your smart phone or computer.  This is perfect for drive time. 

We have been analyzing American Agency Capital Corp. (AGNC) for the past few articles at www.myhighdividendstocks.com .  AGNC purchases mortgage-backed securities and collateral debt obligations from Fannie Mae and Freddie Mac.  So we must understand what Fannie and Freddie are and how the make/lose money.  For those of you who don’t know – Fannie and Freddie are government sponsored enterprises.  That means they have special privileges that other corporations don’t.  They buy mortgages in the secondary market, repackage them into securitized products, and guarantee the principal and interest payments on those securitized products.  They are colossal failures and have to be subsidized by the federal government almost yearly to keep operating.  Ron Paul spoke before the House Financial Services Committee years before the housing crisis and the financial crisis.  He understands that government intervention in markets distorts the allocation of capital in those markets.  The mortgage market is no exception.  This is a concise explanation of how the markets are distorted by congress’ subsidies to Fannie and Freddie.  AGNC’s dependence on Fannie, Freddie, and Congress is a huge risk that you must understand before investing in this stock yielding 20%.

This article appeared on www.LewRockwell.com way back in September 2003

Fannie and Freddie

by Rep. Ron Paul, MD
by Rep. Ron Paul, MD

Ron Paul in the House Financial Services Committee, September 10, 2003

Mr. Chairman, thank you for holding this hearing on the Treasury Department's views regarding government sponsored enterprises (GSEs). I would also like to thank Secretaries Snow and Martinez for taking time out of their busy schedules to appear before the committee.

I hope this committee spends some time examining the special privileges provided to GSEs by the federal government. According to the Congressional Budget Office, the housing-related GSEs received $13.6 billion worth of indirect federal subsidies in fiscal year 2000 alone. Today, I will introduce the Free Housing Market Enhancement Act, which removes government subsidies from the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the National Home Loan Bank Board.

One of the major government privileges granted to GSEs is a line of credit with the United States Treasury. According to some estimates, the line of credit may be worth over $2 billion. This explicit promise by the Treasury to bail out GSEs in times of economic difficulty helps the GSEs attract investors who are willing to settle for lower yields than they would demand in the absence of the subsidy. Thus, the line of credit distorts the allocation of capital. More importantly, the line of credit is a promise on behalf of the government to engage in a huge unconstitutional and immoral income transfer from working Americans to holders of GSE debt.

The Free Housing Market Enhancement Act also repeals the explicit grant of legal authority given to the Federal Reserve to purchase GSE debt. GSEs are the only institutions besides the United States Treasury granted explicit statutory authority to monetize their debt through the Federal Reserve. This provision gives the GSEs a source of liquidity unavailable to their competitors.

The connection between the GSEs and the government helps isolate the GSE management from market discipline. This isolation from market discipline is the root cause of the recent reports of mismanagement occurring at Fannie and Freddie. After all, if Fannie and Freddie were not underwritten by the federal government, investors would demand Fannie and Freddie provide assurance that they follow accepted management and accounting practices.

Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market. This is because the special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.

Despite the long-term damage to the economy inflicted by the government's interference in the housing market, the government's policy of diverting capital to other uses creates a short-term boom in housing. Like all artificially-created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing.

Perhaps the Federal Reserve can stave off the day of reckoning by purchasing GSE debt and pumping liquidity into the housing market, but this cannot hold off the inevitable drop in the housing market forever. In fact, postponing the necessary, but painful market corrections will only deepen the inevitable fall. The more people invested in the market, the greater the effects across the economy when the bubble bursts.

No less an authority than Federal Reserve Chairman Alan Greenspan has expressed concern that government subsidies provided to GSEs make investors underestimate the risk of investing in Fannie Mae and Freddie Mac.

Mr. Chairman, I would like to once again thank the Financial Services Committee for holding this hearing. I would also like to thank Secretaries Snow and Martinez for their presence here today. I hope today's hearing sheds light on how special privileges granted to GSEs distort the housing market and endanger American taxpayers. Congress should act to remove taxpayer support from the housing GSEs before the bubble bursts and taxpayers are once again forced to bail out investors who were misled by foolish government interference in the market. I therefore hope this committee will soon stand up for American taxpayers and investors by acting on my Free Housing Market Enhancement Act.

Dr. Ron Paul is a Republican member of Congress from Texas.

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