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January 2003 Journal  
FEBRUARY OBSERVATIONS
2-12-2003
There are some who imagine that an innate sense of human dignity will prevent man from committing evil actions and insure his spiritual and material perfection. That is, that an individual who is characterized with natural intelligence, high resolve, and a driving zeal, will, without any consideration for the severe punishments consequent on evil acts, or for the great rewards of righteousness, instinctively refrain from inflicting harm on his fellow men and will hunger and thirst to do good.

And yet, if we ponder the lessons of history it will become evident that this very sense of honor and dignity is itself one of the bounties deriving from the instructions of the Prophets of God. We also observe in infants the signs of aggression and lawlessness, and that if a child is deprived of a teacher's instructions his undesirable qualities increase from one moment to the next. It is therefore clear that the emergence of this natural sense of human dignity and honor is the result of education.

Secondly, even if we grant for the sake of the argument that instinctive intelligence and an innate moral quality would prevent wrongdoing, it is obvious that individuals so characterized are as rare as the philosopher's stone. An assumption of this sort cannot be validated by mere words, it must be supported by the facts. Let us see what power in creation impels the masses toward righteous aims and deeds!

(`Abdu'l-Baha: Secret of Divine Civilization, Pages: 97-98)
2-8-2003Letter from the Unemployed
Thought I would give you some personal knowledge of the job market, since I've been out of work since July of last year. I am seeing a few more ads for jobs and it does seem like there is a bit more hiring going on. I personally haven't been called in for an interview since September. One of my co-workers was just called in for a second interview with a company.

I was a help desk supervisor in my previous job, with seven years experience. I haven't even had any luck being called in for customer service jobs. I am attending school at night, on dislocated worker training, and am hoping things pick up, so I can continue to work on my bachelor's degree.

Portland, OR area has been hard hit with layoffs. I do hope the situation is starting to improve a bit here. On the other hand, I'm starting to read of more layoffs in other parts of the country. I certainly do hope that things start to pick up--I'm really tired of not working.
-TP
1-16-2003I think the unemployment number is a misundestanding
Hi Michael,

Over the last few weeks there have been several reserve call up notifications.

I do not know the number, but I expect well over 100K reserves were called up. Effectively they stay on your employment roles, but you have to plan to be without them for at least 3 to 6 months. They have not lost their jobs, but many must go out and hire to replace them temporarily. Hence the decrease in the unemployment rate.

I wonder if this decrease does not also suffer from the number that have fallen off the roles because they have been on too long.

RB

Unemployment rate drops to 5.7%
2-1-2003New Moon Today

New Moon, Saturday Feb 1.
Moon Phase Calendar
2-1-2003  Feb 2002 Flashback: Ron Paul Calls Greenspan on the Carpet!
Ron Paul To be honest, I have only heard of Ron Paul in the last few weeks, and only in connection with GATA. I don't know what his politics are outside of this area. What I do know is that this morning I saw him, live on CNBC, calling our entire fiat money system into question. I cried. He called the Untouchable, Alan Greenspan, right down on the carpet, asking if he sees any similarities between the Federal Reserve's management of money to Enron's shennanigans. He spoke the truth in the rarified air of the House Committee testimony.

He began by making reference to Greenspan's flip comments a few weeks ago about how if fiat money fails, we can always go back to seashells and oxen. That the discount window would stand ready with an adequete supply of oxen.

Following is a transcript of the exchange:

"Chairman, if we get to this point (of the collapse of the dollar), which I suspect we will someday, I ask that we have hearings to debate the issue of what medium exhange we will have before the Fed starts using oxen as a medium of exchange...

"I feel that it is an important point, and I want to relate that to the Enron issue. In many ways I feel that the system you have been asked to manage is similar to being asked to manage an Enron system. Because Congress is notoriously in favor of deficit spending. We are currently expanding the national debt at $250 billion per year, and we have nearly a $6 trillion debt*. Now we create that debt by buying votes. We spend alot of money.

"Now, the Federal Reserve comes in and they buy that debt in order to maintain the interest rate that they think is the right interest rate. And they take that and use it as an asset. You put it in the bank, you call this debt that we created an asset, and you use it as collateral for our Federal Reserve Notes.

"So that's a pretty good scheme, and I think in the moral terms, as well as the economic terms, it is very similar to how Enron operates. I'm not convinced that this system works very well because alot of people here praise you for the adequate amount of liqidity, and that's what inflation is - you create more money, lower interest rates. Every time you ask for liquidity, every time you ask for lower interest rates, you're asking for inflation of the money supply. And I think what we fail to ever do is ask about the cost.

"Do we ever concern ourselves about the people who have had 2/3 of their income removed because they happen to be savers, and living off interest? We gouge them with interest, inflation, a loss of purchasing power, as well as taxing that. And a lot of people in this country have suffered from that particular system.

"Now the analogy that I would like to draw is something that you said in your testimony on page 13. And you have mentioned several times now that Enron may be a good lesson. And I think it is. And I'm not for more of this regulation by the SEC. I think you're correct that derivatives provide a market tool that is worthwhile. But you said the Enron decline is the effective illustration of the vulnerability of a firm who's market value largely rests on capitalized reputation, with very little if no physical assets.

"That's exactly what our monetary system is all about. And that's why I believe that the dollar is vulnerable. We in Congress do not have a responsibility to run Enron. Some other government has the responsibility to deal with fraud. We have a responsibility to the dollar. And I think that's what we fail so often to address around here.

"And you said that Enron provides the encouragement that the force of market discipline can be counted on over time to foster a much greater transparency. That's exactly what the market does with money. If you look at the rapid and sudden devaluations of the fiat currencies around the world, if you look at what happened to us in '79 and '80, that was the market coming in and enforcing vulnerability & transparency on us.

"Now, gold gives you a hint as to what's happening. Gold has sent a mild message in this past year, in spite of the fact that central banks and other continually sell and loan out gold to push the price of gold down. But there is a message there.

"So I would ask you, can you see any correlation between what you're asked to do in running our monetary system to that which Enron was involved in?"

Greenspan's response:

"I hope there are fundamental differences.....er...ar...I mean there are… ...it's ....ah,.. first, dealing with a fiat currency, what it essentially is that we are doing is that the currency is granted value by fiat of the sovereign, as it is said in the text books. The issue there is that..uh...in years past..uh..there have been, there's been considerable evidence.. that fiat currencies have been mismanaged in general and that inflation has been too often the result.

"What I was mentioning in the speech that you were referring to was the fact that there is some evidence that we're learning that lesson…learning how to manage fiat currency..ah...ah...I've always had some considerable skepticism about whether that in a long run can succeed, but I must say to you the evidence..errr...of recent decades is that it has been succeeding. Whether that continues is a forecast which I can't really ...er....project on.

"The Enron situation is essentially one in which..ah..there was an endeavor to imply that earnings were much greater than they really were. That increasing debt was hidden. I can think of no reason to have done what they did with their off-balance sheet transactions, other than to obscure the extent of the debt that they had, and what was essentially squandered in that process was the reputational capital, which they had succeeded in achieving over a period of time...and I don't perceive that …er….that anything that we are doing as a central bank..ah.. involves anything related to that..I hope that ….uh…where we need to be transparent and indicate what we are doing, we do so and we do so except in those areas where it - as I mentioned to you previously- ah…inhibits the ability to actually function as a central bank. But as I say in summary I hope your analogy is inappropriate."

Paul's last word:

"I'll keep hoping."

Watch the video: C-SPAN House Financial Services Committee Testimony - 2/27/2002. The Ron Paul Rumble comes at 1:20:48

*By the way, America's national debt surpassed $6,000,000,000,000 yesterday, to finish the day at: $6,002,734,772,404.52. SEE FOR YOURSELF

More news you won't hear on CNN: This is well over the statutory debt ceiling set by Congress at $5.95 trillion. The government is operating outside the bounds of the law. But what else is new?


Where is your money going? 2003 Budget
2-1-2003Feb 2002 Flashback: How Business Is Done - Enron Style
by Anonymous
Capitalism:
You have two cows. You sell one and buy a bull. Your herd multiplies, and the economy grows. You sell them and retire on the income.

Enron Capitalism:
You have two cows. You sell four of them to your publicly traded company, using letters of credit signed by your brother-in-law the auditor, then execute a debt/equity swap with an associated general partnership so that you get all six cows back, with a tax exemption for nine cows.

Transfer the milk rights of the fifteen cows via an intermediary to a Cayman Island partnership secretly owned by the Vice President of Finance, who sells the rights to all eighteen cows back to your listed company.

The Annual report says the company owns twenty eight cows, with an option to purchase fourteen more using a debt/equity swap. All cows are hedged with puts, including unpurchased cows.

Provide only selected portions of the Balance Sheet. All cows are pro forma.

Trade all fifty cows for the Presidency & Vice Presidency of the United States, leaving you with a negative number of cows.

The public always buys your bull. Leave it to the public to clean up your mess.

****
I got the above in an email today from a friend. Apparently from Eat the State.
Check out the 2002 predictions & other articles in the archives
manystrom@depression2.tv
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