Andy Hoffman's Daily Thoughts

Like the economic "clairvoyant" I am, I can see it now - as the FOMC concludes its upcoming April 28th meeting. With another month of miserable economic data under its belt, and the Fed's real dual mandate - to support the stock market, and devalue the dollar - more imperative than ever, Whirlybird Janet will again attempt to "kick the can" by appeasing "recovery believers" with a hint of hawkish hope, but actingas dovishly as ever; if possible, exceeding even February's "most unequivocally dovish FOMC statement in memory."

 

Today's topic refers to the unabashed disaster the U.S. economy has become, even after the statistical, seasonal, and otherwise fraudulent "adjustments" made by the BLS, BEA, Federal Reserve, and other manipulation agencies. Not to mention, their private "partner in crime" - the newly IPO'd "Markit" company, whose "job" is to produce statistically insignificant "island of lies" diffusion indices. Heck, today's topic was decided upon before this morning's spate of economic horrors, "adjustments" and all; starting with the fourth straight retail sales "miss" - the first time this has occurred since...drum roll please...late 2008. Moreover, when excluding auto "sales" - which I mock, as nearly all such "sales" are either leases or subprime loan financed; retail sales barely rose in March, after falling the three prior months.

 

Next up, the PPI "inflation gauge" came in well below expectations - giving the Fed further ammunition to defer its mythical "rate hikes" indefinitely; and at the same time, insult 320 million Americans whose cost of living continues to skyrocket. Then came the NFIB Small Business Optimism Index - which instead of the expected flat reading, plunged from 98.0 to 95.2; which not only was its lowest reading in nine months, but included the lowest "hiring plans" component in six months. Throw in the beginning of what will undoubtedly be a massively disappointing earnings season - with Johnson & Johnson lowering guidance due to a "strong dollar"; and it becomes painfully obvious that the Fed is boxed in a corner - desperate to purport "recovery," but realizing it must relentlessly print fiat dollars if it wants to prevent not only instantaneous economic implosion, but dramatic losses in the rapidly escalating "final currency war." This is why rates are plunging anew (benchmark Treasury yield down to 1.85% as I write Tuesday morning), joining the rest of the QE-escalating world despite unrelenting propaganda regarding when said "rate hikes" will occur - as if a measly quarter point increase would even remotely impact economic activity. And by the way, last I looked, rising rates were bad for the economy; let alone, one saddled with the largest - and relentlessly increasing - debt load in history.

 

Speaking of debt, the national debt has been stuck at $18.133 trillion for a month now, as the so-called "debt limit" is deferred by yet another round of U.S. government pension thefts and accounting chicanery, as it prepares to "raise the debt ceiling" later this year - which, when it occurs, will cause an instantaneous "reversal" of such tricks, causing the national debt to instantaneously rocket higher. And if Congressional Republicans attempt another messy "debt ceiling" debate - to try and look "conservative" ahead of next year's elections (LOL), don't forget that the President now has the ability to veto any "no" vote they cast. Of course, using "$18.1" trillion as America's debt gauge is laughable at best, given more than $5 trillion sits "off balance sheet" following 2008's nationalizations of Fannie Mae and Freddie Mac. Not to mention, the truemeasure of U.S. government liabilities - per Laurence Kotlikoff, who measures on balance sheet debt plus unfunded liabilities to be $210 trillion, growing exponentially larger with each passing year. I mean, geez, even the government's own "Congressional Budget Office" - using the most wildly optimistic assumptions of long-term economic growth and interest rates imaginable, projects this horror of a debt/GDP ratio for the next five decades; rising from 100% today (heavily understated by accounting gimmicks, I might add) to twice that amount fifty years from now. LOL, at the rate we're really going, we'll be at that level in less than half that time!

 

And then there's exponential growth in "non-revolving" debt - principally utilized for undischargable, non-productive student loans, and the aforementioned subprime auto loans; which, accounting chicanery aside, aren't really funding "sales" at all. Since the 2008 crisis, U.S. non-revolving debt has exploded by more than $1 trillion, or 60% of the pre-crisis level. Conversely, "revolving" - i.e., credit card - debt is down 20% from the pre-crisis level; partly due to write-offs, and partly the inability of over-indebted Americans to add to such burdens.

 

In fact, March's nearly $4 billion revolving debt plunge represented the largest monthly decline infive years; and this, after three straight months of falling retail sales.   Worse yet, the National Association of Credit Mangers' "Rejection of Credit Applications Index" suffered - again, last month- its largest ever crash, breaching even the spike low at the height of the 2008 crisis. But don't worry, as despite negative consumer spending and corporate capital expenditure growth (aside from stock buybacks at record valuations); steadily declining housing prices; and across-the-board weakness in essentially all aspects of the global economy, the "de-coupled" U.S. economy continues to "recover" - whilst the Fed prepares to raise rates, plunging market yields and all, "any day now."  

 

Heck, even if Greece defaults on hundreds of billions of Euros worth of debt this summer - causing other PIIGS to join the debt jubilee party, no less - the U.S. will undoubtedly remain "decoupled"; with lollipops, unicorns, and a pot of gold wheelbarrow full of dollars for all. And putting the nail in the coffin of any remaining optimists, all the aforementioned trends are mathematically irreversible - especially if rates were to rise even a tiny bit. No, the only way the world can extricate itself from the hundreds of trillions of debt history's first global fiat Ponzi scheme has enabled is a giant debt jubilee; either explicitly, via outright default; or more likely, implicitly, via hyper-inflation.

 

Conversely, no trend could be more starkly opposite to the inexorable collapse of global economic activity than the relentless rise in worldwide Precious Metals demand - which currently is being dominated in the East, but shortly will be joined by the West. Frankly, the fact that Western demand is not rising faster - particularly in nations where gold prices are surging, like Japan, the UK, and the entire Eurozone - is a testament to just how effective the past four years of money printing, (paper) market manipulation, and propaganda have been. Much less, five decades of brainwashing - in which fiat currency, not gold and silver, are said to be "money"; and Keynesian monetary and fiscal policy - in which the government micro-manages the economy - is fool-proof. And, I do mean fool.

 

As for PM demand, what more can be said than what I discussed last week - of how Chinese gold demand is running nearly 15% above last year's record level through this year's first quarter? Or how Indian gold imports, despite the unexpected retention of 2013's onerous 10% import tariffs, has literally exploded due to a combination of weakening economic activity, a plunging Rupee, and plunging confidence in the "world's worst government," not even a year after being voted into office. Together, India and China are now consuming essentially all of global production, leaving nothing for the other 4.5 billion other people.

 

Or better yet, per this article, the fact that Central bank gold purchases (at least, the ones officially reported) surged last year to a nearly 50-year high; calling to question, of course, how on Earth prices declined. Of course, the answer, pure and simple, is the Cartel has been naked shorting gold and silver with a vengeance since they peaked - in dollar terms - four years ago; in a desperate attempt to, first and foremost, "kick the can" as long as possible; and equally so, enable TPTB topray that somehow, "Economic Mother Nature" can be defeated.

 

Of course she can't; but as they say, hope springs eternal. At least, until said powers that be lose control of the financial markets they so desperately need to tell the message they want told. Clearly, Economic Mother Nature is winning, and in a big way; as everything from economic activity, to commodities, currencies, and social and geopolitical stability is dramatically declining. To wit, all that's left are "last to go" markets like the "Dow Jones Propaganda Average" and paper gold and silver; and shortly, perhaps very shortly, they too will be liberated by the "unstoppable tsunami of reality." Let alone, as even the so-called "inventory" said "powers" purport to have is comically low - like the eternally collapsing COMEX "registered" (available for purchase) gold cache; at just 550,000 ounces, worth a measly $657 million - an amount so small, even Greece might be able to conjure it up for its next interest payment.

 




Frankly, I'm not going to dignify this article by speaking of the heinous PM raids of the past two days. Fortunately, prices are rebounding smartly as I write; but honestly, what more is there to say except that one has to be an idiot to not realize what's going on here? And for anyone relying on newsletter writers for their "proprietary analysis" - of why gold is going below $1,000/oz (mining industry be damned), or other speculative, sensationalist gibberish - shame on you. Trust me, after 25 years in the markets - in which, atop said experience, I have become in expert in spotting manipulative practices - there is no "secret" to what's going on beyond Occam's razor. In other words, the war between truth and fraud will rage on until truth eventually wins decidedly; and anyone "betting" otherwise will be deposited in the gargantuan dustbin of historical financial failures.

$5,000 SILVER?

A catchy title this "$5,000 Silver?" don't you think?  Am I crazy?  Is this even possible?  In who's lifetime? Ours or our great, great grandchildren long after we are dead and buried?  The best way to look at this I believe is to briefly look at silver's big brother gold and then postulate whether it's possible or not.

   

To begin, let's look at what happened in 1980 and why gold traded up to $875 in the first place.  As Jim Sinclair has said many times, gold "moved in a manner to cover the value of foreign held debt of the U.S.".  He has also said "$50,000 gold is possible and it may turn out that this figure is far too low".  Before you laugh and start firing spitballs at me or Mr. Sinclair, I remind you of his call of "gold at $1,650 per ounce by Jan. 2011".  He said this when gold was $350 per ounce or so and the year was around 2004 if memory serves me correctly.  He was called a nut job and far worse ...he was correct in retrospect and off in his timing by about eight months ...SEVEN YEARS AHEAD OF TIME!

   

To refresh your memory, let's do some basic mathematics.  The U.S. purportedly has 262 million ounces of gold.  (As a side note, if you understand how much gold China has imported just over the last six years and compare that to global production, then you understand the U.S. has in all likelihood "dishoarded" much of this gold).  We can compare this 262 million ounces to our national debt rounded off at $18 trillion.  Doing the math, if we had to back our debt with the gold we supposedly have, the number currently comes up to $68,700 per ounce! 

   

Before you call me nuts, I have one question for you.  Were foreigners to decide that "dollars" for any (many!) reason was no longer acceptable, what would we "pay" with?  Remember, since the dollar is the reserve currency, the U.S. holds almost NOTHING in foreign reserves.  Why should we have to hold foreign reserves, we issue THE reserve currency?!  And yes, I understand the debt is "contracted" in dollars so all we have to do is print more to make the payment.  All I am saying is this, if the U.S. was forced somehow to actually settle the debt ...in gold, our gold would need to be valued at $68,700 per ounce "now".  I say "now" because our debt burden will only grow larger, our gold holdings (IF they truly still exist) will not grow or "breed" making our stash larger with new little goldlings.  My point is this, $68,700 is a credible number only assuming we do have the gold we claim to have.

   

Now let's look at silver.  Silver is taken out of the ground at roughly a 10-1 ratio to gold production.  This number includes "by-product" silver.  The current price ratio is 70-1 or thereabouts, nonsensical when you factor in the price to produce silver is higher than the market price.  This situation argues for severe supply cutbacks in the future unless the price goes higher to allow for a mining profit.  Silver is also a very miniscule market when looked at from a dollar standpoint.  There are roughly 800 million ounces produced globally which in dollar terms is less than $15 billion.  In today's world, $15 billion is nothing!  Individual companies are bought and sold for more every day.

   

Another aspect to silver is the "low hanging fruit" has already been found and mined.  Many companies have high graded production just to stay in business.  New silver deposit exploration has found very little over the last 5-10 years, current new exploration today is almost non existent because the funds from operations have turned into losses.  The capital to look for new silver deposits simply does not exist.  

   

New "uses" for silver, be they electrical, industrial, solar, medical or other seem to be popping up regularly.  Demand will increase over time.  And speaking of time, it is estimated that silver may become the next "extinct element" in about 20 years.  Does this mean there will be no silver left on the planet?  No, new silver will be found and dug up but probably not enough to satisfy the fledging demand of 100's of years ago unless new mining technology becomes available. 

    

What comes our way is a once in hundred's of years currency event.  Never before has the world not had a single currency backed by silver or gold.  There is no place to hide from the currency derivatives/debt/currency meltdown except in the actual metals themselves, "receipts" will not do this time!

   

To finish, I would like to paraphrase something from the Bible.  In Matthew 25, verses 14-30, the "Parable of talents" is written.  It speaks of a master going on a trip and leaving three of his servants bags of gold to care for while he is away.  To one he gave 10, another he gave two and the third servant just one bag.  He did so based upon his judgment of their abilities to handle money.  When the master returned, the servant who was given 10 bags, returned 20 and the servant given two bags returned four.  The last servant, who dug a hole in the ground and buried his bag of gold, dug it up and returned it intact.  The last servant was scorned and called lazy for doing nothing with his "talent".  Please understand in those days, "talent" was considered weight or coinage but can be looked at today as one's talent or ability, it should not be wasted. 

In my opinion, because the "moneychangers" have so rigged and fraudulently ruined the global monetary system, now is not the time to "earn interest".  Now is not the time to try to "make money".  The system is on the verge of a mathematically certain collapse where institutions and governments themselves stand to perish.  Believe this or not, mathematics don't lie.  Now is the time for you to be the third servant and bury you bag of whatever you have accumulated.  Get it out of the system and thus out of the way of the financial carnage coming.  You will have something to "start over" with and give you a head start.  As Richard Russell has said, right now is NOT about making money, it is all about not losing everything. 

   

Will silver go to $5,000 per ounce?  Who knows, we may have a completely different currency in short order and nothing will be quoted in "dollars" anymore.  All I can tell you is that when gold and silver are remonetized back into the system, their purchasing powers will be at least equal to if not many times higher than these depressed levels.  In "dollar terms" they may approach infinity!   

Regards,  Bill Holter

April 15, 2015 | Categories: Articles & Columns | Tags: |  Print This Article


Will Washington Kill Us All?

Paul Craig Roberts

Did you know that Washington keeps 450 nuclear ICBMs on “hair-trigger alert”? Washington thinks that this makes us “safe.” The reasoning, if it can be called reason, is that by being able to launch in a few minutes, no one will try to attack the US with nuclear weapons. US missiles are able to get on their way before the enemy’s missiles can reach the US to destroy ours.

If this makes you feel safe, you need to read Eric Schlosser’s book, Command and Control.

The trouble with hair-triggers is that they make mistaken, accidental, and unauthorized launch more likely. Schlosser provides a history of almost launches that would have brought armageddon to the world.

In Catalyst, a publication of the Union of Concerned Scientists, Elliott Negin tells the story of Soviet Lt. Col. Stanislav Petrov. Just after midnight in 1983 the Soviet Union’s early warning satellite system set off the alarm that 5 US ICBMs were headed for the Soviet Union.

Col. Petrov was supposed to inform the Soviet leader, who would have 8 to 10 minutes to decide whether to launch in retaliation. Who knows what he would have decided. Instead Col. Petrov used his judgment. There was no reason for the US to be attacking the Soviet Union. Moreover, Petrov reasoned that an American attack would involve hundreds of ICBMs, possibly thousands. He checked whether Soviet ground-based radar had detected incoming ICBMs, and it had not. Petrov decided it was a false alarm, and sat on it.

It turned out that the early warning system had mistaken a pattern of sunlight reflection on clouds as missiles. This was a close call, but Negin reports that “a failed computer chip, and an improperly installed circuit card are some of the culprits” that could initiate nuclear war. In other words, the sources of false alarms are numerous.

Fast forward to today. Imagine an American officer monitoring the US early warning system. This officer has been listening to 15 years of war propaganda accompanied by US invasions and bombings of 8 countries. Terrorist warnings and security alerts abound, as do calls from American and Israeli politicians for nuking Iran. The media has convinced him that Russia has invaded Ukraine and is on the verge of invading the Baltics and Poland. American troops and tanks have been rushed to the Russian border. There is talk of arming Ukraine. Putin is dangerous and is threatening nuclear war, running his strategic bombers close to our borders and holding nuclear drills. The American officer has just heard a Fox News general again call for “killing Russians.” The Republicans have convinced him that Obama is selling out America to Iran, with Senator Tom Cotton warning of nuclear war as a consequence. We will all be killed because there is a Muslim in the White House.

Why isn’t anyone standing up for America, the patriotic American officer wonders, just as the alarm goes off: Incoming ICBMs. Are they Russian or Iranian? Was Israel right after all? A hidden Iranian nuclear weapons program? Or has Putin decided that the US is in the way of his reconstruction of the Soviet Empire, which the American media affirms is Putin’s goal? There is no room for judgment in the American officer’s mind. It has been set on hair-trigger by the incessant propaganda that Americans call news. He passes on the warning.

Obama’s Russophobic neocon National Security Advisor is screaming: “You can’t let
Putin get away with this!” “It might be a false alarm,” replies the nervous and agitated president. “You liberal pussy! Don’t you know that Putin is dangerous!? Push the button!”

And there goes the world.

Considering the extreme Russophobia being created among Americans by the Ministry of Propaganda, the demonization of Vladimir Putin–the “new Hitler,” Vlad the Impaler– the propagandistic creation of “the Russian threat,” the crazed neocon desire for US world hegemony, the hatred of Russia and China as rising rivals capable of exercising independent power, the loss of American Uni-power status and unconstrained unilateral action. In the midst of these emotions and minds swayed not by facts but by propaganda, hubris, and ideology, there is a great chance that Washington’s response to a false alarm will bring the end of life on earth.

How much confidence do you have in Washington? How many times has Washington–especially the crazed neocons–been wrong?

Remember the 3-week “cakewalk” Iraq war that would cost $70 billion and be paid out of Iraqi oil revenues? Now the cost is $3,000 billion and rising, and after 12 years the radical Islamic State controls half of the country. To pay for the wars the Republicans want to “privatize,” that is, take away, Social Security and Medicare.

Remember “Mission Accomplished” in Afghanistan? Twelve years later the Taliban again control the country and Washington, after murdering women, children, funerals, weddings, village elders, and kids’ soccer games, has been driven out by a few thousand lightly armed Taliban.

The frustrations of these defeats have mounted in Washington and in the military. The myth is that we lost because we didn’t use our full force. We were intimidated by world opinion or by those damn student protesters, or blocked from victory by some gutless president, a liberal pussy who wouldn’t use all of our power. For the right-wing, rage is a way of life.

The neocons believe fervently that History has chosen America to rule the world, and here we are defeated by Vietnamese guerrillas, by Afghan tribesmen, by Islamist fundamentalists, and now Putin has sent his missiles to finish the job.

Whoever the White House fool is, he will push the button.

The situation is deteriorating, not improving. The Russians, hoping for some sign of intelligence in Europe, contradict Washington’s anti-Russian lies. Washington calls truthful contradiction of its own propaganda to be Russian propaganda. Washington has ordered the Broadcasting Board of Governors, a US government agency, headed by Andrew Lack, a former chairman of NBC news, to counteract an alleged, but non-existent, “Kremlin Troll Army” that is outshouting the Western prostitutes and “perpetuating a pro-Russian dialogue” on the Internet. In case you don’t remember, Lack is the idiot who declared RT to be a “terrorist organization.” In other words, in Lack’s opinion, one that he can enforce, a truth-teller is a terrorist.

Lack epitomizes well Washington’s view of truthful reporting: If it doesn’t serve Washington’s propaganda, it is not true. It is terrorism.

Lack hopes to control RT with intimidation: In effect, he has told RT to shut up and say what we want or we will close you down as a terrorist organization. We might even arrest your American employees as aiders and abettors of terrorism.

To counteract a Revanchist Russia and its Internet Troll Army, the Obama regime is handing $15,400,000 to the insane Lack to use to discredit every truthful statement that emerges from the English language versions of Russian media. This amount, of course, will rise dramatically. Soon it will be in the billions of dollars, while Americans are evicted from their homes and sent to prison for their debts.

In his budget request, Lack, who seems to lack every aspect of humanity, including intelligence, integrity, and morality, justified his request, which will be granted, for the hard-earned money of Americans, whose standard of living is falling, with the wild assertion that Russia “threatens Russia’s neighbors and, by extension, the United States and its Western allies.”

Lack promises to do even more: “The US international media is now set forth to refute Russian propaganda and influence the minds of Russians and Russian-speakers in the former Soviet Union, Europe and around the world.” Lack is going to propagandize against Russia inside Russia.

Of course, the CIA organizations–the National Endowment for Democracy and Radio Free Europe/Radio Liberty–will be enriched by this anti-Russian propaganda campaign and will support it wholeheartedly.

Therefore, the Union of Concerned Scientists’ call for cooperation with Russia to take ICBMs off hair-trigger status is unlikely to occur. How can nuclear tensions be reduced when Washington is building tensions as fast as it possibly can? Washington’s Ministry of Propaganda has reconstructed Putin as Osama bin Laden, as Saddam Hussein, demonized figures, bogymen who evoke fear from the brainwashed American sheeple. Russia is transformed into al Qaeda lusting for another attack on the World Trade Center and for the Red Army (many Americans think Russia is still communist) to roll across Europe.

Gorbachev was a trick. He deceived the old movie actor. The deceived Americans are sitting ducks, and here come the ICBMs. The crazed views of the American politicians, military, and people are unable to comprehend truth or to recognize reality.

The propagandistic American “media” and the crazed neoconservatives have set humanity on the path to destruction.

The Union of Concerned Scientists, of which I am a member, need to come to their senses. It is impossible to work out a reduction in nuclear threat as long as one side is going all out to demonize the other. The demonization of Russia and its leader by the New York Times, Washington Post, CNN, Fox News, and the rest of the American Propaganda Ministry, by almost the entirety of the House and Senate, and by the White House makes reducing the threat of nuclear war impossible.

The American people and the entire world need to understand that the threat to life on earth resides in Washington and that until Washington is fundamentally and totally changed, this threat will remain as the worse threat to life on earth. Global Warming can disappear instantly in Nuclear Winter

 FFF.Org • April 3, 2015
by Jacob G. Hornberger at FFF.Org

It is impossible to overstate the magnitude of the warfare-state revolution that transformed the federal government and American society after World War II. The roots of America’s foreign-policy crises today, along with the massive infringements on civil liberties and privacy and the federal government’s program of secret indefinite incarceration, torture, assassination, and extra-judicial executions can all be traced to the grafting of a national-security apparatus onto America’s federal governmental system in the 1940s.

Certainly, the seeds for what happened in the post-WWII era were sown prior to that time, specifically in the move toward empire, which, interestingly enough, occurred during the same period of time that Progressives were inducing Americans to abandon their system of economic liberty and free markets in favor of socialism and interventionism in the form of a welfare state and regulated economy.

I’m referring to the year 1898, when the U.S. government intervened in the Spanish American War, with the ostensible aim of helping the Cuban and Filipino people win their independence. It was a false and fraudulent intervention, one that was actually designed to place Cuba and the Philippines under the control of the U.S. government. The result was a brutal war in the Philippines between U.S. forces and the Filipino people, along with a never-ending obsession to control Cuba, one that would ending up becoming a central focus of the national-security state.

A national-security state and an empire certainly weren’t among the founding principles of the United States. In fact, the revolution in 1776 was against an empire that the British colonists in America no longer wanted to be part of. They were sick and tired of the endless wars and ever-increasing taxes, regulations, and oppression that come with empire and overgrown military establishments.

In fact, there was a deep antipathy toward standing armies among the Founding Fathers. The words of James Madison, the father of the Constitution, reflect the mindset of our American ancestors:

A standing military force, with an overgrown Executive will not long be safe companions to liberty. The means of defence agst. foreign danger, have been always the instruments of tyranny at home. Among the Romans it was a standing maxim to excite a war, whenever a revolt was apprehended. Throughout all Europe, the armies kept up under the pretext of defending, have enslaved the people.

For more on how 18th- and 19th-century Americans felt about standing armies, see my article “The Biggest Threat to American Liberty.”

What about foreign interventionism? The speech that John Quincy Adams delivered to Congress on the 4th of July, 1821, entitled “In Search of Monsters to Destroy,” expressed the sentiments of our predecessors. Adams pointed out that there were lots of bad things in the world, things like tyranny, oppression, famines, and the like. He said though that America would not send troops to slay these monsters. Instead, America would build a model society of freedom right here at home for the people of the world. In fact, if America ever became a military empire that would engage in foreign interventionism, Adams predicted, it would fundamentally change the character of American society, one that would look more like a society under dictatorial rule.

That’s not to say that 19th-century America was a libertarian paradise with respect to warfare, any more than it was a libertarian paradise in general, as I pointed out in my article “America’s Welfare-State Revolution.” But the fact is that there was no overgrown military establishment, no CIA, no NSA, no conscription, no foreign interventionism, and no foreign aid (and no income tax, IRS, Federal Reserve, and fiat money to fund such things).

There was a basic military force but in relative terms it wasn’t very large. There were also wars, such as the War of 1812, the Civil War, and the Mexican War, and many military skirmishes, but with the exception of the Civil War, the casualties were relatively low, especially compared with such foreign wars as World War I and World War II.

Moreover, it was an established practice to demobilize after each war. That is, a permanent war machine and perpetual war were not built into the system. War and military interventionism were the exception, not the rule.

That all changed with the embrace of a national-security establishment after World War II. In his Farewell Address in 1961, President Eisenhower observed that the national-security state — or what he called the military-industrial complex — constituted an entirely new way of life for the American people, one that entailed what amounted to a new, permanent warfare-state branch of the federal government, consisting of an overgrown military establishment, a CIA, and an NSA, along with an army of private-sector contractors and subcontractors who were feeding at the public trough on a permanent basis.

Most significantly, Ike pointed out that this national-security apparatus constituted a grave threat to the liberties and democratic processes of the American people.

This revolutionary transformation was justified in the name of “national security,” which have become the two most important words in the American lexicon, notwithstanding the fact that no one has ever been able to define the term. The warfare-state revolution would be characterized by an endless array of threats to national security, beginning with communism and communists, the Soviet Union, China, North Korea, Cuba, Vietnam, and others, and later morphing into Saddam Hussein, terrorism, terrorists, Osama bin Laden, al-Qaeda, Boko Haram, ISIS, Libya, Syria, Yemen, Afghanistan, the Taliban, and even the Muslims.

In the process, Adams proved right. By grafting a totalitarian-like structure onto America’s federal governmental system, the United States began displaying the characteristics of a dictatorial society.

Assassination, torture, rendition, secret prisons, medical experiments on unsuspecting Americans, the hiring of Nazis, indefinite detention, partnerships with criminal organizations and foreign dictators, coups, sanctions, embargoes, invasions, undeclared wars, wars of aggression, and extra-judicial executions. When any of those types of things occurred in the 19th century, they were considered exceptions to the system. Now they have become permanent parts of the system.

And look at the results of this gigantic warfare-state transformation: ever-increasing infringements on liberty and privacy, ever-increasing spending, debt, and taxes, and ever-increasing anger and hatred toward our country. Yes, all the things that characterized the British Empire that British colonists revolted against in 1776. How’s that for irony?

Meanwhile, like the welfare state, modern-day Americans continue to remain convinced that their system of government has never changed in a fundamental way. They continue to play like their governmental system is founded on the same constitutional principles as when the country was founded. It is a supreme act of self-deception.

The truth is that America has now had two different governmental systems: One without a national-security apparatus and one with it. It seems to me that it’s a no-brainer as to who was right and which system was better in terms of freedom, privacy, peace, prosperity, and harmony.

via America’s Warfare-State Revolution – The Future of Freedom Foundation.