Robert Gore Said That? 10/10/18

On Septemeber 30, at Murphy, North Carolina, I addressed the Appalachian Network PATCON, a gathering of very bright people on the cutting edge of preparation for the coming catastrophe. The topic was: “How to Survive an Economic Collapse.”

A Silver Lining, by Robert Gore

A political victory only, not a stand on principle.

No lion, tiger, bear, or wolf would, if it could choose, give up its claws or fangs. No poisonous snake or spider would surrender its venom. Only humans voluntarily abandon their means of survival.

Reason is humans’ tool of survival and separates them from the other animals. The Oxford Dictionary defines reason as: “the power of the mind to think, understand, and form judgments by a process of logic.” Ayn Rand had it right when she warned that reason was under sustained attack. It has only intensified since her death in 1982.

Anybody can accuse anybody of committing a crime. The longstanding legal presumption is that the accused is innocent until proven guilty. Given a guilty judgment’s consequences, the burden necessarily falls on accusers to prove guilt. If it did not, mere accusation would be a verdict leading to punishment of the accused, or Salem Witch Trial justice.

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No SLL Posting, 10/11/18-10/16/18

Two trips in a row, one personal, one business, prevent me from posting from 10/11/18 through 10/16/18. Posting will resume 10/17/18. In the meantime, if you have a spare 57 minutes, 30 seconds, watch my speech in North Carolina.

Thanks for your support.

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“Concerned” Bank of England Raises Alarm about Growth of High-Risk Loans, by Don Quijones

The market for high-risk loans that have little or no protections for creditors has ballooned. From Don Quijones at wolfstreet.com:

The power of Collateralized  Loan Obligations.

“The global leveraged loan market is larger than – and growing as quickly as – the US subprime mortgage market was in 2006,” said the Bank of England’s Financial Policy Committee in the statement from its latest meeting. And the committee is “concerned by the rapid growth of leveraged lending.”

In terms of magnitude, the US and EU “leveraged loan” market combined now exceeds $1.3 trillion, up from $50 billion at the turn of the century.

A “leveraged loan” is a loan that is extended to junk-rated (BB+ or lower), over-indebted companies. These loans are considered too risky for banks to keep on their books. Instead, banks sell them to loan funds, or they package them into highly rated Collateralized Loan Obligations (CLOs) and sell them to CLO funds and other institutional investors. In the UK, over £38 billion ($50 billion) of these loans were issued in 2017 — more double the amount in 2016 — and a further £30 billion ($39 billion) has already been issued in 2018.

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Rising health-care costs are eating away at your wages and you may not even realize it, by Alessandra Malito

Americans spend more for medical care and get less for what they spend than virtually any other country on the planet. The solution is less government interference with the market, not more. From Alessandra Malito at marketwatch.com:

Health-care costs are quietly eating away at American wages.

Employer-sponsored insurance premiums have jumped dramatically in the last 20 years, from almost $6,000 in 1999 to more than $18,000 in 2016, according to a report released Wednesday by the Economic Policy Institute, a progressive Washington-based economic think tank. Those health-care expenses accounted for 51.7% of the average annual earnings for the bottom 90% of the workforce in 2016, compared to 25.6% in 1999.

Out-of-pocket costs have also soared. Between 2006 and 2016, out-of-pocket expenses rose more than 53%. Insurers are paying more too; their costs increased 48.5% over the same time frame. As a result, people are spending record amounts of money on health care. In 2016, medical expenses accounted for 17.4% of gross domestic product — the total value of all the goods and services produced in the country — up from 8.4% in 1979 and 5.2% in 1963.

This rising price of health care costs families thousands of dollars a year in foregone wages, out-of-pocket costs and increased taxes, said Josh Bivens, research director at EPI. “Rising health costs are the clearest sign of how dysfunctional the American health care sector is,” he said. “We spend far more for the same — or worse — quality health care as our international peers, which has a tremendous impact on typical workers’ wages and their ability to secure health care on the job.”

Along with more expensive co-pays and deductibles, employers are pressured to take a bigger cut of their employees’ wages to pay for insurance premiums, it added. Workers may not directly see how those expenses affect their paychecks, but he said it’s one reason wages have been stagnant for most workers.

“If employer contributions to employer-sponsored premiums had remained constant as a share of cash wages since 1979, cash compensation could have been $387 billion higher by 2016 for the total labor force, or $327 billion higher for the bottom 90%,” the EPI report concluded. “For the bottom 90% of full-time-equivalent employees, this would imply cash wages that were higher by roughly $2,740 on average.”

The U.S. health-care system ranks last in numerous categories among other wealthy, advanced countries, according to a report released by the Commonwealth Fund last year, even though the U.S. spends the most on health care per capita. What’s more, medical offices and health insurance providers don’t always agree on what’s covered by insurance companies.

Socialism Destroys, by John Stossel

Just because you put the word “Democratic” in front of socialism doesn’t make socialism any better than the failure it has repeatedly been. From John Stossel at theburningplatform.com:

Socialism is hot.

Famous actors recently made a commercial proclaiming that “democratic socialism” creates some of the best parts of America. It’s “your kids’ public school” (says Susan Sarandon), the “interstate highway system” (Rosario Dawson), “public libraries” (Jay Ferguson), “EMTs” (Ethan Embry), “workers who plow our streets” (Max Carver) and “scientists” (Danny DeVito).

Wow. I guess every popular thing government does is socialism.

The celebrities conclude: “We can do better when we do them together.”

There is sometimes truth to that, but the movie stars don’t know that America’s first highways were built by capitalist contractors. They also probably didn’t notice that the more popular parts of government — public schools, EMTs, snow plowing, libraries, etc. — are largely locally funded.

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Revealed: The Run on Banks in Catalonia after the Independence Vote was Fomented by Madrid, by Don Quijones

The Spanish government will do whatever it takes to keep milk-cow Catalonia part of Spain. From Don Quijones at wolfstreet.com:

The clandestine role of the Spanish government in a run on deposits that drained €29 billion from Catalan banks.

Just over a year has passed since over two million people in Catalonia voted in a banned referendum to leave Spain. On that day, the separatists were given a brutal lesson in the raw power of state violence. Days later, they were given another harsh lesson, this time in the fickleness of money. Within days of holding the vote, which was brutally suppressed but not prevented by Spanish police, Spain’s north eastern region was forced to watch as one after another of its brand names moved their headquarters, at least on paper, to other parts of Spain.

Among the first companies to up sticks were Catalonia’s two largest banks, Caixabank and Banco Sabadell, which feared being cut off from European Central Bank funding in the event, albeit unlikely, of Catalonian secession. That would have meant no more virtually interest-free loans from the ECB or access to Europe’s repo markets. In other words, a death sentence, as Caixabank’s then president Isidro Faine recently admitted.

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Erasing History, Diplomacy, Truth, and Life on Earth, by Paul Craig Roberts and Stephen F. Cohen

You can make up fake history and news, but you can’t make up reality. From Paul Craig Roberts at paulcraigroberts.com:

One of the reasons that countries fail is that collective memory is continually destroyed as older generations pass away and are replaced by new ones who are disconnected from what came before.

Initially, the disconnect was handled by history and by discussions around family tables. For example, when I was a kid there were still grandparents whose fathers had fought for the Confederacy. They had no slaves and owned no plantations. They fought because their land was invaded by Lincoln’s armies. Today if Southern families still know the facts, they would protect their children by not telling them. Can you imagine what would happen to a child in a public school that took this position?

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