Ron Paul: Rick Santorum a Typical Big Government Republican

A day after coming in third in the Iowa Republican presidential caucuses, Rep. Ron Paul (R-Texas) set his sights on New Hampshire and took aim at Rick Santorum. He also declared he had no intention of leaving the Republican party.

Santorum is a typical “big government Republican” who is not really conservative, Paul told Larry Kudlow Wednesday.

Paul said he’s the true fiscal conservative, who believes in free market economics—a concept that both Santorum and Newt Gingrich don’t understand.

“I think they think in terms of patching up things, and maintaining the status quo, and don’t rock the boat and you can’t cut anything,” Paul said.

However, former Massachusetts governor Mitt Romney deserved a “little bit of credit” for working in the private sector, he said.

Santorum, a former U.S. senator, finished just eight points behind Romney during Iowa’s caucuses Tuesday. The presidential battle has now shifted to New Hampshire, which hosts the first in the nation primary next week.

The congressman from Texas, who did well among independents and younger voters during Tuesday’s caucuses, told Kudlow he’s candidate who can bring those votes to the GOP. He also slammed those who tried to vilify his supporters throughout the campaign.

“I thought the party was a broad tent, a big tent, [that] brings people in … but aren’t young people pretty important?” Paul said. “I get real energized when I go to the campuses and talk about economic policy and talk about gold standards and things like this, but they don’t want to invite these people in.”

But while his libertarian views may have brought in independent voters, Paul dismissed the idea of running of an independent.

“Right now I’m doing so well, why would I think about it?” he said. “I was raised in a Republican family. I was elected twelve times to Congress as a Republican.”

'In The Money' Poll - 2011 results

Congratulations to Andy Bell (hedgie in NY) for winning our 2011 forecasting poll. Andy had the SPX finishing the year at 1245, which was the closest guess to the actual finish of 1257.60. Andy will be receiving a gift card for his fearless forecast.

Overall, the In The Money pollsters average forecast for 2011 was for a 5.9% gain to 1332. This seemed like a relatively conservative forecast for the first half of the year but things changed markedly in 2H11.

For the 10-year Treasury yield forecast, the winner was Gary Smith (aka "The Internet"). Although Gary's prediction of 3.00% was well bullish of the closing level at 1.87%, it was the most conservative guess in the group. The average forecast for the 10-yr yield was 4.34% last year.

This year (2012) will be our 8th annual year for the poll. With nearly all of the tallies in, the average forecast for this year is for the S&P 500 to gain 8.5% (1364) on the year. That's only slightly more bullish than the Wall St. bigwigs polled by Bloomberg who are looking for SPX 1348 (+7.2%). Our gang also has the 10-year yield finishing 2012 at 2.77%.

Good luck to everyone in 2012!!

PORTFOLIO CHANGE

A portfolio change is been posted to the website.

Taking Our Cues From Overseas

There isn't a lot in the way of market moving news this morning, which leaves the market taking its cues from abroad. Yesterday's session proved to be the biggest up move in two weeks, so its normal to see a pullback. But there were also some developments overseas.

Yields are creeping back up in Spain, which is rekindling concerns in Europe. Also, the financial health of Hungary is now surfacing. These are weighing on the euro, and we know whenever the euro is down U.S. stocks are also down.

Asian markets were mixed overnight with Japan higher but China lower again. Premier Wen Jiabo made cautious comments about the country's economic outlook, which is never a good sign for one of the worlds largest and fastest growing economies.

All of the above had led folks to the safety of the dollar, which is hurting most commodities. Gold prices are adding to yesterday's gains near $1610. And oil prices are only down fractionally after hitting $103 yesterday. But copper, silver, and most other commodities are weaker on the day.

The 10-year yield is down slightly to 1.95%. You sure don't get the sense that the U.S. economy is picking up steam with a yield below 2.0%. Where's the love? As for the VIX, it is up 3% so far back to 23.65.

Trading comment: I was fairly impressed with yesterday's action. Volume picked up to its highest level in 7 trading sessions. And technically the SPX put considerable distance from its 200-day moving average, which should now act as support. Bullish sentiment among investors is rising, but not yet at alarming levels. So I think that this rally can push higher before we have another correction. I wouldn't be surprised to see the runup continue into Q1 earnings season.

PORTFOLIO CHANGE

A portfolio change been posted to the website.

Bulls Cheer The Start To The New Year

The markets are sharply higher in early trading as the bulls cheer in the New Year. This buying interest was absent late last week as the market fell in the latter half of the week and pushed the SPX to close exactly flat for 2011.

Asian markets were strong overnight. India reported its best manufacturing reading in six months. Europe's markets are also strong this morning, with another meeting scheduled for Merkel and Sarkozy.

The euro is up and the dollar is lower, helping to boost commodities. Gold prices are rallying back up to nearly $1600 (+2%). And oil prices are up even more ($102.55) amid threats from Iran regarding Hormuz and blocking shipping lanes.

In the U.S., the December ISM Manufacturing index rose to 53.9 from 52.7 last month. But the market was already nicely higher before this data came out. Recent economic data has been strong, and I wouldn't be surprised to see upward revisions to Q4 GDP estimates soon.

The 10-year yield is also rallying up to 1.96%, but still below the 2.0% level that has been resistance of late. As for the VIX, it is down +3.5% so far near the 22.50 level. It will be interesting to see if the recent trend towards lower volatility persists, or if rhetoric out of Europe heats up again and drives volatility higher like in 2011.

Trading comment: The SPX is staging a strong breakout this morning. As you can see from the chart below, the SPX has been consolidating right at its 200-day moving average for the last 5 days. Today, it is spiking higher and putting some distance between what should now be support at that key moving average. This is a bullish sign and should lead to more short-covering if it holds into the close. As earnings season approaches, I also hope that we don't get any big preannouncements to the downside. We have already heard about some disappointments in the semi space, so reports related to those companies should be discounted already.

How to Become Free From Debt II

This essay is from the website, which itself is a clarified revision of my blogpost of October 10, 2010.  It's critical that I re-publish it here.  Banking is not the root of all evil, but it is a manifestation of the root of all evil within our own thinking.  This is about a simultaneous ending of both what's inside us and its outward manifestation.  This is Occupy Your Heart and Occupy Wall Street, simultaneously.  Both must happen, simultaneously.

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To state the obvious: people all over the world are dealing with endless debt, slaves to banks, slaves to their own promises. I get lots of emails from folks wondering what they can do. Debt puts us asleep to reality and blinds us to gratitude, compassion, and abundance.

 

It begins with freeing our minds of debt

Debt is attachment, sense of guilt, grudge, sense of vengeance: otherwise called consciousness of credit and debt, which physically manifests itself in the world as banking and commerce.  Obviously, I'm saying nothing new here: We can never be forgiven of debt if we cannot forgive others.  We cannot forgive others without simultaneously forgiving ourselves. 

Thus, before reading on, do a mental inventory of everyone you hold a grudge against.  When you can find forgiveness for each and every one of them, when you completely let go,  you've cut this noose around your neck.  Then you can come back and read the rest of this, about banking.  Why?  Because then you will see that banking is unreal, an illusion, and what I say will confirm what you already know.

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We must be responsible.

We naturally have a sense of responsibility to pay our debts.

Banks take advantage of our natural sense of responsibility, and this is how we get under their control.

But if you understand the nature of banks, you understand to whom you are truly responsible.

Are you obligated to pay a bank "back"?

If you asked me for a loan and I wrote you a bad check, would you be obligated to pay me "back"?  

Yeah, let your mind go wild: imagine you asking moneyless me for a loan to buy a house! I then write you a bad check for $200,000 and tell you to not only “pay me back,” but with interest!  Sounds unbelievably absurd, huh?  But this is the very nature of fractional reserve banking and fiat money.  But the absurdity doesn’t stop there.  If you don’t “pay me back,” I get to “re-possess” the house you buy with the “loan.”  Ha!  “Pay me back,” as if I ever lent you anything!  Ha!  “Re-possess,” as if I ever possessed the house in the first place!

Funny how it sounds not only bad, but totally stupid, if I, as an individual, write you a bad check to buy a house, huh?

An individual who counterfeits a few dollars one time is guilty of felony, a federal offense, and will go to prison. An institution that counterfeits billions of dollars every day is called a bank, and its CEO and board members even get to be in the halls of government, as they are this very day!  They get to be the government! 

But this system has been the foundation of our civilization for centuries, so it must be okay, huh?  It's tradition, after all! 

Let's look at simple reality. You never had a debt to me in the first place, and I never gave or even lent you anything but a bad check! Ask yourself this: how can it be moral to even consider paying me “back”?  But you must also consider it was foolish to ask me for a loan in the first place. You must now find out what responsibility and reality is and to whom you’re really supposed to pay back.

We've  known these principles since civilization began

The ancient religions (Judaism, Hinduism, Buddhism, Christianity, and Islam) and philosophers did not talk about reducing interest. They spoke of abolishing interest! They saw the obvious: making profit on nothing is criminal.  It will invariably evolve into fractional reserve banking, counterfeiting, as is rampant right now. 

(see Is Banking Criminal? What the World's Ancient Philosophers & Religions Say)   

Be Responsible

I'm not talking any hidden conspiracy theories here.  Every banker and economist knows, logically, mathematically, that your loan did not come from any bank.  Your loan came from the backs of the working class, from the poor, and it came from your natural environment.  If you erase the illusion of money and simply look at goods and services, this becomes crystal clear.  

Let me state it more simply:

You did not borrow any goods from the bank. You borrowed goods when you purchased goods with the bad check given to you by the bank.  You traded nothing for something.

Thus,  this is your responsibility: you must pay back your loan to those who have less than they need. 

Forget money and banks, which are literally nothing, and simply look at reality:
Anybody in the world who has more stuff than they need is in debt to those who have less than they need.  

When you accept the reality that you own nothing, then your debt is gone.

This is the Reality:  you are defaulting on the loan you took from real, living beings when you pay anything "back" to a bank.  A bank is not a living being.  It is a fiction and lent you fiction.  How can you default on a "loan" from the bank when the bank lent you absolutely nothing?

Excuse me for stating common sense:

it is totally irresponsible to rob the poor to pay the rich. 

It is totally irresponsible to rob reality to pay illusion. 

This is sacrifice to idols (illusions).

All our ideas to heal the world, our social programs, and our activism are futile, in the bigger picture, if we continue to practice interest banking, either as lender or borrower!  It makes no sense to fight the dragon while secretly feeding him at the same time, unless you enjoy perpetually fighting the dragon.

The proof has been all around us for centuries: interest banking causes goods to flow from the workers to the non-workers, from the poor to the rich, and is the cause of the bulk of world poverty, debt, environmental degradation, and mental anxiety that you are likely experiencing right now.  Just your own mental anxiety is proof enough, if you don't have eyes to see the world system. 

Is It Okay to Break Our Promises?

I’m a strong believer in keeping our word. This is why I don’t believe in making promises, because making promises is a guarantee that we will break our word and become liars. Making promises is boasting for tomorrow, the work of ego. When we make any kind of promise we put ourselves in debt.

 

However, if we do make promises, we must keep them if it’s in our power. But sometimes we simply cannot keep our promises.

Are there situations in which it is not only okay, but mandatory, to break our promises?

Let’s use an extreme example to drive home a point. Sometimes people make promises in an irrational fit of vengeance to do something horrendous, like a mafioso or gangster swearing vengeance upon somebody in a blood oath. If you promise to kill somebody, is it a “sin” to break your promise?

We in modern culture are making promises in an irrational fit of faithless anxiety and fear, faithlessness that everything we need is not in the present.  We are making promises to a Mafia. 

 

Both the "conservative" and "liberal" American public are finally waking up and seeing this, after years of being pitted against each other by this very Mafia that doesn't give a gnat's ass about liberal and conservative, religious or non-religious.  The profiteer cares not where profit comes from.    

In Sum: Steps to Becoming Debt Free

1. We must establish that it was bad judgment to take out a loan in the first place. We lost faith that everything we needed was available in the present, as it has been for zillions of years in nature's balance.

2. We must acknowledge that we made a promise to pay back what we borrowed, and we want to be responsible and keep our promise.

3. We must also acknowledge that our promise was more than a simple “yes” and “no," because we signed a contract promising we would pay back our debt. We must realize that going beyond a simple yes or no comes from a corrupt mind and reasoning. A lie is a lie, and to sign a contract is to water down truth.  How is telling a lie "under oath" any different than telling a lie not "under oath?"  Both the mind that requires us to sign a contract and the mind that signs the contract are equally corrupt: both are lost in faulty, irrational thinking.  Now that we've acknowledged this error, we forgive ourselves and move on.

4. We must now ask ourselves where our loan came from so we can pay it back. Again, every banker and economist knows that a bank does not lend us what belongs to the bank. The bank wants you to think it is lending to you from its own reserves, but it is lending nothing.  Not only that, the bank has the audacity to charge you interest on nothing, creating more illusion of something from nothing. Every banker knowingly practices this deception. But every bank justifies itself, not because it does not know that what it is doing is deception, but because what it does is tradition, and all of commercial civilization depends on this tradition! The bank, however, does deceive both itself and us into thinking life will end if it does not practice this deception.  Faithlessness is belief that everything real will fall apart unless you practice a lie.  Faith is belief that everything real will succeed if you are completely real, totally true.  Faithlessness is pretense.  Faith is sincerity.

It is true that everything that is false, the bulk of commercial civilization, would collapse without interest banking.  And it must collapse if we and other living beings are to survive.

5. On realizing we have entered into a knowingly-deceptive contract, our contract is invalidated, freeing us from any responsibility to the contract. The fact that most all the world uses deceptive contracts does not validate any of those contracts. It is, in fact, irresponsible to hold to a corrupt contract in the same way it is irresponsible for a mafioso or gangster to hold to a blood oath to his peers!

6. We must not stray from our integrity, from our responsibility to pay back our debt! Thus we must ask ourselves where our loan truly came from!   When you erase the illusion of money and simply look at goods and services, reality becomes clear.  In the greater world economy, we see, obviously, that goods and services flow from workers to non-workers, from the poor to the rich, from the creative to the non-creative, from the productive to those who produce only illusion, from the givers to the moochers.  The bankers take, and do not borrow, from the world’s workers and creators, and they pay nothing back. By doing any business with the bank, you have become an accomplice to theft and you must reconcile it. You have taken an illusion, fiat money, from the bank, and used it to trade for actual goods created by the world’s poor, causing goods to flow from the poor to the rich, from those who need to those who do not need.

The bank may turn you over to a collection agency. But if you have already returned your stolen goods, the bank has no more power over you.  Perhaps in many countries the bank can jail you.  This is where you must have faith in the Power of Truth, giving you joyful power to shine through Persecution, as Gandhi, Martin Luther King, and Jesus demonstrated.

There is talk of getting banks to forgive debts.

We could talk about regulating crime, reforming crime, or we could talk about ending crime altogether, refusing to do any business whatsoever with crime. 

Some people in the world are talking about reviving the ancient concept of Jubilee.  Jubilee is a concept in the Torah, where Israelites would forgive each other's debts every seven years and every  49 years.

But let's go back to me "lending" you a bad check to buy a house.  Now how can we talk about me forgiving your debt? It’s like asking a rapist to forgive the victim.  It's like talk of getting banks to blow themselves up. 

Jubilee was created for families, friends, and neighbors.  People lend to family, friends, and neighbors with zero profit motivation.  But the very nature of a lending institution is profit from nothing.  A lending institution simply cannot be moral and simply cannot look out for the good of the borrower, despite appearances.  It cannot forgive and cannot be forgiven, not in this life or any life to come. A bank runs on unforgiveable sin (debt).  Its very nature and lifeblood is willful sin (debt).  To end willful debt is to end banking.