Addison Wiggin – November 22, 2011
- When the cops don’t bother knocking: The ugly side of “new taxes and weird fees”…
- Protections dating back to the Magna Carta invalidated by a U.S. court… whatever happened to The Idea of America?
- Jim Nelson on how to stay ahead of the inflation that will result from the supercommittee’s crash-and-burn
- “The Chairman Game”… The Fed tries to show its cute, fun side and fails miserably
- Reader proves the “whipped-dog principle,” improbably stands up for the TSA… and more!
It’s 2:00 a.m. You’re sleeping soundly. Suddenly, police in SWAT gear smash open your front door. You and your spouse are shaken from a sound sleep, bright lights shining in your eyes as you’re ordered to “get the f*** on the floor.”
The cops ransack your home. They don’t tell you, but they’re searching for drugs and guns.
You don’t know what’s going on… you’ve done nothing wrong. Matthew Spaulding lived through something like this a week ago today. Consider it the ugly side of “new taxes and weird fees” — the police state coming to your neighborhood.
“They told us to get on the ground,” Mr. Spaulding, a Jefferson, Iowa, resident told the local Des Moines TV station. “I got on the ground, and they put me in handcuffs.”
“Then they threw my dad to the ground, and my dog Sadie was right here, sniffing my head. She was next to me. They shot her. The blood got on my face, and then she took off running behind me, and they shot her like three more times.”
“My son hit the ground,” says Matthew’s disabled father, Chris. “I hit the ground, but I didn’t make it too fast, so (the officer) jumped on the middle of my back, shoved his knee in and held a gun to the back of my head and handcuffed me. After they shot my first dog, my mom came out.”
Then it was Matthew’s grandmother’s turn to be slammed to the ground. The cops were executing a search warrant, looking for drugs and a stolen Xbox video game system. They found nothing. No one was arrested. Two of the family dogs are dead.
Police aren’t commenting.
Neither are the fat asses who peppered-sprayed tuition-paying student protestors over the weekend at UC Davis. The incident was caught on video by another student and has since gone viral on the Web.
These ignorant rent-a-cops haven’t been strung up by their testicles, as you might expect — they’ve been placed on “administrative leave” and are still getting paid while the incident is under review.
We were already vigilant of the ever-increasing use of military tactics by local and city police departments. But this video made us even more concerned…
“U.S. police forces have become increasingly militarized, and it’s showing in cities everywhere,” writes Norm Stamper, the former police chief of Seattle. “Everyday policing is characterized by a SWAT mentality, every other 911 call a military mission.”
“Originally,” writes Arthur Rizer, an ex-soldier and ex-cop in The Atlantic, “only the largest of America’s big-city police departments maintained SWAT teams, and they were called upon only when no other peaceful option was available, and a truly military-level response was necessary.”
“Today, virtually every police department in the nation has one or more SWAT teams, the members of whom are often trained by and with United States special operations commandos.”
“When police officers are dressed like soldiers, armed like soldiers and trained like soldiers, it’s not surprising that they are beginning to act like soldiers.”
Last week, the cops were called to an elementary school in Fort Myers, Fla., because a little girl kissed a little boy during gym class.
The teacher who saw it notified the assistant principal, who — suspecting a sex crime in progress — notified the cops.
At least, in this instance, they exercised their better judgment. “Deputies do not appear to be further probing the preteen kiss,” according to The Smoking Gun, which obtained a copy of the police report.
Last May, a SWAT team in Tucson, Ariz., raided the home of Jose Guerena, an Iraq war veteran who was asleep one morning after working the graveyard shift at a mine.
Suspecting a robbery, he told his wife and four-year-old son to hide in a closet. He grabbed his AR-15 to defend himself. Five cops fired 71 shots before Guerena could get off even one.
The cops had been looking for evidence of drug trafficking. They found none.
Even if you’ve done nothing wrong and you manage to successfully fend off the officers, you might be hauled off for doing so. The state Supreme Court in Indiana ruled last May that if police unlawfully enter your home, you have no right to defend yourself.
“We believe,” wrote the court’s majority, “a right to resist an unlawful police entry into a home is against public policy and is incompatible with modern Fourth Amendment jurisprudence.”
No matter that the ruling contradicts a precedent dating back to 1215 and the Magna Carta.
Forecast: As the mother of all asset bubbles continues to collapse, the police state will become more aggressive and blindly target the citizens its meant to protect and serve.
We’re sure, the incidences are already numerous… if you’ve read about similar events we’d like to know here.
“Government is not reason,” George Washington warned lo those many years ago. “It is not eloquence. Government is force; like fire, it is a dangerous servant — and a fearful master.”
We lament the creeping police state this morning, even as we learned we’re now able to download the brand-new Kindle version of The Idea of America — the collection of essays Bill Bonner and Pierre Lemieux assembled as a reminder of what America once was… and by implication, what it’s become now.
U.S. stocks have gyrated much of the day, mostly on the down side. The Dow was down as much as 100 earlier, but has since recovered the 11,500 level.
Traders are mostly marking time until later this afternoon, when minutes from the Federal Reserve’s Nov. 1-2 meeting are released… when every amateur Kremlinologist out there will try to sniff out clues to what the Fed will do at its next meeting, on Dec. 13.
As Yogi Berra would say, “include us out.”
Then again, you could pretend to be Ben Bernanke and have perfect knowledge about every aspect of the economy and how it interacts with all the other aspects.
That’s the idea behind the “Fed Chairman Game” on the website of the Federal Reserve Bank of San Francisco. You get to tinker with the fed funds rate and see how it affects unemployment and inflation. You even get to see future newspaper headlines that result from the actions you take!
But what you don’t get to do is start from current conditions. No, you only get a hypothetical starting condition of a 4.75% fed funds rate (current rate — below 0.25%), unemployment of 4.75% (current rate — 9.0%) and inflation of 2.14% (current rate — 3.6%).
This might be the biggest waste of Internet bandwidth since Perez Hilton.
Whoops, the anemic economic growth of the third quarter has even fewer red blood cells than originally thought.
Last month, the Commerce Department’s first guess at third-quarter GDP rang in at an annualized 2.5%. The next guess came out this morning: The “expert consensus” was looking for a teensy revision to 2.4%. In the event, we got a major revision, to 2.0%.
The year-over-year change looks even worse, at 1.5%. Factor out the Commerce Department’s statistical games, and GDP actually fell 3%, according to John Williams at ShadowStats.com.
“The U.S. dollar will remain in danger,” says our income specialist, Jim Nelson, examining the take-aways from yesterday’s failure of the “supercommittee.”
“Inflation will attack just about everyone spending greenbacks. And more downgrades will be unleashed on U.S. debt.”
But first, a quick review of how we got here: “Democrats want the Bush tax cuts to expire,” says Jim. “And the GOP wants ‘serious reforms’ to entitlement programs — aka, deep cuts or restructurings to Medicare, Medicaid and Social Security that will, likely, leave you on the outside looking in.
“Of course, neither can agree on anything. So nothing will change.”
“Oh, and those ‘triggers’ that are supposed to automatically go into effect, which would cut more than $1 trillion from spending starting in 2013, most likely won’t happen, either. “If Congress is good at one thing, it’s continuing the status quo. It’ll surely repeal that part of the original agreement.”
“Income investing is one of the only ways to combat inflation,” Jim goes on. “But a 2% yield that isn’t growing won’t help you at all. So right off the bat, Treasuries, savings accounts, bank CDs and even most investment-grade bonds are out the window.”
The answer, he says, lies in the sort of alternative income plays Jim writes about in Lifetime Income Report: “those that are growing their payments like wildfire and those that already pay substantially larger yields that outpace inflation.” Intrigued? Here’s where to act.
[Ed. Note: Jim’s success with alternative income plays has some readers asking for more. One reader put it like this: “Develop a portfolio that performs above average with as little volatility as possible. Above-average performance means that, after inflation, the portfolio returns 5-10% annually, for risk-averse investors.”
“Other portfolios could be dialed up in risk for moderate investors, and finally, a third portfolio could be developed for those who wish to put a portion of their assets into higher risk/higher reward investments.”
A tall order… but Jim is about to deliver. This is something he’s had in the works for 18 months… and he’s ready to take the wraps off next week. Watch this space.]
Geron Corp.’s departure from stem cell research “can only help the companies that are actually pioneering regenerative medicine,” says Patrick Cox, back today to further assess the fallout.
It’s not only BioTime, discussed yesterday, that stands to benefit. Another company he follows is leading the way in “human parthenogenic stem cells,” or hpSCs. These cells come from an immature unfertilized human egg.
“HpSCs have several enormous advantages over the embryonic stem cells that Geron was using,” Patrick explains. “Most notably, hpSCs have only half the genetic complexity of a regular embryonic or induced pluripotent stem cell.”
What does that mean? Patrick points to research in the prestigious British medical journal The Lancet: “Only 10 hpSC lines would immune match 80% of the world’s population.” That’s something embryonic stem cells could never do.
What’s more, the company “owns the key patents on hpSCs. I’ve even heard researchers complain that they own hpSCs themselves, even if somebody else figures out another way to produce them.”
“Thousands of our best minds are working now to exploit the power of stem cells,” Patrick concludes. “This means that breakthroughs are coming in adult, embryonic and induced pluripotent stem cells. Anything learned in any of these areas can then be applied by [this company] to their parthenogenic platform.”
New readers of Breakthrough Technology Alert receive a special report naming his favorite pioneers in the stem cell field, poised to deliver the life-changing gains. Access here.
After sinking to $1,675 yesterday, gold has reclaimed the $1,700 level on this, an options-expiration day for precious metals.
Silver is, once again, proving to be the more-volatile metal. Down as low as $31.16 in overnight trading, it’s only a dime or so away from $33, again.
Back to our new taxes and weird fees file: The crackdown on roll-your-own cigarette machines has come to New York City.
The city sued a smoke shop called Island Smokes last week, contending blatant tax evasion. An ordinary pack of cigarettes costs $13 in New York. Using the machine, it’s less than $4.
“By selling illegally low-priced cigarettes,” contends the suit, “defendants not only interfere with the collection of city cigarette taxes, they also impair the city’s smoking-cessation programs and impair individual efforts at smoking reduction, thereby imposing higher health care costs on the city and injuring public health.”
Yes, we’re gasping with pretended horror, too.
The business is fighting back, its lawyer contending it is neither selling nor manufacturing cigarettes. We wish them luck. We’re not holding our breath.
“I have been on this earth for 49 years,” writes a reader with an unsolicited account of airport security, “and have never flown until this past summer.”
“We flew out of Detroit to St. Petersburg I have a knee replacement, which didn’t make it through the scanner undetected. I was pulled off to the side as they explained what was going on. I was searched in front of everyone there, and when they didn’t find anything, was allowed to proceed.”
“This was TSA. They couldn’t have been friendlier or more professional in both airports. This is a different world we live in, and I like to know that when I get on a plane, everyone who may seem suspicious is evaluated — even if it’s me.”
“I am so sick of hearing these babies b**** all the time. These a**holes would bitch if they weren’t searched.”
The 5: Hmmm… is that a storm of hostile email we detect? And just in time for the busiest travel day of the year, too…
The 5 Min. Forecast
P.S. Confidential to members of The Essential Investor: It’s part of the experiment! We encourage you to post on the wall at the members-only website. I received this message today…
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