http://www.wired.com/gadgetlab/2009/08/britain-to-put-cctv-cameras-inside-private-homes/

£400 million ($668 million) will be spend on installing and monitoring CCTV cameras in the homes of private citizens. Why? To make sure the kids are doing their homework, going to bed early and eating their vegetables. The scheme has, astonishingly, already been running in 2,000 family homes. The government’s “children’s secretary” Ed Balls is behind the plan, which is aimed at problem, antisocial families. The idea is that, if a child has a more stable home life, he or she will be less likely to stray into crime and drugs.

It gets worse. The government is also maintaining a private army, incredibly not called “Thought Police”, which will “be sent round to carry out home checks,” according to the Sunday Express.

All I can say is WOW.  I don’t like to think about what the next steps will be.  If history is an indicator, things only get rough from this point on.

I often wonder where the bravery and spirit of state's, and especially individuals' stand in regard to their actual rights.  It seems, that I'm not the only one who would like to see a re-enabling of our rights as states and individuals and a removal of the Federal Government's jack boot on backs.  The feds have done everything from remove opportunities to build out infrastructure at state cost, expand passenger rail service, encourage higher standard for automobile exhaust, and more.

Yeah, that's right, the Federal Government.

While reading this article I stumbled into some events I did not know of and found it almost shocking in a refreshing sense.  In the article Walter E. Williams writers, "Eight state legislatures have introduced resolutions declaring state sovereignty under the Ninth and 10th amendments to the U.S. Constitution; they include Arizona, Hawaii, Montana, Michigan, Missouri, New Hampshire, Oklahoma and Washington.

There’s speculation that they will be joined by Alaska, Alabama, Arkansas, California, Colorado, Georgia, Idaho, Indiana, Kansas, Nevada, Maine and Pennsylvania."

Really?

Seriously?

Americans are growing a set again and stepping up to bat for their rights?!  It can't be!  I'm impressed.  As one state proudly proclaims in its motto, "Life free or die!", New Hampshire is staying true to its motto and constitution as was written long ago in that state, "That the several States composing the United States of America, are not united on the principle of unlimited submission to their General (federal) Government; but that, by a compact under the style and title of a Constitution for the United States, and of amendments thereto, they constituted a General Government for special purposes, delegated to that government certain definite powers, reserving, each State to itself, the residuary mass of right to their own self-government; and that whensoever the General Government assumes undelegated powers, its acts are unauthoritative, void, and of no force."

These types of acts, we need, desperately in this country now.  Especially in this time of weakness we need to protect and to act out in our best interests state by state, individual by individual to prevent further encroachment.

The Federal Government through blackmail, mostly by threatening to remove highway funds, has held states by the noose for so long many can't remember when states actually had access to and notions of independence.  Then of course, there is barely an individual alive today that can clearly remember liberty of the scale and expanse of the past.  In a mere decade or two, there definitely won't be a soul left.  We need to take it back so that we can have a new generation know and live in true liberty.

Of course, I am pessimistic yet hopeful.  Maybe we can regain ourselves and our choices for ourselves again.

Maybe.

My friend, who I NEED to go visit, haven't seen in ages, Topher posted a comment on a recent entry in regards to a solution for Detroit.  Many people are one way or another on this bailout mess and the situation Detroit is in.  The op-ed contribution by Mitt Romney (yeah, that guy) "Let Detroit go Bankrupt" is the best piece I've seen on what to do yet.  It's an honest to goodness GOOD solution.  Some of the parts that really just hit the nail on the head;

The need for collaboration will mean accepting sanity in salaries and perks. At American Motors, my dad cut his pay and that of his executive team, he bought stock in the company, and he went out to factories to talk to workers directly. Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat.

The playing field has to be leveled some, and not under rules, legislation, and law of Government.  That type of leveling is far worse than even the resentment workers can have for the rich elite of these companies.

Investments must be made for the future. No more focus on quarterly earnings or the kind of short-term stock appreciation that means quick riches for executives with options. Manage with an eye on cash flow, balance sheets and long-term appreciation. Invest in truly competitive products and innovative technologies — especially fuel-saving designs — that may not arrive for years. Starving research and development is like eating the seed corn.

PLEASE, get America innovating again!  We've allowed the world to catch up, STOP playing at that level.  We started the modern world and we can surpass and exceed what we've done better than anyone on the planet.  America has this history, don't squander it in a failure after a measly almost hundred years.

In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.

...and this last statement just summed it up perfectly.  If the Government is to play a role, it must be autonomous enough to not infringe on progress and actually allow progress to be made.  Invest the money research, but also don't stop there.  Get rid of the archaic regulations and limitations that cause Americans to be forced to build some of the most arcane and backwards automobiles in the world.  Let us step up and get that web of strangling Government manhandling out of the way.  Let's play for a win-win and not a win lose, we've been doing that since the 80s and it isn't working out so hot.

Pick just about any major out-of-control issue, and you can find politicians and other government figures coming up with all sorts of non-solutions to the problem that serve to do little more than placate the masses into believing that something is being done.
…
Hollywood suggests that spies and terrorists sit around and photograph things. The real intelligence services know better, but the reality is that to Joe proletariat, hassling photographers who are taking pictures of landmarks presents the illusion that the government actually is in control of the situation, when the reality is that nothing could be farther from the truth.

Over the years I've stated time and time again, that the system was going to collapse.  At least the financial system.  The physical system; infrastructure including rails, roads, electricity and all that sort of thing are still about 10-15 years out optimistically and 5-8 years out pessimistically.  Right now though, the United States has the potential for one of the greatest recoveries in history.  It also has the change to fall into complete ruin, and worse case scenario would have us smack in the middle of civil strife.  All of this though dictates one thing, "It is definitely time to INVEST!"  Warren Buffet said it best, and I'm paraphrasing here, "When the market is in fear, buy".  This is really good advice, the crux is, and the beauty of it is, the market will hit several more shocks still before gaining some type of balance.  During that time many investors, the market, will continue to fear.

On another front one has to be very careful not to invest in things that the Government will wreck, nationalize, or ruin.  There are a number of businesses out there like this, hundreds if not thousands, that are great investments but won't be if the Federal Government steps into the market to heavy handed.  Some of the great investment areas are railroads, and other companies that work heavily with commodities.  Commodities are going to be hot ticket items soon, and even with ups and downs, with the prices as they are, they'll be steals and bumped up some kind of crazy in 4-5 years.  In the near term, forget it.  There isn't a thing in the market for the near term schmucks to jump into without exponentially great risk.

On another note, even with my personal motive to buy, buy, buy right now, I do fear the personal liberty I've been losing will drastically increase.  Hopefully I'll be successful and if I do lose liberty, I can buy it back.  I know, that might sound pessimistic, but at this time the only thing that is going to maintain some semblence of liberty over the next 2-3 years is going to be those that are well off.  The middle class and poor are definitely going to get beaten up, especially those that have made stupid decisions about house purchases or even stock investments.  Two things that the middle class and especially the poor - if and when they get into them - rarely do with accuracly or intelligence.  With that said, crime and other petty uncivil things could definitely increase over the next 2-3 years in significant ways.  Desperation breeds bad things.

That's it for projections and such right now.  I'm off to get some food and to figure out what I'm going to invest in.

Without the bailout even starting to have effect, which when it does it will probably ruin these positive moves.

• Market Watch - Pending home sales index rises 7.4% in August:  NAR.
• Bloomberg's Report on the Same

In other news oil is also down.

• Forbes - Crude Oil Stockpiles Unexpectedly Jumped Last Week
• Reuters - U.S. crude, gasoline inventories jump; distillates slip

So now the question is, "will the markets be allowed to remedy this?" or will the regulatory hand of the Government, along with the inflation based money policy of the Federal Reserve just wreck these positive moves?

It seems no one wants to trust the market, even though it chugs along even in these dire times attempting to re-balance itself.  Instead we're now looking down the barrel of $700 billion of inflationary excess currency along with world banks shoving billions, if not a few trillions back into the entire global economy.  Again, the market will probably fall into a rather horrid depression, or even a rough recession, that will be dragged out possibly 2-3 years just because of these stupid moves by the world banks.

When money needs to hold its value and prices need to fall, these types of stupid actions just lead us to further extend these collapses.

• 2-3 years at this time, that's my current estimate, and I'm leaving it open to getting extended if the world Governments keep screwing up.
• 6 months - 1 years before prices hit bottom.  8 months - 1 year before the unemployment starts to wreck havoc.

When the unemployment starts hitting then we'll really start to get a solid picture of how long this thing is going to be with us.

It seems to be the battle cry these days.  All evidence, if one looks at history, seems to point to a few very solid conclusions.

1. The bailout won't fix things.
   
2. Regulation will only create more shadow markets in which to make these types of trades.  The problem is human nature, not regulation or the lack of it.
3. Changing regulation will not create anymore accountability and responsibility than what exists now in the mixed mode economy.  A true free market wouldn't increase the accountability or responsibility but it would make it more obvious when these traits are being ignored for short term profit.
4. These ups and downs will always occur, the extreme failures of financial markets will generally always occur in extremes.  The system that has the best track record so far to cope is the American System.  Some smaller states/countries also have a fairly decent track record.

Panic of 1873-1879

Lead Up
The Black Friday panic was caused by the attempt of Jay Gould and Jim Fisk to corner the gold market in 1869. They were prevented from doing so by the decision of the administration of President Ulysses S. Grant to release government gold for sale. The drive culminated in a day of panic when thousands were ruined - Friday, September 24, 1869, popularly called Black Friday.

The Coinage Act of 1873 changed the United States policy with respect to silver. Before the Act, the United States had backed its currency with both gold and silver, and it minted both types of coins. The Act moved the United States to the gold standard, which meant it would no longer buy silver or mint silver coins.

In September 1873, Jay Cooke & Company, a major component of the country’s banking establishment, found itself unable to market several million dollars in Northern Pacific Railway bonds. Cooke's firm, like many others, was invested heavily in the railroads. At a time when investment banks were anxious for more capital for their enterprises, President Ulysses S. Grant's monetary policy of contracting the money supply made matters worse. While businesses were expanding, the money they needed to finance that growth was becoming more scarce.

Cooke and other entrepreneurs had planned to build the nation's second transcontinental railroad, called the Northern Pacific Railway. Cooke's firm provided the financing, and ground was broken for the line on February 15, 1870. But just as Cooke was about to receive a $300 million government loan in September 1873, false reports circulated that his firm's credit had become nearly worthless. On September 18, the firm declared bankruptcy.

Problem
In Vienna and Berlin, Paris and London, St. Petersburg and New York, the business cycle had run its course. The failure of the Jay Cooke bank, followed quickly by that of Henry Clews, set off a chain reaction of bank failures and temporarily closed the New York stock market. Factories began to lay off workers as the United States slipped into depression. The effects of the panic were quickly felt in New York, more slowly in Chicago, Virginia City and San Francisco.

The New York Stock Exchange closed for ten days starting September 20. Of the country's 364 railroads, 89 went bankrupt. A total of 18,000 businesses failed between 1873 and 1875. Unemployment reached 14% by 1876, during a time which became known as the Long Depression. Construction work lagged, wages were cut, real estate values fell and corporate profits vanished.

Resolution
This financial panic resolved itself after 6 years.  Wages dropped, but prices did more during this period also creating continued efficiencies in the overall economy.  Unemployment reached 14%.  No reserve, no federal bail out.

Panic of 1907

Lead Up
The crisis occurred after an attempt by Otto Heinze to corner the market in United Copper, a company that had collapsed that October. When the bid failed, banks that had loaned money for the scheme experienced a number of runs which in time spread to affiliated banks and trusts, leading a week later to the downfall of the Knickerbocker Trust Company. With the collapse of New York's third largest trust company fear spread throughout the city's trusts and across the country as regional banks pulled deposits from New York and as nationwide people withdrew deposits from their regional banks.

Problem
The Panic of 1907, also known as the 1907 Bankers' Panic, was a financial crisis which occurred in the United States when the stock market fell close to 50% from its peak in the previous year. At the time the economy was in recession and there were numerous runs on banks and trust companies. The panic's primary cause was a retraction of loans by a number of banks in New York City, and the sentiment quickly spread across the nation leading to the closures of both state and local banks and businesses.

Resolution
The panic may have been worse if not for the intervention of J.P. Morgan, who convinced other bankers in the city to provide a backstop for the crisis.

This financial panic resolved itself after a short period, about a month.  Wages and prices did not fluctuate drastically.  Unemployment did not get out of control.  No reserve, no federal bail out.

Depression 1929-1939

Lead Up

The Clayton Antitrust Act of 1914, (October 15, 1914, ch. 323, 38 Stat. 730, codified at 15 U.S.C. § 12–27, 29 U.S.C. § 52–53), was enacted in the United States to add further substance to the U.S. antitrust law regime by seeking to prevent anticompetitive practices in their incipiency. That regime started with the Sherman Antitrust Act of 1890, the first Federal law outlawing practices considered harmful to consumers (monopolies and cartels). The Clayton act specified particular prohibited conduct, the three-level enforcement scheme, exemptions, and remedial measures.  This act is what actually gave the Sherman Act actual capability to act upon.  Before the Sherman Act was so vague that much legal discourse over how to actually take action limited its usefulness

Federal Reserve Created.  Created in 1913 by the enactment of the Federal Reserve Act, it is a quasi-public (government entity with private components) banking system composed of the presidentially appointed Board of Governors of the Federal Reserve System in Washington, D.C.

...this enabled one of the major causes...
Debt - A major problem with our current economy - is seen as one of the causes of the Great Depression, particularly in the United States. Macroeconomists including Ben Bernanke, the current chairman of the U.S. Federal Reserve Bank, have revived the debt-deflation view[citation needed] of the Great Depression originated by Arthur Cecil Pigou and Irving Fisher:[citation needed] in the 1920s, American consumers and businesses relied on cheap credit, the former to purchase consumer goods such as automobiles and furniture, and the latter for capital investment to increase production. This fueled strong short-term growth but created consumer and commercial debt.

Problem
The Great Depression was a worldwide economic downturn starting in most places in 1929 and ending at different times in the 1930s or early 1940s for different countries. It was the largest and most important economic depression in modern history, and is used in the 21st century as a benchmark on how far the world's economy can fall.

Extending the Problem
The Smoot-Hawley Tariff Act (sometimes known as the Hawley-Smoot Tariff Act) was an act signed into law on June 17, 1930, that raised U.S. tariffs on over 20,000 imported goods to record levels. In the United States 1,028 economists signed a petition against this legislation, and after it was passed, many countries retaliated with their own increased tariffs on U.S. goods, and American exports and imports plunged by more than half. In the opinion of most economists, the Smoot-Hawley act was partially responsible for the severity of the Great Depression.  Once again, another bad example of Government intrusion doing more harm than good.

Short Summary:

In all these cases, the most severe of financial issues occurred, and took longest to recover, when there was much more extensive Government involvement from the Federal Reserve, to the Anti-Trust Acts, to the reinforcement of those, to price controls.  In the most severe economic failure listed a distinct and large involvement by the Federal Government could easily be pointed to as part of the problem, if not at least extending the problem further along than otherwise would have occurred.

Government oversight is ok sometimes, but rarely does it truly help the situation.  I fear we might be heading that same direction with the bail out being pushed for today.  I fear we haven't really learned from the past and are ill-prepared to face this problem now.

Ben Benanke, being no idiot, but also not having much to work with is definitely in a tight position.  The Republican and Democratic leaders of the nation are also just spinning their wheels figuring out how to add more oversight, more regulation, and even more Govenrment beauracracy to the whole problem.  Adding band aids, is not going to stop a major arterial from bleeding out.  In the end, band aids still leave us dead.

I'd prefer the economy come alive again, do we have any leaders, who would possibly get a clue about what to do?  It doesn't appear so at this juncture, but I haven't written the country off yet.

Sound money.  $1 buck plus another $1 is $2 dollars.  If you have $2 dollars you have more than if you have $1 dollar and can of course purchase more things with that $2 dollars.

If someone then wants to borrow 50 cents from you, from your $2 dollars, you'll end up with $1.50.  Say you loan them that 50 cents, and they offer to pay you back the next day at 75 cents.  You'll then have $2.75 pending you don't spend any of that money today.

Now say you loaned out that 50 cents, and then another friend comes and loans another $1.40 from you.  They tell you they'll give you $3.00 bucks tomorrow.  You loan it to them, but know they'll probably not pay until a week or more, not the next day.  You're left with 10 cents.  5% liquid assets at that point with the prospect of having a payout around the end of the week of $3.75 cents.  Just shy of the $2.00 dollars you started with.

But now you remember you borrowed a quarter form a friend yesterday and he's now approaching you.  That friend wants his 25 cents, he's got some bubble gum to buy and he's not waiting.  You're over leveraged and now stuck letting your friend down, he won't be able to get his bubble gum.

You break to him the news, you only have 10 cents.  So he then demands his 10 cents.  He doesn't mind that you don't have the full amount, he figures he'll just take that out now and retrieve the rest later.  No need to have anymore money deposited in the account than he needs right?  Why prop you up because you've loaned all your money out and are left with little liquidity.  Well he takes his 10 cents and you're now out of money.  You've got nothing.

Another friend then approaches you and wants to borrow 50 cents since he let you borrow 50 cents a few days ago.  Well, you tell him you don't have it but he could borrow it from your other friend that borrowed some money from you.  He says okay.

So now we have a web of loans, no liquidity, and people owing you money, with no tangible prospect of paying up.  The metaphor isn't exact, but it really is that simple.  This is how the United States of America's Financial System has screwed itself, and us, the citizens of the nation.

How do we fix it?  Well long term we make sure those kids of our nation don't go loaning out everything they have.  The first kid that gets lashes - the United States Government for going around and requesting all the kids loan out all their money, so everyone can have their bubble gum immediately.

We also can't control the friends of the kids.  We can't do this, but we can setup the monetary system so that it doesn't provide over extension like this.  Property laws should dictate how these things go, and shouldn't let people default so easily.  There is structure that has existed before, most based on simple common sense, that should be put in place.  No need to heavily regulate, create new committees and boards that won't do anything useful, no need for continued nonsense!  Just make sure that people are held accountable for what they do and the mess will clean itself up.

Bail em' out, and we've just prepped ourselves for the next utter catastrophe.