It's 2014. Welcome to the USSA. We have entered the age of social control.
There are only four historic navigational guides to what's going on in the US now. They're from world literature.
Two are by an Englishman, Eric Arthur Blair (British novelist George Orwell).
One is by a Russian novelist, Boris Pasternak, and that is Doctor Zhivago.
Published in Italy in 1957 and never ever published in the USSR, "Zhivago" was in the 1950s a tale so incendiary and so threatening to the Marxist power structure of the USSR that being caught with a smuggled copy of it in Russia was a death sentence or a ticket to a forced labor camp.
And one novel, published in 1953, Fahrenheit 451 is by an American, Ray Bradbury (1920-2012) a self-taught genius who schooled himself in the Los Angeles public libraries and in doing so escaped the political correctness and the mind-crushingly-destructive control mechanisms of the USA's early 1950s and was able to cut to the chase with unclouded vision.
The only other notable books on social control are how-two do-it manuals. Specifically,
one nonfiction book by a German, Mein Kampf
and one by a Russian, Nikita Kruschev, whose
Conquest Without War was published in the US in 1961.
Kruschev was famous for his threat to the West "We will bury you" which Americans understood as a threat of nuclear annihilation. But here's what Kruschev actually said:
Kruschev's actual verbal context was: "Whether you like it or not, history is on our side. We will dig you in". In a subsequent public speech, Khrushchev declared: "We must take a shovel and dig a deep grave, and bury colonialism as deep as we can." Later, on August 24, 1963, Khrushchev remarked during a speech in Yugoslavia, "I once said, 'We will bury you,' and I got into trouble with it. Of course we will not bury you with a shovel. Your own working class will bury you." This is a reference to the Marxist saying, "The proletariat is the undertaker of capitalism" based on the concluding statement in Chapter 1 of the Communist Manifesto: "What the bourgeoisie therefore produces, above all, are its own grave-diggers. Its fall and the victory of the proletariat are equally inevitable"
Marxism, and particularly Kruschev's form of it, (Kruschev also famously said, "We will force the United States to spend itself to death.") was the first and primary how-to-do-it manual for social control.
The late 1950s and the early 1960s the how-to-do it manuals were taken up by the American academics of what came to be called the New Left. Leaders of this pro-Marxist movement were notably the era's prominent sociologists and social theorists C.Wright Mills and Herbert Marcuse, and anthropologist Bronislaw Malinowski. Marcuse taught at Brandeis and Columbia. The New Left
All this has now had fifty years to sink in. A generation, and then a second one, of publicly-educated Americans were taught these precepts. Gasoline on the fire occurred in the late 60s with what started as the "Women's Rights" movement (initially a highly-valid endeavor: Swiss women were not allowed to vote until 1971) but which became the radical feminist movement, a sexualized version (of what was originally voting rights equal education and equal pay) and then became an 'academic feminism' that literally took over the arts and much of liberal undergraduate arts education in US colleges, starting out with 'feminist studies' that became in its heart and at its core a movement to dismantle the (white)(capitalist) (pro-business pro-manufacturing) (private land ownership/rural agricultural base) male power structure in the US and replace it with socialist/Marxist structure.
This fire that started in the USA's barn in the late 1950s and 1960s is now a roaring blaze, and you're now seeing America in flames.
The active ingredient in Marxism, the control lever of language, is the phrase "dictatorship of the proletariat" and this aspect, that of social control, is what's being taken up in the United States now, and under the Obama regime, it has become something that is nearing that may be unstoppable.
Our K thru 12 public school systems are now unrecognizable. High School: 1957 VS 2013
Market Witch began commenting in the late 1990s in these pages- fifteen years ago- that the USA's higher educational system was (A) collapsing in quality and (B) becoming no longer cost effective.
In 1998 we began counseling MW readers who had high-school-age children this: unless your child wants to be something remarkably specific- a specialty MD, a chemist, an microbiologist, an Agribiz scientist, a sleuth-scientist for the Center for Disease Control- do not send your child to college to allow your child an expensive four-year babysitter and the opportunity to become a lifelong binge drinker. Take that $$- in the late 1990s this was $20k to $40k a year and is now much more- and invest it according to the MW STRONG BUY lists, and urge your child at the same time to join the Peace Corps, work for Red Cross, get a job in a ski lodge, move luggage make beds or drive the shuttle for a great hotel, work as a day laborer, become a bartender, become a Marine, work as a merchant seaman on the Great Lakes, get a job in a brewery, learn social skills and become a waiter/waitress in an upscale restaurant, etc, etc, and then give your child all this money at the age of 25, and now with some serious life experience, to start a business.
In 2003 we began to comment on the USA's loss of its Middle Class and that, as a corollary, the United States was becoming a Third World Country and the first Western Developed Nation to fall from economic success for its masses into a collapsed economic power that now was developing a largely unskilled labor force in competition with the labor forces of Mexico, Brazil, China India and SE Asia, which were developing skilled labor.
PS: Mexico Brazil and China won. And on their heels are India and Malaysia. Mexico builds the world's cars, and Brazil and Mexico and China host much of the world's steel foundries. Brazil is becoming the world's Agribiz breadbasket and this year will become the world's largest exporter not only of iron ore but also of soybeans. China took over from the US as the world's leader of industrial production of consumer goods. It's no accident that China and India are buying most of the world's gold, because the economic balance of power has shifted Eastward as development ensues. And a highly-skilled labor force is developing in these countries even as, in the US, 70% of incoming freshman college students need remedial math and 34% need remedial English.
What's going to happen to these kids? Well, for one thing, they won't have jobs. And if they do, these will not be jobs that can support what once was a Middle-Class American Lifestyle.
The US now has one skilled automotive labor force that produces cars insider the US but the car companies in America are Nissan Toyota and Honda Hyundai & Kia that produce cars for the North American Market and these companies are Japanese and Korean and simply use America as a cheap colonial labor force. Much of the cars and truck production for the global/Latin American market are produced in Mexico, which is overtaking the Euro-production of vehicles (VW BMW Mercedes etc are built in Mexico for the Western Hemisphere markets). And the US has another skilled labor force, the steel industry, but most of the steel production is done by companies like Arcelor Mittal (MT) which is European, or Gerdau, which is Brazilian.
The US has one bright and shining skilled labor force and this is the world of Infotech: the domain of Google Intel Hewlett Packard Amazon eBay Apple IBM et al, and this overlaps with the science and engineering that goes on in companies like 3M Celanese and DuPont and most of these American companies are international/multinational. These factors are what is driving the USA's thriving equities markets even as the majority of Americans are withering in an America that offers part-time jobs to the once white-collar and no jobs at all to the no-collar, the t-shirt and billed-hat-indoors crowd.
There is also the issue of values.
In early 2008 we began commenting that the United States had broken into two separate countries, each with a different set of beliefs goals and values. One of these countries is deeply religious and one is not only secular but is aggressively against strong Christian and Jewish religious beliefs and is aggressively trying to dismantle the USA's religious structure.
One side of this split country is now making its play for complete social control.
One aspect of that social control: The Affordable Care Act.
At the start of 2015, a year from now, any employer, i.e. any small businessperson with 50 or more 'equivalent' employees (ie employees who work more than 30 hours a week) must themselves provide "affordable" health insurance for these employees and must bear the cost of this. That means the portion that employees pay can't be more than 9.5% of their household income, ie if your household income is $60k your monthly premium is $475. If employers don't offer this insurance for their employees they face fines and the fines are intentionally not tax-deductible. Small businesses with fewer than 25 full-time employees who make less than $50k annually may be eligible for small tax credits…but what's actually going to happen is that many many American small businesses will, when faced with all this, simply close their doors. That means that a country with an already 15% unemployment rate and the smallest work force in relation to the size of the population since 1978, will see its unemployment rate rise, not fall. What will also happen: many many small businesses who do stay open will avoid these draconian taxes by hiring part-time workers for three months, laying them off, and then re-hiring them, and repeat the process. The result: there will be even more underemployed and part-time American workers than there are now.
Here is a fun exercise in logic: Advocates of the ACA explain that "insurance works because all contribute" and compare the tenets of the Affordable Care Act to automobile insurance. If you do not own a car, however, there is no mandate to purchase auto insurance. Under the ACA, if you are alive, in America, you must purchase health insurance and for the most part you must purchase it through the ACA because the rates of non-participating and shut-out companies and hospitals are rising wildly. This is the sort of thinking typical of totalitarian regimes like that of Spain's Francisco Franco in the 1930s and it is the sort of thinking that caused American writers to pen books like For Whom the Bell Tolls and The Grapes of Wrath.
The United States govt has essentially gone Marxist. The ultimate example of Marxist/socialist power play is the confiscation of private property. One of those pieces of private property is your IRA or your brokerage account, which is about to be subjected to heavy additional taxation in order to pay for the millions- some forty million, actually, who will receive 'health care' coverage essentially free.
As the Marxists who seek power will tell you, poverty unemployment, poverty is disempowerment, poverty powerlessness, poverty is slavery.
Over 90% of all small businesses started in America are started by first and 2nd generation Americans. Many of them have first-hand experience living under totalitarian regimes as children or as adults.
Here is one of these 1st/2nd generation Americans speaking out recently:
I have a fundamental advantage over those who hold the opinion that big Government doing more and more for the common person is inherently good. They sincerely believe Big Government will protect average people (and particularly minorities) from powerful corporations, from rich people, from haters and racists. The perpetrators of those offenses, in their view, are corporations and people who believe in limited government. My advantage over Big Government liberals is that I and my family have lived both under National Socialism (Nazism) in Germany and also in post WWII communism in Romania and East Germany. In all three countries we had powerful socialist governments that controlled our lives. In communist East Germany, everyone was equal. People were equally poor. However, government officials government bureaucrats and big business leaders connected with the government were "more equal" than the common people. Those people enjoyed higher pay, had more freedom and much better health care. The common people had abysmal health care, poor food, no hope, and drab lives. I share liberals' concern for minorities. That concern is laudable. One of the countries my dad lived in after WWII was communist Romania. Unfortunately for us, our family was part of a minority. In the "people's" socialist state, our property was taken, our religious and political leaders were jailed, and we were hunted and arrested. A female cousin of mine was arrested at the age of 19 and sent off to a slave labor camp in Russia. What happened in the Big Government National Social state of Germany was even worse. The Nazis and communists monitored our activities and communication. Although these authorities were hampered by rather primitive technology, they did a pretty good job of controlling the people. There are no such technological limitations now. Beware the hand of Big Government bearing gifts. The Big Hand will take from you much more than you can imagine.
Author's name supplied upon request.
Here is what one highly-educated Afro-American (Thomas Sowell) actually thinks about the Obama/Pelosi/Harry Reid world:
THOMAS SOWELL: Stop the war on achievement -- Missoulain
We are becoming the USSA. Fight back, or become enslaved.
If you are in the 2014 American health care system, you are a unit. And whether you get treatment and what treatment you receive will depend upon statistics for your age and status and upon the whim of some bureaucrat. If you are texting on Facebook (USA: FB) or Twitter (USA: TWTR) or Windows Live Messenger (USA: MSFT) or posting some ad on Craigslist (privately-held)(but eBay USA: EBAY owns 30% of Craigslist so if you wish to invest in Craigslist, invest in EBAY shares STRONG LONG-TERM BUY) remember that you are being watched. It's that simple.
Traditionally, when Americans become collectively angry there is no stronger force on earth. At least that's how it used to be.
This may not now be the case. We believe that undereducated and now-powerless Americans have given up control to bureaucrats and social engineers.
Today's Americans could no longer now, we think, unify, address and control and therefore win a threat like
Just so you know: this is what the United was and this is what the United States sounded like fifty years ago, in the spring of 1963, on a Columbia LP, courtesy of the Mormon Tabernacle Choir.
Unbelievable as it must seem to most, this is who were we were as an American people.
Fifty years later, the US has become a colonialized country w far less global power and prestige, even though it still has a profoundly powerful military. But the control of that military is for the most in the hands of those who wish to see that power further diminished and its people further weakened..
At one time, when the nation was founded, it was based upon the principle that power was to be placed in the hands of the American people, not their leaders and not their bureaucrats. In the 1960s, the war cry of the disenfranchised was 'power to the people.'
Today, most Americans are disenfranchised and citizens of a colonialized country. Americans are spied upon by their own government, underemployed, impoverished, and they are citizens of a Third World totalitarian country with a totalitarian government.
We do not want to see any more US postage stamps that say Freedom or Equality or Liberty on them. These things may be happening someplace else but they are not happening in the USA.
Mark Twain said of Americans: It is easier to fool people than it is to convince them that they have been fooled. Ray Bradbury said: You can't make people listen. They have to come around in their own time, wondering what happened and why the world blew up around them.
Ray Bradbury also said: Insanity is relative. It depends on who has who locked in what cage.
It's a much-different country in a much-different world than a year ago.
There are however ways to invest very successfully into it. That's why we're here.
Financial USA in 2014: The rich get richer, the poor get poorer, the middle class has gone the way of the American Bison. US politics: could get ugly. Gold is as low now as you'll see it again and it's being artificially held down with Federal Reserve-created dollars that are debt, not wealth.
Ordinary Americans continue to struggle. The success of membership car rental Car2go™ in various cities (rent a car for 38 cents a minute or about $25 an hour, pick it up on the street in your "zone" leave it on the street in your "zone") and the newfound hipness of what are called "cargo bikes" mask the fact that many Americans can no longer afford to own or lease a car. Although many Americans continue to suffer a new impoverished status (almost fifty million Americans are on some form of food assistance, the real unemployment rate is around 15% ,and the US "underemployment" rate is 35-40%) not all Americans are poor or in trouble, not by a long shot.
US household net worth high a record high in late 2013 as home prices marched upward and US equities indices and their mutual funds surged. The Fed says US household wealth is up to just under $77.4 trillion, the highest level since 1945, when the Federal Reserve began to keep records on this. A sad fact is that since 2008, most Americans who were part of a new Investment Class of Americans lost money by selling at the bottom, locking in loss, and have since been terrified of equities and reluctant to re-enter what has been a very strong equities market in 2013 and which we expect to remain very strong as key big American companies continue with their fat black numbers.
Something no one is talking about in the US (too busy fussing over Obamacare, the Budget Wars, and the Second Amendment) is that the TwentyTeens and the TwentyTwenties Global Commodity Supercycle blazes right on.
Gold price in the US is being intentionally held down under the thumb of the USA's Federal Reserve and Treasury Dept who are pouring billions in paper "debt money" into our economy each month, additionally debasing our currency, but those chickens will come home to roost. US household debt is above $13.2 trillion and increasing fast, and the median US household owes almost $16,000 in credit card debt and can't pay it, can only pay the interest on it, just as our government does with its dollars.
We continue to advocate the Swiss franc (FXF) as a safer way to hold cash than your local bank, which offers virtually no interest on a bank- deposited dollar that is decreasing in value.
Various pundits and prognosticators, including the 8-ball teams at various Big Banks, including CIBC Bank of America Goldman Sachs UBS and others, are forecasting lower gold prices in 2014 and saying things like "Gold is unlikely to regain its former appeal" but we doubt this very much, and Big Banks in Europe doubt this as well: watch the US dollar continue to fall against the Euro. We expect gold to move higher overall year by year throughout the rest of the TwentyTeens and far into the TwentyTwenties.
Right now, as we enter the New Year, gold is selling above $1700/oz in key Asian markets and exchanges. We expect iron ore prices to be quite high in 2014 (above $145) and for copper and the others to become more expensive as well. If you believe in growth, you believe in copper and steel. China and Germany continue to have stronger economies than ours, but many already-profoundly-strong US companies will get even stronger this year.
Various prognosticators and pundits including the 8-ball teams at various Big Banks, are forecasting a 20,000 Dow and a 2000 S&P and a possible 5000 Nasdaq a la year 1999. We are not so sure. The indices are rising on the back of the Fed's monthly purchase of tens of billions in T-bills. That means the markets are going for an upward ride via a foundation of debt.
Not only are we continuingly edgy about the value of the dollar, we think the political power structure of our US government is fragile and is prone to, metaphorically, a 7.9 earthquake with aftershocks and there are any number of things that could set this off. We continue to advocate Big Global stocks and High Net Asset Value companies like US railroads, iron ore and copper ore mining companies, petroleum giants like Royal Dutch Shell, and powerful technology and chemical companies like Celanese and Siemens.
So without further ado, let's profit from 2014. We continue to advocate MarketWitch High Net Asset Value companies and their stocks, and we've put together the best-ever set of model investment portfolios for 2014 in addition to our monthly MarketWitch Strong Buy Lists. Come along with us, and prosper.