Hard Money Conference

Onion Jam, At least this won't lose any money. I recently attended a hard money conference sponsored by Cambridge House in Palm Springs. Also in attendance were such hard money luminaries as Peter Schiff, John Mauldin, and Eric Rule. Attending was an easy decision as it was only a one hour drive, and it was free. Well, almost free, $15 for a cheeseburger was a little high, even with the onion jam. Have you ever had onion jam? Interesting. The reason it was free is that the conference was designed to encourage the purchase of junior mining stocks, you know stocks costing 25 cents and listed on obscure stock exchanges. I was not convinced to buy any. 

I will be blogging about the various speakers over the next week, maybe two.

The first speaker I wish to talk about is the one I disagreed with the most. The whole point of his presentation seemed to be how awful it was to cut any military spending. I will point out tomorrow how charts and statistics are used to mislead. This presentation had such a chart. My guess is that the person was not lying, just hopelessly deceived. I may be naïve about this.

A more realistic chartHis chart had military spending as a percentage of total spending and it showed that military spending was down slightly over the last few years. This is a function of the much larger increase in non-defense spending that is the cause of the “decline.” But the decline is not in absolute defense expenditures, in that area spending is up, way up. It is just that other spending went up even more. 

Here is some information extracted from the US Treasury by alternative Internet newspaper CNS:

In fiscal 2002, which started on Oct. 1, 2001--three weeks after the Sept. 11, 2001 terrorist attacks—Defense Department spending was $423,856,810,000 in constant 2012 dollars. Ten years later, in fiscal 2012, Defense Department spending was $650,869,000,000 in 2012 dollars.

Thus, from fiscal 2002 to fiscal 2012, Defense Department spending increased by $227,012,190,000 in constant 2012 dollars—or by 53.558 percent.

This same article points out that even Obama, in real terms adjusted for inflation, increased defense spending by over 2%. 

I do not think that defenders of the status quo always realize the dire situation we are in. We are spending a lot more than we are taking in. In fact we are borrowing, mostly from the Fed by money printing, 42% of every dollar spent. Defense is 20% of this. (Actually it is more as they hide defense spending in other departments.) If we exempt defense spending from cuts, then the rest of the budget has to be cut more. Instead of cutting by 42% to balance our national budget, everything else must be cut by over 50%. Oh no, we must also exempt Social Security as well as defense, one might say. In that case we must also cut everything else by about 70%. What, cut medicine for poor people! If we exempt medical, Social Security, and defense we must cut the rest of the budget by over 100%.

Every part of the budget must be cut, Defense, Medicine, and Social Security cannot be exempt. We have no choice. The other speakers understood this better and I will talk about them over the coming days.