Introducing the latest bubble about to burst: The Money Bubble

Glenn has been warning for some time that our current system is unsustainable and simply cannot last. Today Glenn saw a chart that should strike fear into every American citizen. It shows the latest bubble that appears to be approaching the moment where it will burst -- the money bubble.

On Sunday, USA Today published a article by John Maxfield from The Motley Fool, featuring a terrifying chart showing the internet bubble, the housing bubble, and an unnamed bubble that Maxfield said was being called a stock market bubble.

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Now, Maxfield's article doesn't say there is a stock market bubble happening in the United States. He explains, "the fact that the Fed's monetary policies have caused stock prices to soar, doesn't mean there's a bubble."  He does say, however, that they will most likely deflate as part of an overall correction.

Now, why does Glenn think the above chart is so important?

"I'm not sure if the stock market bubble and the money bubble will be exactly the same, but I think they are. It's being propped up by bogus money. You are borrowing money from the Fed at zero interest rates, and that money is worthless. It's not backed up by anything. And when we really do hit the money bubble, we're out. We're out."

"I wanted to show this to you, because for those of you listening to me for a long period of time, you know I'm wrong on timing. I'm always wrong on timing, but I'm not wrong usually in direction," Glenn said.

Later in the show, Glenn pulled out the transcript from March 2008 when he was on Headline News where he described how "the money bubble" would come about and collapse.

"If you see what was in USA Today, you will see that they are now talking about the money bubble. We built a bigger bubble than that housing bubble in 2008. Remember when we said if we don't fix this, this will get much, much worse? And when it gets much worse, when it finally pops, what do we do as a people?" Glenn asked.

Way back in 2008, Glenn warned that the policy of the Federal Reserve could result in a "money bubble". The transcript from that segment is below via CNN.com:

BECK: Welcome to the real story. I want you to look at your newspaper today and you will see all kinds of headlines in there trumpeting the great news that home sales were unexpectedly higher in February. Hey, that`s great, until you start looking under the hood of those headlines, you`ll find a very different story. Yes, sales were up slightly in February, but they were down nearly 24% from last year. And prices, which are now just a little more important are now down 11% from last year, biggest drop in the history of the S & P index. I know, details, details, shut up guy on TV.

The Dow now was up another 180 points yesterday, nearly 8% in the last nine trading days alone. I mean, that`s great. Everybody`s happy, what recession? If I may introduce you, one more time, I`m sorry to do this to Mr. Gloomy Pants. The real story is that we are now witnessing the birth of our next bubble. Just like communists, financial bubbles don`t ever go away, they just change their look.

The internet bubble shaped, shifted into the housing bubble and then the housing bubble has now shifted into something, I`m officially declaring, the nanny state money bubble. For the last few years, America has been, if I may, on a Las Vegas binge. Wall Street would be, were like out with hookers every night, Main Street doing blow and eating caviar off of somebody`s belly and then the bill claim and we just handed over our credit card. You take American Express? Then the party ended and the bills started to come in. And you know, we didn`t go home because the bill collectors were waiting for us at the front door. We just stood there in the bar and now we`re holding our hands out.

You know, looking, hey, Paris Hilton, she by the way in this analogy is playing the federal government, Paris Hilton, you`ll cover us right? Well, for now, Paris Hilton is happy to do that. She is cutting rates. She is bailing out company. She is printing out money in the basement, anything to make us all forget that the open bar is now over. But sooner or later, we`re all going to realize, wait a minute, Paris Hilton is not only unemployed, but her credit is actually worse than ours is. She doesn`t have any cash and more importantly, she has no ability to earn any cash. She`s been paying our tab by borrowing money, in fact, Paris Hilton, I believe, is the perfect analogy for this economy, neither have any real substance and both look far better in night vision, I`m just saying.

Bruce Bartlett this is former U.S. treasury official. Bruce, you`re kind of regretting coming on this program after I just equated the economy to Paris Hilton.

BRUCE BARTLETT, FORMER U.S. TREASURY OFFICIAL: Wow.

BECK: The federal government, aren`t you? You can be honest. That`s OK.

Bruce, tell me, the Fed is printing money, dumping money, the government is. Everybody is doing this. The stimulus package. They`re now looking for more, they`re bailing out companies and now they want to bail out borrowers. How do you -- this is bogus. What`s happening here is bogus money. There`s no real creation of anything here except debt.

BARTLETT: Look, the Federal Reserve, basically, is responsible for all of these bubbles and credit cycles, whatever you want to call them because it always overdoes things. You know, when the economy is hurting, it shovels money out any way it possibly can, and then they just keep shoveling more and more because they`re never sure that they`ve done enough because there`s always enormous political pressure to do something. And then eventually, you get inflation, they start to tighten. They always tighten a little too much. And so you`ve always got this boom and bust cycle that basically, I think, comes back to the Federal Reserves` money creation policy.

BECK: Here`s the problem. It seems to me that we are always popping a bubble. And in retrospect, you always go back and go, yes, $900 a share for pets.com. That wasn`t such a smart idea. It all makes sense after you get past it. How is it that nobody is seeing that the Fed right now is dumping money or shoveling money, as you say, but they`re not paying attention to inflation at all. What they`re doing is going to cause more inflation and then they got a really Sinbad belt tight, you know, tighten the belt on us to the point to where it`s going to hurt the other direction.

BARTLETT: Well, the problem is what the Fed does to the economy always takes -- there`s always a lagged effect. What the Fed is doing today will ultimately impact on the economy two years from now. But by then, people will have forgotten that that was the root cause. By then, they`ll talk themselves into believing it`s something else all together. Remember, Alan Greenspan gave his famous irrational exuberance speech about the tech bubble in 1996, but it wasn`t until 2000 that the bubble finally burst.

And in the meantime, people talked themselves into believing it wasn`t really a bubble that it was all real.

BECK: I get it.

BARTLETT: And the same thing in the housing sector.

BECK: I have to tell you, it`s like we`re taking political rufies all the time but we just what? I don`t remember that at all. Bruce, thanks a lot.

 

From the moment the 33-year-old Thomas Jefferson arrived at the Continental Congress in Philadelphia in 1776, he was on the radical side. That caused John Adams to like him immediately. Then the Congress stuck Jefferson and Adams together on the five-man committee to write a formal statement justifying a break with Great Britain, and their mutual admiration society began.

Jefferson thought Adams should write the Declaration. But Adams protested, saying, “It can't come from me because I'm obnoxious and disliked." Adams reasoned that Jefferson was not obnoxious or disliked, therefore he should write it. Plus, he flattered Jefferson, by telling him he was a great writer. It was a master class in passing the buck.

So, over the next 17 days, Jefferson holed up in his room, applying his lawyer skills to the ideas of the Enlightenment. He borrowed freely from existing documents like the Virginia Declaration of Rights. He later wrote that “he was not striving for originality of principle or sentiment." Instead, he hoped his words served as “an expression of the American mind."

It's safe to say he achieved his goal.

The five-man committee changed about 25 percent of Jefferson's first draft of the Declaration before submitting it to Congress. Then, Congress altered about one-fifth of that draft. But most of the final Declaration's words are Jefferson's, including the most famous passage — the Preamble — which Congress left intact. The result is nothing less than America's mission statement, the words that ultimately bind the nation together. And words that we desperately need to rediscover because of our boiling partisan rage.

The Declaration is brilliant in structure and purpose. It was designed for multiple audiences: the King of Great Britain, the colonists, and the world. And it was designed for multiple purposes: rallying the troops, gaining foreign allies, and announcing the creation of a new country.

The Declaration is structured in five sections: the Introduction, Preamble, the Body composed of two parts, and the Conclusion. It's basically the most genius breakup letter ever written.

In the Introduction, step 1 is the notificationI think we need to break up. And to be fair, I feel I owe you an explanation...

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another…

The Continental Congress felt they were entitled by “the Laws of Nature and of Nature's God" to “dissolve the political bands," but they needed to prove the legitimacy of their cause. They were defying the world's most powerful nation and needed to motivate foreign allies to join the effort. So, they set their struggle within the entire “Course of human events." They're saying, this is no petty political spat — this is a major event in world history.

Step 2 is declaring what you believe in, your standardsHere's what I'm looking for in a healthy relationship...

This is the most famous part of the Declaration; the part school children recite — the Preamble:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

That's as much as many Americans know of the Declaration. But the Preamble is the DNA of our nation, and it really needs to be taken as a whole:

That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

The Preamble takes us through a logical progression: All men are created equal; God gives all humans certain inherent rights that cannot be denied; these include the rights to life, liberty, and the pursuit of happiness; to protect those rights, we have governments set up; but when a government fails to protect our inherent rights, people have the right to change or replace it.

Government is only there to protect the rights of mankind. They don't have any power unless we give it to them. That was an extraordinarily radical concept then and we're drifting away from it now.

The Preamble is the justification for revolution. But note how they don't mention Great Britain yet. And again, note how they frame it within a universal context. These are fundamental principles, not just squabbling between neighbors. These are the principles that make the Declaration just as relevant today. It's not just a dusty parchment that applied in 1776.

Step 3 is laying out your caseHere's why things didn't work out between us. It's not me, it's you...

This is Part 1 of the Body of the Declaration. It's the section where Jefferson gets to flex his lawyer muscles by listing 27 grievances against the British crown. This is the specific proof of their right to rebellion:

He has obstructed the administration of justice...

For imposing taxes on us without our consent...

For suspending our own legislatures...

For quartering large bodies of armed troops among us...

Again, Congress presented these “causes which impel them to separation" in universal terms to appeal to an international audience. It's like they were saying, by joining our fight you'll be joining mankind's overall fight against tyranny.

Step 4 is demonstrating the actions you took I really tried to make this relationship work, and here's how...

This is Part 2 of the Body. It explains how the colonists attempted to plead their case directly to the British people, only to have the door slammed in their face:

In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury...

They too have been deaf to the voice of justice... We must, therefore... hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

This basically wrapped up America's argument for independence — we haven't been treated justly, we tried to talk to you about it, but since you refuse to listen and things are only getting worse, we're done here.

Step 5 is stating your intent — So, I think it's best if we go our separate ways. And my decision is final...

This is the powerful Conclusion. If people know any part of the Declaration besides the Preamble, this is it:

...that all political connection between them and the State of Great Britain, is and ought to be totally dissolved...

They left no room for doubt. The relationship was over, and America was going to reboot, on its own, with all the rights of an independent nation.

And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.

The message was clear — this was no pitchfork mob. These were serious men who had carefully thought through the issues before taking action. They were putting everything on the line for this cause.

The Declaration of Independence is a landmark in the history of democracy because it was the first formal statement of a people announcing their right to choose their own government. That seems so obvious to us now, but in 1776 it was radical and unprecedented.

In 1825, Jefferson wrote that the purpose of the Declaration was “not to find out new principles, or new arguments, never before thought of… but to place before mankind the common sense of the subject, in terms so plain and firm… to justify ourselves in the independent stand we are compelled to take."

You're not going to do better than the Declaration of Independence. Sure, it worked as a means of breaking away from Great Britain, but its genius is that its principles of equality, inherent rights, and self-government work for all time — as long as we actually know and pursue those principles.

On June 7, 1776, the Second Continental Congress met in Philadelphia at the Pennsylvania State House, better known today as Independence Hall. Virginia delegate Richard Henry Lee introduced a motion calling for the colonies' independence. The “Lee Resolution" was short and sweet:

Resolved, That these United Colonies are, and of right ought to be, free and independent States, that they are absolved from all allegiance to the British Crown, and that all political connection between them and the State of Great Britain is, and ought to be, totally dissolved.

Intense debate followed, and the Congress voted 7 to 5 (with New York abstaining) to postpone a vote on Lee's Resolution. They called a recess for three weeks. In the meantime, the delegates felt they needed to explain what they were doing in writing. So, before the recess, they appointed a five-man committee to come up with a formal statement justifying a break with Great Britain. They appointed two men from New England — Roger Sherman and John Adams; two from the middle colonies — Robert Livingston and Benjamin Franklin; and one Southerner — Thomas Jefferson. The responsibility for writing what would become the Declaration of Independence fell to Jefferson.

In the rotunda of the National Archives building in Washington, D.C., there are three original documents on permanent display: the Constitution, the Bill of Rights, and the Declaration of Independence. These are the three pillars of the United States, yet America barely seems to know them anymore. We need to get reacquainted — quickly.

In a letter to his friend John Adams in 1816, Jefferson wrote: “I like the dreams of the future, better than the history of the past."

America used to be a forward-looking nation of dreamers. We still are in spots, but the national attitude that we hear broadcast loudest across media is not looking toward the future with optimism and hope. In late 2017, a national poll found 59% of Americans think we are currently at the “lowest point in our nation's history that they can remember."

America spends far too much time looking to the past for blame and excuse. And let's be honest, even the Right is often more concerned with “owning the left" than helping point anyone toward the practical principles of the Declaration of Independence. America has clearly lost touch with who we are as a nation. We have a national identity crisis.

The Declaration of Independence is America's thesis statement, and without it America doesn't exist.

It is urgent that we get reacquainted with the Declaration of Independence because postmodernism would have us believe that we've evolved beyond the America of our founding documents, and thus they're irrelevant to the present and the future. But the Declaration of Independence is America's thesis statement, and without it America doesn't exist.

Today, much of the nation is so addicted to partisan indignation that "day-to-day" indignation isn't enough to feed the addiction. So, we're reaching into America's past to help us get our fix. In 2016, Democrats in the Louisiana state legislature tabled a bill that would have required fourth through sixth graders to recite the opening lines of the Declaration. They didn't table it because they thought it would be too difficult or too patriotic. They tabled it because the requirement would include the phrase “all men are created equal" and the progressives in the Louisiana legislature didn't want the children to have to recite a lie. Representative Barbara Norton said, “One thing that I do know is, all men are not created equal. When I think back in 1776, July the fourth, African Americans were slaves. And for you to bring a bill to request that our children will recite the Declaration, I think it's a little bit unfair to us. To ask our children to recite something that's not the truth. And for you to ask those children to repeat the Declaration stating that all men's are free. I think that's unfair."

Remarkable — an elected representative saying it wouldn't be fair for students to have to recite the Declaration because “all men are not created equal." Another Louisiana Democrat explained that the government born out of the Declaration “was used against races of people." I guess they missed that part in school where they might have learned that the same government later made slavery illegal and amended the Constitution to guarantee all men equal protection under the law. The 13th, 14th, and 15th Amendments were an admission of guilt by the nation regarding slavery, and an effort to right the wrongs.

Yet, the progressive logic goes something like this: many of the men who signed the Declaration of Independence, including Thomas Jefferson who wrote it, owned slaves; slavery is evil; therefore, the Declaration of Independence is not valid because it was created by evil slave owners.

It's a sad reality that the left has a very hard time appreciating the universal merits of the Declaration of Independence because they're so hung up on the long-dead issue of slavery. And just to be clear — because people love to take things out of context — of course slavery was horrible. Yes, it is a total stain on our history. But defending the Declaration of Independence is not an effort to excuse any aspect of slavery.

Okay then, people might say, how could the Founders approve the phrase “All men are created equal," when many of them owned slaves? How did they miss that?

They didn't miss it. In fact, Thomas Jefferson included an anti-slavery passage in his first draft of the Declaration. The paragraph blasted King George for condoning slavery and preventing the American Colonies from passing legislation to ban slavery:

He has waged cruel war against human nature itself, violating its most sacred rights to life and liberty in the persons of a distant people who never offended him, captivating and carrying them into slavery in another hemisphere... Determined to keep open a market where men should be bought and sold, he has prostituted his negative for suppressing every legislative attempt to prohibit or to restrain this execrable commerce.

We don't say “execrable" that much anymore. It means, utterly detestable, abominable, abhorrent — basically very bad.

Jefferson was upset when Georgia and North Carolina threw up the biggest resistance to that paragraph. Ultimately, those two states twisted Congress' arm to delete the paragraph.

Still, how could a man calling the slave trade “execrable" be a slaveowner himself? No doubt about it, Jefferson was a flawed human being. He even had slaves from his estate in Virginia attending him while he was in Philadelphia, in the very apartment where he was writing the Declaration.

Many of the Southern Founders deeply believed in the principles of the Declaration yet couldn't bring themselves to upend the basis of their livelihood. By 1806, Virginia law made it more difficult for slave owners to free their slaves, especially if the owner had significant debts as Jefferson did.

At the same time, the Founders were not idiots. They understood the ramifications of signing on to the principles described so eloquently in the Declaration. They understood that logically, slavery would eventually have to be abolished in America because it was unjust, and the words they were committing to paper said as much. Remember, John Adams was on the committee of five that worked on the Declaration and he later said that the Revolution would never be complete until the slaves were free.

Also, the same generation that signed the Declaration started the process of abolition by banning the importation of slaves in 1807. Jefferson was President at the time and he urged Congress to pass the law.

America has an obvious road map that, as a nation, we're not consulting often enough.

The Declaration took a major step toward crippling the institution of slavery. It made the argument for the first time about the fundamental rights of all humans which completely undermined slavery. Planting the seeds to end slavery is not nearly commendable enough for leftist critics, but you can't discount the fact that the seeds were planted. It's like they started an expiration clock for slavery by approving the Declaration. Everything that happened almost a century later to end slavery, and then a century after that with the Civil Rights movement, flowed from the principles voiced in the Declaration.

Ironically for a movement that calls itself progressive, it is obsessed with retrying and judging the past over and over. Progressives consider this a better use of time than actually putting past abuses in the rearview and striving not to be defined by ancestral failures.

It can be very constructive to look to the past, but not when it's used to flog each other in the present. Examining history is useful in providing a road map for the future. And America has an obvious road map that, as a nation, we're not consulting often enough. But it's right there, the original, under glass. The ink is fading, but the words won't die — as long as we continue to discuss them.

'Good Morning Texas' gives exclusive preview of Mercury One museum

Screen shot from Good Morning Texas

Mercury One is holding a special exhibition over the 4th of July weekend, using hundreds of artifacts, documents and augmented reality experiences to showcase the history of slavery — including slavery today — and a path forward. Good Morning Texas reporter Paige McCoy Smith went through the exhibit for an exclusive preview with Mercury One's chief operating officer Michael Little on Tuesday.

Watch the video below to see the full preview.

Click here to purchase tickets to the museum (running from July 4 - 7).

Over the weekend, journalist Andy Ngo and several other apparent right-leaning people were brutally beaten by masked-gangs of Antifa protesters in Portland, Oregon. Short for "antifascist," Antifa claims to be fighting for social justice and tolerance — by forcibly and violently silencing anyone with opposing opinions. Ngo, who was kicked, punched, and sprayed with an unknown substance, is currently still in the hospital with a "brain bleed" as a result of the savage attack. Watch the video to get the details from Glenn.