Saturday, June 12, 2010
A POST BY 'STEVE321' ON THE BRIMELOW ARTICLE BELOW
"In the absence of a gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good and thereafter decline to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as claims on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to be able to protect themselves.
This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."
-- The above was said by Alan Greenspan, 'Gold and Economic Freedom' in 1966.
This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."
-- The above was said by Alan Greenspan, 'Gold and Economic Freedom' in 1966.
BRIMELOW AT MARKETWATCH ON HARRY SCHULTZ
JIM SINCLAIR POSTED THIS ONE AS SCHULTZ IS ONE OF THE 'MASTERS' OF THE MARKETS WHICH I DISCOVERED BACK IN THE 1970's WHEN I WORKED AT MONEX.
HIS NEWSLETTER IS ONE OF THE MOST EXPENSIVE.
http://www.marketwatch.com/story/hyperinflation-could-happen-suddenly-2010-06-10
HIS NEWSLETTER IS ONE OF THE MOST EXPENSIVE.
http://www.marketwatch.com/story/hyperinflation-could-happen-suddenly-2010-06-10
Monday, June 7, 2010
BILL BONNER OF THE DAILY RECKONING 6/7/2010 PUTS IT INTO PERSPECTIVE
Counting on Government Stupidity
The specious reasoning of Census employment
Bill Bonner
Reckoning from Baltimore, Maryland...
Well, the much-awaited unemployment report came out on Friday. The pundits, analysts, and kibitzers were all waiting. Their mouths open. Their pulses racing. They expected an "I told you so" moment.
Bloomberg polled them a week or two ago. The 2000 of them surveyed were overwhelmingly bullish...with the average forecast of a 27% increase for the stock market in 2010.
They must have thought the job figures would show that the 'recovery' was firmly underway...with unemployment finally turning down in a big way. Then it would be clear sailing...
Oops... Bummer!
It turned out that 95% of the new jobs were census takers - people paid by the government to count the people who pay the government.
It also turned out that people are waiting longer than ever to find a job...an average of 34 months compared to only 16 months in 2007.
Investors' mouths turned down. They sold stocks so they could go home for the weekend without worrying. The Dow dropped 323 points.
The shorthand interpretation? It's a Great Correction...not a recovery.
The census takers illustrate our point. Government spending - including government jobs - do not really make us richer. They make us poorer. If you could make people better off by hiring them to count each other, why not count them twice? Or three times?
The trouble is, no matter how often you do it...or how well you do it...counting people doesn't add to our wealth; it takes away from it. Because it diverts resources - human labor - from worthwhile activities to activities that are a waste of time. And the more people you hire, the bigger the waste...and the poorer you get.
Why count people anyway? So you can apportion seats in the House of Representatives? We got a census form in the mail. It looked official...and very nosey. As far as we're concerned, it's none of their damned business!
But wait a minute. What if the government hired people to do useful things - such as baking and pole dancing? Well, as Jefferson put it, if you expect the government to do your baking for you, you "will soon want bread."
As for the pole dancing, we don't know...
But there's no secret to what makes people wealthier. No magic. No miracles. No free lunches.
People want to believe that the feds can pull off some trick...that they can turn this Great Correction around by stimulating this or regulating that. Or how about tarring and feathering the BP chairman? Or sacrificing a few of Goldman's young virgins? What? There are no virgins at Goldman? Well, how about some old sluts from JPMorgan?
JPMorgan just got fined $50 million - the largest penalty ever handed out by a UK regulator. What was its crime? "Failing to protect billions of dollars of client money by keeping it in segregated accounts," says The Financial Times.
How much did clients lose as a result of JPMorgan's faithlessness?
Not a penny. But they could have lost big-time, said the FSA. And besides, the regulators are getting tough everywhere.
Back in the USA, BP faces criminal charges. We don't know exactly what its crime was either...but with so many laws on the books, it's hard to imagine the giant oil company didn't break a few of them.
Not that we're shedding any tears for the goo pumper. If they can't keep the oil in their pipes, they should get out of the oil business. But it's a tough business. And accidents are bound to happen.
Destroying the oceans and endangering life on planet earth could be called a mistake. But destroying the economy is malicious mischief. Which is what the feds are doing.
So, Friday, the news was let out that the jobs stimulus effort was a flop. And as it made its way from one Bloomberg terminal to the others...the traders sold!
'Risk off'...the traders call it. It means that they are selling their 'risky' investment positions and putting the money into safe positions - notably, US treasury bonds. The dollar rose on the news - and is now near a 4-year high.
The specious reasoning of Census employment
Bill Bonner
Reckoning from Baltimore, Maryland...
Well, the much-awaited unemployment report came out on Friday. The pundits, analysts, and kibitzers were all waiting. Their mouths open. Their pulses racing. They expected an "I told you so" moment.
Bloomberg polled them a week or two ago. The 2000 of them surveyed were overwhelmingly bullish...with the average forecast of a 27% increase for the stock market in 2010.
They must have thought the job figures would show that the 'recovery' was firmly underway...with unemployment finally turning down in a big way. Then it would be clear sailing...
Oops... Bummer!
It turned out that 95% of the new jobs were census takers - people paid by the government to count the people who pay the government.
It also turned out that people are waiting longer than ever to find a job...an average of 34 months compared to only 16 months in 2007.
Investors' mouths turned down. They sold stocks so they could go home for the weekend without worrying. The Dow dropped 323 points.
The shorthand interpretation? It's a Great Correction...not a recovery.
The census takers illustrate our point. Government spending - including government jobs - do not really make us richer. They make us poorer. If you could make people better off by hiring them to count each other, why not count them twice? Or three times?
The trouble is, no matter how often you do it...or how well you do it...counting people doesn't add to our wealth; it takes away from it. Because it diverts resources - human labor - from worthwhile activities to activities that are a waste of time. And the more people you hire, the bigger the waste...and the poorer you get.
Why count people anyway? So you can apportion seats in the House of Representatives? We got a census form in the mail. It looked official...and very nosey. As far as we're concerned, it's none of their damned business!
But wait a minute. What if the government hired people to do useful things - such as baking and pole dancing? Well, as Jefferson put it, if you expect the government to do your baking for you, you "will soon want bread."
As for the pole dancing, we don't know...
But there's no secret to what makes people wealthier. No magic. No miracles. No free lunches.
People want to believe that the feds can pull off some trick...that they can turn this Great Correction around by stimulating this or regulating that. Or how about tarring and feathering the BP chairman? Or sacrificing a few of Goldman's young virgins? What? There are no virgins at Goldman? Well, how about some old sluts from JPMorgan?
JPMorgan just got fined $50 million - the largest penalty ever handed out by a UK regulator. What was its crime? "Failing to protect billions of dollars of client money by keeping it in segregated accounts," says The Financial Times.
How much did clients lose as a result of JPMorgan's faithlessness?
Not a penny. But they could have lost big-time, said the FSA. And besides, the regulators are getting tough everywhere.
Back in the USA, BP faces criminal charges. We don't know exactly what its crime was either...but with so many laws on the books, it's hard to imagine the giant oil company didn't break a few of them.
Not that we're shedding any tears for the goo pumper. If they can't keep the oil in their pipes, they should get out of the oil business. But it's a tough business. And accidents are bound to happen.
Destroying the oceans and endangering life on planet earth could be called a mistake. But destroying the economy is malicious mischief. Which is what the feds are doing.
So, Friday, the news was let out that the jobs stimulus effort was a flop. And as it made its way from one Bloomberg terminal to the others...the traders sold!
'Risk off'...the traders call it. It means that they are selling their 'risky' investment positions and putting the money into safe positions - notably, US treasury bonds. The dollar rose on the news - and is now near a 4-year high.
Sunday, June 6, 2010
Thursday, June 3, 2010
Tuesday, June 1, 2010
Sunday, May 30, 2010
Dan Denning on the accuracy of Austrian Economic Theory
Whiskey & Gunpowder
By Dan Denning
May 27, 2010
Melbourne, Australia
There is a place in life for expert opinion. If a doctor tells us our heart is going to quit because we’re drinking too much beer and not exercising enough, we listen to him. If a physicist tells us that jumping from high places without a parachute could be bad for our health, we listen to him. If Tiger Woods tells us how to correctly hit a one iron or send a saucy text message, we listen to him.
But if a group of economists tells us that a government tax delivers a public benefit, we are inclined to guffaw in their collective face.
Most of the economics profession that gets quoted in so-called respectable publications has studied the wrong textbooks over the last 50 years. They are doctors prescribing remedies based on an incorrect understanding of illness.
Most mainstream textbook economists are reading from the playbook of John Maynard Keynes. They believe, and will say on command – not because there’s any evidence that it works but because it’s how you get tenured and earn grant money or get a government job – that when private demand falls because households and business de-leverage, it is the proper role of government to boost consumption and aggregate demand by increasing public spending. Amen.
As a scientific proposition, empirically speaking, there is zero evidence that this policy works. The one example trotted out is FDR’s spending boom in the Great Depression. But the evidence now suggests that it was war-time production that dragged the American economy out of depression, not morally enlightened fiscally policy.
There no evidence to suggest the big deficit spending really is better than doing nothing. But time after time, the interventionist mantra gets trotted out like the Ten Commandments in the Ark of the Covenant to incinerate anyone who doubts its gospel truth. Yet it’s just a bunch of superstition with very little basis in fact.
Economics is simply not a science in the same way that chemistry and physics are sciences. It’s probably not a science at all, to be honest. Or, if it is, it’s a pseudo science, having more in common with psychology than geology.
Complex adaptive systems like the modern marketplace do not behave mechanistically. They cannot be controlled precisely with the rods and levers of monetary and fiscal policy. To believe so is an enormous – and as we’re finding out – costly error. It’s also massively arrogant and conceited.
There’s a reason the great Austrian economist Ludwig von Mises called his great book “Human Action.” Economics is the study of human action. And human action is sometimes rational, sometimes irrational, sometimes predictable...but ultimately...very difficult to model and predict with charts.
As Nassim Taleb points out, all the most important stuff in your life probably happened or will happen in non-predictable ways. Most of the time, today is going to be like yesterday and tomorrow is going to be liked today. But the most life-changing things happen to you at times you’d have no way of predicting or preparing for. But not everyone is comfortable with this kind of un-planned spontaneity.
Please note the Austrian School of Economics was the only school of economic thought that accurately predicted the current crisis. Why? The Austrians correctly identified the influence of credit (free money to change your life) on human action. Altering the price of money alters incentives and changes individual calculations across the breadth and depth of an economy.
The Austrians pointed out that government-controlled interest rates are the real cause of the business cycle inasmuch as they lead to credit booms and inevitable busts. When the price of money is rigged, the market isn’t free. Only if you understand the “root cause” of the business cycle can you learn how to prevent bubbles from blowing up and popping later. The Austrian answer is, by the way, sound money.
By Dan Denning
May 27, 2010
Melbourne, Australia
There is a place in life for expert opinion. If a doctor tells us our heart is going to quit because we’re drinking too much beer and not exercising enough, we listen to him. If a physicist tells us that jumping from high places without a parachute could be bad for our health, we listen to him. If Tiger Woods tells us how to correctly hit a one iron or send a saucy text message, we listen to him.
But if a group of economists tells us that a government tax delivers a public benefit, we are inclined to guffaw in their collective face.
Most of the economics profession that gets quoted in so-called respectable publications has studied the wrong textbooks over the last 50 years. They are doctors prescribing remedies based on an incorrect understanding of illness.
Most mainstream textbook economists are reading from the playbook of John Maynard Keynes. They believe, and will say on command – not because there’s any evidence that it works but because it’s how you get tenured and earn grant money or get a government job – that when private demand falls because households and business de-leverage, it is the proper role of government to boost consumption and aggregate demand by increasing public spending. Amen.
As a scientific proposition, empirically speaking, there is zero evidence that this policy works. The one example trotted out is FDR’s spending boom in the Great Depression. But the evidence now suggests that it was war-time production that dragged the American economy out of depression, not morally enlightened fiscally policy.
There no evidence to suggest the big deficit spending really is better than doing nothing. But time after time, the interventionist mantra gets trotted out like the Ten Commandments in the Ark of the Covenant to incinerate anyone who doubts its gospel truth. Yet it’s just a bunch of superstition with very little basis in fact.
Economics is simply not a science in the same way that chemistry and physics are sciences. It’s probably not a science at all, to be honest. Or, if it is, it’s a pseudo science, having more in common with psychology than geology.
Complex adaptive systems like the modern marketplace do not behave mechanistically. They cannot be controlled precisely with the rods and levers of monetary and fiscal policy. To believe so is an enormous – and as we’re finding out – costly error. It’s also massively arrogant and conceited.
There’s a reason the great Austrian economist Ludwig von Mises called his great book “Human Action.” Economics is the study of human action. And human action is sometimes rational, sometimes irrational, sometimes predictable...but ultimately...very difficult to model and predict with charts.
As Nassim Taleb points out, all the most important stuff in your life probably happened or will happen in non-predictable ways. Most of the time, today is going to be like yesterday and tomorrow is going to be liked today. But the most life-changing things happen to you at times you’d have no way of predicting or preparing for. But not everyone is comfortable with this kind of un-planned spontaneity.
Please note the Austrian School of Economics was the only school of economic thought that accurately predicted the current crisis. Why? The Austrians correctly identified the influence of credit (free money to change your life) on human action. Altering the price of money alters incentives and changes individual calculations across the breadth and depth of an economy.
The Austrians pointed out that government-controlled interest rates are the real cause of the business cycle inasmuch as they lead to credit booms and inevitable busts. When the price of money is rigged, the market isn’t free. Only if you understand the “root cause” of the business cycle can you learn how to prevent bubbles from blowing up and popping later. The Austrian answer is, by the way, sound money.
Saturday, May 29, 2010
Thursday, May 27, 2010
Tuesday, May 25, 2010
VERY FUNNY SHORT VIDEO
Clarke and Dawe ask the million dollar questions
http://www.informationclearinghouse.info/article25521.htm
http://www.informationclearinghouse.info/article25521.htm
Sunday, May 23, 2010
**1911 Turkey established gun control. From 1915-1917, 1.5 million Armenians, unable to defend themselves, were rounded up and exterminated.
**1929 The Soviet Union established gun control. From 1929 to 1953, approximately 20 million
dissidents, unable to defend themselves, were rounded up and exterminated.
**1935 China established gun control. From 1948 to 1952, 20 million political dissidents, unable to defend themselves, were rounded up and exterminated.
**1938 Germany established gun control in 1938 and from 1939 to 1945, 6 to 7 million Jews,
gypsies, homosexuals, the mentally ill, and 12 million Christians who were unable to defend
themselves, were rounded up and exterminated.
**1956 Cambodia established gun control. From 1975 to 1977, one million “educated” people,
unable to defend themselves, were rounded up and exterminated.
**1964 Guatemala established gun control. From 1964 to 1981, 100,000 Mayan Indians, unable to defend themselves, were rounded up and exterminated.
**1970 Uganda established gun control. From 1971 to 1979, 300,000 Christians, unable to defend themselves, were rounded up and exterminated.
**After the Christian Tutsis had been disarmed by governmental decree in the early 1990s, Hutu-led military forces began to systematically massacre the defenseless Christians. The massacre began in April 1994 and continued until July 1994. Using machetes rather than bullets, the Hutu forces were able to create a state of abject fear and terror within the helpless Christian population as they systematically butchered hundreds of thousands of them.
**1929 The Soviet Union established gun control. From 1929 to 1953, approximately 20 million
dissidents, unable to defend themselves, were rounded up and exterminated.
**1935 China established gun control. From 1948 to 1952, 20 million political dissidents, unable to defend themselves, were rounded up and exterminated.
**1938 Germany established gun control in 1938 and from 1939 to 1945, 6 to 7 million Jews,
gypsies, homosexuals, the mentally ill, and 12 million Christians who were unable to defend
themselves, were rounded up and exterminated.
**1956 Cambodia established gun control. From 1975 to 1977, one million “educated” people,
unable to defend themselves, were rounded up and exterminated.
**1964 Guatemala established gun control. From 1964 to 1981, 100,000 Mayan Indians, unable to defend themselves, were rounded up and exterminated.
**1970 Uganda established gun control. From 1971 to 1979, 300,000 Christians, unable to defend themselves, were rounded up and exterminated.
**After the Christian Tutsis had been disarmed by governmental decree in the early 1990s, Hutu-led military forces began to systematically massacre the defenseless Christians. The massacre began in April 1994 and continued until July 1994. Using machetes rather than bullets, the Hutu forces were able to create a state of abject fear and terror within the helpless Christian population as they systematically butchered hundreds of thousands of them.
Tuesday, May 18, 2010
A MUST READ ARTICLE
http://matterhornassetmanagement.com/2010/05/18/alea-iacta-est/
Yes this is it! We have crossed the Rubicon and events in the world economy are now likely to unfold in a totally uncontrollable fashion. Clueless governments still don’t understand that it is their ruinous actions that have created a credit infested and bankrupt world. They will continue to prescribe the same remedy that caused the problem in the first place, namely more credit and more printed money. The consequences are clear; we will have hyperinflation, economic and human misery as well as social unrest.
Yes this is it! We have crossed the Rubicon and events in the world economy are now likely to unfold in a totally uncontrollable fashion. Clueless governments still don’t understand that it is their ruinous actions that have created a credit infested and bankrupt world. They will continue to prescribe the same remedy that caused the problem in the first place, namely more credit and more printed money. The consequences are clear; we will have hyperinflation, economic and human misery as well as social unrest.
Saturday, May 15, 2010
Friday, May 14, 2010
Thursday, May 13, 2010
Tuesday, May 11, 2010
QUOTES TO THINK ABOUT
"When I contemplate the natural dignity of man; when I feel ... for the honor and happiness of its character, I become irritated at the attempt to govern mankind by force and fraud, as if they were all knaves and fools, and can scarcely avoid disgust at those who are thus imposed upon." - - Thomas Paine - (1737-1809)
He that would make his own liberty secure must guard even his enemy from oppression; for if he violates this duty he establishes a precedent that will reach to himself: Thomas Paine
Liberty is meaningless where the right to utter one's thoughts and opinions has ceased to exist. That, of all rights, is the dread of tyrants. It is the right which they first of all strike down: Frederick Douglass
He that would make his own liberty secure must guard even his enemy from oppression; for if he violates this duty he establishes a precedent that will reach to himself: Thomas Paine
Liberty is meaningless where the right to utter one's thoughts and opinions has ceased to exist. That, of all rights, is the dread of tyrants. It is the right which they first of all strike down: Frederick Douglass
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