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Sunday, May 31, 2009

Class of ‘09: You’re Screwed

No one invited Bill Bonner to give a commencement speech this year, but he offers one anyway. A must-read for the class of '09. And the classes of '10, '11, '12 . . .

No one but Bill will level with the new graduates and tell them the harsh, brutal truth: the real world is more unreal than you can imagine! It's so unreal it's surreal!

Here's an excerpt or two to tempt you to read the whole article:
So far, not a single major university has asked us to make the commencement address. Nor a minor college. Not even a school of cosmetology or taxidermy. But here at the Daily Reckoning headquarters in London, protected by a broad ocean and a narrow reading of the First Amendment, we will give them – and UK graduates too – advice no one asked for. . . .

When you were born 20-some years ago, the nation’s total debt per person was less than $90,000 – adjusted to ’09 dollars, of course. While that was a lot of money, it was nothing compared to what was coming. Now it’s $186,717 per person – more than twice as much, in real terms. . . .

While your parents had control of the US government they allowed themselves a little larceny. Add the unfunded retirement and healthcare benefits they voted for themselves to the official national debt, and together they are scheduled to cost your generation 4 times the total annual output of the US. This is over and above the private debt they accumulated.

Some of this debt can be carried. Some will have to paid down. But as it stands, as much as $77 trillion of post-’09 earnings must be stolen from the future in order to pay for the liquor your parents drank…the bombs they dropped on god-forsaken foreigners…and the interest on their debts. So, forget about saving for a European vacation or a house of your own. Even if every penny of your savings – and every other American’s savings – are put to the task you will still be paying for your parents’ expenses all your life.

But wait, there’s more! The burden is getting heavier. Federal budget projections show an additional $7 trillion in deficits over the next 10 years. Described as the cost of fighting recession, the present generation buries its own mistakes under cash that the next generation hasn’t even earned yet. Today’s bankers, businessmen and speculators are being bankrolled by you – tomorrow’s bankers, businessmen and speculators. Today’s homeowners get a helping hand…from whom? Tomorrow’s homeowners – you. Today’s employees get a boost too. Same story. Where do you think the money came from to pay Wall Street bonuses this year? How do you think GM stays in business…and Fannie Mae…and AIG… Who pays those salaries? Who pays to keep troops all over the world and keep old people supplied with new drugs? Who pays for hundreds of billions’ worth of ‘shovel ready’ boondoggles? You will. At least, that’s the plan.

The luck of one generation is the curse of the next. Like Pericles, your parents inherited a dollar; they leave you a peso. They took over the strongest, richest, most competitive nation in the world. And like Pericles they minded everyone’s business but their own. Now, not only does the US owe money all over town, its government puts out trillions more in IOUs every year – each one with your name on it. You’re not even out in the real world yet, and you’re getting the bill for 50 cents of every dollar the feds spend – almost none of it earmarked for you. But that is the thing about the real world your teachers probably forgot to tell you about. It is more unreal and fantastical than anything you studied.

Here’s what’s real: You’ve been dealt a bad hand. From the bottom of the deck…your parents have slipped you some nasty cards. Our advice? Fold ’em. Get up from the table before they clean you out.
-- from "Class of ‘09: You’re Screwed" by Bill Bonner.

The Greatest Generation gave us the Boomer Generation, and the Boomer Generation is giving us the Busted Generation. In short, today's graduates are going to be collateral damage in the great Boomer bust!

P. S. While I'm handing out kudos for superb commencement addresses, let me also recommend J. K. Rowling's "The Fringe Benefits of Failure, and the Importance of Imagination", her address at Harvard last year.

Saturday, May 30, 2009

"The Colorectal Surgeon's Song"

It's another Saturday morning in Vermont, so I'm doing the trash and recycling while listening to "Music To Go To The Dump By" on WDEV, a. k. a. "Radio Free Vermont"--"The station of stature in Harold Grout's pasture"!

Of all the great music I've heard Ken Squier play on "Music To Go To The Dump By", my favorite is "The Colorectal Surgeon's Song":

Schiff to CA: Drop Dead!

Peter Schiff says no to a federal bailout of California:
California, like many states, expended its bureaucracy as the nation’s bubble economy inflated. When condos flipped like hamburgers and homeowners flush with equity spent like lottery winners, extra tax revenue flooded into Sacramento. However, instead of saving the money for a rainy day or paying off prior debts, the state government simply ballooned its spending. Now that the bubble has burst, and revenues are severely depleted, it is time for California to reconsider its excesses.

Governor Schwarzenegger’s claim that a federal guarantee is not a bailout is ludicrous. No one in the private sector will lend California any money because the state can’t pay it back. Just like AIG and GM, it needs federal help to stay solvent. And although the Federal balance sheet is in far worse shape than California’s, there is one crucial difference: Washington has a printing press, and Sacramento does not. With the ability to pay off debts with newly created funds, a federal default is not a concern.

However, if Obama comes to the rescue, none of the needed cuts will be made. Instead, California will continue to operate its bloated bureaucracy and will be in constant need of more bailouts. In other words, if Schwarzenegger gets his bailout, look for him to utter his famous line – “I’ll be back.”

But it’s not just Schwarzenegger who will be back, but governors from all the other states as well. After all, if the Federal government bails out California, by what right can they deny similar aid to other states? The bailout will send a clear message that states do not need to cut spending.

Similar to the reckless behavior that resulted from federally guaranteed mortgages, federal guarantees on state debt will counteract the market’s attempt to force states to act responsibly. As the market accurately prices-in the heightened risk of default, California faces staggering increases in its borrowing cost. Under normal circumstances, this pressure would force the state to act prudently now to diminish the risk of a future default. However, by allowing California to evade the “bond market vigilantes,” the stage will be set for much bigger losses.

The moral hazards created by state bailouts are tremendous. With federal guarantees given to profligate states, those states that had shown greater fiscal responsibility will face higher interest rates –as their bonds lack a federal guarantee. This creates the perverse incentive for all states to act irresponsibly.

Just as government-guaranteed mortgages lead the market to make overly risky home loans, federally guaranteed state obligations will set the stage for yet another crisis.
-- from "Obama Should Tell California to Drop Dead" by Peter Schiff.

Home prices crash

The median price of an existing home sold in April crashed 15.4% annually, the National Association of Realtors said today. The average price of such a home is now just $170,200. Home sales did pick up 2.9% from March, but not nearly enough to make a dent in the glut of supply. Existing home inventories actually increased last month, to a 10.2-month supply. That’s just under 4 million homes.
--from Agora Financial's "Five Minute Forecast".

Marc Faber sees hyperinflation ahead

“The problem with government debt growing so much,” says famous investor and economic commentator Marc Faber, “is that when the time will come and the Fed should increase interest rates, they will be very reluctant to do so and so inflation will start to accelerate.

“I am 100% sure that the U.S. will go into hyperinflation,” he added, the sort that will be “close to” Zimbabwe-style price insanity.
--from Agora Financial's "Five Minute Forecast".

Friday, May 29, 2009

The median single-family home in ounces of gold

[I]t currently takes 192 ounces of gold to by [sic] the median single-family home. This is considerably less that [sic] the 601 ounces it took back in 2001. When priced in gold, the median single-family home is down 68% from its 2001 peak and remains within the confines of its four-year accelerated downtrend.
-- from Chart of the Day.

Will the price of gold rise enough and/or will the price of the median single-family home drop enough so that the graph revisits its early-1980s low?

The truth about war

The disparity between what we are told or what we believe about war and war itself is so vast that those who come back, like Lefèvre, are often rendered speechless. What do you say to those who advocate war as an instrument to liberate the women of Afghanistan or bring democracy to Iraq? How do you tell them what war is like? How do you explain that the very proposition of war as an instrument of virtue is absurd? How do you cope with memories of children bleeding to death with bits of iron fragments peppered throughout their small bodies? How do you speak of war without tears?
-- from "What War Looks Like" by Chris Hedges.

Torturing to justify the Iraq invasion, before and after the fact

We now know that the reason the Bush regime tortured its captives was to coerce false testimony that linked Iraq and Saddam Hussein to al-Qaeda and Sept. 11. Without this "evidence," the U.S. invasion of Iraq remains a war crime under the Nuremberg standard. . . .

It is a known fact that torture produces unreliable information. The only purpose of torture is to produce false confessions. . . .

[The] "evidence" obtained by torture can have catastrophic consequences. In making the case against Iraq at the UN, former secretary of state Colin Powell assured the countries of the world that his evidence rested on "facts and conclusions based on solid intelligence." Today Powell and his chief of staff, Col. Lawrence Wilkerson, are ashamed that the "evidence" for Powell’s UN speech
turned out to be nothing but the coerced false confession of Ibn al-Shaykh al-Libi, who was relentlessly tortured in Egypt in order to produce a justification for Bush’s illegal invasion of Iraq.
-- from "Succumbing to the Dark Side" by Paul Craig Roberts.

Is the Obama regime complicit in the Bush regime's crimes?

If the Obama regime does not hold the Bush regime accountable for violating U.S. and international law, then the Obama regime is complicit in the Bush regime’s crimes. If the American people permit Obama to look the other way in order "to move on," the American people are also complicit in the crimes.

Hunsinger, Paul, and others are trying to save our souls, our humanity, our civil liberty, and the rule of law. Obama can say that he forbids torture, but if those responsible are not held accountable, he has no way of enforcing his order. As perpetrators are discharged from the military and reenter society, some will find employment as police officers and prison officials and guards, and the practice will spread. The dark side will take over America.
-- from "Succumbing to the Dark Side" by Paul Craig Roberts.

Peter Schiff and Marc Faber: high or hyper inflation is in our future!

Frodo lost again!

Now Obama has The Ring!
[T]he people cannot themselves individually exercise the power of government; the power must be held by one or a few persons. Those who hold the power always claim that they use it for the people, whether the form of government is a kingdom, a dictatorship, a democracy, or whatever. If the people truly desire to retain or to regain their freedom, their attention should first be directed to the principle of limiting the power of government itself instead of merely demanding the right to vote on what party or person is to hold the power.
-- from "The First Leftist" by Dean Dean Russell (HT: LewRockwell.com).

Thursday, May 28, 2009

"Green investment" = "lousy investment"?

Cafe Hayek's Russ Roberts reads a WaPo story about President Obama giving a speech at an Air Force base near Las Vegas, "pointing to the base's vast array of solar panels as a model for the nation as it seeks to reduce its dependence on foreign oil." Obama said that the plant, which cost $100 million, "will save the Air Force nearly $1 million a year". Here's Russ's response:
A project that costs $100 million (though I'd guess this number probably doesn't include the land costs) to save almost $1 million a year? There's a name for that—a lousy investment.
-- from "Touting Failure" by Russell Roberts at http://www.cafehayek.com/hayek/2009/05/touting-failure.html.

And why are so many Americans and politicians worried about our "dependence" on foreign oil when no one seems to be worried about our "dependence" on, say, foreign coffee? Can you imagine what would happen to the U. S. economy if the Organization of Coffee Exporting Countries ("OCEC") imposed a coffee embargo on the U. S.? Industry, academia, and government would "grind" to a halt! (Well, if government ground to a halt, that wouldn't be so bad!)

Alice Schroeder's bio of Warren Buffett

If you don't think you have time to read Alice Schroeder's "Snowball: Warren Buffett and the Business of Life" (http://www.amazon.com/Snowball-Warren-Buffett-Business-Life/dp/0553805096; 787 pages long!), take a few minutes to read the review by Michael Lewis at http://www.tnr.com/story_print.html?id=12ef5554-1023-4be9-ad93-681003b280ef. Here's the ending:
Buffett might not like it, but this book has done him a very Buffett-like service. Twenty years from now, when the financial markets have forgotten our current trauma, and finance is once again fashionable, some young person will pick it up and discover that history's most legendary investor was not a cartoon but a real live human being. And still, somehow, deeply admirable.

Or check out this 5-minute video of Alice Schroeder discussing Warren Buffett and "The Snowball":

Looking back on the election of 2008

Instead of electing the Mad Bomber, "we" elected the Mad 'Bama! :-) :-)

(Nota Bene: I didn't vote for McCain OR Obama!)

S&P 500 earnings and P/E

Wednesday, May 27, 2009

The Waxman-Markey climate change/carbon cap bill

A climate change/carbon cap bill has cleared the House Energy Committee. What’s called the Waxman-Markey bill is quickly slithering its way through the legislative process… much to the dismay of our resident value investor:

"This looks likes the most expensive thing to hit the economy since the financial crisis began,” warns Chris Mayer. “First off, the stated objective of cutting carbon emissions by 83% by 2050 will go down in history as outrageous — akin to when Who drummer Keith Moon drove his Lincoln Continental into the pool at the Holiday Inn. I think members of Congress must be smoking the same thing Moon was."

“To meet the Waxman-Markey bill’s goals would mean we have to go back to a carbon footprint about as big as the Pilgrims’ at Plymouth Rock circa 1620. . . ."

This is the way the world works. Politicians do dumb things. We have to play the ball where it is. And that means we have to figure out who wins and who loses.

“Among the winners, look to agriculture . . . . Agriculture, for whatever reasons, is exempt from the new rules. So farmers don’t have to worry about those manure pools out back or the flatulent cows emitting methane all over God’s green meadows. Those big tractors? Burn up that diesel!"
-- from "Investing in Climate Change" by Ian Mathias at http://dailyreckoning.com/investing-in-climate-change/.

Why should agriculture get a free pass? Why is farming different from any other industry? What? You mean to say that politicians play favorites?

General Motors vs. Facebook

General Motors is worth $879 million; Facebook is worth $10 billion. What else do you need to know about the strength of the American economy?

The world’s largest automaker (until last year) is hurtling toward certain bankruptcy, but still clings to a market capitalization of nearly $1 billion. Meanwhile, the world’s largest social-networking Web site, which contributes little more than narcissism and inane IM messages to the global economy, is worth ten times as much based on yesterday’s investment by a Russian firm.

Are these the data points of economic rejuvenation? Can we Facebook our way to positive GDP growth?
-- from "Fear, Evil…and Gold" at http://www.agorafinancial.com/afrude/2009/05/27/fear-eviland-gold/.

Will the real Barack Obama please stand up?

Lord Acton: "Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men."

Tuesday, May 26, 2009

Peace through Politics?

Democracy involves the majority forcing the minority to act contrary to the minority's wishes, so isn't "Peace through Politics" an oxymoron?

Revisionist History Day, 2009

Good post for Memorial Day, 2009 from Sheldon Richman: http://sheldonfreeassociation.blogspot.com/2009/05/revisionist-history-day.html.

Now under new management: the U. S. Empire!

The return of the liberal warmongers:
How long does it take a mild-mannered, antiwar, black professor of constitutional law, trained as a community organizer on the South Side of Chicago, to become an enthusiastic sponsor of targeted assassinations, “decapitation” strategies and remote-control bombing of mud houses the far end of the globe?

There’s nothing surprising here. As far back as President Woodrow Wilson in the early twentieth century, American liberalism has been swift to flex imperial muscle, to whistle up the Marines. High explosive has always been in the hormone shot. . . .

A targeted bombing yields up Bola Boluk, and the incandescent enmity of most Afghans. The war on al Qaida mutates into war on the Taliban, and 850,000 refugees in the Swat Valley in Pakistan. The mild-mannered professor is bidding to be as sure-footed as Bush and Cheney in trampling on constitutional rights. He’s now backing into pledges to shut down the kangaroo courts (“military commissions”) by which means the US have held prisoners at Guantanamo who've never even been formally charged with a crime! He's threatening to hold some prisoners indefinitely in the U.S. without trial. He’s been awarded a hearty editorial clap on the back from the Wall Street Journal . . .
-- from "How Long Does It Take?" by Alexander Cockburn at http://www.counterpunch.org/cockburn05222009.html .

Monday, May 25, 2009

The money quote from "The Americanization of Emily"

Worth remembering on Memorial Day. And every day.

HT: http://www.lewrockwell.com/blog/lewrw/archives/026930.html.

Since it's actually a clip--not a quote--from a film, I suppose it's actually a "money clip", rather than a "money quote"? :-)

Sunday, May 24, 2009

Bill Bonner on the Great Freeze and the Great Thaw

Now that we've seen the Great Meltdown, Bill Bonner describes what's happening now as the Great Freeze and he's looking ahead to the Great Thaw. At the same time, he's waiting for the snow pack of money to reach a tipping point and turn into the Great Avalanche of Cash! Whatever it is, no one mixes metaphors with such delightful effect as well as does Bill!
According to theory, an increase in the supply of something leads directly to a decrease in the price of it… That is, if other things remain constant. Despite the credit crunch, the banking freeze-up, and the economic recession, the money supply in the US as measured by M1 is actually rising at 14% per year. Yet consumer prices are not keeping pace. The latest report shows them actually going down slightly over the last 60 days.

Turns out, causing inflation is not as easy as it looked; controlling it probably will be even harder. It’s not enough to manage the quantity of money; you also need to be able to control its behavior. Money can be a solid, a liquid, or a gas depending upon the temperature of the economy. At normal temperatures, money runs freely, watering the economy. And when things really get hot, it vaporizes, creating gaseous bubbles such as those of the late Bubble Period. But when the temperature falls, money shivers in wallets and bank accounts – reluctant to go out into the cold. Economists refer to the ‘velocity of money” to describe the magnifying effects of motion. When the same dollar bill appears in three different places in the same day, it is as if the money supply had been multiplied three-fold. In a freeze, on the other hand, it comes to a dead stop.

When the thaw will come, we don’t know. But the authorities are ready for it. When consumer prices begin to rise, they’ll stop adding to the money supply. Then, they’ll withdraw liquidity, as need be, to keep it under control.

They know that runaway inflation would cause problems – the collapse of the dollar…and the US Treasury bond market, for example. So, at the first signs of inflation, they will move quickly to remove excess liquidity from the system. How? Their emergency plan is simple enough. Now, they are buying bonds. When their inflation targets are met, they will begin selling them.

We thought the Bubble Epoch was the peak in claptrap and illusions. But we were only in the foothills. The feds now pretend to bail out the economy by giving money to companies that pretend to be concerned, run by people who pretend to know what they are doing.A nd when they run short of money, they create more of it, pretend it is real…and pretend they can tell it what to do.

What is likely is that money will have a mind of its own. First, the markets will react…and the authorities will not. They will remember their own critiques of Japanese and Roosevelt-era monetary policy. In both cases, they believe central banks removed the punch bowl too early – before the party really got rolling. In both cases, the recovery was cut off.

Then, while they are hesitating, money will turn on them. Inflation rates will rise further. The velocity of money will pick up. And investors – including foreign governments – will become eager sellers of government debt. Suddenly, it will be too late. In order to remove the monetary inflation they previously added, central banks will have to sell bonds instead of buying them, trying to re-absorb money from the economy. The extra cash would then disappear back into the central banks. But in order to bring inflation under control, the biggest bond buyers in the world must turn into the world’s biggest sellers. Bond prices, already falling as investors feared the worst, will collapse immediately. An avalanche of dollars will fall upon the world markets – as dollar holders all over the world become desperate to get rid of them.

We don’t know what day it will happen. But we have a good idea as to what time of day central bankers will realize that they are doomed. About 4 AM is our guess. That is the moment when Ben Bernanke and other central bankers begin to feel like members of the Donner Party. That is, like imbeciles.
-- from "An Avalanche of Claptrap" by Bill Bonner at http://dailyreckoning.com/an-avalanche-of-claptrap/.

Saturday, May 23, 2009

Glenn Greenwald on preventive detention

It's not just the right, but the duty, of citizens to pressure and criticize political leaders when they adopt policies that one finds objectionable or destructive. Criticism of this sort is a vital check on political leaders -- a key way to impose accountability -- and Obama himself has said as much many times before.

It has nothing to do with personalities or allegiances. It doesn't matter if one "likes" or "trusts" Obama or thinks he's a good or bad person. That's all irrelevant. The only thing that matters is whether one thinks that the actions he's undertaking are helpful or harmful. If they're harmful, one should criticize them. Where, as here, they're very harmful and dangerous, one should criticize them loudly. Obama himself, according to Ambinder, "finds this outside pressure healthy and useful." And it is. It's not only healthy and useful but absolutely vital.

-- from "Facts and myths about Obama's preventive detention proposal" by Glenn Greenwald at http://www.salon.com/opinion/greenwald/2009/05/22/preventive_detention/index.html

Preventive detention is the antithesis of true liberalism. Even supporters of Obama need to line up, criticize him for this dumb and dangerous idea, and pressure him to abandon it.

Friday, May 22, 2009

Laurence M. Vance reflects on Memorial Day

Every U.S. soldier who died in Iraq died for a lie. They may have died for Bush, Cheney, Rumsfeld, Rice, the U.S. global empire, the U.S. government, the military-industrial complex, or Halliburton, but none of them died for the American people or our freedoms.

If they died for a lie, then the liars should be held accountable. But don't look for Congress to do anything. How can we expect a Congress that continues to fund this war to hold the Bush administration accountable for its lies? Every member of Congress that continues to vote to fund this war is complicit in these lies. How many more dead American soldiers and billions of dollars will it take before Congress finally says enough is enough? How many American soldiers not currently in Iraq who are enjoying this Memorial Day holiday will be sent to Iraq to die for a lie before the next observance of Memorial Day?

-- from " Dying for a Lie" by Laurence M. Vance at http://www.lewrockwell.com/vance/vance80.html.

Note that Vance wrote this on Memorial Day, 2006. Three years have come and gone; uncountable peace demonstrations have come and gone; uncountable anti-war articles have come and gone; more Americans, Afghans, Pakistanis, and Iraqis have been killed and maimed; more American, Afghan, Pakistani, and Iraqi treasure has been wasted; two major national U. S. elections have come and gone; yet nothing has changed.

Doug Bandow reflects on Memorial Day

The passing of another Memorial Day should lead to serious reflection. But not just on the heroic sacrifices upon which politicians routinely dwell. Americans should ponder the lies and deceptions used to justify most of America's wars. Americans should consider the tragic disjunction between rhetoric and reality, the fact that most US conflicts wasted American lives for dubious causes. Americans should confront the often shockingly high price paid by the innocent peoples the US government claims to be saving. And Americans should challenge political leaders who insist on threatening new wars, having learned nothing from previous ones.

--from "Heroic Sacrifices for Foolish Causes: Memorial Days Past and Present" by Doug Bandow at http://www.antiwar.com/bandow/?articleid=12919.

Peace: it's not just right, it's cheap!

[W]hile it is imperative that libertarians continue focusing on the fundamental immorality of U.S. foreign policy — that is, the assassinations, invasions, occupations, bombings, torture, indefinite imprisonments, denial of due process, denial of trial by jury, cancellation of habeas corpus, and other infringements on civil liberties — it is also imperative that we continue reminding our fellow Americans what these people are doing to the financial and economic well-being of our country. Empires bankrupt nations. And that’s precisely what the U.S. Empire is doing to America.

-- from "The Empire Is Bankrupting America" by Jacob G. Hornberger at http://www.fff.org/blog/jghblog2009-05-22.asp.

Wednesday, May 20, 2009

No war for oil! No war over coal, either!

Concerns over climate change have led to various forms of "climate action". One wonders: will climate action include military action? Here's NY Times columnist Paul Krugman:

As the United States and other advanced countries finally move to confront climate change, they will also be morally empowered to confront those nations that refuse to act. Sooner than most people think, countries that refuse to limit their greenhouse gas emissions will face sanctions, probably in the form of taxes on their exports. They will complain bitterly that this is protectionism, but so what? Globalization doesn’t do much good if the globe itself becomes unlivable.

It’s time to save the planet. And like it or not, China will have to do its part.

-- from "Empire of Carbon" by Paul Krugman (May 14, 2009) at http://www.nytimes.com/2009/05/15/opinion/15krugman.html?adxnnl=1&adxnnlx=1242655327-hSzWhIT0UpgdpL/0apoSpQ.

In response to Krugman, GMU economist Russ Roberts writes as follows:
The implications of Krugman's certainty is much more frightening than he is willing to admit. If you think China is destroying the planet, a tariff is just the beginning of what you will do.

-- from "Fooled by randomness" by Russell Roberts at http://www.cafehayek.com/hayek/2009/05/fooled-by-randomness.html.

Lovers of peace need to pay attention to this. Once some countries feel--as Krugman says--"morally empowered to confront those nations that refuse to act", climate action could lead to military action and war.

Mario Rizzo on stimulus

[S]pending can beget spending. But so what?

Some Keynesians will say that the spending will lift resources out of idleness and almost any use of these resources will be of greater value than idleness.

Today’s idleness is waiting for the sky to clear, that is, it is the consequence of trying to figure out, amid the process of liquidation of resources in over-expanded sectors, the appropriate areas for new investment. The true value of this idleness is imputed from the value of the improved resource allocation that it permits.

It would be great, of course, if (1) it took no time to re-allocate resources, or (2) it did not matter where resources were employed as long as they are employed. But each of these statements is clearly untrue.

-- from "Economic Confidence: An Empty Box?" (May 17, 2009) by Mario Rizzo at http://thinkmarkets.wordpress.com/2009/05/17/economic-confidence-an-empty-box.

Tuesday, May 19, 2009

Audit the Fed!

Ron Paul discusses HR 1207, "which calls for a complete audit of the Federal Reserve and removes many significant barriers towards transparency of our monetary system":
The main argument [against HR 1207] seems to be that Congressional oversight over the Fed is government interference in the free market. This argument shows a misunderstanding of what a free market really is. Fundamentally, you cannot defend the Federal Reserve and the free market at the same time. The Fed negates the very foundation of a free market by artificially manipulating the price and supply of money – the lifeblood of the economy. In a free market, interest rates, like the price of any other consumer good, are decentralized and set by the market. The only legitimate, Constitutional role of government in monetary policy is to protect the integrity of the monetary unit and defend against counterfeiters.

Instead, Congress has abdicated this responsibility to a cabal of elite, quasi-governmental banks who, instead of stabilizing the economy, have destabilized it. It took less than two decades for the Federal Reserve to bring on the Great Depression of the 1930’s. It has also inflated away the value of our currency by over 96 percent since its inception. It has invisibly stolen from the poor and given to the rich through this controlled inflation, and now openly stolen through recent bank bailouts. It has predictably exacerbated the very problems it was meant to solve.

-- from "Audit the Fed, Then End It!" by Ron Paul at http://lewrockwell.com/paul/paul529.html.

Monday, May 18, 2009

Lew Rockwell interviews Jim Rogers

The great Lew Rockwell interviews the great Jim Rogers: "Economic Advice to My Children (and You)" at http://www.lewrockwell.com/podcast/?p=episode&name=2009-05-17_123_economic_advice_to_my_children_and_you.mp3.

Sunday, May 17, 2009

Lew Rockwell says, "Live Free Or Move!"

[W]e will soon be dealing with an added issue of a growing brain drain. I personally know many brilliant people who have left the country or are seriously considering doing so, looking around the world for a home with economic opportunity and where the looters aren't running public policy.

-- from "Sad End to the Immigration Issue" by Llewellyn H. Rockwell, Jr. at http://lewrockwell.com/rockwell/end-of-immigration-issue.html.

War is not necessary to secure oil.

If the American economy requires oil, there is no need to use military measures to secure it. Countries with oil have every incentive to trade with us. Hostile countries are no exception. Ivan Eland has pointed out that even if Saddam Hussein had taken over the United Arab Emirates, Kuwait, and Saudi Arabia,

his control over a greater market share of world-wide oil production and reserves would have allowed him to drive oil prices higher by cutting production somewhat. Yet, according to [economist David] Henderson, those price increases would have amounted to less than one-half of 1 percent of U.S. Gross National Product. (Ivan Eland, The Emperor Has No Clothes [Independent Institute 2004, p. 249.])

The American foreign-policy elite has indeed sought control of foreign resources, but this reflects its own quest for power and profit rather than an attempt to fulfill the demands of the rapacious consumer.

-- from " The End of American Exceptionalism by David Gordon (5/14/2009) at http://mises.org/story/3447.

Saturday, May 16, 2009

What I've been reading

Dora Cheok on "Buy Yuan and Beware of Boys, [Jim] Rogers Tells His Daughters" (May 20, 2009) at http://www.cnbc.com/id/30836189.

Frank Shostak on "Can President Obama’s Policies Heal the US Economy?" (May 20, 2009) at http://mises.org/story/3471.

Michael Scheuer on "Obama Steers Toward Endless War With Islam" (May 20, 2009) at http://original.antiwar.com/scheuer/2009/05/19/obama-steers-toward-endless-war-with-islam/.

Llewellyn H. Rockwell, Jr. on "The Humanitarian Face of the State, With Fangs" (May 20, 2009) at http://lewrockwell.com/rockwell/humanitarian-face-fangs.html.

Ron Paul on "Audit the Fed, Then End It!" (May 19,2009) at http://lewrockwell.com/paul/paul529.html.

William L. Anderson on "Change We Can’t Believe In" (May 18, 2009) at http://lewrockwell.com/anderson/anderson250.html.

Mario Rizzo on "Economic Confidence: An Empty Box?" (May 17, 2009) at http://thinkmarkets.wordpress.com/2009/05/17/economic-confidence-an-empty-box/.

Llewellyn H. Rockwell, Jr. on "Sad End to the Immigration Issue" (May 17, 2009) at http://lewrockwell.com/rockwell/end-of-immigration-issue.html.

Geoff Cutmore on "Marc Faber on Armageddon" (May 15, 2009) at http://www.cnbc.com/id/30759753.

Sheldon Richman on "Government Run Amok" (15 May 2009) at http://fee.org/featured/government-runamok/.

David Gordon reviews Andrew J. Bacevich's The End of American Exceptionalism in "The End of American Exceptionalism" (5/14/2009) at http://mises.org/story/3447.

Paul Boutin on "All You Need to Know to Twitter" (May 6, 2009) at http://www.nytimes.com/2009/05/07/technology/personaltech/07basics.html?_r=2.

Ron Paul on spending and foreign policy

Friday, May 15, 2009

Anything that's peaceful

Why are we waging a war on people who want to work?
My hunch is that deep down the immigration warriors have known the entire time that their welfare argument was bogus. Illegal immigrants risk their lives and their liberty in an effort to sustain and improve their lives and the lives of their families through labor. The notion that they're going to risk their lives and liberty in order to walk into a welfare office in an attempt to defraud U.S. officials is ridiculous. These people are scared to death of public officials and will do everything they can to avoid contact with them, for fear of being caught and deported. All they want to do is work for American employers, who, by the way, recognize their value by hiring them.

In fact, take a look at this Washington Post article that appeared last Wednesday. It's entitled "Vermont Dairy Farms Count on Illegal Immigrants." A New Hampshire citizen, Nancy Sabin, puts the matter succinctly: "If it wasn't for the Hispanics, there would be no family farms. There would be no farms, period." The article goes on to speak the truth about illegal immigration in Vermont;

"This is the open secret behind the black-and-white Holsteins, rolling hills and postcard images: Unable to attract local workers for the grueling job of milking cows and working the farm, Vermont, the nation's 14th-largest dairy state, props up its dairy industry with perhaps thousands of immigrant laborers, many of whom are in the U.S. illegally. 'Everyone knows some of these people are illegal,' says Vermont Agriculture Secretary Roger Allbee. But, he says, 'The system is broken. There's the need for labor.'"

The system is indeed broken, as are so many other federal programs that have placed law in contradiction to moral principles. But the good news is that there is a way to fix the system: by restoring the principles of economic liberty, freedom of contract, freedom of association, and open immigration to our land.

-- from "Illegal Aliens: Welfare or Work?" by Jacob G. Hornberger at http://www.fff.org/blog/jghblog2009-05-15.asp.

Shouldn't the law allow anything that's peaceful?

ONN explains Keynesian stimulus

In The Know: Should The Government Stop Dumping Money Into A Giant Hole?

What would we do without "Onion News Network"?

HT: "Obama on Unsustainable Debt" By Ian Mathias at http://dailyreckoning.com/obama-on-unsustainable-debt/.

Your tax dollars at work!

Eyewitness accounts of U.S. airstrikes in Granai, Afghanistan, last week, as described in the New York Times:
The number of civilians killed by the American airstrikes in Farah Province last week may never be fully known. But villagers, including two girls recovering from burn wounds, described devastation that officials and human rights workers are calling the worst episode of civilian casualties in eight years of war in Afghanistan. . . .

The bombs were so powerful that people were ripped to shreds. Survivors said they collected only pieces of bodies. Several villagers said that they could not distinguish all of the dead and that they never found some of their relatives. . . .

The enormous explosions left such devastation that villagers struggled to describe it. “There was someone’s legs, someone’s shoulders, someone’s hands,” said Said Jamal, an old white-bearded man with rheumy eyes, who lost two sons and a daughter. “The dead were so many” . . . .

Tillah, the 12-year-old girl, whose face bears the scars of a scorching blast, still twisted in pain from the burning in her leg at the provincial hospital in Herat, where she and other survivors were taken to a special burn unit. Her two sisters, Freshta, 5, and Nuria, 7, were barely visible under the bandages swathing their heads and limbs.

The three girls were visiting their aunt’s house with their mother when a plane bombed the nearby mosque, around 8 p.m., Tillah said. That is when they fled to Said Naeem’s seven-room home.

“When we reached there we felt safe and I fell asleep,” Tillah said. She said she heard the buzzing noise of a plane, but then only remembers coming to when someone pulled her from the rubble the next morning. . . .

-- from "Afghan Villagers Describe Chaos of U.S. Strikes" By CARLOTTA GALL and TAIMOOR SHAH at http://www.nytimes.com/2009/05/15/world/asia/15farah.html?_r=1&hp.

HT: "Murder in Afghanistan" by Sheldon Richman at http://sheldonfreeassociation.blogspot.com/2009/05/murder-in-afghanistan.html. Richman writes, "This is what the U.S. government does in our name. Who isn't sickened by what's going on? What now, Obama? He withholds torture pictures for fear of inflaming anti-American sentiment, yet he does this."

Bernie Sanders joins Ron Paul in saying, "Audit the Fed!"

Scroll down for Update 1.

If we can't abolish the Fed, can't we at least audit it?

So there is a bill before Congress that calls for a full-scale audit of the Federal Reserve System -- the Federal Reserve Board based in Washington, and the 12 regional Federal Reserve Banks.

That bill, H.R. 1207, now has 149 cosponsors and counting. It was introduced by Texas Rep. Ron Paul, now nominally a Republican, but a former leader of the Libertarian Party who is still best known for his strong libertarian principles. Read more about the bill.

Paul, as his fans well know, would just as soon abolish the Fed as look at it, but this issue gives him a chance to come in from the political fringe and at least start a process the could result in changing accountability at the Fed.

Paul's bill directs the Government Accountability Office to audit the Federal Reserve Board and regional banks by the end of 2010 and present a detailed report to Congress. The audit would look at the Fed's actions during the crisis and its decision-making process.

The 149 cosponsors include all but three of the 29 Republican members of the House Financial Services Committee, starting with ranking member Spencer Bachus of Alabama. While the bulk of the bill's supporters are Republicans, 20 House Democrats have also signed on as cosponsors. The companion bill in the Senate, S. 604, introduced by independent Bernie Sanders of Vermont, has no cosponsors yet.

--from "Is it time to stress-test the Federal Reserve? / Commentary: Congressional critics ramp up efforts to corral central bank" By Darrell Delamaide at http://www.marketwatch.com/story/is-it-time-to-stress-test-the-federal-reserve. HT: http://www.lewrockwell.com.

As these bills are debated, will Americans finally realize that abolishing the Fed is a necessary step on the path to peace and on the road to recovery--an enduring, sustainable economic recovery? After all, it's the Fed's manipulation of the money supply and interest rates that makes war easy and--per the Austrian school of economics--causes the malinvestments that, in turn, cause the booms that inevitably lead to the busts.

As far as I know, Vermont's Representative Peter Welch has not yet signed on to Paul's bill.

Update 1
For information on the Austrian school of economics, see, e.g., http://lewrockwell.com and http://mises.org. Also recommended: "No, the Free Market Did Not Cause the Financial Crisis" by Thomas E. Woods, Jr. at http://www.lewrockwell.com/woods/woods111.html.

Time to sell stocks?

Bill Bonner thinks the 'Bama Bounce in the stock market might be over:

Let’s review: stocks get expensive…then they become cheap. That’s just the way it works. Prices go up and down in long cycles. At the top of the cycle, they’re very expensive – over 20 times earnings. At the bottom, they’re very cheap, under 5 times earnings. At the top of the cycle you might need as many as 43 ounces of gold to buy the Dow stocks. At the bottom, one or two ounces will do the job.

At present, stocks are not cheap. In nominal terms, the Dow is 8 times higher than it was when the bull market began in August 1982. In terms of gold, it takes about 9 ounces today to buy the Dow. That’s a lot less than it took in 1998, when the Dow was 43 times the price of an ounce of gold. But it’s a lot more than you find at real bottoms. At the bottom of the cycle in 1982, you could buy the entire Dow for just one ounce of gold. And in terms of P/E ratios, you can buy a few stocks at very low price-to-earnings ratios today, but the majority are still above 15. When they get down to 5, we’ll talk.

There being no sign of a bottom in the stock market yet, nor even the seeds of a bottom, we’ll adjourn today’s session…and guess that the real bottom is still far ahead.

Time to sell the rally.

--from "Time to Sell Stocks" by Bill Bonner at http://dailyreckoning.com/time-to-sell-stocks/.

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Thursday, May 14, 2009

Alexis de Tocqueville says, "Live Free Or Move!"

Unlimited power is in itself a bad and dangerous thing. Human beings are not competent to exercise it with discretion. God alone can be omnipotent, because his wisdom and his justice are always equal to his power. There is no power on earth so worthy of honor in itself, or clothed with rights so sacred, that I would admit its uncontrolled and all-predominant authority. When I see that the right and the means of absolute command are conferred on any power whatever, be it called a people or a king, an aristocracy or a republic, I say there is the germ of tyranny, and I seek to live elsewhere, under other laws.

-- from "Democracy in America" (1835) by Alexis de Tocqueville (HT: FFF Email Update at http://www.fff.org/whatsNew/2009-05-14.htm)

We don't need stimulus!

Peter Schiff warned that stimulus spending is misguided and will drive the economy deeper into debt.

"What we should do is let the recession unfold and allow businesses to fail and asset prices to fall," he said during his keynote speech to the New Brunswick Securities Commission Fullsail Summit.

"We don't need more stimulus," he said. "We need to come down from this artificial high and rebuild our economy. And that isn't something that can be combated with monetary fiscal policy."

"It means allowing the recession," he added. "That is the cure and we simply need to allow it to run its course" . . . .

Schiff has been in the limelight since his shocking predictions of a crash in the housing and stock markets - laid out in his 2007 book Crash Proof: How to Profit from the Coming Economic Collapse - came true. . . .

He cautioned that the cash for government stimulus projects will likely come from governments printing more money, which means that even if taxes aren't hiked taxpayers will pay because of inflation and less valuable paychecks. . . .

In October 2007, during a TV interview with Fox Business, Schiff forecasted the global economic meltdown and that the Dow Jones Industrial Average would fall below 10,000 points.

"The U.S. economy was headed for a major crash because our economic growth over the last seven or eight years has been phony," he said.

"Our growth has been a function of how much we've borrowed and spent, not how much we've saved and produced."

The executive's guidance for investors is to include precious metals in their accounts - gold, silver and other "inflation hedges-" and to rethink stock portfolios.

"The idea is to sell your U.S. stocks and replicate a portfolio of diversified stocks outside the United States," Schiff said.

-- from "Allow the recession to run its course / Peter Schiff warns that stimulus spending is misguided and will drive the economy deeper into debt" by Brett Bundale at http://nbbusinessjournal.canadaeast.com/journal/article/665386 (HT: http://lewrockwell.com/).

A classic, Austrian-economic prescription for what ails the economy from one of the few people who predicted the bust and meltdown.

The Empire strikes out?

Countries make mistakes too. Reliably. One empire declines so another can rise. In modern history, one western country has replaced another, as the world’s dominant power, about every century. Spain until the Armada sank, France until the battle of Waterloo, England until 1914, and then America until…?

The mistakes made by America are the same mistakes that empires always make. “Imperial overstretch,” it is called. Spain reached for England…and drowned in the North Sea. France stretched to Moscow…and froze in the snow. England’s elastic stretched all over the world – to colonial outposts in Singapore, Australia, and Rhodesia. But by the time she was challenged by the Huns in WWI, her economy had already been surpassed not only by Germany but by America too.

Now, it is the US that wears the purple. It has its fingers in every pie, its ships in every port, and its red ink running over everywhere. Even at the very peak of its authority – in the ’90s – it was already relying on the savings of poor people in Asia in order to continue its big spending ways. And now, confronted with the challenge of a worldwide financial meltdown…the obvious consequence of too much spending and too much borrowing for too many years…what does it do? Does it cut back? Does it bring the troops home and the deficit down?

NO! It spends and borrows even more!

In other words, it makes a grand, fatal mistake. Now, an amount equal to its total receipts must be borrowed just to keep the federal government going. Even taking 100% of domestic savings only brings in less than half of the amount needed to finance its deficit. So, the rest – an amount equivalent to the entire US military budget – must be borrowed from kind strangers, business competitors and potential rivals for power.

Sooner or later, the foreigners will not be so easy with their money. Instead of buying US Treasury debt, they will sell it. Instead of supporting America’s imperial ambitious, they will undermine them.

--from "GM and US Going Broke" By Bill Bonner at http://dailyreckoning.com/gm-and-us-goinhttp://www.blogger.com/post-create.g?blogID=21113445g-broke/.

Can anyone deliver the bad news in a more delightful way than Bill Bonner? You can now follow Bill and the whole Daily Reckoning gang on twitter at https://twitter.com/DailyReckoning.

Earlier in the above-quoted article, Bill writes, "David Walker, star of Addison’s movie – I.O.U.S.A. – writes in the Financial Times that the US is headed for bankruptcy just like GM", which reminds me of Chris Leithner's "Avoid the Rush: Prepare Now for America’s Bankruptcy" at http://www.leithner.com.au/newsletter/issue87-89.htm. (Chris, a devotee of the Austrian School of economics, hails from Australia, which I guess makes him an Australian Austrian!) Also see Chris' "The Real Subprime Crisis: Why Should Uncle Sam Retain His AAA Rating?" at http://www.leithner.com.au/newsletter/issue93-95.htm.

Ron Paul is already against the next war

We are broke. This is money we don’t have, and it is an insult to the American people to run up the national credit card for this type of military adventurism after many Americans thought they were voting for peace.

The bottom line is our involvement in Pakistan’s internal problems is not making us safer. In fact, we are adding to the numbers of our enemies and increasing the threats to our security here at home. We are inciting the very terrorism and extremism we are trying to stop. Every dollar we send, even if it is for humanitarian purposes, frees up resources to make war and potentially prop up unpopular leaders. The factions and politics of the Middle East are irrational and dangerous. We play with fire when we meddle in their affairs, and we isolate ourselves diplomatically by making more enemies than friends. We need to bring our troops home, end all foreign aid, and maintain a neutral stance on the world stage. It, in fact, is the only foreign policy we can afford right now, and it would gain us more friends and trading partners than our bombs ever could. Besides, that’s what the Constitution permits and our founders strongly advised.

--from "On Af-Pak: Stop 'Helping'" by Ron Paul at http://www.lewrockwell.com/paul/paul528.html.

Doubling down on Bush's bad bet in Afghanistan by spreading the war to Pakistan is not "change we can believe in"!

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Don Boudreaux's inheritance

GMU economist Don Boudreaux writes about his father in "My inheritance" at http://www.pittsburghlive.com/x/pittsburghtrib/opinion/columnists/boudreaux/s_624810.html .

Wednesday, May 13, 2009

It's the Empire, stupid!

In a recent article, the Independent Institute's Ivan Eland unearths the root cause of the present economic crisis. Despite the claims of many politicians and pundits, it wasn't greed:

War has a history of causing financial and economic calamities. It does so directly by almost always causing inflation — that is, too much money chasing too few goods. During wartime, governments usually commandeer resources from the private sector into the government realm to fund the fighting. This action leaves shortages of resources to make consumer goods and their components, therefore pushing prices up. Making things worse, governments often times print money to fund the war, thus adding to the amount of money chasing the smaller number of consumer goods. Such “make-believe” wealth has funded many U.S. wars. . . .

The Fed caused the current collapse in the real estate credit market, which has led to a more general global financial and economic meltdown, by earlier flooding the market with excess credit. That money went into real estate, thus creating an artificial bubble that eventually came crashing down in 2008. But what caused the Fed to vastly expand credit?

To prevent a potential economic calamity after 9/11 and soothe jitters surrounding the risky and unneeded U.S. invasion of Iraq, Fed Chairman Alan Greenspan began a series of interest rate cuts that vastly increased the money supply. According to Thomas E. Woods, Jr. in Meltdown, the interest rate cuts culminated in the extraordinary policy of lowering the federal funds rate (the rate at which banks lend to one another overnight, which usually determines other interest rates) to only one percent for an entire year (from June 2003 to June 2004). Woods notes that more money was created between 2000 and 2007 than in the rest of U.S. history. Much of this excess money ended up creating the real estate bubble that eventually caused the meltdown. Ben Bernanke, then a Fed governor, was an ardent advocate of this easy money policy, which as Fed Chairman he has continued as his solution to an economic crisis he helped create using the same measures.

Of course, according to Osama bin Laden, the primary reasons for the 9/11 attacks were U.S. occupation of Muslim lands and U.S. propping up of corrupt dictators there. And the invasion of Iraq was totally unnecessary because there was never any connection between al-Qaeda or the 9/11 attacks and Saddam Hussein, and even if Saddam had had biological, chemical, or even nuclear weapons, the massive U.S. nuclear arsenal would have likely deterred him from using them on the United States.

So the causal arrow goes from these imperial behaviors — and blowback there from — to increases in the money supply to prevent related economic slowdown, which in turn caused even worse eventual financial and economic calamities. [Emphasis added.] These may be indirect effects of empire, but they cannot be ignored. Get rid of the overseas empire because we can no longer afford it, especially when it is partly responsible for the economic distress that is making us poorer.

--from "How the US Empire Contributed to the Economic Crisis" by Ivan Eland at http://original.antiwar.com/eland/2009/05/08/how-the-us-empire-contributed-to-the-economic-crisis/.

Once the American people understand the role played by the Empire and the Federal Reserve in causing the economic meltdown they will be ready to abolish the Empire and the Fed.

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Tuesday, May 12, 2009

War made easy!

[H]ow does [Matthew] Yglesias suppose the Iraq War – which he deeply opposed, I'm sure – was financed? In considerable part by the Fed's creation of new money out of thin air.

Let me put this as simply as possible. Is the federal government more or less likely to go to war, and are its wars likely to be more or less costly and destructive, if it has access to a money creation machine? Why is the Left, which prides itself on its intellectual independence and its willingness to question old taboos, so intellectually moribund that an obvious question like this is never even raised? I'm supposed to take Yglesias and the rest of the misnamed "progressives" seriously when they propose to grant the government its money-creation machine but hope it doesn't use it in an anti-social or murderous way?

-- from "Question Authority (Unless I Say Not To)" by Thomas E. Woods, Jr. at http://lewrockwell.com/woods/woods113.html

If we want peace, we should work to abolish the Fed.

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Friday, May 08, 2009

What we have is a mismatch between capital structure and consumer demand

The problem, therefore, isn’t that we lack enough “spending” or “demand,” and that we need government to fill in the “missing demand.” The problem is that in the wake of Fed-induced misallocations of resources we wind up with structural imbalances, a mismatch between the capital structure and consumer demand. The recession is the period in which the economy repairs this mismatch by reallocating resources into lines of production that actually correspond to consumer demand. The modern preoccupation with levels of spending instead of patterns of spending obscures the most important aspects of the question.

Had the market been allowed to work before the collapse, there would have been no housing bubble and no crisis in the first place. Had the market been allowed to work when the crisis hit, recovery would have been swift – as it was in 1920–21, when an even worse depression came to a rapid end without any open-market operations by the Fed, and without any fiscal stimulus. (In fact, the federal budget was cut in half from 1920 to 1922.)

What, in short, should we do now? Exactly the opposite of what our so-called experts, who in a sane world would be forever discredited, urge upon us.

-- from "No, the Free Market Did Not Cause the Financial Crisis" by Thomas E. Woods, Jr. at http://www.lewrockwell.com/woods/woods111.html.

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The market did not fail: interventionism failed

F.A. Hayek won the Nobel Prize for his work showing how the central bank’s intervention into the economy gives rise to the boom-bust cycle, making us feel prosperous until we suffer the inevitable crash. Most Americans know nothing about Hayek’s theory (known as the Austrian theory of the business cycle), and are therefore easy prey for the quacks who blame the market for problems caused by the manipulation of money and credit. The artificial booms the Fed provokes, wrote economist Henry Hazlitt decades ago, must end “in a crisis and a slump, and…worse than the slump itself may be the public delusion that the slump has been caused, not by the previous inflation, but by the inherent defects of ‘capitalism.’”

--from "No, the Free Market Did Not Cause the Financial Crisis" by Thomas E. Woods, Jr. at http://www.lewrockwell.com/woods/woods111.html.

Thursday, May 07, 2009

Peace is cheap

Obama can find only $17 billion of fat in a $3,400 billion budget? That's just 0.5%! (http://bit.ly/RJY6b.) He could save much, much more just by leaving Afraq!

HT: GMU economist Russ Roberts at http://www.cafehayek.com/hayek/2009/05/dog-bites-man.html.

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Alvaro Vargas Llosa on Jim Rogers' new book

[Jim Rogers] just looks at the world, wonders if we have all gone mad, and enjoys life while investing. He is an eccentric who knows the center of things. Maybe that makes the rest of us the real eccentrics.

--from "An American Eccentric" (May 6, 2009) by Alvaro Vargas Llosa at
http://www.independent.org/newsroom/article.asp?id=2494 .

It almost sounds like a haiku:

A Jim Rogers Haiku
Just looks at the world;
Wonders, have we all gone mad?
Live, invest, enjoy!

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Wednesday, May 06, 2009

“And that’s why inflation is bad. It F*CKS UP relative prices!”

We need resources to flow out of bloated sectors (real estate and construction first among them, but autos and many parts of the financial sector as well). This is never an easy process. Indeed, it is inevitably painful. But it is necessary to compare that pain, to the pain of alternatives. Distorting relative prices and impeding the flow of resources to higher value uses will only make things worse.

--from “Because it #%@*s Up Relative Prices!” by Craig Pirrong at http://streetwiseprofessor.com/?p=1662.

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Monday, May 04, 2009

'I am not selling my gold,' says Jim Rogers

Legendary global investor and chairman of Singapore- based Rogers Holdings, Jim Rogers said he is concerned some institutional gold reserves may be sold, affecting prices in the short term.

In an interview with Bloomberg radio, Rogers said: “I own some gold, but I am not buying at the moment because the IMF, which is one of the largest owners of gold in the world, is desperate to sell its gold.”

“I’m not selling my gold,” Rogers said.

The IMF “is trying to get permission from everybody,” Rogers added.

“If and when they sell their gold, they may set a bottom. Who knows? It may go down to US$700. They got a lot of gold to sell. If it does, I hope I’m brave enough and smart enough to buy more.”

-- from "'I am not selling my gold,' says Jim Rogers" at http://www.bi-me.com/main.php?id=35643&t=1&c=35&cg=4&mset=1011.

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I'm back!

That was a l-o-n-g hiatus!

Not sure how long I'll be back, but let's enjoy it while we can!