--Alexander Hamilton (1790, amid a populist backlash against American bankers)
To active file <<<
SoroS pushing transnationalism in the war of statues -
Mail Online has a pretty comprehensive 'must read' story on the monetary and financial state of affairs. As SoroS is still in the business of transnational empire building, Greece and Germany are exchanging insults, photoshopping each other's cultural heritage (funny, if the prospects weren't so dire) - Here's Mark Steyn's view of the situation: he's blaming the collapsing Ponzi scheme -
Update: the story seems to have inspired quite a few worthy blog posts today. Nourishing obscurity has this quote lifted from the Telegraph:
"Theodoros Pangalos, deputy prime minister, said Germany had no right to reproach Greece for anything after it devastated the country under the Nazi occupation, which left 300,000 dead. “They took away the gold that was in the Bank of Greece, and they never gave it back. (...) Twisting the knife further, he said the current crop of EU leaders were of “very poor quality” and had botched this month’s crisis summit in Brussels. “The people who are managing the fortunes of Europe were not up to the task,” he said.Yes, I agree. We're ruled by G-d darned hippies! That's why I say, bring back the grown-ups!
Mail Online: "Man who broke the Bank of England, George Soros, 'at centre of hedge funds plot to cash in on fall of the euro'", by Karl West
Soros Fund Management said the legendary investor did not attend the dinner on February 8, but did not deny that his firm was represented. At the dinner, the speculators are said to have argued that the euro is likely to plunge in value to parity with the dollar. The single currency has been under enormous pressure because of Greece's debt crisis, plus financial worries in Portugal, Italy, Spain and Ireland.
Exchange Rate Mechanism on Black Wednesday in 1992, believes the structure of the euro is 'patently flawed'. Hitting back: Greek PM George Papandreou blames 'speculators' for preying on the country's troubles He said: 'Makeshift assistance should be enough for Greece, but that leaves Spain, Italy, Portugal and Ireland. 'Together they constitute too large a portion of euroland to be helped in this way.'
He believes that unless the European Commission is given sweeping powers over taxation and spending, the single currency will always be vulnerable to financial turbulence in individual states. 'If member countries cannot take the next steps forward, the euro may fall apart,' he added.(...) >>>
Febr. 27, 2010
Is the European Camelot crumbling?
Business Week: "Europe's debt crisis intensifies", by Aoife White and Pan Pylas
Fears of another crisis spiral for the world economy deepened Friday after the Portuguese parliament defeated a government austerity plan, triggering renewed concern that the financial crisis in that country and in Greece could spread through the eurozone and spill across its borders. Spooked investors worldwide were fleeing risky assets like stocks. And from Shanghai to Sao Paolo, people were awakening to the reality that what is happening in these European minnow states has vast implications for the fate of the fragile global economic recovery. (...)
Markets fear Greece may default or require a costly bailout from already strapped European governments, and those concerns are spreading to other financially troubled governments such as Portugal and Spain. Portugal's position looked even weaker Friday after opposition parties defeated a government plan for austerity measures that the country needed to pass to soothe markets and reduce the soaring cost of insuring its debt, a measure of investor fear. "Portugal is next in line (...) >>>
Feb. 5, 2010
Image via WikipediaDer Spiegel: "Economists in Davos Look with Concern to 2010"
Many countries have started to see a rebound from last year's economic recession. But will it last? Economists at the World Economic Forum in Davos warn that paying down massive public debt will be "very, very painful." Deep spending cuts and significant tax hikes may be unavoidable.
For those now in their 30s, Kenneth Rogoff has bad news. "It will be terrible for you," the Harvard University economics professor told a young German at the World Economic Forum in Davos. "Germany's debt is exploding, the population is aging," he said. "And to be honest, I think your country is going to have average growth of just 1 percent in the coming years." (...) >>>
Feb. 1, 2010
Operation downgrade the Euro: It's evident that Greece - being the weakest link - is under attack, but there's more here than meets the eye. Some have suggested the Greek Labor government is acting as Obama's trojan horse in Europe, working for a depreciation of the Euro. Here's a word on hedge funds speculation on the Greek debt. Euro zone threat.
WSJ: "Greece Will Be Make-or-Break Test for the Euro"
A test of fire for the euro zone and Greece, the common currency's weakest link, is playing out in the financial markets. Greece is facing a debt crunch: it must raise €54 billion this year or face default. Athens says it can cut its giant budget deficit and raise the money. But the markets are testing its claims to destruction. "These six months are going to be crucial. They will be the test for us and, internationally, for our credibility," Greek Prime Minister George Papandreou said in an interview with The Wall Street Journal Thursday. His government's race against the clock began the week well. An international bond issue to raise €5 billion was oversubscribed five times, allowing the government to expand the issue to €8 billion. The debt was expensive, but the government got the money in the bag. Then the government became embroiled in what Greek officials are calling the China syndrome.(...) >>>
Jan. 30, 2010
The intelligentsia and Newspeak: Thomas Sowell has just written his third book in a year, Intellectuals and Society, and America's foremost economist and contemporary philosopher has again given IBD permission to publish excerpts.
The new book is a study of what intellectuals do, why they do it the way they do and — most important —their effects on society. (...)
Other chapters in the 398-page volume released last week by Basic Books cover "Intellectuals and Social Visions," "Intellectuals and the Law," "Intellectuals and War" and "Optional Reality in the Media and Academicia," among other topics.
Part I - Part II - Part III - Part IV - Part V
Forever blowing bubbles ...
Following up on the well-received series by Thomas Sowell on The Economics of Medical Care, IBD posts excerpts from Sowell’s latest book, The Housing Boom and Bust, a chronicle of the biggest economic disaster of our time.
The causes of that debacle still aren’t understood and many of the same mistakes are being made now — in some cases by the same politicians — in efforts to overhaul America’s medical and financial systems.
The series starts below and will run in five Monday installments. "How Little Law From '70s Brought The Financial System To Its Knees", a Monday series excerpting the chapter on political implications from Thomas Sowell's latest book, "The Housing Boom and Bust."
December 2009 - January 2010
Stephen Green, chairman of the HSBC, is interrogated by two out of control, postmodern activist-journalists. Let's give them full credit for their trouble. Green says the new world order is already upon us (G20, Western influence waning), omits to blame Government for subprime mortgage crisis ...
Der Spiegel: "The New World Order 'Is Already Underway'", by Thomas Tuma and Beat Balzli
Since 2006 Stephen Green, 61, has been the group chairman of HSBC, the world's largest private bank. For three years previously he headed the banking group as its chief executive. In his free time, he serves as an ordained minister in the Church of England. He is also the author of the book "Good Value: Reflections on Money, Morality and an Uncertain World." (...) >>>
Dec. 23, 2009
Hudson NY: "The Origins of Islamic Economics", by Daniel Atzori
Islamic finance and Islamic banking, which are among the fastest growing financial industries in the world, are best understood in their political and cultural contexts, and by what formed their theoretical origins. To begin with, Islamic banks are based on a corpus of doctrines called “Islamic economics,” which claims to be based on the Quran, but is actually the creation of the Islamist thinker Abu’l-A’la Mawdudi (1903-1979). Mawdudi is both the father of Islamic economics and (together with Hassan al-Banna, founder of the Muslim Brotherhood) the father of modern political Islam. His crucial contribution to the development of Islamism has been highlighted by Seyyed Vali Reza Nasr in “Mawdudi and the Making of Islamic Revivalism,” while his role in the birth of Islamic economics has been studied by Timur Kuran in “The Genesis of Islamic Economics.” (...) >>>
Dec. 19, 2009
Telegraph: "Société Générale tells clients how to prepare for 'global collapse'"
Société Générale has advised clients to be ready for a possible "global economic collapse" over the next two years, mapping a strategy of defensive investments to avoid wealth destruction. (...) Overall debt is still far too high in almost all rich economies as a share of GDP (350pc in the US), whether public or private. It must be reduced by the hard slog of "deleveraging", for years. "As yet, nobody can say with any certainty whether we have in fact escaped the prospect of a global economic collapse," said the 68-page report, headed by asset chief Daniel Fermon. It is an exploration of the dangers, not a forecast. (...) >>>
Nov. 19, 2009
!Enter Stage Right: "A man-made financial disaster", by Alan Caruba
You will recall that, shortly before the end of the 2008 political campaign, the White House announced a threat to the entire financial system and called on Congress to enact emergency spending powers. The Emergency Economic Stabilization Act of 2008 was enacted on October 3, 2008.
Just eighteen days earlier an event occurred that slid under the radar screen of virtually the entire mainstream media. On Thursday, September 15, 2008, at approximately 11 A.M., the Federal Reserve noticed a tremendous draw down of money market accounts in the nation, amounting to $550 billion dollars. It occurred within an hour or two. The money was removed electronically.
It has never been made public which accounts were affected, nor where the withdrawn funds were sent. If we knew those facts, we would know who launched an attack on the United States that has been more devastating than any in our history.
Had the Federal Reserve not closed down the accounts involved it is estimated that by 2 P.M. $5.5 trillion would have been withdrawn and the entire economy of the nation would have collapsed. It would have been followed within a day with the collapse of the world's economy. (...) >>>
Nov. 16, 2009
Cato: "Hu versus Sarkozy", by Steve H. Hanke
There is no more reliable rule than the 95% rule: 95% of what you read about economics and finance is either wrong or irrelevant. Just reflect for a moment on the most frequently repeated lessons drawn from the Great Depression (1929-33). According to most accounts, the stock market crash of October 1929 was the spark that sent the economy spiraling downward. How could this be? (...) >>>
Oct. 26, 2009
Robert Fisk is further clarifying his revelation in this video:
The Independent: "The demise of the dollar", by Robert Fisk
In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading>
In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.
Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars. (...) >>>
Oct. 8, 2009
IBD: "Today's Crisis Is Rooted In 1930s Policies"
A year after the financial bubble burst, recovery still struggles against the political meddling that caused the recession in the first place. But the G-20 meeting of government leaders in Pittsburgh offers more of the contradictory promises made in April, offering bailouts and subsidies while condemning protectionism.
We would all be better off if the Western economic powers had simply let the recession work itself out. The financial crisis was not caused by bankers. Bankers have been doing their business for centuries. (...) >>>
Sept. 27, 2009
Obama's nationalization drive ...
Cato@Liberty: "Taking Over Everything"
“My critics say that I’m taking over every sector of the economy,” President Obama sighed to George Stephanopoulos during his Sunday media blitz. Not every sector. Just health care - energy - local schools - banks - insurance companies - automobile companies - compensation at financial firms - newspapers - the internet. This president and his Ivy League advisers believe that they know how an economy should develop better than hundreds of millions of market participants spending their own money every day. That is what F. A. Hayek called the “fatal conceit,” the idea that smart people can design a real economy on the basis of their abstract ideas. (...) >>>
Sept. 24, 2009
Telegraph: "Barack Obama accused of making 'Depression' mistakes"
Barack Obama is committing the same mistakes made by policymakers during the Great Depression, according to a new study endorsed by Nobel laureate James Buchanan. (...) >>>
Sept. 7, 2009
These Leftist ninconpoops are too clever by half! Here's one who has devised a scheme to limit a country's "rights to produce" (guess which those will be!), essentially a new tool for the global redistribution of wealth: "(...) all humans have equal rights to the atmosphere. This is a basic right." But ... "industrialized nations have already exceeded their quotas if you take into account past emissions."
Spiegel Online: "'Industrialized Nations Are Facing CO2 Insolvency'"
In a SPIEGEL ONLINE interview, Hans Joachim Schellnhuber, the German government's climate protection adviser, argues that drastic measures must be taken in order to prevent a catastrophe. He is proposing the creation of a CO2 budget for every person on the planet, regardless whether they live in Berlin or Beijing. (...) >>>
Sep 4, 2009
- FEATURE -
PJM: "Defending the Free Market: An Interview with Guy Sorman", by Bernard Chapin
Which economic policies can defeat recessions? And which are doomed to prolong them?
Addressing events across five continents, former professor at the Paris Institute of Economics Guy Sorman has published over twenty books in the course of his career. Currently he is a contributing editor for City Journal and a writer for the Wall Street Journal and Le Figaro. His latest book is most topical and entitled Economics Does Not Lie: A Defense of the Free Market in a Time of Crisis. (...) >>>
July 25, 2009
July 19, 2009
At last, here it is ... fuel poverty! Here put to the table by a UK source is a serious problem at the root of which is the combined effort of environmentalism and greedy government: overtaxation of fuel is making it increasingly hard for families to make ends meet. It's got to stop! Stop using fuel is a milchcow!!!
ITN: "Government 'must do more on fuel poverty'"
The Government's Fuel Poverty Advisory Group said more households will be pushed into fuel poverty by the Government because of higher energy prices and growing unemployment unless the Government acts.(...) >>>
July 13, 2009
Dr Sanity: "GREEN JOBLESSNESS"
(...) The Spanish professor is puzzled. Why, Gabriel Calzada wonders, is the U.S. president recommending that America emulate the Spanish model for creating "green jobs" in "alternative energy" even though Spain's unemployment rate is 18.1 percent -- more than double the European Union average -- partly because of spending on such jobs? Calzada, 36, an economics professor at Universidad Rey Juan Carlos, has produced a report which, if true, is inconvenient for the Obama administration's green agenda, and for some budget assumptions that are dependent upon it.
Calzada says Spain's torrential spending -- no other nation has so aggressively supported production of electricity from renewable sources -- on wind farms and other forms of alternative energy has indeed created jobs. But Calzada's report concludes that they often are temporary and have received $752,000 to $800,000 each in subsidies -- wind industry jobs cost even more, $1.4 million each. And each new job entails the loss of 2.2 other jobs that are either lost or not created in other industries because of the political allocation -- sub-optimum in terms of economic efficiency -- of capital. (European media regularly report "eco-corruption" leaving a "footprint of sleaze" -- gaming the subsidy systems, profiteering from land sales for wind farms, etc.) Calzada says the creation of jobs in alternative energy has subtracted about 110,000 jobs from elsewhere in Spain's economy. (...) >>>
June 29, 2009
Go, go, go help defeat immoral smoking bans that kill off small businesses without compensation!
Update: Two small cafes have been cleared of breaking the ban - it's for the wrong reasons, but the verdict opens the way for small cafes to claim millions from the state in compensation.
DutchNews: "Tobacco lobby helps bars fight smoking ban"
The tobacco industry is helping small cafes and bars fight the ban on smoking introduced last July, according to research by the NRC newspaper. The treasurer of the small cafe owners lobby group told the paper his organisation has received some €50,000 from tobacco companies. Ton Wurtz also said that he regular meets with the chairman of the tobacco industry federation SSI for strategy talks. "Red de kleine horecaondernemer" (save the small cafe owner) has 1,200 members. (...) >>>
June 22, 2009
FT: "Obama unveils regulatory reforms"
Financial companies were faced with a fundamental change in their balance sheets and profitability on Wednesday as President Barack Obama laid out the biggest regulatory reform since the 1930s.Stringent new capital requirements lie at the heart of a raft of proposals that require the Federal Reserve to watch for systemic dangers emanating from the biggest banks, insurers and, potentially, private equity firms. Remuneration and profits at Wall Street and beyond could be hit by the reforms, which will see the administration attempt to tighten capital and leverage rules at global banks in negotiation with the Basel Committee on Banking Supervision.The administration sees the new rules as a rejection of the light-touch approach that held sway under Alan Greenspan, former Fed chairman, and previous governments, which Mr Obama and his advisors blame for sparking a debt-fuelled financial crisis. (...) >>>
June 17, 2009
CNSNews: "Treasury Secretary's Secret Talking Points Reveal That Banks Were Forced to Surrender Ownership Stakes to Government"
Last October, then-Treasury Secretary Henry Paulson ordered nine banks that the Treasury Department described as "healthy" financial institutions to surrender ownership interests to the government or else face regulatory action that would force them to surrender ownership interests to the government, according to an internal Treasury Department document. Paulson's extraordinary threat culminated in one of the most sweeping government intrusions into the free-enterprise system in the history of the United States. (...) >>>
June 3, 2009
Lew Rockwell: "Who, Me? Yes You!", by Peter Schiff
(...) Yet in a speech this Tuesday before the National Association of Realtors, Sir Alan “the-bubble-blower”[ed. Greenspan] claimed that his low interest rate policies in the early and middle years of this decade had no effect on mortgage rates or real estate prices. As a result, he claims no responsibility for the subprime mortgage crisis. But even current Treasury Secretary Timothy Geithner, who shared interest rate policy responsibility as governor of the New York Fed during the Greenspan regime, recently admitted that overly accommodative policy helped inflate the bubble. So what does Greenspan know that everyone else doesn’t? (..) >>>
May 17, 2009
Politeia: "The Coup of State on the Economy in Perspective"
In America the organizations who are helping us getting our human heads around the unprecedented, astronomical figures involving the various economic stimuli, are the Tea Party Movement (sites here and here) and Stop Spending our Future. The latter has published following information in helping us reducing it all to a more or less human scale: fasten seat belts for this one! (video) >>>
May 9, 2009
The Foundry: "The Outlines of the G-20 Deal Emerge, And They’re Not Good"
In the run-up to the G-20 summit in London on April 2, a curious division has emerged. On one side stand the U.S. and Britain, both sounding like continental Europeans in their enthusiasm for deficit spending. On the other stand France and Germany, rejecting stimulus packages but eager to impose a new system of “global governance” on the world’s markets and nations. (...) Barroso demanded that “Europe must speak with one voice in London.” But his comments later in the interview were more interesting. In an obvious effort to bridge the divide between the two sides, he urged all concerned to:avoid the false choice between fiscal stimulus or improved regulation. The reality is that we need both and I believe we are seeing convergence within Europe and with our international partners on this.
And there you have the outline of the deal. Like all deals, it pretends to offer something for everyone: the U.S. and Britain will get a reference to their right to pass stimulus measures, and a vague statement that such measures may in some cases be appropriate for some states. And France and Germany will get the regulatory framework they desire. The Obama administration could then trumpet its protection of U.S. fiscal sovereignty and the vague endorsement of fiscal stimulus, while France and Germany got down to the serious business of not going deeper into debt and imposing new restrictions on Britain and the U.S. (...) Let’s hope that the unelected Barroso is as out of touch with the realities of international politics as he is with the publics of Europe. (...) >>>
Apr 1, 2009
WSJ: "China Takes Aim at Dollar"
China called for the creation of a new currency to eventually replace the dollar as the world's standard, proposing a sweeping overhaul of global finance that reflects developing nations' growing unhappiness with the U.S. role in the world economy.The unusual proposal, made by central bank governor Zhou Xiaochuan in an essay released Monday in Beijing, is part of China's increasingly assertive approach to shaping the global response to the financial crisis. (...) >>>
Mar 24, 2009
The Daily Beast: "The Fed Calls the Shots", by Matt Miller
For all the arrows aimed at Tim Geithner right now, it's really Ben Bernanke's arsenal of tricks that can manipulate the economy—and his surprise move this week was just a warm-up. Between the wall to wall AIG outrage this past week, plus leaks of the coming details from Tim Geitner’s latest bank bailout, you can be forgiven if you haven’t paused to reflect on what Fed chairman Ben Bernanke did the other day.But in a week when all the other economic news was grist for either rage or tears, gentle Ben actually offered something creative, and even hopeful. Why do I say this? Ever since the financial crisis broke I’ve been an advocate of what I call Spaghetti Economics – as in, if we throw trillions against the wall, enough will stick, however imperfectly, to avoid anything like a 1930s style calamity. (...) >>>
Mar 22, 2009
The Big Picture: "Paul Volcker: “Not an Ordinary Recession”"
Paul Volcker is the former U.S. Federal Reserve Board chairman, and is now a member of President Barack Obama’s advisory team on the economy. He recently gave a speech in Toronto on the extent of the U.S. economic crisis.
Here is the speech (...):
I really feel a sense of profound disappointment coming up here. We are having a great financial problem around the world. And finance doesn’t work without some sense of trust and confidence and people meaning what they say. You take their oral word and their written word as a sign that their intentions will be carried out. (...) This is not an ordinary recession. I have never, in my lifetime, seen a financial problem of this sort. It has the makings of something much more serious than an ordinary recession where you go down for a while and then you bounce up and it’s partly a monetary – but a self-correcting – phenomenon.
The ordinary recession does not bring into question the stability and the solidity of the whole financial system. Why is it that this is so much more profound a crisis? I’m not saying it’s going to get anywhere as serious as the Great Depression, but that was not an ordinary business cycle either. This phenomenon can be traced back at least five or six years. (...) with the help of our new profession of financial engineering – we developed ways of making weaker and weaker mortgages. The biggest investment in the economy was residential housing. And we developed a technique of manufacturing class D mortgages but putting them in packages which the financial engineers said were class A. So there was an enormous incentive to take advantage of this bit of arbitrage – cheap money, poor mortgages but saleable mortgages.
A lot of people made money through this process. (...) At some point people began getting nervous and the whole process stopped because they realized these mortgages were no good. (...) There were two things that were particularly contributory and very simple. Compensation practices had gotten totally out of hand and spurred financial people to aim for a lot of short-term money without worrying about the eventual consequences. And then there was this obscure financial engineering that none of them understood, but all their mathematical experts were telling them to trust. These two things carried us over the brink. (...) There was so much opaqueness, so many complications and misunderstandings involved in very complex financial engineering by people who, in my opinion, did not know financial markets. They knew mathematics. They thought financial markets obeyed mathematical laws. They have found out differently now. (...) >>>
Mar 22, 2009
WSJ: "ECB Official Responds to Krugman Criticism"
ECB executive board member Lorenzo Bini Smaghi published a letter in the Italian newspaper La Repubblica today challenging Paul Krugman’s recent contention that euro zone governments and the ECB aren’t doing enough to prop up the struggling economy. The following is the full text of the letter translated from the original Italian.
To the Editor.
In a recent article in the International Herald Tribune, Professor Paul Krugman states that Europe may have made a mistake in adopting the euro ten years ago. His point, he claims, is corroborated by the euro area’s apparent institutional inability to react to the severe crisis we are facing at present, an inability which, he claims, may have disastrous results. The claims made in the article are in no way supported by empirical evidence. I don’t want to bother the readers with too many figures and statistics, but we should also avoid gross inaccuracies. (...) >>>
Mar 19, 2009
FT: "G20 pledges to restore global growth"
The world’s leading finance ministers and central bank governors pledged on Saturday “to take whatever action is necessary until growth is restored,” suggesting that further action on monetary policy, fiscal stimulus and regulatory reform would be introduced in the months to come.
Although the meeting ended without specific new commitments and no country or central bank would be forced to change any existing policy in light of the communiqué, the participants representing 85 per cent of the world’s economic output said they were pleased by the spirit of cooperation among the Group of 20 leading and emerging economies. (...) >>>
Mar 14, 2009
Economists Against Stimulus: "With all due respect Mr. President, that is not true", by Cato Institute
Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan's "lost decade" in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policy makers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth (...) >>>
Mar 5, 2009
Yahoo!News: "US steps up pressure on UBS in bank secrets case"
A government lawsuit Thursday seeks the identities of tens of thousands of possible U.S. tax cheats who hid billions of dollars in assets at the Swiss-based bank UBS AG. A defiant Swiss president pledged to maintain his country's bank secrecy laws. In the suit filed in Miami, the Obama administration wants UBS to turn over information on as many as 52,000 U.S. customers who concealed their accounts from the U.S. government in violation of tax laws. (...)>>>
Feb 19, 2009
We're being duped once again! The Spectator launches a counter-investigation into the causes of the recession and starts with exposing the theatricals on view in many parliaments around the globe these days, titled "Hang-a-Banker". Thank you, Mr. Nelson ...
The Spectator: "Fraser Nelson launches the Spectator's inquiry into the causes of the recession"
(...) For a bubble to exist, the entire political and financial establishment must climb inside it. When the bubble bursts, as J.K. Galbraith observed, they then enter a state of denial. (...) Just as the Dutch blamed the tulip-sellers for their 1637 bubble, so bankers are taking the fall now. And this suits the large number of people, in government and outside, who were complicit. This is why Gordon Brown’s proposed year-long review of the banking system is a masterstroke. It is a slight change from blaming America, but it will keep the hang-a-banker mood music going for months with the Tories whistling along. Yet it would be a grave error to follow Brown’s logic. (...)
We will put work in progress on spectator.co.uk — where we can print transcripts of interviews with expert witnesses and display the warnings which Mr Brown pretends were never made. (...) Bankers are no more responsible for the debt crisis than barmen are for Britain’s oft-lamented drink problem. When money is tight, bankers are picky about whom they lend it to. When it is being churned out as if from a never-ending fruit-machine jackpot, as the Bank of England allowed for much of the last decade, bankers are — well — not so careful. (...) unleashed a flood of easy money, on which the City gorged. While there was greed for bonuses, it was by no means restricted to the Square Mile. For Mr Brown’s Treasury received a 40 per cent slice of every bonus doled out, at a time when it had embarked on the largest expansion of state spending in Europe: tax from bonuses paid for an army of bureaucrats and public sector workers. Government grew addicted to the revenue that the financiers produced. (...)
Crucially, although the recession is now global, the collapse of banks is not. Spain and Canada also had a housing boom, yet neither has a single collapsed bank. (...) And where was the parliamentary scrutiny? John McFall has made his name as Treasury select committee chairman by shouting at bankers, but was more guarded with HM Treasury itself. (...) became the master of all the tricks that Mr Brown affects to be so appalled to discover at work in the banking sector. (...) This helps explain Mr McFall’s fury. He needs a scapegoat too, as for seven years he failed to spot what was happening in front of his nose. (...)
The Spectator’s inquiry will not waste too much time on Gordon Brown. He designed the banking regulations, raided pension funds, concocted ‘stability’ rules and masterminded a debt concealment programme. For all this he will be punished on election day. For Britain to recover to where we were in 1999, at the peak of our economic stability, the errors of judgment which accompanied the Brown era must be identified and corrected. The Prime Minister has long understood the truth in Orwell’s saying that he who controls the past controls the future.
The future of British politics — and, arguably, of British capitalism — will depend on how we interpret what just happened. Mr Brown may be resigned to losing the election, but by blaming the banks he may still win the argument. That is why so much is now riding on the battle to define the past. And armed with the suggestions, theories and insights of our readers, it is one The Spectator will enthusiastically join. >>>
Feb 14, 2009
The Right Perspective: "Putin Warns US About Socialism"
(...) “In the 20th century, the Soviet Union made the state’s role absolute,” Putin said during a speech at the opening ceremony of the World Economic Forum in Davos, Switzerland. “In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly. I am sure nobody wants to see it repeated.” (...) “Nor should we turn a blind eye to the fact that the spirit of free enterprise, including the principle of personal responsibility of businesspeople, investors, and shareholders for their decisions, is being eroded in the last few months. There is no reason to believe that we can achieve better results by shifting responsibility onto the state.”
Putin also cautioned the US against using military Keynesianism to lift its economy out of recession, saying, “in the longer run, militarization won’t solve the problem but will rather quell it temporarily. What it will do is squeeze huge financial and other resources from the economy instead of finding better and wiser uses for them.” Putin’s comments come in sharp contrast to Russia’s own military buildup and expansion. (...) “we must assess the real situation and write off all hopeless debts and ‘bad’ assets. True, this will be an extremely painful and unpleasant process. (...) However, we would ‘conserve’ and prolong the crisis, unless we clean up our balance sheets.” “The time for enlightenment has come. (...) >>>
Feb 13, 2009
Geek Politics: "The New Deal Didn’t Work the First Time, Let’s Try it Again", by Derek Clark
(...) If Obama can’t learn from history, we are doomed to repeat it. When FDR took office in 1933 unemployment was over 24%. In 1939, it was 17.2%. In 1943 it was 1.9%. In FDR’s seventh year in office, unemployment was still over 17%. That doesn’t really seem to me like something that worked really well. World War II on the other hand did get us out of the Depression. It made unemployment go away. The New Deal did not. I certainly do not want another world war. Obama’s New Deal is also something I could do without. (...) >>>
Feb 6, 2009
Commentary Magazine: "The Madness of Crowds",
Fueled by easy credit, the real-estate market had been rising swiftly for some years. Members of Congress were determined to assure the continuation of that easy credit. Suddenly, the party came to a devastating halt. Defaults multiplied, banks began to fail. Soon the economic troubles spread beyond real estate. Depression stalked the land. The year was 1836. (...) Let us begin our account of the catastrophic effects of speculative bubbles and political gamesmanship with the collapse of 1836. (...) >>>
Jan 25, 2009
You gotta love this guy! Already I'm willing to take back anything subjective I ever said about him ...
Mail Online: "UK 'could run out of money very soon' warns Cameron amid fears of 70-style IMF bail-out"
David Cameron has warned Britain faces a real risk of needing a humiliating 1970s-style bail-out from the International Monetary Fund. In his strongest remarks to date on the financial crisis, the Tory leader said if the Government continued on its present course, 'the money will run out'. (...) Under the Prime Minister's plans, Britain is set to borrow 8 per cent of national income next year - the same figure that in 1976 forced the then Labour government to go cap in hand to the IMF. Then, Chancellor Denis Healey had to ask for a loan of U.S. $4billion after sterling slid on international markets. The IMF is the international lender of last resort and hands out financial and technical assistance to its members. (...)
Stung by suggestions that conservatism is less relevant because markets have failed, the Tory leader said it was 'completely wrong' to claim that 'the big state is back'. The recession doesn't vindicate big government; it hammers the final nail in its coffin,' he said. 'We know that we're in this mess because of too much debt: too much banking debt, too much personal debt and too much government debt. 'Our response cannot be to borrow more and make government even bigger.' (...) >>>
Jan 24, 2009
Von Mises Institute: "The Left, the Right and the State"
The Left, The Right, and The State
Jan 17, 2009
LE QUÉBÉCOIS LIBRE: "KEYNES WAS NEVER A LIBERAL", by Vincent Geloso
(...) Keynes probably had a certain fascination for Russia due to his hatred of profit and speculation (even though he himself made a fortune) while clearly and virulently abhorring its horrors. However, it is the destruction of the profit motive and the elimination of private property that were at the root of those horrors. Keynes refused to consider them as root causes and blamed "some beastliness in the Russian nature (...) Keynes actually considered in his essay National self-sufficiency that fascism, Nazism and communism were "social experiments" whose failures and tragedies could be explained by administrative bungling. (...) >>>
Jan 16, 2009
A post by Tom Blumer on PJM's has some early good news for Americans, which means ultimately good news for everyone ... long live Christmas ... down with POR (what? POR, or an economy suitable for campaign purposes):
PJM: "Obama’s Race Against the Economy"
(...) the president-elect (...) contended that an economic recovery “will take longer than any of us would like — years, not months. (...) Biden, on the verge of becoming the first vice president in U.S. history who can’t count to four, said that “the economy is in much worse shape than we thought it was in,” and expressed fears that it is close to “absolutely tanking.” (...) we can “count” on two things: old media won’t accuse them of negatively influencing the economy and cowed Republicans will barely object. Of course, new administrations tend to lower expectations a bit in advance of taking power, but Obama and Biden’s statements were unusually sweeping.
There’s a reason for that. The economy just might be recovering. That would be really, really bad news for their ambitions. Good news “too soon” would be bad news for the massive $850 billion stimulus package Obama and the Democratic Congress wish to pass. If a recovery has visibly commenced, who, besides their pork-addicted constituencies and the endless line of bailout beggars who should know better, will need stimulation? Obama, Biden, and the Democratic Party are engaging in their sharply negative jawboning on the economy for the same reason a mob hit man sends a person he knows to attend his target’s funeral: he wants to make sure he’s dead. (...) >>>
Dec 25, 2008
From the following article it emerges that political correctness is no longer a harmless toy in the hands of the engaged intelligentsia, but lies at the root of the current crisis - President Elect Obama has played an active role, but this will not be held against him (of course) given the good intentions underlying the scheme ...
PJM: "It’s Time to Uproot the Real Cause of the Mortgage Crisis", by Hans A. von Spakovsky
(...) Nothing in the mortgage bailout legislation called for Congress to fix the serious problems with the Community Reinvestment Act (CRA) that empower ACORN-style pressure tactics against lenders. Nothing made the Federal Reserve change its lending instructions. Nothing urged the president to change the enforcement policies at the Justice Department and HUD that forced lenders to make risky loans to unqualified applicants.
At its most basic level, this crisis started because of the weakening of mortgage lending standards caused by the Federal Reserve and other federal agencies. Lenders also feared facing discrimination claims and enforcement actions by government law enforcement agencies and organizations such as ACORN. (...) Some minority groups do have a higher rejection rate for mortgages on average, but because of weaker credit histories, not discrimination by lenders. (...)
Eventually this lie began to poison the mortgage market, and now the entire economy is at risk.” (...) With the regulatory structures that are the root and cause of this whole problem unchanged, the American taxpayer will almost certainly be called upon to bail the mortgage system out again, as well as all of the other sectors of our economy being hurt by the credit crunch it engendered. >>>
Dec 20, 2008
AIM: "Fraudulent “Credit Crisis” Paves Way for Economic Disaster", by Cliff Kincaid
(...) the claims made by Treasury Department Secretary Henry Paulson and Federal Reserve chairman Ben Bernanke to justify a socialist takeover of the financial industry were demonstrably false. The analysis, Flawed Assumptions about the Credit Crisis: A Critical Examination of US Policymakers, concludes that the result of the unjustified massive federal intervention in the economy could be similar to the economic crisis in the Weimar Republic of 1922, where disastrous hyperinflation made the currency worthless and threatened the nation’s political system and stability.
Paulson had claimed that, by mid-September, when he persuaded President Bush to go public with demands for Congress to approve a $700-billion bailout plan, the financial system had “seized up,” credit markets had “froze,” and interbank lending had been “substantially reduced.” But none of this was true. “The freezing of the credit markets that Secretary Paulson cites is not visible” in the data, the Celent report shows. Paulson also made the claim that blue chip industrial companies could not issue longer-term commercial paper. But this claim “finds no support” in the data, the report says.
Bernanke had claimed that businesses were “confronting diminished access to credit” when in fact “the opposite” was true, the study demonstrates. The suggestion is made that Bernanke and Paulson were acting on behalf of “a particular set of businesses and financial institutions” and exaggerated the problem in order to justify “unprecedented levels of government intervention in the markets.” It is implied that these firms were certain big banks and companies. But while they may have been having problems raising funds, the credit market in general was “working well,” the report said.
It declares, “Doubtlessly, a number of the leading financial institutions in the US are in serious trouble, as are a number of the leading industrial firms. However, credit difficulties surrounding a specific set of firms is not the same as a problem in the credit markets in the aggregate.” The study says that, “A clear and cogent analysis of the credit crisis has not been presented by policymakers, despite the fact that unprecedented levels of public funds are being deployed.” As a result, the “massive injection of funds could well exacerbate the problem rather than help.” (...) >>>
Dec 16, 2008
PJM: "The Fallacy That Government Creates Jobs", by Daniel J. Mitchell
(...) Some supporters of this new spending seem genuinely convinced that the federal government can create jobs. In part, this is a debate about Keynesian economics, which is the theory that the economy can be boosted if the government borrows money and then gives it to people so they will spend it. This supposedly “primes the pump” as the money circulates through the economy. Keynesian theory sounds good, and it would be nice if it made sense, but it has a rather glaring logical fallacy. (...) >>>
Dec 5, 2008
... the shock, awe and the world's unraveling comes courtesy of the entertaining and enlightening Glenn Beck, who weighs in here ... "They are not telling you the full truth (...) they know what it means if they say something that causes people to panic. This is the next level in getting people prepared for what's coming ..."
Telegraph.co.uk: " Citigroup says gold could rise above $2,000 next year as world unravels"
Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world's monetary system with liquidity, according to an internal client note from the US bank Citigroup. The bank said the damage caused by the financial excesses of the last quarter century was forcing the world's authorities to take steps that had never been tried before.
This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold."They are throwing the kitchen sink at this," said Tom Fitzpatrick, the bank's chief technical strategist."The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed though into an inflation shock.
"Or it will not work because too much damage has already been done, and we will see continued financial deterioration, causing further economic deterioration, with the risk of a feedback loop. We don't think this is the more likely outcome, but as each week and month passes, there is a growing danger of vicious circle as confidence erodes," he said. "This will lead to political instability. We are already seeing countries on the periphery of Europe under severe stress. (...) Citigroup said the blast-off was likely to occur within two years, and possibly as soon as 2009. (...) >>>
Dec 3, 2008 ...
... updated Dec 5: Arthur Doctors van Leeuwen, President of the Ctee of European Securities Regulators (CESR) - a wise and erudite man, we might add - just said in an interview that to this day it is a puzzle how it happened that - more or less simultaneously - all financial securities broke down (see archive, and here another article by Cliff Kincaid of Accuracy in Media) ...
Memri: "Oil-Producing Countries in Middle East Face Plummeting Oil Prices"
After a hefty spike in oil prices in the preceding year, reaching as high as $147 a barrel in July 2008, prices plummeted in the subsequent four months to below $55 a barrel on the close of trading day of November 14 - a a sharp price decline of close to two-thirds. The decline is quite far-reaching, given that oil revenues provide 70 to 80 percent of government revenues in OPEC countries. According to the International Monetary Fund (IMF) a decline of $1 in the price of crude would translate into a loss in revenues of $3.5 billion in Saudi Arabia, $300 million in Qatar, $1 billion in the United Arab Emirates (UAE) and $960 million in Kuwait, calculated in an annualized basis. (...) >>>
Nov 19, 2008
Politeia: "Just What the World Needs: Another En-Gee-O, the Jee Twenty"
Initial research learns that the G20 have emerged from the the Doha Trade Round, set up on the basis of a Brazilian initiative in the run-up to the Cancun Conference. Apart of the states making up the G8, G20 member states include Argentina, Brazil, China, India, Indonesia, Mexico, Saudi Arabia, South Africa, South Korea, Turkey, the EU and European Central Bank, and the NGOs IMF, the World Bank and their Development Committee. (...) >>>
Nov 17, 2008
WSJ: "Five Myths About the Great Depression - Herbert Hoover was no proponent of laissez-faire"
The current financial crisis has revived powerful misconceptions about the Great Depression. Those who misinterpret the past are all too likely to repeat the exact same mistakes that made the Great Depression so deep and devastating. Here are five interrelated and durable myths about the 1929-39 Depression (...) >>>
4th Nov 2008
Politeia: " Yes, He Can"
(....) this may after all look like a conspiracy to get candidate Obama elected on a platform of "the Dems own this economy, stupid"? With Joe "the Mouth" Biden making headlines with his "generated crisis" for a President Obama, is the financial collapse a coincidence, only six weeks before the election, when John McCain was leading in the polls, and appearing to be on his way to a election victory? "The crisis was man-made", states Kincaid boldly. Let's start at the bottom and then read "Who’s Behind the Economic Collapse?" top down, keeping in mind the very personal vow taken by the Anti Christ of Haute Finance, to defeat Bush in 2004 — with every penny if necessary ... (Malkin pulls a number of threads in the tarantula's web) ... (...) >>>
1st Nov 2008
... here we have the Objectivist/Libertarian view of the crisis - this is the philosophical approach (lesson 1: stay away from Pragmatism; it is utterly destructive, and moreover, it's amoral) ... in the best Ayn Rand tradition, no convenient excerpts, synopsis, short cuts, quick fixes or free lunches on this one - occasionally a gem like that pops up and none would do it justice - read it in all its glory (Hat Tip: aynrandfan) - permanent entry
Aristotle the Geek: "A Convincing Explanation"
Update: there's one more: "He Said, She Said" - okey, just one teaser here: "(...) no argument to the contrary will move them. Donkeys will learn Latin before pragmatists learn economics.
21st Oct 2008
... Europe - monolithically behind Obama - is in for a cold shower (serves them right for blindly following Utopian instincts without looking at facts) ...
IBD: "Stances On Trade Are Worlds Apart"
(...) Voters who don't see much difference between the candidates haven't taken a close look at how far apart McCain and Obama are on trade. The issue is especially important now because exports are a lone bright spot in the U.S. economy as recession looms. The choice is whether to keep that momentum going or kill it off and retreat into isolationism. McCain is clearly in favor of free trade, recognizing not only its benefits to the U.S. but also its capacity to turn poor countries into rich ones, and potential enemies into friends. His record shows it. (...) In effect, he won the Vietnam War by making an ally of an enemy and a partner with $8 billion in two-way commerce. Today, McCain is a hero in Vietnam for breaking the trade gate open. (...) This all contrasts to the record of Obama.
The Democratic candidate says he's pro-free trade, but funny things happen to him whenever it's time to vote in the Senate. Other than a pact for Oman, he has opposed every trade treaty put in front of him, telling Honduras, Guatemala, Dominican Republic, Costa Rica and Nicaragua they weren't good enough. (...) Meanwhile, Obama talks about going "beyond free trade" and offers aid and community organizers in its place. He even opposes past treaties such as NAFTA, which he claims benefits only "corporate interests." The problem with renegotiating all trade pacts is that it allows all players to dictate new terms, much to America's detriment. Obama's positions will not benefit the U.S. economy as a whole. But they will serve special interest groups such as public-sector unions. (...) >>>
18th Oct 2008
... evidence from the UK (must be going on elsewhere as well) of the big state coup amidst the opinion from the Left that ... capitalism (read: greed) has to be bailed out by socialism ... (really) ...
Times Online: "Petrol companies told to cut prices at pumps"
17th Oct 2008
... here we have something totally interesting ... a transcript from a speech given at the Credit Bubble Symposium by Doug Noland ... dated September 20, 1999 (funny, how these things always seem to creep out of the wood work after the event!) ...
Prudent Bear - Credit bubble bulletin archive: "Coin In the Fuse Box"
I have spent the past decade in a personal quest, striving to understand the workings of our financial system and economy. I am here today hoping to share a few insights. Part of the dilemma we all face is that we are so inundated with numbers and statistics that it is difficult to see the forest through the trees. Today, I hope to bring some clarity to the forest. (...) the Fed had repeatedly circumvented market forces with liquidity injections and, by accommodating credit and speculative excesses, perpetuated the fateful bubble.
That is, the Fed circumvented natural market circuit breakers – the adjustments necessary for cleansing the system of building excesses and distortions. Instead of shutting off the source fueling these excesses before they became a risk to the entire system, the Fed allowed them to escalate until the great crash. Today’s Fed has repeated this catastrophic error. Like the Fed of the 1920s, the 1990s Fed has repeatedly put "Coins in the Fuse Box" over what I see as a "Persistent Financial Crisis" going back to the 1987 Stock market crash. (...)
(...) money was not at issue - it was all about credit. For example, let’s say we have Bank A that has failed with $1 billion in deposits. We also have troubled, but not yet failed, bank B. Here’s basically how these bailouts worked. The government would fund $1 billion to troubled bank B, as payment for accepting the $1 billion of deposit liabilities from failed bank A. Troubled bank B, now with $1 billion of funds to invest, would then buy government bonds, sending the liquidity right back to the government where it could then fund more bailouts.
As a result, it took very little money to "solve" the problem. Instead, funds just spun around between the government and the banking system, creating additional government debt. In short, the bank and S&L bailouts were simply monetized. Moreover, government debt purchased by the banks rose in value as interest rates declined. Here, of course, the Fed played its instrumental role cutting rates 23 straight times, with short rates falling to 3% by early 1992. In the process, a steep yield curve allowed troubled banks to repair themselves. Soon the banks were cured and the Fed became very confident in administering "coins to the fuse box" (...) >>>16th Oct 2008
... Dutch magazine Elsevier has an interesting article on the crisis which largely bears out our position on the crisis ... here are the main points:
- the crisis has caused a paradigm shift in international and monetary affairs on a magnitude of world wars or revolutions;
- justified or not, the US is seen as the source of the trouble; this is a catalyst for anti American sentiments in other parts of the world;
- American prestige has diminished, but no country has benefited from this;
- in Europe only the large powers matter; the smaller ones have been reduced to eparchies; non Euro zone countries matter even less;
- the Euro zone Stability Pact is dead;
- the crisis has shown that when something major hits the fan, institutions as the Commission and Parliament are lame ducks; the European Union is a mobile conference table;
- power has shifted from corporations to the state: ideas about limited government and reduction of corporate subsidies will have to be shelved (no idea they were actually on the table); the astronomical prop ups in Europe pale the American bail out by comparison ...
... and here's the main point:
The grip of the states on the financial sector isn't likely to loosen up in the short term. This means that power has shifted from the executive to governments, with a result that these countries will come to resemble autocracies like Russia and China, where economies are run by single political parties or elites (what a surprise!).
In the Netherlands, Parliament was sidelined during the crisis, while the Government made major international commitments. What are usually seen as important issues, are now dwarfed in comparison. The article dares speak of a state controlled economies and opines these aren't particularly democracy's heydays.
Key words: more state, less private initiative, less competition, less responsibility (as the states control everything, also covering bad behavior), weak democracy, large deficits, and less prosperity. This is what Hegel terms, "world historical events".
14th Oct 2008
NewsMax: Barney Frank Hit Over Boyfriend’s Fannie Mae Role"
Critics are crying “conflict of interest” over Democratic Rep. Barney Frank’s live-in relationship with Fannie Mae executive Herb Moses while Frank was on the House Banking Committee. Moses was Fannie Mae’s assistant director for product initiatives from 1991 to 1998.
He was also openly gay Frank’s live-in boyfriend during that time, while the Massachusetts lawmaker was on the committee that had jurisdiction over government-sponsored Fannie Mae, Fox News’ Bill Sammon reported. Now that Fannie Mae is at the center of the recent financial meltdown, the relationship is coming under increased scrutiny. (...) >>>
12th Oct 2008
... better, force banks to behave like 'social security outlets', i.e. force them to act in a way that is alien to their nature, and when the system blows up, say Capitalism is to blame: the gotzpah of the European, Hegelian statists (and see them retake default positions) ... the' fallibility' of markets is like blaming the weather for storms; we will see much more of this: the statists are always prepared to establish their Socialist Utopia on the smoldering ruins of whatever crisis (induced or otherwise) - the principle of inciting revolution ...
... and something else that's alien to the statist's mind, who believes that the message of pumping public money into the system will help it adjust ... instead of it signaling that it is sick and needs more and more injections ... as usual THEY and their remedies are the problem, not the markets! ... we'd better be on high alert for the coming months ...
Yahoo!News: "On crisis, Europe to US: 'I told you so'"
The economic image of the United States as a high-rolling tycoon at a Vegas casino, willing to gamble and reap rewards, has always stood in stark contrast to that of the European bean counter. (...) "Some in Europe see the financial crisis as a win on points for the Continental financial system against the Anglo-American one," conservative commentator Friedhelm Hengsbach recently wrote in the Suddeutsche Zeitung, a German daily. (...) They also go some way to explaining how both sides of the Atlantic are responding to the crisis and which direction capitalism might take when financial systems finally recover and rebuild. (...)
"There's a sense that the United States did it the opposite way, where, from the beginning, it was all about the institutions and only after did they think about small savers."(...) "There is now a huge corporate distrust in a society that is always swinging between, on the one hand, saying yes to a kind of capitalism and on the other a kind of modern socialism," says Otto Fricke, a member of the Liberal Party in the German parliament.A financial crisis, Mr. Fricke says, "always gets people swinging to the socialist side." >>>
... oh, and for the record ...
Boston Globe: "Frank's fingerprints are all over the financial fiasco"
10th Oct 2008
... what's crying to high Heaven is that in America swathes of people protest these coups vehemently, while in Europe no one batters as much as an eyelid (statists to a man!) ...
PJM: "Bailout Saga Proves That Elites Don’t Care What We Think - A loophole-laden monstrosity puts a broken political culture on full display." by Tom Blumer
In mid-September, when it became clear to Hank Paulson, Ben Bernanke, and George Bush that extraordinary measures were needed to address the mess that had built up in the financial markets during the past decade or so, their first instincts should have been to say: “We need to have a complete plan to deal with this.” -“We need to make a case to Congress and the American people that our plan will work.” They did neither of these things (...) Of course, a large plurality of Congressmen and Senators, along with a majority of the American people, were repulsed. The wonder is that everyone wasn’t. (...) Among the repulsed were well over 150 economists from across the political spectrum, including three Nobel laureates, who signed a letter of protest (also carried here; bolds are mine) (...) You can’t get much more ambiguous than what a Treasury official told Forbes Magazine on September 23 (bolds are mine): "... some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy. “It’s not based on any particular data point,” a Treasury spokeswoman official told Forbes Magazine on Tuesday. “We just wanted to choose a really large number.” Again: Blackmail. Oh, and do you think that even the made-up $700 billion now enshrined into law is any kind of real limit? Think again. (...) >>>
4th Oct 2008
Bailout Bill just passed Senate - on a pensive day a quotes of the trade ...
"Gentlemen, I have had men watching you for a long time, and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out."
--President Jackson (1832)
2nd Oct 2008
... plea for a new gold standard - what a novel idea! (please revert to the permanent entry at the very bottom of present file) ...
WSJ: "Loose Money and the Roots Of the Crisis - No one can believe in the omniscience of central bankers anymore", by Judy Shelton
(...) the whimpering is real, and justified, because it hurts to have your world come crashing down (...) even when the impact is momentarily softened through massive injections of artificial money -- "artificial" because the fiat money does not represent a store of genuine value but rather an airy government claim to future wealth yet to be created. (...) we sort out causes and assign blame, with experts offering various solutions -- More regulation! Less complex financial instruments! -- let's not lose sight of the most fundamental component of finance (...) the monetary unit of account in which its value is calculated. Money (...) defines the very substance of the economic contract between buyer and seller. It is the money that is broken. (...)
Writing in the People's Daily, Chinese economist Shi Jianxun laments: "The world urgently needs to create a diversified currency and financial system and fair and just financial order that is not dependent on the United States." (...) a new foundation for international economic relations and financial relations -- one dedicated to open markets and based on monetary integrity. Every country is responsible for anchoring its own currency to the universal reserve asset, and every citizen has the right to convert the national currency into the universal reserve asset. That's how a gold standard works. (...) the money is fixed to a common anchor -- and thus automatically functions as a common currency to serve the needs of legitimate producers and consumers throughout the world. (...) Nothing can rescue humans from occasionally making bad choices or succumbing to herding instincts. But on the same principle as democracy and free elections, embedded in the aggregate judgment of individuals over time is a wisdom that outperforms the most ostensibly savvy administrator. Sound money would go a long way toward eliminating the distortions that pervert financial decisions and credit allocations. Price signals do matter; if they don't, then free markets don't matter, and capitalism doesn't work. In which case, let government dictate demand and regulate supply. No, we need to fix the money. Literally. (...) >>>
30th Sep 2008 (the day after "The Beltway Crash")
... CONTAINS ALL INFO ON THE CREDIT CRUNCH CRISIS YET (please advise if we missed crucial information) ...
Politeia: "Bailout Bill"
The text of the Bailout Bill in PDF format by Fox News.
World shocked, shocked ... House Reps throw out corporate social security act!
Video archive material on hearings: Democrats blocking Republican calls for regulation of Fannie Mae and Freddie Mac.
The video shows what no ones wants to learn: the way to hell is paved with good intentions; but the effect of selfish capitalism means prosperity for all! Point being, a system that works, in tandem with the right philosophy based on the real reality (as opposed to a perceived, or wished one) takes courage - isn't for the meek or the feeble of spirit ...
Dr Sanity: "CAPITALISM IS GOOD FOR THE SOUL-- IF YOU HAVE ONE
(For your own good and) for morality read fifty times "The Fable of the Bees"
Here's the best explanation yet.
But here's the thing:
Real Clear Politics: "In Times of Crisis, Trust Capitalism", by Joseph Calhoun
There has always been a stigma attached to borrowing directly from the Fed and for good reason. If a bank can’t get other banks to lend it money, that tells the market something about the condition of the bank in question. Last August, Bernanke convinced three large banks to borrow at the discount window in an effort to remove that stigma. When that didn’t work, he concocted a scheme to allow banks to borrow from the Fed in anonymity via a mechanism he called the Term Auction Facility. (...) Banks will not lend to each other because they don’t know which ones are really in trouble. The rise in inter-bank lending rates is a rational market response to a lack of information. Furthermore, why pay those inter-bank rates when the Fed or ECB is offering easier terms? These opaque lending facilities are just part of the problem created by the Fed and Treasury. (...) Trust capitalism. It works. >>>
"this must run its course" >>>
29th Sep 2008
Open Europe Blog: "We Hate to Say Told You So"
Every crisis is an opportunity for the those who believe in the project of "ever closer union".
So it's no surprise to see in the FT today - that the inevitable is finally starting to happen in euroland:
The crucial problem on this side of the Atlantic is that the largest European banks have become not only too big to fail, but also too big to be saved. (...) With banks that have outgrown their home turf, national treasuries and regulators in Europe are living on borrowed time: they cannot simply develop “road maps” (the only result of various Ecofin discussions of regulatory reform by finance ministers), but must contemplate a worst-case scenario.
Given that solutions for the largest institutions can no longer be found at the national level it is apparent that the European Central Bank will need to be put in charge as it is the only institution that can issue unlimited amounts of a global reserve currency. The authorities in the UK and Switzerland – which cannot rely on the ECB – can only pray that no accident happens to the giants they have in their own garden. So the ECB finally gets put in charge of financial regulation/supervision. Quelle surprise.
The only weak step in the argument is the last one - about being able to print money in a "reserve currency" - what exactly are they saying the threshold is here?
(a) Both GPB and CHF are reserve currencies in proportion to the size of their economies - and (b) why does that even matter?
The point is to have the option not excercise it. Yes, the UK is a more open economy than the eurozone taken in aggregate. But mass "printing of money" whatever that means would still cause inflation in the Eurozone. Arguably the UK and Swiss have greater flexibility here because they have freedom of action - it is not clear under which circumstances the ECB could start "printing money" - i.e. changing its rules and targets.
The UK and the Swiss authorities at least have the option of coordinating their fiscal and monetary policies, whereas the members of the eurozone will shortly being having some "interesting" discussions as the interests and policies of different member states diverge more and more, the rules are broken further, and the ECB tries to square the circle. Good luck with that. >>>
28th Sep 2008
Atlas Shrugs: "INDICTED MASSIVE FRAUD GROUP ACORN TO GET 20% OF FINANCIAL BAILOUT"
Regular righteous Atlas readers know I have been railing about the massive voter fraud over at ACORN for years. ACORN should have been indicted and had their eligibility revoked years ago. If ACORN is going to get googles of money, it's time fro a revolution. This makes the Boston Tea Party look like childsplay. (...) Instead I am hearing this deeply correct leftard org and Obama's training ground (it was his first job) is going to receive 20% of the 700 ntrillion dollar bailout. (...) >>>
27th Sep 2008
Dr Sanity: "POURING OIL ON THE ECONOMIC FIRE: The Democrat/Marxist Con Job"
(...) Fannie Mae Eases Credit To Aid Mortgage Lending - Published: September 30, 1999
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders. The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring. Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans. ''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''
Does all this sound familiar? Now go watch the youtube videos I linked here and here. (...) >>>
... there's also this video, filled to the brim with facts on the financial crisis ... Hat Tip: Dr Sanity
26th Sep 2008
Carpe Diem: "Flashback to the 1990s: Origins of the Credit Crisis," by Dr. Mark J. Perry
It’s one of the hidden success stories of the Clinton era. In the great housing boom of the 1990s, black and Latino homeownership has surged to the highest level ever recorded. (...) In 1992, [a majority Democratic] Congress mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains. (...) Most importantly, Fannie Mae has agreed to buy more loans with very low down payments–or with mortgage payments that represent an unusually high percentage of a buyer’s income. That’s made banks willing to lend to lower-income families they once might have rejected.
The top priority may be to ask more of Fannie Mae and Freddie Mac. The two companies are now required to devote 42% of their portfolios to loans for low- and moderate-income borrowers; HUD, which has the authority to set the targets, is poised to propose an increase this summer. Although Fannie Mae actually has exceeded its target since 1994, it is resisting any hike. It argues that a higher target would only produce more loan defaults by pressuring banks to accept unsafe borrowers.
LA Times article on May 31, 1999
MP: Government policy turned millions of perfectly good renters into terribly bad homeowners. >>>
... for those who want to engage in the blame game, here's Glenn Beck's suggestion for a rebuttal ...
WSJ: "The Paulson Plan Will Make Money For Taxpayers"
My analysis suggests that Treasury Secretary Henry Paulson (a former investment banker, no less, not a trader) may pull off the mother of all trades, which could net a trillion dollars and maybe as much as $2.2 trillion -- yes, with a "t" -- for the United States Treasury. Over 10 years this could change the budget scenario in D.C., which can also strengthen the dollar. The next president gets a heck of a windfall. In the spirit of Secretary of State William Seward's purchase of Alaska for $7 million in 1867, this week may be remembered as Paulson's Folly. >>>
25th Sep 2008
WSJ: "Blame Fannie Mae and Congress For the Credit Mess"
Many monumental errors and misjudgments contributed to the acute financial turmoil in which we now find ourselves. Nevertheless, the vast accumulation of toxic mortgage debt that poisoned the global financial system was driven by the aggressive buying of subprime and Alt-A mortgages, and mortgage-backed securities, by Fannie Mae and Freddie Mac. The poor choices of these two government-sponsored enterprises (GSEs) -- and their sponsors in Washington -- are largely to blame for our current mess.
How did we get here? Let's review: In order to curry congressional support after their accounting scandals in 2003 and 2004, Fannie Mae and Freddie Mac committed to increased financing of "affordable housing." They became the largest buyers of subprime and Alt-A mortgages between 2004 and 2007, with total GSE exposure eventually exceeding $1 trillion. In doing so, they stimulated the growth of the subpar mortgage market and substantially magnified the costs of its collapse. It is important to understand that, as GSEs, Fannie and Freddie were viewed in the capital markets as government-backed buyers (a belief that has now been reduced to fact). Thus they were able to borrow as much as they wanted for the purpose of (...) >>>
23rd Sep 2008
... comes recommended by Glenn Beck ...
WSJ: "Shock Forced Paulson's Hand "
When government officials surveyed the flailing American financial system this week, they didn't see only a collapsed investment bank or the surrender of a giant insurance firm. They saw the circulatory system of the U.S. economy -- credit markets -- starting to fail. Huddled in his office Wednesday with top advisers, Treasury Secretary Henry Paulson watched his financial-data terminal with alarm as one market after another began go haywire. Investors were fleeing money-market mutual funds, long considered ultra-safe. The market froze for the short-term loans that banks rely on to fund their day-to-day business. Without such mechanisms, the economy would grind to a halt. Companies would be unable to fund their daily operations. Soon, consumers would panic. For at least a month, Mr. Paulson and Treasury officials had discussed the option of jump-starting markets by having the government absorb the rotten assets (...) >>>
20th Sep 2008
... the President of the Netherlands National Bank confirmed John McCain's point of view on the US economy - the fundamentals (economic code for the essential parameters, Obama!) are sound - we should differentiate between the financial sector and the economy as a whole ...
Update: CNN cleared up McCain's point that there is a marked difference between "the fundamentals are sound" which was understood and derided by Obama as 'the economy is fundamentally sound' ... which betrays O's ignorance and the press' sheepishly following ... no one will notice the correction and the damage is done ... thanks!
NY SUN: "In Defense of Markets"
As the crisis on Wall Street tempts the politicians, someone needs to put in a word for free markets. Senator Obama is rushing to blame the Bush administration and New Yorkers and calls for more regulation. "The challenges facing our financial system today are more evidence that too many folks in Washington and on Wall Street weren't minding the store," Mr. Obama said in a statement yesterday.(...) If not even our leading Republican politicians are going to speak up for markets at this juncture, allow us the opportunity. America got into the subprime housing crisis not only because of errors in the business community but because our governmental authorities sought to encourage greater diversity in lending, because the Congress and our monetary authorities failed to protect the value of the dollar, and because all too few in our political leadership respected the market in the first place. To where has wisdom fled Washington? Senator Obama's claim that the problem is the policies of the Bush administration doesn't stand the test of reason. The Bush administration was in office and its policies were in effect in 2003, 2004, 2005, and 2006, when the American economy, the housing market, and the stock market were doing pretty well. (...) >>>
Michael Johns: "Obama Doublespeak and Liberal Complicity in America's Banking Crisis"
In remarks yesterday in Golden, Colorado, Democratic presidential candidate Barack Obama passed around plenty of blame for America's unfolding banking crisis: He blamed American corporations. He blamed Washington lobbyists. And he even blamed Republican presidential candidate John McCain.
But the core of political blame for America's banking crisis, conservative writer Michael Johns argues, lies with a Democratic-led Congress that actually mandated much of the very sub-standard mortgage lending that is now setting off a snowballing liquidity crisis at some of America's largest financial institutions. Meanwhile, Johns says, Congress and Washington regulators failed in their responsibility to ensure appropriate regulatory oversight of high-risk leveraged borrowing that now threatens the solvency of these financial institutions. (...) >>>
17th Sep 2008
Townhall: Economic Myths,"
By taking a couple of courses in economic theory, we could immunize ourselves from nonsense spouted by politicians and pundits, but in the meantime check out Professor John R. Lott's "Freedomnomics: Why the Free Market Works." His first chapter is "Are You Being Ripped Off?" It addresses myths about predation (...) Lott's "Crime and Punishment" chapter has a lot of interesting tidbits. It starts off stating a fundamental principle of economics: the higher the cost of something, the less people will do of it. (...) The same principle applies to the U.S. crime rate that fell after the death penalty was reinstated, more prisons were built and concealed-weapon carry laws were enacted. The higher the cost of a crime, the less people will do of it. (...) >>>
Updated: 20th Aug. 2008
Townhall: "Remembering a Hero: Milton Friedman," by Andrew P. McIndoe
Few men have had such a profound impact on the world’s economy as Milton Friedman. Though he passed away on November 16, 2006, he left behind an unparalleled legacy of freedom. Today, July 31, 2008 would have been his 96th birthday. Despite this legacy, students today know little of Friedman’s accomplishments. (...) I am reminded of the lessons I learned. Friedman spoke of the dangers of an intrusive government and the key role that a free competitive economy plays in making a free society possible. Not only is economic freedom an end in itself, Friedman rightly argued that it is also an indispensible means towards the achievement of political freedom. He warned of the disastrous results that occur when government attempts to substitute its own judgment for the judgment of free people. Friedman asked in his famous book, Capitalism and Freedom: “How can we keep the government we create from becoming a Frankenstein that will destroy the very freedom we establish it to protect?” He had a vision of society where men and women are free to choose, but where government is not as free to override their decisions. (...) “Nothing is so permanent as a temporary government program,” (...) “If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.” (...) >>>
Updated: 31st July 2008
Cafe Hayek: ""I Do Not Believe the State Has Any Right to Tell Me What to Put In My Head"
The great Milton Friedman, were he still alive, would turn 96 today. This interview with him was conducted just prior to his death in 2006. And here is the second part of the interview. >>>
Bearwatch: "Inflation, deflation, the world economy and freedom"
This article by Matthew Beller on the Mises website tries to show how the US government can't "print its way out" of the present crisis. (...) I cannot see how we can avoid becoming poorer, on average, than we have been in past decades, even if an elite in our society grows richer and more powerful (a phenomenon associated with more impoverished economies). We cannot rely on high-end production (...) And so democracy in the West will come under pressure. In difficult times, people are thrown back on a network of social relationships and mutual expectations, but sudden, unreal access of wealth has tempted us to put our faith in the amassing of cash, and/or government intervention, to the detriment of agreed internal social control and support systems. When the system enters its failure phase, which Fischer ("The Great Wave") thinks may be starting, the social threads begin to snap: inflation, crime, family breakdown, war. The reification of the ties that bind us together tempts our government to maintain the social order through externalised means of surveillance and enforcement. Ultimately, the mismanagement of national budgets is a freedom issue. (...) >>>
Updated: 25th July 2008
Morning Bell: `Hey Hey, Ho Ho, the Housing Slush Fund Has Got to Go!`
Anticipating legislative action on a bailout for Fannie Mae and Freddie Mac in the House tomorrow, the White House reaffirmed a veto threat Monday if the proposed package includes a money for state and local governments to buy real estate. Speaker Nancy Pelosi responded, “Let me get this straight. The president is asking us to do something quite significant on the housing crisis, and he is going to prevent local government from buying up these properties?” Pelosi’s statement exemplifies the mentality on the left that makes it essential conservatives and President Bush stand firm on the $4 billion in grant money: liberals refuse to do something for the good of the nation (shoring up the financial system) unless they get something in return (a $4 billion slush fund to dole out to their political allies). (...) the government is the cause of, not the solution to, this housing crisis. Fannie Mae and Freddie Mac were not founded by enterprising American capitalists. They are government-created relics of the New Deal and Great society. They are leftovers from an era when giant government entities seemed essential to achieving social goals. (...) >>>
Updated 23rd July 2008
Telegraph: "Oil price shock means China is at risk of blowing up," by Ambrose Evans-Pritchard - Hat Tip: The Two Wolves, Bearwatch
The great oil shock of 2008 is bad enough for us. It poses a mortal threat to the whole economic strategy of emerging Asia. The manufacturing revolution of China and her satellites has been built on cheap transport over the past decade. At a stroke, the trade model looks obsolete. (...) Products are sent to China for final assembly, then shipped again to Western markets. The snag is obvious. The cost of a 40ft container from Shanghai to Rotterdam has risen threefold since the price of oil exploded. "The monumental energy price increases will be a 'game-changer' for Asia" (...) China's factories "were not built with current energy levels in mind", said Mr Jen. The outcome will be "non-linear". My translation: China is at risk of blowing up. (...) Come what may, globalisation has passed its high-water mark. The pendulum will now swing back from China to America. The mercantilists will have to reinvent themselves (...) >>>
Read more by Ambrose Evans-Pritchard
Updated: 21st July 2008
Capitalists-at-Work: "The Ballad of Fannie Mae"
So it’s all come unstuck for Fannie and Freddie, and we may all suffer. (...) These guys were riding for a fall: the US mortgage industry, as we all know now, was lending like a drunken sailor on pay-day, partly for the origination bonuses and partly because there was pressure to let previously excluded sectors of American society - excluded because they couldn’t afford it - in on the property boom But they still couldn’t afford it. (...) >>>
Updated: 17th July 2008
Townhall: "Scapegoating Speculators," by Walter E. Williams
Despite Congress' periodic hauling of weak-kneed oil executives before their committees to charge them with collusion and price-gouging, subsequent federal investigations turn up no evidence to support the charges. Right now oil company executives are getting a bit of a respite as Congress has turned its attention to crude oil speculators, blaming them for high oil prices and calling for tighter control over commodity futures trading. Let's look at the futures market and for simplicity use corn futures discussed in my May 28th column titled "Futures Market." While corn is different from oil, both obey the laws of supply and demand, just as humans are very different from bricks but both obey the laws of gravity. Say that today's price of corn is $7 a bushel. I have a hunch (...) >>>
Updated: 9th July 2008
Forbes: "Czech president says euro is 'no great success'"
The euro is 'no great success' and it will soon face a 'serious crisis' that could test its integrity as a common currency, Czech President Vaclav Klaus wrote in a comment piece Thursday (... ) sluggish economic growth in the euro zone, varying rates of inflation between the different states that made up the common currency area, and differing rates of growth (...) euro zone growth was 'slower than the US and the European Union as a whole' (...) labour productivity (...) slowed (...) the inflation differences between countries could become greater.
Klaus also criticised 'a reluctance to carry out necessary liberalisation and pro-market reforms' in EU countries(...) : 'We hear the usual calls for greater fiscal discipline, for the perfection of the 'stability and growth pact' and for decisive structural reforms.' 'But these calls are not serious.' (...) EU bureaucrats were 'not able to react to the changing conditions.''They underestimate the struggle for raw materials and the pressures posed by the economic emancipation of underdeveloped countries' (...) 'They blindly keep on making climate change their global priority (...) 'The euro has shown that forcing an economically disparate Europe into a homogenous entity through a political decision is political engineering par excellence and has been far from beneficial for all the countries.'(...) >>>
Updated: 13th June 2008
Elsevier: "Old men sound alarm in open letter"
The grand old men are stirring in Europe. Otto Graf Lambsdorff is 81, Jacques Delors becomes 83 in July, Helmut Schmidt is 89. The three famous former Finance Ministers (Schmidt was also German Chancellor for many years, and Delors a famous president of the European Commission) are amongst the signatories of an open letter to Danilo Türk, President of Slovenia, and temporary chairman of the European Union.
The letter was also sent to Commission President Jose Manuel Barroso. The fourteen signatories, Social Democrats and Liberals demand the speedy establishment of a European Crisis Committee, made up - yes - of the old wise men who - together with renowned economists and financial experts from all continents - should analyze the financial crisis in the world and propose measures. (...) Rocard hopes to have a report within three to five months. One thing is certain. This list of signatories cannot simply be ignored by their successors. >>>Read the entire article >>>
Updated: 21st May 2008
... call me a suspicious opponent of the delete-the-border movement, who fails to see the inevitability of the Hegel end-game in which man-made 'world historical events' play so prominent a role ... but I think we may have a Transnational Progressivism alert on our hands:
BBC: "Brown warns on global cash crisis"
The world is facing "the first truly global financial crisis", the prime minister has told leaders. Gordon Brown said institutions such as the World Bank and United Nations need reform to tackle the double threat of economic turmoil and climate change. He is hosting the two-day gathering in Watford attended by delegates including ex-US president Bill Clinton and Australian PM Kevin Rudd. Topics including climate change and development (...)
Speaking at the start of the Progressive Governance conference of centre-left leaders and politicians, Mr Brown said that the old institutions established in the aftermath of World War II were now unable to cope. "We now have to reshape our global rules and global institutions for this new era," he said. "We are facing a global financial crisis which is probably the first truly global financial crisis of the modern world. "We have to reform our global financial institutions. It is absolutely clear that the national supervision that we have is inadequate and we need a global agreement." (...) >>>
Updated: 5th Apr 2008
Politeia: "Of the Welfare State and Bankruptcy", by JackDM1294
It's the logic that it's always possible to find money by taking it from someone else's pocket. (...) We have to understand that our children will be the ones to pay for it. At least if they can! If it's not the case, the only solution will be decreasing retirement money. (...) Sweden and Canada restructered their countries. It can be done! >>>
Updated: 30th Dec. 2007
Politeia: "Ryanair and the EU", by JackDM1294
Well, a honeymoon between Ryanair and EU isn't for tomorrow. Proof is that all available actions against Ryanair have been tried, especially the ones for receiving illegal allowances from airports managements, while all actions taken by Ryanair against other companies for the same reasons (Alitalia, Lufthansa, Air France) have not. (...)
What we see with Ryanair is the evil role played by the EU. While the worst performing companies get protection, the best are taking a beating. The EU prefers spending time and money to keep ill managed carriers afloat, instead of encouraging brilliant businessmen.And what about European citizens! Their tax money is wasted, while the EU tries to force them into expensive air travel! >>>
Updated: 27th Dec. 2007
The Brussels Journal: "What Is Wrong With the Euro (and the Dollar)?", by John Laughland
One often has the impression, indeed, that the only thing which never or seldom goes up is the official inflation rate: all the real prices rises in food and the cost of living are “offset” in the official figure by drops in price for commodities which most people never buy. In the United Kingdom, the disconnect between these official statistics and reality is especially Stalinist, because the retail price index does not include the price of property – the normal family’s biggest expense, after tax itself. (...)
To understand this key point, it is necessary to know and understand only two things. The first is the concept of “legal tender”. (...) . The second thing you need to understand is that, before war broke out in 1914, all the world’s major currencies were convertible into gold. >>>
27th Dec. 2007
- Aristotle the Geek: "A Convincing Explanation"
- Prudent Bear - Credit bubble bulletin archive: "Coin In the Fuse Box"
- The Brussels Journal: "What Is Wrong With the Euro (and the Dollar)?", by John Laughland
- "The Ethics of Capitalism"
- "The Perversion of Development Aid"