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Showing posts from February, 2010

Did Joe Stack read Flight?

I rather doubt it, but given what's been reported about what he did and why, there are eerie similarities to the actions of my lead character in Flight of the Barbarous Relic. Thanks to daughter Kimmi Smith for pointing this out.

Slow-frying the taxpayer, over and over

Some years ago I wrote an article about the passage of The Current Tax Payment Act of 1943, a.k.a., withholding. Even as the plan was being sold to Americans as a public benefit, their elected representatives in D.C. were gloating over how this new bill would allow them to "fry" whatever revenues they wanted out of the taxpayer. Any suggestion that this was the real motive behind the law, of course, was dismissed as a conspiracy theory, and a pernicious one at that, since the government was engaged in another war.

As insidious as withholding is, it is not without competition. In fact, it bows humbly to the true master of monetary evil, The Fed. At least withholding is done in plain sight. You can look at your paycheck stub and see how much the government has taken. We never really know how much the Fed steals since it works in secret, which it prefers to call "independence." The Fed poses as our protector against the "tax" of inflation while using …

Capitalism's war against scarcity

Jeff Tucker has an insightful article on the shift from physical to digital over the last decade. He cleaned out his office recently for the first time in ten years. He writes:
Here's some of what I found: video tapes of short clips of ideas and events that are now all on YouTube; a printout of contacts generated by my own Palm Pilot, all of which are now back on a handheld device that syncs through cyberspace with any online device; my ancient Palm Pilot itself, which is about as useful as a pet rock; first print runs of legislation before Congress, now all on the Internet and searchable; two big plastic trays, one labeled "in box" and one labeled "out box," now replaced by a gargantuan archive of emails that I can access in seconds; photographs of this and that, easily scanned and posted and shared with the world; scholarly journals (say no more); pile after pile of weekly magazines and newspaper clippings, all long ago digitized; cassette recorders for doin…

The last honest bank in history

The Bank of Amsterdam was founded in 1609 as a deposit bank. It was highly unusual among banks because it was a deposit bank that only engaged in deposit banking. It refused to make loans. From G. Edward Griffin's The Creature From Jekyll Island: A Second Look At the Federal Reserve:
Its income was derived solely from service fees. All payments in and around Amsterdam soon came to be made in paper currency issued by the bank and, in fact, that currency carried a premium over coin itself. [pp. 172-173; emphasis added]
Quoting from John Kenneth Galbraith's Money: Whence It Came, Where It Went, Griffin writes:
For a century after its founding it functioned usefully and with notably strict rectitude. Deposits were deposits, and initially the metal remained in storage for the man who owned it until he transferred it to another. None was loaned out. [Creature, p. 173]
According to Jesus Huerta de Soto in Money, Bank Credit, and Economic Cycles [Pdf], the bank was founded on the p…

Trouble at the Fed

Writes Antony P. Mueller, an adjunct scholar at the Mises Institute:
Bernanke's challenge resembles the task at which the Gosplan of the Soviet Union failed. In most of the so-called "capitalist economies," modern central banks are supposed to accomplish a similar task: to make the economy and employment grow, to finance wars and fight depressions, to supervise and regulate financial markets, and all along to guarantee "price stability." In order to grapple with such a superhuman challenge, the Fed staff make up one model after another, only to have them each be immediately falsified by new data. As a consequence of this confusion, each erroneous policy measure is followed by the next.

Ben Bernanke is too much of a good guy to practice the art of deceit in the cynical way that is necessary for deception to work on a grand scale. His predecessor at the helm of the US central bank, Alan Greenspan, at least knew that central banking is not a science but a kind of s…

Six Blunders of the Current Orthodoxy

Robert Higgs, a Senior Fellow at the Independent Institute and editor of The Independent Review, describes (Pdf) six major errors of the current economic orthodoxy, which he says began with "the first edition of Paul Samuelson’s Economics (1948), the best-selling economics textbook of all time and the one from which a plurality of several generations of college students acquired whatever they knew about economic analysis. Long ago, this view seeped into educated discourse, writing in the news media, and politics, and established itself as an orthodoxy."

Higgs calls this phenomenon "vulgar Keynesianism," which he further refines this way:
I use "vulgar Keynesianism" to denote a loosely articulated belief system about economic booms and busts to which journalists, politicians, and a wide segment of the general public have subscribed since the 1950s. It is not necessarily the same thing as Keynes's own ideas or the models developed and refined by so-calle…

Mogambo sounds off

He sounds off on -- what else? The Fed and its product, which we're all forced to accept as a stand-in for wealth. He never lets up, nor should he until the damn Fed and its paper currency are gone forever. As Mogambo tells us in one breath, the party started
in 1971 when Nixon severed the dollar/gold link, and especially since 1987 when Alan Greenspan took over the Federal Reserve, and doubly-especially since 1997 when this same moron named Alan Greenspan lost his freaking mind and really started creating excess credit in the banks, and triply especially since 2008 when that raving lunatic bastard, Ben Bernanke, took over at the damned Federal Reserve and really, really, really started to create money by the trillions of dollars, using some of it to actually buy up worthless, dog-crap assets and the rest to buy government bonds so that the commie rats in the White House and Congress could continue to deficit-spend us into bankruptcy, a budget deficit which now approaches 12% of…

More on the PIGS

From Gary North:
The crisis over Portugal, Italy, Greece, and Spain – PIGS – continues to escalate. Because they have surrendered their monetary policy to the ECB, these nations are unable to inflate their way out of the fiscal crisis. This leaves the following options.

1. Default on some or all of their debts
2. Pay higher interest rates
3. Cut spending
4. Raise taxes
5. Withdraw from the EMU
6. Withdraw from the EU
7. Wait for a bailout by the ECB.
8. Choices 2-7

There is a legal question regarding withdrawal. These nations have surrendered their national sovereignty to the New Europe. How can they regain it? At what price?

If they leave, the EU will have to impose sanctions. Military invasion is out of the question. Want to fight Spain across the Pyrenees? How about fighting Greece in the hills? So, the sanctions would be economic. A major one would be to impose high tariffs on these nations. The borders would be closed.

These four nations are ruled by politicians who cooperatively sold their …

More bailouts ahead

This time it's not Wall Street necessarily, but countries, with Greece apparently being first in line for a bailout. Writes John Rubino:
With a bail-out of Greece apparently immanent and everyone drawing parallels between the PIGS countries [Portugal, Italy, Greece, and Spain] and the Wall Street firms that nearly cratered the global economy in 2008, this might be a good time to ask why each year seems to bring a new set of financial basket cases requiring taxpayer cash.

The answer, of course, is easy money. When governments create too much credit, borrowing gets easier at the margins and the less intelligent, moral, and wise end up borrowing far more than they would normally be able to. When they inevitably implode, the world gets another chance to behave rationally by letting them go, accepting the resulting short-term pain, and learning the relevant lessons. But beginning in the 1990s with the Mexican and Russian defaults and the self-destruction of Long Term Capital Management,…

Secret summit of top bankers

This posting is late, but the importance of the event has not diminished. As reported by George Lekakis and Fleur Leyden on February 6, 2010:
THE world's top central bankers began arriving in Australia yesterday as renewed fears about the strength of the global economic recovery gripped world share markets.

Representatives from 24 central banks and monetary authorities including the US Federal Reserve and European Central Bank landed in Sydney to meet tomorrow at a secret location, the Herald Sun reports.

Organised by the Bank for International Settlements last year, the two-day talks are shrouded in secrecy with high-level security believed to have been invoked by law enforcement agencies. . . .

The arrival of the high-powered gathering coincided with a fresh meltdown on world sharemarkets, sparked by renewed concerns about global growth and sovereign debt.
A commentator named Temjin had this astute comment:
MOST of the bad debt has NOT been written off yet. They have only been carrie…