Monday, November 14, 2011

Rickards and Grant on Bloomberg

What do you get when you get Jim Rickards and Jim Grant together?  Excellence.

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Thursday, November 03, 2011

Adam Fergusson Interview

I've blogged about Adam Fergusson's classic book about the Weimar hyperinflation When Money Dies.  James Turk of GoldMoney.com has released an interview with Ferguson.  I commend the interview to you.  I also recommend the book.


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Monday, September 19, 2011

Third World News Service

To those of us saturated in the age of the television and internet, the events of 9/11 were experienced nearly simultaneously.  Yet we forget that there are hosts of people who've never heard of 9/11 nor the city where it took place.

This fascinating report from Afghanistan shows that large portions, if not the overwhelming majority, of that nation have never heard of 9/11, and hence, have no conception of why American forces are present in their country.

Surely the ignorance of the population, as to our mission, does not invalidate the righteousness of our cause (at least initially), but it should put doubts into our minds as we enter a new decade of presence there.  It should also cause concern that we're breeding contempt for America in a new generation of Afghans.


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Friday, September 16, 2011

Self Determination

Woodrow Wilson is famous for advocating "self determination" in matters of government--without external coercion.  It has been a doctrine of the United States since--at least in theory.  In reality, it is more a rhetorical device intended as a veneer for the more sinister doctrine of "American interest."

This article about a the presidential election in Taiwan is ample proof of the imperial reach of America over its client states abroad.  The article begins, "The Obama administration has warned that a victory by Tsai Ing-wen, the Taiwanese opposition leader, in the island's January presidential election could raise tensions with China."

The article then quotes a "Senior US official as saying, "Ms Tsai, the Democratic Progressive party leader who is visiting Washington, had sparked concerns about stability in the Taiwan Strait, which is 'critically important' to the U.S."  But why is "stability in the Tawain Strait" "critically important to the US?"  Well, primarily, because the United States has given Taiwan its absolute assurance that we will defend Taiwan against China.  But why have we given such a guarantee?  We've wanted to defend Taiwan against a communist aggression and maintain "self determination."  But this begs the question--why would the United States pledge such a thing to a tiny country on the other side of the world?  What is the real American interest there?

But the question remains, if America is in a position to bless or curse Taiwan's presidential candidates, what kind of "self determination" does Taiwan possess?  It would seem to be a sham.  It is ironic, that the same article states, "During her visit to Washington, however, Ms Tsai appears to have failed to convince the administration that she would keep the improved relationship with China on track."  Yet it confesses, ""Beijing has not commented on Ms Tsai's candidacy."

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Wednesday, September 14, 2011

Idols for Destruction Endorsement

I've plugged Herbert Schlossberg's book Idols for Destruction repeatedly on this blog, but this is perhaps the best endorsement I've yet encountered.  It comes from Gary North in his "Select Bibilography" in the book "Wealth & Poverty: Four Christian Views of Economic."


"The other book which is absolutely vital is Herbert Schlossberg's Idols for Destruction: Christian Faith and Its Confrontation with American Society (Nashville: Thomas Nelson, 1983; $8.95 soft cover, $14.95 hard cover). This is the finest presentation of Christian social theory ever written, period. It covers politics, inflation, taxation, poverty, foreign aid, the establishment of Christian alternatives to humanism, education, the evils of the corporate State-in short, everything.  In my opinion, anyone who speaks in the name of Christ on social theory, and who has not mastered this book, need not be taken seriously."

I thought the book was absolutely remarkable, myself, but North's endorsement has emboldened my high opinion of the book even more.


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Republican Militarism

Lew Rockwell shared a commentary on the most recent Republican Presidential Primary debate from David Franke.  His comment on Ron Paul was perhaps the best insight into the state of the Republican party that I've seen.  He writes:

The small loser was Ron Paul.  Since he has never risen consistently above 15% (and more often 10%), he doesn’t have that far to fall.  I don’t think he fell tonight, but it was very clear that he will not be able to break that 15% barrier—not in the Republican Party primaries.  If by some miracle he could get the GOP nomination, Gallup and other polls show he would be competitive with Obama.  But the Republican Party is a militarist party, which puts a ceiling on how far he can go.  He probably got as many cheers as boos when he talked about foreign policy, but the boos were what you noticed.  They served as a reminder of just how militarist the Republicans are.  They want to cut spending, but not the military budget—impossible!  And this is why I think the Republicans would be basically as hopeless as the Democrats at handling the crises ahead.


Franke understands perhaps the primary deficiency in the Republican Party.  The Republicans, at their core, are militarists.  They are not defined by social policies, fiscal conservatism, or constitutionalism, but by their militaristic theology.

Every person I've spoken with regarding Ron Paul says something to this effect: "Ron Paul is great on the Constitution and money, but he's terrible on foreign policy."  I said the very same thing myself in 2008 before finally agreeing with Paul.

Republicans have embraced the rhetoric of Woodrow Wilson's doctrine of democracy.  Democracy has become an idol--the new gospel for all nations to embrace.  We claim to want to bring democracy to Afghanistan and Iraq (and others), but in reality, this is hollow rhetoric, for American foreign policy has been propping up dictators in countless countries across the globe in the name of "American interests."  Our government would be content with whatever form of government Afghanistan or Iraq chooses, as long as they follow our dictates.

The Republican Party's doctrine of "American Exceptionalism" is the national manifestation of Friedrich Nietzsche's "Übermensch" or  "Superman."  Nietzsche argued that the "Übermensch" was above the rules of the rest of humanity--he makes his own rules. Indeed, America does play by its own rules.  When Ron Paul asks what would we think if China were to dictate to us what we could or couldn't do, we too, would be indignant.  Yet the very question is ignored, as though it is incoherent.  Paul's question simply defies the categories of the "Übermensch" theology.  It is akin to asking, "What if a bird dictated what you could or couldn't do?"

Without a change in theology, America will never be able to truly embrace a statesman such as Ron Paul.  Nor will America ever come to terms with its deficit spending.  Militarism is the true third rail in Republican politics.  Franke is right, the Republican Party, as it is currently constituted, could never embrace Paul. America does not deserve someone of Paul's caliber.  Paul is as a pearl, and we are the swine.
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Blowback, Ron Paul, and 9/11

Ron Paul caused quite a ruckus when he in a recent debate, he argued that 9/11 was the result of years of foreign policy intervention in the Middle East.  Rick Santorum, among others, was incredulous and, not a little self-righteous in his condemnation of Ron Paul's assertion.


Jack Hunter responded to this same objection to Ron Paul during the 2007 Republican Presidential Primary.  I commend the video to you, as it demonstrates the reasoning behind Paul's claims.


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Tuesday, August 23, 2011

Outstanding Interview

I highly recommend this interview.  It is simply outstanding.  It is long, but well worth your time.


James G. Rickards talks to James Turk
James Turk is the founder and chairman of GoldMoney, a company that I've been "advertising" here on my blog for quite some time.  Jim Rickards is a macro-economic analyst that I've been following for nearly as long.

HT: GoldMoney Foundation

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Friday, August 19, 2011

Behold! The Wonders of Science!

Beware, oh, climate change denier!  For your very species--your very biological heritage may be in danger!  Scientists warn that "extraterrestrial beings might view changes in Earth's atmosphere as symptomatic of a civilisation growing out of control – and take drastic action to keep us from becoming a more serious threat."  Though they consider the possibility "unlikely" this very situation "could unfold in the aftermath of a close encounter."


But, do not despair!  Not all is yet lost!  Nobel Prize winning economist Paul Krugman believes that the potential alien invasion of earth, and the defense build-up in advance of such an invasion and "this slump would be over in eighteen months."  Even if it such an attempt were all for naught, we would still have our "fiscal stimulus!"

Indeed, we have reached the golden age of science and reason!  Our noble and empirical elite have reached the pinnacle of human knowledge, wherein we are able to discern the thoughts of higher (or lower) intelligent (or unintelligent) beings (or non-beings) from afar.  But our wisdom and intelligence is not limited to the heavenly sphere--but our understanding of economics is such that we can stimulate ourselves out of an economic slump by preparing for an alien invasion!  Oh, great, and marvelous Reason, we do worship at thy altar!

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Monday, August 01, 2011

From Rationalism to Irrationality

C. Gregg Singer is a remarkable thinker--the kind of man our age desperately needs, but is no longer able to produce.  He is a remnant of the Christian heritage of the West, but his death parallels the disappearance of the rigorous academic polemicists in the mold of Francis Schaeffer and J. Gresham Machen. 

Singer is a bold and unapologetic Calvinist.  To Singer, Christian Theism means the reformed doctrines of John Calvin--anything less is a deficient theology.  In Calvin, Singer finds the answer to the philosophers that have sought to create systems of rational thought, yet have all been deterred by the corollary of irrationalism that is inherent in any autonomous philosophy.

This is the theme of Singer's book From Rationalism to Irrationality--no philosophy apart from Christian Theism can stand due to its inherently irrationality.  He begins with an evaluation of the Greek and Roman philosophers, Augustine and the early church fathers, the Renaissance, Reformation, Enlightenment, German idealism, Marxism, Darwinism, and Existentialism.

The last and most important chapter is his argument for Christian Theism in the mold of Calvin.  This is the kind of thing any Christian would benefit from in reading.  It is the kind of thing that is no longer preached in our pulpits or taught in our churches.  The rigorous, God-centered view of the world where all things are subject to Christ.  There is no concession made for autonomous human institutions.  The implications of this are massive.  Few Christians are ready spiritually or intellectually for this.

Again, Singer reads like a prophet of old, from a lost age.  Our culture can no longer produce men of such intellect or temper.  We've lost our way and our cultural institutions have decayed such that we need to rebuild for generations to regain what has been lost.

This is a hard to come by book, but find it, read it, and you'll have your reward.

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Wednesday, July 27, 2011

IRA and 401k Confiscation

Nearly two years ago I wrote about how I was reconsidering the legitimacy of IRA and 401k accounts for retirement.  My concern stemmed from the fact that the government limits your ownership of the money until retirement as well as the prospect of government confiscation.  Since then I've seen countless articles discussing the possibility of the government confiscating individual retirement accounts and forcing the money into treasuries.

Today I encountered one from a relatively unlikely source, The American Thinker.  I don't read The American Thinker often, in fact, I only do so when get linked to it.  My impression is that they are a fairly mainstream conservative site, not conspiratorial or fringe-libertarian.  I suggest you read the article yourself and rethink your willingness to participate in these government programs.

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Friday, July 15, 2011

The Sorrows of Empire

I recommend this Gonzalo Lira blog post about the decline of America.

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Monday, July 11, 2011

Michele Bachmann: The Tax Man

I've wondered recently, about Michele Bachmann's past as an attorney for the IRS.  The thought of a "conservative" Republican presidential aspirant as a former tax attorney for the IRS simply seems hypocritical.  As it turns out, Salon and The Atlantic both have articles today, concerning this seeming contradiction.

Is it not curious that a former IRS tax-hound, could ever seriously be considered a contender for the Republican presidential nomination?  I hope that this is something she is forced to reckon with as she seeks the nomination, as I believe this all but disqualifies her in my mind, without an explanation of how she could reconcile her past with the IRS, her convictions as a Christian, and as an outspoken critic of federal taxes.  But of course, I doubt this will go very far, as questioning the legitimacy of the IRS is surely socially disruptive radicalism.


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Friday, July 08, 2011

Socially Disruptive Radicalism

Former George W. Bush speechwriter, Michael Gerson, is a well known evangelical political thinker.  He writes for the Washington Post, and has previously criticized the libertarian views of Congressman Ron Paul.  The most recent critique I'm aware of was his reaction to Ron Paul's views on the drug war as stated at the South Carolina Republican Primary Debate.  You may read my comment concerning that blog here.


Gerson's most recent critique of Paul exposes the foundation of his rigid ideology as post-biblical theology.  A bold statement, no doubt.  Here is the critical passage from his recent critique:

Paul is sometimes viewed as a naive but fearless conservative role model — implying that other Republicans are timid or compromised. But the project of reversing the Great Society, the New Deal and progressive reform is not ideological purity; it is socially disruptive radicalism.

Now, this is why Gerson's "conservatism" is post-biblical.  As you might expect, Herbert Schlossberg has something to say on the matter:

"We take a wrong turn and find ourselves in what appears to be an endless bog.  We decide to turn around and retrace our steps to discover the correct route to the destination.  However, someone in our party has read his Hegel and tells us that we want to turn back the clock back.  The reply to that is that to go straight ahead will take us deeper into the bog without knowing how many miles it stretches or what lies beyond, that the destination is elsewhere, and that the only way we shall find it is to discover where we made our mistake.  Thus, the turning back has to do with space and not time.." (Idols For Destruction, p. 17)


If you didn't catch that, Schlossberg is arguing that those who want to "turn back the clock" have bought into Hegelian philosophy, implicitly, if not explicitly.  Gerson is arguing that a return to the sort of Constitutional Republican values our nation was founded upon is "socially disruptive radicalism."  I can hardly believe someone of Gerson's reputation would utter such a notion.  
 As Schlossberg points out, you can't get out of the bog by going further into it, you must turn around!  Again, this is precisely why we Christians find ourselves in the political bind we are in--we listen to men like Gerson, and we find ourselves deeper and deeper in the bog.  But Gerson would have us follow that bog into Mordor (to borrow another illustration), rather than back to the Shire.  Let us ignore the "useful idiots" such as Gerson, and seek the third way--a return to Constitutional Republicanism.

I should add that Hegelian philosophy, as C. Gregg Singer observes in his book A Theological Interpretation of American History, is the foundation for the anti-Christian movements of the 19th and early twentieth centuries, that oversaw the demolition of the Republic and the transformation into the democratic totalitarianism of the twentieth and twenty-first centuries.  The Hegelian Dialectic reached its apotheosis in the communism of Marx.  Just sayin'.

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Friday, July 01, 2011

Augustine's Ponzi Scheme

Those willing to critically read Treasury Secretary Timothy Geithner's letter to Senator Jim DeMint, will realize that Geithner has essentially confessed to the reality that the United States Government is running the largest Ponzi scheme in the history of the world.  Here is the critical confession:



If investors chose not to purchase a sufficient volume of new Treasury securities, the United States would be required to pay the principal on maturing debt, and not merely the interest, out of available cash. Yet the Treasury would be unable to make these principal payments without the continued confidence of market participants willing to buy new Treasury securities. 


Now, consider a Ponzi scheme, such as that run by Bernie Madoff.  He was forced to find new investors to continue to fund the "growth" of previous investor;s investments.  He took Peter's money to pay Paul.  Then he had to find a Stephen to pay for Peter, and then a Jane to pay Stephen, and so on.  How is this fundamentally different than what the United States government is doing?

This reminds me of a quote from Augustine's City of God.  Augustine writes, "that was an apt and true reply which was given to Alexander the Great by a pirate who had been seized.  For when that king had asked the man what he meant by keeping hostile possession of the sea, he answered with bold pride, “What thou meanest by seizing the whole earth; but because I do it with a petty ship, I am called a robber, whilst thou who dost it with a great fleet art styled emperor.”


Bernard Madoff should have used this defense in his trial.  He could have said something like this: "What thou meanest by fleecing the whole earth; but because I fleece only a few whilst in New York, I am called a robber, whilst though who dost from Washington, art styled the Treasury."

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Thursday, June 30, 2011

Hyperinflation, Economic Nonsense, and the Perspective of History

What does Lindsay Lohan have in common with economic historian Adam Fergusson?  The answer is that they both understand the cause of hyperinflation.  Yesterday Lindsay Lohan tweeted, "Have you guys seen food and gas prices lately?  U.S. $ will soon be worthless if the Fed keeps printing money!"  

One could hope that the perspective of history, specifically as demonstrated by Adam Fergusson's classic When Money Dies, would grant a measure of common sense to later generations concerning something so insidious as hyperinflation.  Yet Daniel Indiviglio of The Atlantic is brazen enough to act the part of Walther Rathenau, who oversaw the beginning of the Weimar hyperinflation.  Indiviglio writes, “The Fed's intervention is not driving food and energy prices. Moreover, the current levels of inflation are not nearly approaching levels where U.S. dollars will soon be worthless. To be sure, prices had been rising, but Americans aren't going to be pushing around wheelbarrows of dollars anytime soon to purchase a quart of milk.

Now, compare that to what Fergusson writes of Rathenau, that he, "expressly and publicly denied that the printing press had any role to play in that permanently spiraling sequence of events, and by ascribing the country’s ills primarily to the unfavourable trade balance caused by reparation payments he totally failed to understand the reality that the country was living far beyond its means, printing money to pay for excesses which included over-employment, the inordinate subsidy of industry, the import and manufacture of luxuries for domestic consumption, and a grossly inefficient tax-collection system.”

I know I frequently sound like I have nothing new to say regarding inflation, and our current state of economic affairs.  Yet I cannot remain silent on this.  Indiviglio is enabling the inflationary policies by parroting the Fed’s lies.  Inflation is never understood when it is happening—it happens slowly at first, that hardly anyone notices, and then it accelerates so suddenly that everyone is so consumed with spending their money to survive, that they have no time to reflect upon what got them into the situation they’re in.  This is one of the lesson’s Fergusson gives in his book.  Not only is he enabling the inflators, but he is actively denying their involvement and redirecting those harboring suspicion of the Fed to bogus claims of increased demand.

There are essentially two options in how to understand economics.  You can either listen to the King’s wise men, sorcerers, and magicians, like Indiviglio, or you can listen to those outside the establishment, with nothing to gain by the inflationary policies of our Gangster Government.  But remember, it is the court magicians and their wannabes, that never know what is happening until it is past, and then never recognize that things are as bad as they are, and then when it is too late, you’ve lost everything.


The reality of the situation, just like Weimar Germany, is that the Central Bank is creating money at a pace unparalleled in American history.  This is causing inflation, if not hyperinflation.  If you want to protect your wealth through the destruction of the dollar, you must put your money in things of real value, assets that will see you through the inflationary crisis we’re experiencing.  Get some gold and/or silver.  Do it now.  Ignore the fallacious economics of men like Indiviglio, and do what you know you must.


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Monday, June 20, 2011

Modern Conservatism's Achilles Heel

I encountered this blog post from nearly four years ago, that is precisely what is wrong with modern conservatism.  Porter Stansberry, an investment adviser, was invited to dinner with Ann Coulter and Doug Casey.  He writes of the encounter:

It gives me no pleasure to tell you about my dinner with Ann Coulter…
I was thrilled when a mutual friend invited me to join him, Doug Casey, and Ann for dinner in New Orleans. I thought, regardless of her rabid political views, surely Ann Coulter is an intelligent, curious, well-read person who has insight into the world…
Wrong. Dead wrong.
Ann Coulter is stunningly ignorant of the issues outside of constitutional law (she is a lawyer) and politics. Thus, in her view, politics is both the cause of all of our problems and the only possible solution.
Over dinner she reiterated her obnoxious opinion that the “experiment” with woman’s suffrage is the root cause of big government. Like a child playing with an Etch-a-Sketch, she points to a straight line, leading back through history. There, she says… big government started right there, in 1920. That’s when the 19th amendment was ratified, ergo that’s the cause of the whole problem. After that, according to Ann, it was all downhill.
Doug and I looked at each other curiously… But Ann, that same line, if you move it just a bit further, actually seems to start in 1913, when the Federal Reserve was created, the prohibition of income taxes was repealed and the Republic was put to rest through the direct election of senators. Don’t you think these changes to the Constitution and the policies they enabled – like FDR’s gold seizure and our resulting experiment with paper money – were far more significant than woman’s suffrage?
Ann Coulter had never heard of the gold standard. She didn’t believe us when we told her that in 1933 FDR seized all of the privately held bullion in the country, then devalued the dollar – probably the greatest financial crime in history. She didn’t even know it was illegal for citizens to own bullion up until 1974. Bretton Woods? Coulter thought we were talking about tennis rackets. She told me flatly “I don’t know anything about finance or economics.” Not even the basics, like how inflation affects prices or the key role paper money and progressive income taxes have played in building the welfare state. We might as well have been talking to a horse. Ann just looked at us, her long face turned sideways with incredulity.
Lacking anything intelligent to say, she decided to simply insult us. “I was a libertarian as a teenager, but I emerged from adolescence…”
Good one, Ann. What a zinger.

Coulter, like most outspoken conservatives, is simply ignorant of economics.  They have no real understanding of America's economic history, the role the gold standard played, the way the progressive era undermined the liberties Americans once possessed, and simply give lip service to "free market" economics.  Conservatives have bought whole-hog into the progressive policies of the early twentieth-century and adapted to the way things are, rather than insisting on Constitutional government.  And perhaps the worst thing about it all, is that they are self-righteously simple-minded.  There is no true intellectual foundation to the modern conservative movement.  This anecdote about Coulter is a distillation of an entire movement.

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Thursday, May 26, 2011

An Excellent Interview

RT has done an excellent interview with journalist Matt Taibbi.  I highly recommend it.

More on Belarus

I previously discussed some lessons to learn from the currency crisis underway in Belarus.  Zero Hedge has more insight into what is happening there, and warns of an impending hyperinflation there.

"Ultimately, Belarus will succumb to hyperinflation, as will each and every other government seeking to devalue its currency (hint: all of them): "Unless Belarus heeds Russia’s call for mass privatization of state assets, it is headed for “hyperinflation, massive un- and under-employment, and a shutdown of production,” VTB’s Moiseev said. The ruble will slide to 10,000 per dollar, he added." Of course, this is the primary side effect of attempting to avoid formal bankruptcy through currency devaluation. And all those who continue to believe deflation is an outcome that will be allowed by the Fed, need to look just to the former Soviet satellite to see what lies in store for everyone currently doing all in their power to devalue their currency."

Note that the situation has become so dire that the nation's assets must be sold to avoid hyperinflation.  The Belorussian  government has kicked the can down the road long enough that they've found themselves backed into a corner with essentially only two options: sell their sovereignty or hyperinflation.

I wonder if we've gone beyond our tipping point here in America?

Another Lesson on Inflation

Belarus is currently experiencing a very high rate of inflation and this article has some good lessons on what inflation does to a country and how the government acts as a demagogue in such situations.  Here are some key effects of inflation:


1. Rapid move from cash into tangibles and out of cash:
"Belarus consumers are sweeping store shelves bare in a frantic attempt to spend their devalued rubles before prices of imported goods go even further through the roof in the cash-strapped former Soviet state."

2.  Rapid devaluation of currency creates a panic and a desire (but lack of ability) to move to other currencies:
"On Tuesday, Belarus devalued its ruble by 36 percent, fixing it at 4,930 rubles to the US dollar.
But for consumers, buying dollars at the official rate has become a real problem with so few willing to sell any US currency leading to lines at exchange booths.

Five people sat on crates and folding chairs next to one booth in Minsk waiting for dollars -- or any other currency to go on sale."

3.  The government acts as demagogue:

"The president on Wednesday admitted that the ruble's value was plunging but refused to attribute the troubles to his own policies, blaming them instead on rising energy prices set by Russia.

"Perhaps we overdid it with the easing but the main thing is the leap in the price of energy," local news agencies quoted him as saying while on a visit to Kazakhstan."

4.  Bailouts required, and the weakened government loses sovereignty to another nation: 


"Lukashenko has pushed for a bailout loan from Russia, which has for years supported its economy by selling it cheap gas.

But Moscow hiked the price last year, with a senior Russian official noting Tuesday that Belarus "has lived at our expense long enough."

A Russian-led union of ex-Soviet states is now preparing a $3.0 billion loan which calls for Belarus to sell off its main government-owned firms. A final decision is expected on June 4.

Russia is already in a position to take control of the Belarus state gas transport company and has its eyes on other prized industrial assets."

Of course the government won't accept responsibility for the weak currency, instead, they blame someone else for their troubles.  This is precisely what happened in Weimar Germany, and what happens whenever the government is caught devaluing their currency.

The article states clearly what is the cause of the ruble's troubles:  "The economic crisis in Belarus was triggered by a colossal trade deficit and massive state spending that preceded last year's presidential elections which gave a new term to authoritarian ruler Alexander Lukashenko."

Sound familiar?


As Adam Fergusson writes in When Money Dies, the government blamed the Mark's problems on

"an adverse trade balance, the consequent necessity to sell German currency abroad, and its resulting depreciation, followed by the fall in the exchange rate and inevitable rise of home prices, leading to increased costs of materials and labour and so to new rifts in the budget.  Dr Rathenau expressly and publicly denied that the printing press had any role to play in that permanently spiraling sequence of events, and by ascribing the country’s ills primarily to the unfavourable trade balance caused by reparation payments he totally failed to understand the reality that the country was living far beyond its means, printing money to pay for excesses which included over-employment, the inordinate subsidy of industry, the import and manufacture of luxuries for domestic consumption, and a grossly inefficient tax-collection system.”

As Herbert Schlossberg writes, "Inflation is both a cause and effect of moral decline."  The panic buying of tangible assets and out of paper currency creates a spending furor that encourages greed, hoarding, and a sort of savagery.


As Fergusson concludes, "Thus must sound money be the first bastion of a society’s defence."

Wednesday, May 04, 2011

Now for Something Completely Different

I was asked to comment on the Minnesota Twins season-to-date, and I thought I'd take a quick excursion on an entirely different topic than of late.

To begin, I must confess that I have yet to see or hear a game yet this season, so my comments will be limited to the team's statistics thus far.  Unfortunately, the statistics show precisely the same problems fans have been lamenting thus far.  The team can't hit and can't pitch this year, and I see no reason to believe they'll turn things around in time to save their season.

The Twins had a very good offense last year, but losing Hardy and Hudson left two glaring weaknesses up the middle the Twins, and Nishioka's injury has only widened that gap and shown how truly thin the Twins middle infield is.  Who was the last really good Twins middle infielder?  Rod Carew?

Joe Mauer was evidently rushed to the active roster after what had been described as minor off-season knee surgery.  Clearly the surgery wasn't as minor as advertised, or it was done too close to the beginning of the season because Mauer wasn't ready to be playing every day.

Justin Morneau has managed to play 23 of the first 28 games, but he's been ineffective and without the power stroke to which we're accustomed.



The rest of the Twins hitters have either been plagued by injury, or simply haven't performed to expectations.  Thome is old, and may not have much left.  Young had a career year and may never be so good again.  Valencia was playing far above expectations last year, and likely won't repeat.  Cuddyer has been overrated for years now.  Kubel is a streaky player that can't hit lefties, but is continually exposed to them.

Liriano's no-hitter was one of the ugliest, and luckiest no hitters you'll ever see.  6 walks agains 2 strikeouts, in just about any other situation, would have led to Gardenhire pulling him long before finishing a game.  I had hoped the Twins would lock-up Liriano over the off season for the next few years, but what we learned in Spring Training, is that Liriano has a very poor work ethic, and seems to lack the mental acuity and discipline required of an ace pitcher.  He might be about done as a top of the rotation starter.

Baker and Duensing have pitched pretty well so far, but after them the staff and the bullpen are a mess.  Slowey's return may bolster the staff some, but he's not enough--especially if he's not going to start.  Pavano will give the staff some good innings, which is very valuable, but he's not an ace.  I expect him to improve.  But I'm not confident that Blackburn will get much better.

The Twins are not playing like a playoff team, and I don't have any confidence that they will play any better the remainder of the season.  They'll get better, but I can't envision the Twins being much better than a .500 team this year--that might even be a stretch.

Tuesday, May 03, 2011

More on Hyperinflation

I posted a brief review of When Money Dies recently, a book dealing with the Weimar hyperinflation.  About the same time I encountered this blog post about hyperinflation that I also found very helpful, and helped me grasp some of the concepts of the book.  It is a very long post, but it is worth reading to gain further insight into why hyperinflation is an almost certain outcome of our current financial situation.  Please note that in my previous post I expressed doubt about this, but this article reminded me that the political will that has brought us to this point will ensure that hyperinflation does indeed occur.  There is no going back, read the article if you doubt this.

One of the most important things in the article is the idea that hyperinflation is a political event, or as Adam Fergusson calls it, a moral one.  Our political, or moral will, is simply not strong enough to pursue the reversal of the current policies, and because of this, hyperinflation is all but guaranteed.

As counter intuitive as it might seem, bankers, traders, and Wall Street at large would prefer hyperinflation to deflation--and these are the only two options at this point.  We either cease spending and money printing leading to deflation, or we continue doing what we are doing and we get hyperinflation.  The deflationary route would wipe out Wall Street, pensions, banks, and investors.  Our monetary system is built on debt, and the cessation of debt creation would lead to economic devastation that would be unacceptable to nearly everyone--but most importantly to the financial oligarchs.

Hyperinflation, on the other hand, ensures the system of debt creation continues longer--how long no one really knows.  Debts can continue to be paid, Wall Street continues to get its huge bonuses, and the public is at least consoled by a nominal rise in the Dow, Nasdaq, S&P, etc.  And when hyperinflation comes, it is the bankers and Wall Street that will get the new money first, and the first fruits of the inflation. 

The blogger, "FOFOA", divides people into two groups--debtors and savers.  It is critical to understand that the financial oligarchs, though wealthy, are debtors.  That is, they feast off of a monetary system that creates debt, which gives them their wealth.  Without their leveraging debt, they would be forced to produce something (other than debt) to grow their wealth.  It is the largely the middle class that are the savers--and that will ultimately pay the inflationary piper.

FOFOA writes:

"This is very important: Once hyperinflation commences it is characterized by a running shortage of cash, even though it appears like the opposite to the outside observer. The currency collapses in value against economic goods because the debt and the credit collapsed. There is no credit, only cash, and there is a shortage of cash for everyone, including the Elite and the government. So they, the Elite/government, print and print for their own survival while saying it is for yours."

I made a similar argument in my previous post about the Weimar inflation.  Cash is very difficult to come by--largely because credit is gone.  Purchases that were once made with credit must now be transacted in cash.  Imagine having no credit card and relying upon cash to make all purchases!  There simply isn't enough cash in our system, and it would have to be printed, which would drive further inflation.  It is a self-perpetuating problem that ends in the "crack up boom" Mises predicted.

Silver and gold have increased remarkably since I first wrote about them on this blog, but it is still not too late to protect your wealth, rather than let it be confiscated by the financial oligarchy through a hyperinflationary crisis.

FOA acknowledges you don't invest in gold to see you through hyperinflation.  He writes:

"...gold is not at its highest and best use being spent (circulated) as a currency during a hunger crisis. Instead, if you are one with PLENTY of net worth, gold is the very best way to shuttle your wealth THROUGH a crisis to the other side. If you are forced to deploy this wealth for food during a crisis, then you apparently planned poorly."

I'll simply add that silver (especially pre-1960s silver coinage, aka 'junk silver') is perhaps the best way to get through a hyperinflationary crisis, as it is denominated in small coins making small, simple transactions easy.  It is not too late!

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