Wednesday, February 29, 2012
New Ron Paul Ad Goes After Gingrich, Santorum and Romney
Jesse Benton, Ron Paul's national campaign chairman, says the ad is part of Dr. Paul's "delegate-attainment strategy."
Fed: All Areas of the Country Show Growth
The Fed said in its report, known as the Beige Book said that all 12 of its banking districts reported some level of growth in January and the first half of February.
Manufacturing output rose in all districts. Auto manufacturing, steel makers and other metal producers all reported solid growth.
Home sales increased in at least half of the districts.
The Beige Book is released eight times a year. The findings from each of the Fed's regional bank districts are all anecdotal; there are no numbers.
There is an opposing view.
Manufacturing output rose in all districts. Auto manufacturing, steel makers and other metal producers all reported solid growth.
Home sales increased in at least half of the districts.
The Beige Book is released eight times a year. The findings from each of the Fed's regional bank districts are all anecdotal; there are no numbers.
There is an opposing view.
Judge Napolitano: Geithner Could Face Criminal Charges
Geithner is surrounded. It looks Geithner's father, who I believe is high level CIA, will have to step in to keep Timmy out of the slammer.
Top Investment Manager: “Capitalism Threatens Our Existence”
Here's more proof that just because you are a successful money manager, it doesn't mean that you understand basic economics:
Al Lewis at Market Watch writes:
Marx may have had a bunch of mad economic views in his mind, but most assuredly, he wasn't thinking about Mussolini economics. It is terrible that a successful money manager doesn't even understand the economic system he is operating under. Most bizarre, Grantham wants an expansion of the Mussolini act. Lewis writes mlore, quoting Grantham:
And what would be an absurd economic argument without bringing in the Malthusian fallacy. :
Bottom line: Never trust an investment manager who takes up central planning as a hobby. Babe Ruth was great at hitting home runs, but it doesn't mean that he knew a damn thing about the physics of how he did it. Money managers are proving, regularly, from Buffett to Grantham that they consider themselves experts in fields where they are clueless. Don't ever fly in a plane designed by Babe Ruth or an economy designed by Buffet or Grantham.
Al Lewis at Market Watch writes:
With all the news focused on Warren Buffett’s annual shareholder letter, it was easy to miss Jeremy Grantham’s more urgent missive.Grantham, of course, mistakenly believes we live in a capitalistic economic system, which we don't. It is a system of government intervention, where government leaders in cahoots with crony capitalists create advantages for the cronies. It is a Mussolini-type economic system.
Like Buffett, Grantham is a legendary value investor. He’s co-founder of the Boston-based investment firm GMO LLC, which manages $97 billion. That’s about half the market value of Berkshire Hathaway Inc. but still big enough to produce a noteworthy letter...
Grantham, however, takes a longer view, and isn’t so “awe shucks” about the future of our broken economic system.
“Capitalism,” he writes, “threatens our existence.”
Already, capitalism is proving that Karl Marx and Friedrich Engels were at least partially correct [says Grantham]. They “looked forward to globalization and the supranational company because they argued it would make capitalism even more powerful, overreaching, and eventually reckless,” Grantham writes.
Globalization “would ... offer the capitalists more rope to hang themselves with ... rope ... bought from briskly competing capitalists, eager till the end for a good deal.”
Grantham, who is British, studied economics at the University of Sheffield and has an MBA from Harvard Business School.
Marx may have had a bunch of mad economic views in his mind, but most assuredly, he wasn't thinking about Mussolini economics. It is terrible that a successful money manager doesn't even understand the economic system he is operating under. Most bizarre, Grantham wants an expansion of the Mussolini act. Lewis writes mlore, quoting Grantham:
Governments must step in. “To interfere with Marx’s apocalyptic vision, we need some enlightened governmental moderation ... before capitalism gets so cocky that we have some serious social reaction.”Governments are the problem. We don't need an expanded government so that more crony deals can be cut. We need less government.
And what would be an absurd economic argument without bringing in the Malthusian fallacy. :
Economic theory ignores natural laws. It suffers an “absolute inability to process the finiteness of resources. ... Capitalism wants to eat into ... limited resources at an accelerating rate with the subtext that everyone on the planet has the right to live like the wasteful polluting developed countries do today...It’s not just inexpensive oil we are running out of: The “loss of our collective ability to feed ourselves, through erosion and fertilizer depletion — has received little or no attention.”For a refutation of this absurdity, see here.
Bottom line: Never trust an investment manager who takes up central planning as a hobby. Babe Ruth was great at hitting home runs, but it doesn't mean that he knew a damn thing about the physics of how he did it. Money managers are proving, regularly, from Buffett to Grantham that they consider themselves experts in fields where they are clueless. Don't ever fly in a plane designed by Babe Ruth or an economy designed by Buffet or Grantham.
Ron Paul to Ben Bernanke: People Lose Trust in the Government Because You Lie to Them About Inflation
First, Barney Frank pats Bernanke on his head for helping bail out Europe, then Ron Paul lets Bernanke have it.
Nomura Analyst: We are Facing 'Monetary Anarchy'
Bob Janjuah, head of tactical asset allocation at Nomura, correctly writes:
He said bubbles were visible in all asset classes because central bank balance sheets are at the core.
The end of the bubble will be signposted by either monetary anarchy creating major real economy inflation or by a deflationary credit collapse.
Bizarrely, Janjuah also says:
We have Monetary Anarchy running riot, where the elastic band between the real economy and the current liquidity-fuelled markets is stretched further and further beyond credulity.
He said bubbles were visible in all asset classes because central bank balance sheets are at the core.
The end of the bubble will be signposted by either monetary anarchy creating major real economy inflation or by a deflationary credit collapse.
Bizarrely, Janjuah also says:
Real assets are relatively attractive. But I am going to wait for this current central bank bubble to burst before going all in.Note to Janjuah: You get in now and get out when the money printing stops. The price climb on real assets is about to enter a spectacular upside phase.
GDP Rockets
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.0 percent in the fourth quarter of 2011, according to the "second" estimate released by the
Bureau of Economic Analysis. In the third quarter, real GDP increased 1.8 percent.
These mass aggregated numbers are not my favorites, but Keynesians love them. Most noteworthy, the GDP climb occurred while Paul Krugman was blind to the turnaround and putting his finishing touches on this.
Krugman who also fears deflation will have to also explain the developing price inflation. The GDP related price indexes soared. The price index for gross domestic purchases, which measures prices paid by U.S. residents,increased 1.1 percent in the fourth quarter, 0.3 percentage point more than in the advance estimate, and an annualized rate of 4.4 percent. Even the Nixon favorite, "core inflation", soared, excluding food and energy prices, the price index for gross domestic purchases increased 1.2 percent in the fourth quarter, an annualized rate of 4.8 percent.
These price advances, it should be noted are all before the latest soaring gasoline prices.
Bureau of Economic Analysis. In the third quarter, real GDP increased 1.8 percent.
These mass aggregated numbers are not my favorites, but Keynesians love them. Most noteworthy, the GDP climb occurred while Paul Krugman was blind to the turnaround and putting his finishing touches on this.
Krugman who also fears deflation will have to also explain the developing price inflation. The GDP related price indexes soared. The price index for gross domestic purchases, which measures prices paid by U.S. residents,increased 1.1 percent in the fourth quarter, 0.3 percentage point more than in the advance estimate, and an annualized rate of 4.4 percent. Even the Nixon favorite, "core inflation", soared, excluding food and energy prices, the price index for gross domestic purchases increased 1.2 percent in the fourth quarter, an annualized rate of 4.8 percent.
These price advances, it should be noted are all before the latest soaring gasoline prices.
Gas Prices Top $5 Per Gallon On Long Island, NY
CBS New York reports:
There is an opposing view.
The sign at the Gulf station on Northern Boulevard in Great Neck really does say a gallon of regular will cost you $4.99.9. Unless you have a spare one-tenth of a penny lying around, for all intents and purposes, that’s a $5 gallon of gasoline — $5.09 if you use a credit card.Looks like price inflation to me.
There is an opposing view.
Tuesday, February 28, 2012
House Passes Bill That Will Make Protesting Illegal at Secret Service Covered Events
Reports RT:
(Thanks2AndreGrillon)
The bill passed the Senate on February 6 and only requires the signature of the President to become law.
The House of Representatives approved a bill on Monday that outlaws protests in instances where some government officials are nearby, whether or not you even know it.
The US House of Representatives voted 388-to-3 in favor of H.R. 347 late Monday, a bill which is being dubbed the Federal Restricted Buildings and Grounds Improvement Act of 2011. In the bill, Congress officially makes it illegal to trespass on the grounds of the White House, which, on the surface, seems not just harmless and necessary, but somewhat shocking that such a rule isn’t already on the books. The wording in the bill, however, extends to allow the government to go after much more than tourists that transverse the wrought iron White House fence.
Under the act, the government is also given the power to bring charges against Americans engaged in political protest anywhere in the country.
Under current law, White House trespassers are prosecuted under a local ordinance, a Washington, DC legislation that can bring misdemeanor charges for anyone trying to get close to the president without authorization. Under H.R. 347, a federal law will formally be applied to such instances, but will also allow the government to bring charges to protesters, demonstrators and activists at political events and other outings across America.
The new legislation allows prosecutors to charge anyone who enters a building without permission or with the intent to disrupt a government function with a federal offense if Secret Service is on the scene, but the law stretches to include not just the president’s palatial Pennsylvania Avenue home. Under the law, any building or grounds where the president is visiting — even temporarily — is covered, as is any building or grounds “restricted in conjunction with an event designated as a special event of national significance."
It’s not just the president who would be spared from protesters, either.
Covered under the bill is any person protected by the Secret Service. Although such protection isn’t extended to just everybody, making it a federal offense to even accidently disrupt an event attended by a person with such status essentially crushes whatever currently remains of the right to assemble and peacefully protest.
Hours after the act passed, presidential candidate Rick Santorum was granted Secret Service protection...
In the text of the act, the law is allowed to be used against anyone who knowingly enters or remains in a restricted building or grounds without lawful authority to do so, but those grounds are considered any area where someone — rather it’s President Obama, Senator Santorum or Governor Romney — will be temporarily visiting, whether or not the public is even made aware. Entering such a facility is thus outlawed, as is disrupting the orderly conduct of “official functions,” engaging in disorderly conduct “within such proximity to” the event or acting violent to anyone, anywhere near the premises. Under that verbiage, that means a peaceful protest outside a candidate’s concession speech would be a federal offense...
While presidential inaugurations and meeting of foreign dignitaries are awarded the title, nearly three dozen events in all have been considered a National Special Security Event (NSSE) since the term was created under President Clinton. Among past events on the DHS-sanctioned NSSE list are Super Bowl XXXVI, the funerals of Ronald Reagan and Gerald Ford, most State of the Union addresses and the 2008 Democratic and Republican National Conventions....
When thousands of protesters are expected to descend on Chicago this spring for the 2012 G8 and NATO summits, they will also be approaching the grounds of a National Special Security Event. That means disruptive activity, to whichever court has to consider it, will be a federal offense under the act.
And don’t forget if you intend on fighting such charges, you might not be able to rely on evidence of your own. In the state of Illinois, videotaping the police, under current law, brings criminals charges. Don’t fret. It’s not like the country will really try to enforce it — right?
(Thanks2AndreGrillon)
Dow Closes Above 13,000 for the First Time Since May 2008...
Just in time for Paul Krugman's prophetic book.
George Soros Ex-Girlfriend Problems
Bess Levin reports the details as only she can do:
Remember Adriana Ferreyr? To recap, she’s a woman with whom George Soros either conducted “a serious meaningful relationship” that lasted five years or had had an “on-again, off-again and non-exclusive intimate relationship,” depending on who you ask. Last August, Ferreyr sued the billionaire based on the promise he allegedly made to buy her a “dream home” at 30 East 85th Street, before “heartlessly” dumping her a few days after the contract was signed. Ferreyr was pretty pissed about the situation but, as these things go, the duo “briefly reconciled for a romantic night together” during which Jorge supposedly had the Soroses to “whisper in her ear” that he’d given the keys to her dream house to another one of his gal-pals. Adriana also claimed that after she aired her displeasure with Soros’ decision to give away her apartment, he slapped her across the face and ”proceeded to put his hands around her neck in an attempt to choke her…then allegedly tempted to strike her with a glass lamp narrowly missing though cutting her foot.” From the beginning, Soros’s lawyers have denied almost all of Ferreyr’s account, from the characterization of their relationship to the bit about him assaulting her with his hands and furniture. They did admit that there was a promise of an apartment but 1) the couple broke up so no deal and 2) the way they see it, Ferreyr’s “baseless” lawsuit is simply the manifestation of her “disappointment that Soros moved onto other women.”Judging from what I have seen of the billionaire (and sub-billionaire) class, these guys like to play with these women and fight for every penny. I think they would fight over a penny. When you are a bored billionaire, after manipulating the entire world, what else is there to do?
Now, one would think Soros would want all of this to go away, as, true or not, most people prefer not to be accused of pelting people with lamps, etc. And yet today we were given a hint that GS is actually enjoying all this and, on the contrary, doesn’t want it to go away quietly, as evidenced by his attorneys’ latest statement.
Billionaire George Soros is trying to toss out a lawsuit from an ex-girlfriend who claims he reneged on a promise to buy her a $1.9 million apartment and assaulted her when they were in bed discussing his supposed betrayal. Lawyers for Soros are filing papers today in Manhattan Supreme Court, blasting Adriana Ferreyr’s “fog of overheated rhetoric” and her claim that Soros “promised to give her, for free, a multimillion dollar luxury apartment” but got “upset after she and Soros ended their relationship.Correct us if we’re wrong (we’re not) but is calling someone who is clearly in a delicate place “overheated” the best course of action here? Team Soros basically just told a completely riled up person to “calm down,” i.e. throwing a lit match into a dream apartment filled with gasoline. He’s about to feel the full fury of a “on-again, off-again non-exclusive intimate relationship” scorned.
Malthusian Mad Logic Hits Twitter
Henry Blodget tweets:
Murray Rothbard put Malthusian madness in proper light when he quoted Edwin Canna and wrote:
RT @Bill_Gross: "We need about 1.5 Earths to sustain our current level of economy." Paul Gilding @ #TEDDamn supply and demand, damn marginal utility, lets all stick our heads in the sand and arithmetic and exponetial draw graphs.
Murray Rothbard put Malthusian madness in proper light when he quoted Edwin Canna and wrote:
For spurious Malthus's ratios undoubtedly were. There was no proof whatever for either of these alleged ratios. The absurdly mechanistic view that people, unchecked, would breed like fruit flies cannot be demonstrated by simply spelling out the implications of the alleged "doubling itself every twenty-five years."...Malthus's one attempt at proof of his ratios was extraordinarily feeble. Priding himself on relying on "experience," Malthus noted that the population of the North American colonies had increased for a long while in the "geometric ratio" of doubling every 25 years. But this example hardly demonstrates the fearful outstripping by population of the "arithmetically increasing" food supply. For, as Edwin Cannan astutely notes, "This population must have been fed, and consequently the annual produce of food must also have increased in a geometrical ratio." His example proved nothing.t.
Cannan adds that by the sixth chapter of his Essay, Malthus "seems to have had some inkling of this objection to his argument," and he tries to reply in a footnote, that "In instances of this kind, the powers of the earth appear to be fully equal to answer all the demands for food that can be made up on it by man. But we should be led into an error, if we were thence to suppose that population and food ever really increase in the same ratio." But since this is precisely what had happened, Malthus is clearly totally unwitting that the second sentence in this note is in flat contradiction to the firs
Paul Krugman: The Worst Timing for a Book Ever
Just as the manipulated boom will be in full swing and price inflation will start its climb, Paul Krugman's new book will be out. I kid you not:
He writes at his blog today:
Talk about being handed material on a silver platter.
He writes at his blog today:
Available in a couple of months.
Talk about being handed material on a silver platter.
EPJ's Google + Page
Chris Rossini has been kind enough to set up an EPJ Google+ page. You can find it here.
World Bank Warns: China is a Ticking Time Bomb
Paul Farrell writes:
...just when you though it couldn’t get worse: The World Bank warns that China is headed for collapse. Imagine China crashing. The country holding over a trillion of America’s debt. The same China that’s running all over the world like a 19th century Wild West robber baron, using reserve dollars they got from years of financing America’s costly wars and cheap toys.If you add crazed money printing, the picture for China and, eventually America, is complete.
Adding insult to injury, China’s now using these reserve dollars to buy and hoard huge land resources, commodity futures and equities worldwide. Yes, China’s rubbing it in: China’s future is being paid for at the cost of America’s future...the World Bank’s game-changing new report predicting China’s headed for a major collapse that will sabotage the global economy.
Yes, a collapse of China. And what’s really fascinating is how China’s predictable doomsday scenario parallels America’s. Yes, we know America’s elite Super Rich gained virtual control over Washington the past three decades. And now, ironically, that same bizarre capitalism is sabotaging the goose that laid the golden egg for China’s Super Rich too.
In that game-changing study just released by World Bank President Robert Zoellick we’re “warned of a spreading crisis,” says Reuters...
Get it? The cause of China’s problems is exactly like America’s. In both nations, a new, powerful Super Rich is aligned with politicians — will eventually self-destruct. The World Bank warns that China’s corrupt state-owned companies have created a Chinese Super Rich class aligning communist party bosses and corporate executives.
And neither has any interest in the World Bank’s call for reforming their incestuous economic system — which is exactly the same problem with America’s conspiracy between our Super Rich, Wall Street CEOs and Washington politicians.
A Report from the Grocery Store
An EPJ reader emails:
Love your site. Spend too much time reading it.
I don't talk too much about economics and what's coming with my wife. Stresses her out too much. However, she does know my general perspective on things and that I spend time reading your site and lewrockwell.com
Last night she came home and shared with me that the price of ground beef is north of $4 (she said to the penny - I don't remember). But then continued that she's seeing significant changes in many items she regularly purchases. This worries her.
I told her that I'm not surprised.
Just thought you'd be interested in another data point. People who aren't thinking about this stuff all the time are starting to notice.
Although, as I understand, there is a competing perspective out there. : ) I think Krugman's warning that deflation is really what should should concern me.
Taking the Fed Economists Head On
UPDATE at bottom of post.
Senior Vice President Macroeconomic and Monetary Studies Function Federal Reserve Bank of New York Dick Peach has responded to my earlier email:You are correct that several national home price indices have declined to 2002/early 2003 levels. Do you think it is possible that home prices are overshooting to the downside?
Also, I was wondering what metric you used to conclude that home prices were overvalued in 2004 and 2005.
Regards
Richard W. Peach
My new response to Mr. Peach:
I didn't use a "metric". That's the key you guys at the Fed, of all places, don't seem to get. I think you fail to understand business cycle theory and your methodology is wrong.
By the Federal Reserve distorting prices through money printing, it's impossible to know what the non-manipulated housing market would look like.There is no "metric" that can tell you. I just knew that at some point you have to slow money printing for a short period for fear of price inflation, which Mr. Bernanke did in the summer of 2008, which crashed the entire damn thing, which I warned about in real time, here, here, here, here, here, here, here and here.
My statements have been bold, but they have been correct. I also am on record as seeing the current turnaround well before most. Here's a December post. I have also been warning about a great price inflation that is developing. In all seriousness, since you guys missed the housing bubble, the Great Recession and the turnaround and I have nailed them all in real time, don't you think it is time to have me over for lunch so I can explain why you guys are about to blow the economy up in a price inflation spiral? Or are you happy with your faulty models and what they will do to the country?
UPDATE: Fed economist Richard Peach has graciously invited me to lunch and to give a seminar at the New York Fed.
Checkmate: The New York Fed as Totally Missing the Housing Bubble
NEW! The Fed Flunks: My Speech at the New York Federal Reserve Bank
By Robert Wenzel
Paperback
Price: $9.50
Ships in 1-2 business days
In April 2012, Robert Wenzel delivered a speech at the New York Federal Reserve that rocked the financial world. The Fed Flunks contains the speech he delivered, plus two other essays. In addition, Wenzel explains in The Fed Flunks just how it came about that he, a major critic of the Fed, was invited to deliver a speech at the Fed, how the event was almost sabotaged, who was at the speech and the reaction of the Fed economists there.
Product Details
ISBN 9781312047235
Copyright Gallatin House LLC (Standard Copyright License)
Edition First Edition
Publisher Gallatin House
Published May 15, 2014
Language English
Pages 73
Binding Perfect-bound Paperback
Interior Ink Black & white
Weight 0.35 lbs.
Dimensions (inches) 6 wide x 9 tall
Monday, February 27, 2012
Clueless Michael Douglas versus Murray Rothbard
This is sad. First, we had Clint Eastwood in an absurd Super Bowl commercial.
Now, we have Michael Douglas doing an absurd "public service" announcement against securities fraud and insider trading..
In the commercial Douglas says:
Douglas goes on:
Harry Markopolos warned the SEC for years about the scam Bernie Madoff was running and that did a lot of good.
As for as insider trading, it does nothing but make markets more efficient. It's done every day on Wall Street. The government just takes on outsiders. Raj Rajaratnam and Rajat Gupta certainly are not names you are going to find on the list of Boston Brahmins.
Douglas concludes the propaganda piece by telling viewers how to report insider trading or other securities fraud to the FBI.
Here's Murray Rothbard contra-Michael Douglas
Now, we have Michael Douglas doing an absurd "public service" announcement against securities fraud and insider trading..
In the commercial Douglas says:
Hello, I’m Michael Douglas. In the movie ‘Wall Street,’ I played Gordon Gekko, a greedy corporate executive who cheated to profit while innocent investors lost their savings.Here's the first problem with this propaganda. The character Douglas played in the movie, Gordon Gekko, didn't cheat "innocent investors". He sought out information so that markets became more efficient. He launched takeovers to make firms more efficient. Investors that held stocks where Gekko bought in benefited from his actions. No one "lost their savings." Did Douglas even understand what the hell was going on in the movie?
Douglas goes on:
The movie was fiction, but the problem is real. Our economy is increasingly dependent on the success and the integrity of the financial markets. If a deal looks too good to be true, it probably is.The absurdity of this quote is that when there is real fraud, even if it is reported to the government, the governmnet, via the SEC, has shown it will do nothing.
Harry Markopolos warned the SEC for years about the scam Bernie Madoff was running and that did a lot of good.
As for as insider trading, it does nothing but make markets more efficient. It's done every day on Wall Street. The government just takes on outsiders. Raj Rajaratnam and Rajat Gupta certainly are not names you are going to find on the list of Boston Brahmins.
Douglas concludes the propaganda piece by telling viewers how to report insider trading or other securities fraud to the FBI.
Here's Murray Rothbard contra-Michael Douglas
Rand Paul as a Potential Anti-Dick Cheney
Judging from the comments in posts below about a Romney-Rand Paul ticket, many libertarians are against such a ticket. I think this is ignoring recent history.
A rambling president with no strong principles coupled with a vice-president with strong principles can result in a very powerful vice-president, for good or bad. Most recently, the George Bush-Dick Cheney administration can serve as an example. Cheney did not take the vice-presidency to be GW's lap dog. He took it to run policy (for evil purposes though it might have been)
Since Mitt Romney blows in the wind on almost any issue, a strong principled, libertarian oriented vice-president could accomplish a lot. He could be a sort of anti-Dick Cheney, a man who could reorient the country back toward freedom and, also, away from foreign entanglements.
Rand Paul would not be a Joe Biden or Al Gore type vice-president, relegated to attending funerals of second tier global leaders. A Mitt Romney-Rand Paul administration would get real interesting real fast.
A rambling president with no strong principles coupled with a vice-president with strong principles can result in a very powerful vice-president, for good or bad. Most recently, the George Bush-Dick Cheney administration can serve as an example. Cheney did not take the vice-presidency to be GW's lap dog. He took it to run policy (for evil purposes though it might have been)
Since Mitt Romney blows in the wind on almost any issue, a strong principled, libertarian oriented vice-president could accomplish a lot. He could be a sort of anti-Dick Cheney, a man who could reorient the country back toward freedom and, also, away from foreign entanglements.
Rand Paul would not be a Joe Biden or Al Gore type vice-president, relegated to attending funerals of second tier global leaders. A Mitt Romney-Rand Paul administration would get real interesting real fast.
Ron Paul Is Not About to Become a Power Broker
By Walter Block
According to Gandhi "First they ignore you, then they laugh at you, then they fight you, then you win." How does this apply to Ron Paul? Well, it is a bit more complicated than that in this case. Here, the "ignoring" certainly fits. The mainstream media talks about everyone else under the sun except for You Know Who. And who can forget the "laughing": he is a crazy old uncle, his suits don’t fit, his eyebrows aren’t "presidential" enough, etc. The "fighting" is clear: he has been smeared with everything in the book they could throw at him, and with lots of stuff that isn’t in the book too. But in the Gandhi case, each of these things occurred pretty much one at a time. First¸ they did this, then they did that. The implication is that after they finished the first thing, they stopped it, and then went on to the second; ditto for the third and fourth. Not so in the case of the Congressman from Texas. Even now, amidst all the laughing and the sneering, they are stillignoring Dr. Paul. How many stories about the presidential campaigns of Romney, Gingrich and Santorum (notice who is missing?) must we read from the New York Times and the Washington Post? How many times must we be reminded that Dr. Paul has not yet won any state election outright? (Maine doesn’t count. Vote fraud is yet another issue that did not beset Gandhi.) Why is it that the major media almost entirelyignored that magnificent and unprecedented march of his supporters in the military on Washington D.C. on February 20, 2012? Don’t ask me how these people can at one and the same time ignore Ron, smear him and laugh at him. To the uninitiated, this sounds like a logical contradiction. But, it would appear, our Powers That Be are even capable of ignoring the laws of logic.
But there are at present two more altogether different deviations from the Gandhi scenario now in play.
The second non-Gandhian scenario being experienced by Ron Paul is that he is now in cahoots with Mitt Romney. Mitt Romney? Bost and tosh. Yes, there is a lack of personal antipathy between the two men; indeed, there is some sort of grudging respect between them. Their wives are friendly. Yes, Ron sees in Mitt a person who is less of a loose cannon in many ways than either Scam or Noot. So what? When it comes to matters of substance, in terms of foreign policy, economic principles, personal liberties as Ron never tires of telling anyone who will listen, there is as much of a unbridgeable a gap between Ron and Mitt as there is between Ron and either of the two others (notice, I’m not mentioning their names? Hah! Take that). This collusion scenario too is an attempt to deflect the Congressman from his goal of bringing liberty to the world. For surely Dr. Paul would be the junior partner in any such amalgamation, at least in the eyes of the mainstream media and the real power brokers in the Republican Party. Maybe, possibly, he or his son Senator Rand Paul from Kentucky will be offered theVice Presidential spot on the ticket.The first is that Ron Paul has "elevated" to the status of "power broker." Nonsense. No, nonsense on stilts. This is just another attempt on the part of the ruling class in our society to deflect Mr. Paul from his goal. First, to win the Republican nomination for President, then to gain a landslide victory over Mr. Obama in the fall, and finally to turn the U.S. and the world too into a free, peaceful, prosperous place where there is liberty for all. And, he will do it too. Yes, the Texas Congressman will have a difficult time attaining the first of these goals. But when and if he does, it will be all downhill after that, as he cashes in on his additional support of first Independents, and second, disaffected Democrats too. The status of "power broker" implies that the next president of the U.S. will take Paul’s calls; that he will have some input into the party platform (which is almost totally ignored in any case); that, perhaps, there will indeed be some sort of luke-warm oversight placed on the Fed; that there will be yet another blue-ribbon commission instituted to study whether marijuana shall be legalized (which will also be ignored). No. "Power broker" is a mere booby prize. Ron is in this for the long haul. For him it is "President or bust." "Power broker," along with ignoring, laughing at, smearing, are just attempts to deflect him from his this magnificent goal of his.
Well, maybe, who knows, the future is uncertain. But at this point in time, there is no doubt about it. Ron Paul is in this game for all the marbles. And power broker, along with junior partner, are only obstacles in his path, along with ignoring, laughing at, smearing, and other such impediments.
February 27, 2012
Dr. Block [send him mail] is a professor of economics at Loyola University New Orleans, and a senior fellow of the Ludwig von Mises Institute. He is the author of Defending the Undefendable and Labor Economics From A Free Market Perspective. His latest book is The Privatization of Roads and Highways.
The above originally appeared at LewRockwell.com
Lessons in Super Deal Making
James Altucher is at his best in a new column. He starts by discussing a show I never heard of, and at first would never consider watching. But pay attention to the way Altucher takes the analytical knife to this show. It's awesome and right here.
How to Get a Second Passport if You are not Irish, Polish, or Italian
Simon Black reports:
Potentially the most important and most powerful aspect of your life to diversify, however, is citizenship. I view this as the ultimate insurance policy– something that you hope you’ll never have to use, but you’ll really be glad you have it in case you do.
Having a second citizenship is like having a ‘get out of jail free’ card. It creates options. No matter what happens in the world, you’ll always have a place to go. You’ll always have a ticket out. And as I’m fond of saying, nobody ever hijacks an airplane and threatens to kill all the Lithuanians. Second citizenship does bring a greater sense of security.
Obtaining citizenship, however, is elusive for many people. Some people are lucky enough to come from a line of Irish, Polish, or Italian ancestors. For most, though, it takes a combination of three things:
- Money
- Time
- Flexibility
If you’re willing to simply pay for it, there are certain countries like St. Kitts and Dominica which offer citizenship to people who are simply willing to pay. Most folks unfortunately can’t afford the $250,000+ price tag that’s required, so that leaves the other two.
Just about every country is willing to eventually naturalize permanent residents who reside in the country for a particular amount of time. It varies greatly from place to place. This past weekend, I learned from a subscriber who came down to Chile that, in Japan, it takes two decades of continuous residence.
Other places, like Belgium, offer naturalization after as little as three years, possibly two in extreme circumstances. This is a much easier option for most people, especially for such a valuable passport.
Then there’s the ability to obtain citizenship through what I call ‘flexibility’. This may include something like getting married to a local, which in many countries can provide an extremely rapid path to naturalization.
As an example, I’d like to outline a few options below of high quality passports that anyone can obtain with either time and/or flexibility:
1) SINGAPORE. Easily the most valuable travel document on the planet, a Singaporean can travel almost anywhere without a visa, including to the US and Europe. It takes two years of residence after obtaining permanent residency to qualify for naturalization. And obtaining permanent residence is a snap– you can simply set up a local company to qualify.
Pitfalls: Singapore does have mandatory national service, and it’s important to review the rules to find out whether you would fall within the window.
2) BRAZIL. There are two great things about Brazil. One, they refuse to extradite their citizens to answer for foreign crimes. It just doesn’t happen. Two, ANYONE can be Brazilian, whatever their ethnicity– black, white, brown, it doesn’t matter. Brazil is a huge melting pot. We are all Brazilian.
Brazil is the KING of ‘flexible’ citizenship options– getting married, adopting a child, hell even adopting a rain forest in some cases. And it can happen in as little as six-months to three years. Just don’t expect the process to be crystal clear.
3) ISRAEL. Speaking of flexible, if you’re willing to become Jewish, the State of Israel’s Right of Return entitles you to citizenship. Make no mistake, though, it’s not just going through the motions– you have to work with local religious leaders and actually make the conversion before they’re willing to go through the process.
Pitfalls: The downside of Israeli citizenship should be clear as military service is compulsory.
4) BELGIUM. At its core, Belgium’s naturalization laws allow foreigners who have maintained residence in the country for three years to apply for citizenship. “Residence” can either be in Belgium, or even abroad so long as you can demonstrate ties to Belgium, i.e. family, friends, employment, property ownership, paying taxes, etc.
Aside from being an incredibly valuable travel document, Belgian naturalization also passes to all minor children– in other words, if you become a naturalized Belgian, your kids do too.
Simon Black has more details here.
Potentially the most important and most powerful aspect of your life to diversify, however, is citizenship. I view this as the ultimate insurance policy– something that you hope you’ll never have to use, but you’ll really be glad you have it in case you do.
Having a second citizenship is like having a ‘get out of jail free’ card. It creates options. No matter what happens in the world, you’ll always have a place to go. You’ll always have a ticket out. And as I’m fond of saying, nobody ever hijacks an airplane and threatens to kill all the Lithuanians. Second citizenship does bring a greater sense of security.
Obtaining citizenship, however, is elusive for many people. Some people are lucky enough to come from a line of Irish, Polish, or Italian ancestors. For most, though, it takes a combination of three things:
- Money
- Time
- Flexibility
If you’re willing to simply pay for it, there are certain countries like St. Kitts and Dominica which offer citizenship to people who are simply willing to pay. Most folks unfortunately can’t afford the $250,000+ price tag that’s required, so that leaves the other two.
Just about every country is willing to eventually naturalize permanent residents who reside in the country for a particular amount of time. It varies greatly from place to place. This past weekend, I learned from a subscriber who came down to Chile that, in Japan, it takes two decades of continuous residence.
Other places, like Belgium, offer naturalization after as little as three years, possibly two in extreme circumstances. This is a much easier option for most people, especially for such a valuable passport.
Then there’s the ability to obtain citizenship through what I call ‘flexibility’. This may include something like getting married to a local, which in many countries can provide an extremely rapid path to naturalization.
As an example, I’d like to outline a few options below of high quality passports that anyone can obtain with either time and/or flexibility:
1) SINGAPORE. Easily the most valuable travel document on the planet, a Singaporean can travel almost anywhere without a visa, including to the US and Europe. It takes two years of residence after obtaining permanent residency to qualify for naturalization. And obtaining permanent residence is a snap– you can simply set up a local company to qualify.
Pitfalls: Singapore does have mandatory national service, and it’s important to review the rules to find out whether you would fall within the window.
2) BRAZIL. There are two great things about Brazil. One, they refuse to extradite their citizens to answer for foreign crimes. It just doesn’t happen. Two, ANYONE can be Brazilian, whatever their ethnicity– black, white, brown, it doesn’t matter. Brazil is a huge melting pot. We are all Brazilian.
Brazil is the KING of ‘flexible’ citizenship options– getting married, adopting a child, hell even adopting a rain forest in some cases. And it can happen in as little as six-months to three years. Just don’t expect the process to be crystal clear.
3) ISRAEL. Speaking of flexible, if you’re willing to become Jewish, the State of Israel’s Right of Return entitles you to citizenship. Make no mistake, though, it’s not just going through the motions– you have to work with local religious leaders and actually make the conversion before they’re willing to go through the process.
Pitfalls: The downside of Israeli citizenship should be clear as military service is compulsory.
4) BELGIUM. At its core, Belgium’s naturalization laws allow foreigners who have maintained residence in the country for three years to apply for citizenship. “Residence” can either be in Belgium, or even abroad so long as you can demonstrate ties to Belgium, i.e. family, friends, employment, property ownership, paying taxes, etc.
Aside from being an incredibly valuable travel document, Belgian naturalization also passes to all minor children– in other words, if you become a naturalized Belgian, your kids do too.
Simon Black has more details here.
Assassination Plot Against Putin?
They are much more skeptical in Russia. Reuters reports:
Russian and Ukrainian security services have foiled a plot to assassinate Vladimir Putin after next week's presidential election, Ukraine's SBU counter-intelligence agency said on Monday.
Russian pro-government Channel One television said Ukrainian special services in the Black Sea port of Odessa had held two men linked to a group seeking an Islamist state in Russia's North Caucasus.
"I can officially confirm that they were preparing an (assassination) attempt on Putin," said Marina Ostapenko, a spokeswoman for the SBU.
Ostapenko said two men were under arrest. One was seized in Odessa after being wounded in an explosion at an apartment in the city on January 4 which also killed another alleged plotter.
The second man, who was on the international wanted list, was arrested a month later after initially escaping, she said.
"We found him in an apartment and detained him without a single shot being fired on February 4," she said.
Some Russians reacted with skepticism, making clear on social network sites that they did not believe the report or suggesting the timing of the announcement was intended to attract sympathy for Putin before the March 4 election.
Airlines Raise Fares Again; Hotels Rates Soar
Reports Lati:
For the third time this year, several of the nation's major airlines raised airfares last week, with United and Continental airlines initiating a $4 to $10 increase in round-trip ticket prices.Also from LaTi:
Virgin America, Delta Air Lines, US Airways and American Airlines have matched the increase, but JetBlue Airways and the nation's largest domestic passenger carrier, Southwest Airlines, have yet to follow.
The average hotel room rate in North America climbed 7% in January.It is not clear if Paul Krugman still thinks deflation is the biggest threat.
Putin, Krugman and Michael Milken on Stage Together
This is a strange one. FT's Gideon Rachman reports:
It's also important to note that Ludwig von Mises destroyed the overproduction theory decades ago, before Putin or Krugman were even born.
Vladimir Putin’s public appearances are always interestingly theatrical. His performance yesterday at the Russia Forum, here in Moscow, was characteristically peculiar. At times, Putin was all swagger. At other times, he seemed rather uncertain. At one agonising point, he lost his place in his notes. I was told later that this only lasted for ten seconds. It felt like ten minutes.OMG, Rachman doesn't give us enough detail, so it's not clear how Krugman countered Putin's overproduction theory. But as Henry Hazlitt reminds us:
What was most interesting, however, was his interaction with the foreign visitors, who had the dubious privilege of sharing the stage with him. (I was in the audience.) Putin was clearly keen to show off his intellect. He argued at length that the world’s economic problems were a crisis of over-production. This sounded to me like re-heated Leninism. Paul Krugman, the Princeton economics professor, sharing the stage with him, fairly politely refuted the “over-production” argument – which I’m not sure you are meant to do, when the Tsar is outlining how the world works.
But the best example of foreigners not knowing how to behave, came when it was Michael Milken’s turn to speak. (It was a fairly bizarre panel.) Milken came equipped with a Powerpoint presentation, and by God he was determined to plough his way through his slides. Under normal circumstances, I think I would have found Milken’s charts mildly interesting. There was a good one on the relative rankings of world universities. (Cambridge and Oxford at two and three.)
But this was not a regular business conference. So the main question in my mind – watching Milken’s single-minded trudge through his Powerpoint (which went on for at least 20 minutes, maybe half an hour) – was how long is Putin going to sit still for? Would he get up and walk out? Or interrupt? After all, the main purpose of the event – as far as I could see – was to focus attention on the commanding presence of the former and future president. Not for him to sit through an interesting lecture by a former junk-bond king and jailbird – turned philanthropist.
In the event, Putin sat the whole way through – and engaged in some light banter with both Milken and the audience, afterwards. But it was a peculiar and tense moment.
Keynes's "greatest achievement," according to his admirers, was his famous "refutation" of Say's law of markets... Say's law was merely the denial of the possibility of a general overproduction of all goods and services.Thus with this mad crew on stage, you have Keynesian Krugman attacking a key Keynesian tenet behind general economic downturns brought to the front by Putin.
It's also important to note that Ludwig von Mises destroyed the overproduction theory decades ago, before Putin or Krugman were even born.
Sunday, February 26, 2012
The Richest Zip Codes in the United States
Of 29,000 zip codes examined by the Internal Revenue Service, only three had an average yearly income of one million dollars or more, based on recently released data from 2008. But the average income per year for all of the top ten richest zip codes exceeds $700,000, according to IRS data, reports HuffPo.
Three of the wealthiest five zip codes are located in New York City. Among its residents, Manhattan has 7,270 people worth $30 million or more.
1. Lower Manhattan 10274
2. 30 Rockefeller Plaza 10112
3. Fisher Island, FL 33109
4. 45 Rockefeller Plaza 10111
5. Oklahoma City, OK 73154
6. Downtown Chicago 60604
7. Atherton, CA 94027
8. Century City Los Angeles 90067
9. New Vernon, NJ 07976
10. Grand Central Station, NY 10168
The top zip code, 10272, begins only blocks from the New York Federal Reserve Bank. (Just coincidence, I'm sure.)
Number 2 and 4 zip codes, different parts of Rockefeller Center, are, of course, home to Rockefeller Family money management and where former Fed chairman Paul Volcker maintains an office. (More coincidence, I'm sure.)
Three of the wealthiest five zip codes are located in New York City. Among its residents, Manhattan has 7,270 people worth $30 million or more.
1. Lower Manhattan 10274
2. 30 Rockefeller Plaza 10112
3. Fisher Island, FL 33109
4. 45 Rockefeller Plaza 10111
5. Oklahoma City, OK 73154
6. Downtown Chicago 60604
7. Atherton, CA 94027
8. Century City Los Angeles 90067
9. New Vernon, NJ 07976
10. Grand Central Station, NY 10168
The top zip code, 10272, begins only blocks from the New York Federal Reserve Bank. (Just coincidence, I'm sure.)
Number 2 and 4 zip codes, different parts of Rockefeller Center, are, of course, home to Rockefeller Family money management and where former Fed chairman Paul Volcker maintains an office. (More coincidence, I'm sure.)
Blast Injures U.S. Soldiers as Riots Rage in Afghanistan
It appears there is no safe place for U.S. soldiers in Afghanistan. NYT reports:
A grenade thrown by Afghan protesters wounded at least six American service members in northern Afghanistan on Sunday, officials said...
The injuries to American service members on Sunday were inflicted after protesters threw a grenade at a camp in the northern city of Kunduz, where the American military has a mentoring program with the Afghan national police., said Mohammed Ayob Haqyar, the district chief of Imam Sahib District where the base is located.
Exposed: Romney is a Closet Keynesian
None other than major league Keynesian Paul Krugman exposes Mitt Romney for the Keynesian he is.
Krugman writes:
Krugman writes:
According to Michael Kinsley, a gaffe is when a politician accidently tells the truth. That's certainly what happened to Mitt Romney on Tuesday, when in a rare moment of candor -- and, in his case, such moments are really, really rare -- he gave away the game.Krugman is clueless when it comes to correct economic theory, but he is spot on in identifying fellow Keynesians. There has never been more truth written about Romney.
Speaking in Michigan, Romney was asked about deficit reduction, and he absent-mindedly said something completely reasonable: "If you just cut, if all you're thinking about doing is cutting spending, as you cut spending you'll slow down the economy." A-ha. So he believes that cutting government spending hurts growth, other things equal.
...a Romney spokesman tried to walk back the remark, claiming, "The governor's point was that simply slashing the budget, with no affirmative pro-growth policies, is insufficient to get the economy turned around."
But that's not what the candidate said, and it's very unlikely that it's what he meant. Almost surely, he is, in fact, a closet Keynesian...
we know who he turns to for economic advice; heading the list are Glenn Hubbard of Columbia University and N. Gregory Mankiw of Harvard. While both men are loyal Republican spear-carriers -- each served for a time as chairman of George W. Bush's Council of Economic Advisers -- both also have long track records as professional economists. And what these track records suggest is that neither of them believes any of the propositions that have become litmus tests for would-be GOP presidential candidates.
Consider Mankiw, in particular. Modern Republicans detest Keynes; Mankiw is the editor of a collection of papers titled "New Keynesian Economics." In an early edition of his best-selling textbook, he dismissed supply-side economics -- the doctrine embraced by the sainted Ronald Reagan -- as the creation of "charlatans and cranks." And, in 2009, he called for higher inflation as a solution to the economic crisis, a position anathema to Republicans like Rep. Paul Ryan, chairman of the House Budget Committee, who warn ominously about the evil of "debasing" our currency.
Given his advisers, then, it seems safe to assume that what Romney blurted out Tuesday reflected his real economic beliefs -- as opposed to the nonsense he pretends to believe, because it's what the Republican base wants to hear.
And therein lies the reason Romney acts the way he does, why he is running a campaign of almost pathological dishonesty...
As I see it, it comes down to the cynicism underlying the whole enterprise. Once you've decided to hide your beliefs and say whatever you think will get you the nomination, to pretend to agree with people you privately believe are fools, why worry at all about truth?
What this diagnosis implies, of course, is that the many people on the right who don't trust Romney, who don't believe that he's truly committed to their political faith, are correct in their suspicions. He's playing a role, and it's anyone's guess what lies beneath the mask...
The truth is that Mr. Romney is so deeply committed to insincerity that neither side can trust him to do what it considers to be the right thing.
Citi Banksters Abandoning Obama
The uneasy alliance between President Obama and the banksters is ripping big time at Citigroup.
A key Citigroup player is aggressively hustling his fellow Citi employees to contribute to the Mitt Romney campaign. This is a major turn at Citi. Former-OMB director under Obama has hung his hat at Citi and Citi has always been Obama country. But, most see Orszag as a lightweight opportunist and some say he couldn't influence a cleaning lady to turn off the vacuum cleaner.
Watch Romney's upcoming contribution reports for the Citi deluge/
A key Citigroup player is aggressively hustling his fellow Citi employees to contribute to the Mitt Romney campaign. This is a major turn at Citi. Former-OMB director under Obama has hung his hat at Citi and Citi has always been Obama country. But, most see Orszag as a lightweight opportunist and some say he couldn't influence a cleaning lady to turn off the vacuum cleaner.
Watch Romney's upcoming contribution reports for the Citi deluge/
Your Email Account Has Been Deactivated
Sovereign Man writes:
More from Sovereign Man here.
Imagine waking up one day only to find out that your email account has been deactivated and the contents seized by some alphabet soup government organization.
That's exactly what happened to one unsuspecting Gmail™ user not long ago.
At the order of a judge, Google® was required to deactivate the user's account and disclose certain private details to the court
Did the Gmail™ user break a law or perhaps violate Google's Terms of Service?
No.
In fact, the user did absolutely nothing wrong according to all parties involved.
The electronic police state is alive and well. And if you're truly determined to live a multiple flag lifestyle, then planting a technology flag is a must in order to diversify your sovereign risk.
Is your current technology setup putting you at risk? You can figure that out pretty quickly...
Just ask yourself, "Is the company that provides my email service and/or website service based in the same jurisdiction where I live, work and hold citizenship?"
If your answer is "Yes," then you are at risk.
More from Sovereign Man here.
Saturday, February 25, 2012
Gasoline Prices Climb for 18th Day in a Row
The price of unleaded gasoline inched higher again overnight, rising 2.7 cents to a nationwide average of $3.67 a gallon on Saturday, according to the motorist group AAA. That's almost a 30-cent increase from a month ago when the nationwide average was $3.38 a gallon.
Average prices for regular gasoline are more than $4 a gallon in California, Alaska and Hawaii, and are just shy of the $4 mark in New York, Connecticut, and Washington, D.C., according to AAA. The lowest average gas prices are in Wyoming, Colorado and Utah, where a gallon is going for less than $3.20.
This is only the beginning. There are very specific reasons that oil and gasoline lead other prices higher. Given the amount of money printing that is being conducted by the Federal Reserve, prices across the board will climb much higher.
This is another economic event that has been missed by Paul Krugman, Ben Bernanke and other Keynesians. They missed the bust, they missed the manipulated boom and they are going to really get smacked hard by the coming price inflation. Bottom line: Their economic models are trash.
Average prices for regular gasoline are more than $4 a gallon in California, Alaska and Hawaii, and are just shy of the $4 mark in New York, Connecticut, and Washington, D.C., according to AAA. The lowest average gas prices are in Wyoming, Colorado and Utah, where a gallon is going for less than $3.20.
This is only the beginning. There are very specific reasons that oil and gasoline lead other prices higher. Given the amount of money printing that is being conducted by the Federal Reserve, prices across the board will climb much higher.
This is another economic event that has been missed by Paul Krugman, Ben Bernanke and other Keynesians. They missed the bust, they missed the manipulated boom and they are going to really get smacked hard by the coming price inflation. Bottom line: Their economic models are trash.
Are You a Young Failure?
Are you young, but have not yet founded your multi-billion dollar business? It turns out you may not be a failure, just yet. Economist magazine reports:
The world is swamped with unemployed college graduates. If there are no great entrepreneurs where you live, then move.
Great entrepreneurship requires experiences so that you see more and more. It's the only way to spot entrepreneurial opportunities. You are not going to find these in your room, moping and cursing a world that sucks.
The world is pretty tough these days, but if you are clever and curious you can still carve out an amazing life. Just get off your butt and get experiences. The more the better. Work for one entrepreneur, quit after a year and work for another. Keep doing that until you find an entrepreneurial opportunity that you see for yourself that you can execute.
It is time to do for enterprise what such ageing rockers have done for pop music: explode the myth that it is a monopoly of the young. This idea has been powerfully reinforced by the latest tech boom: Facebook, Google and Groupon were all founded by people in their 20s or teens. Mark Zuckerberg, aged 27, will soon be able to count his years on earth in billions of dollars. But the trend is not confined to tech: Michael Reger was a founder of one of America’s most innovative energy companies, Northern Oil and Gas, aged 30.It is more difficult than ever to start a business in many sectors because of growing regulation. Further, education sucks the entrepreneurial instincts out of most youth. The youth I talk to tend to have no idea as to what it means to be an entrepreneur. The only way to get those instincts back is to get a job with an entrepreneur. It's better getting a job sweeping the floors of a firm run by a great entrepreneur than to pursue a college degree, these days.
The rise of the infant entrepreneur is producing a rash of ageism, particularly among venture capitalists. Why finance a 40-year-old (with a family and mortgage) when you can back a 20-year-old who will work around the clock for peanuts and might be the next Mr Zuckerberg? But it is not hard to think of counter-examples: Mark Pincus was 41 when he founded Zynga and Arianna Huffington was 54 when she created the Huffington Post.
Research suggests that age may in fact be an advantage for entrepreneurs. Vivek Wadhwa of Singularity University in California studied more than 500 American high-tech and engineering companies with more than $1m in sales. He discovered that the average age of the founders of successful American technology businesses (ie, ones with real revenues) is 39. There were twice as many successful founders over 50 as under 25, and twice as many over 60 as under 20. Dane Stangler of the Kauffman Foundation studied American firms founded in 1996-2007. He found the highest rate of entrepreneurial activity among people aged between 55 and 64—and the lowest rate among the Google generation of 20- to 34-year-olds. The Kauffman Foundation’s most recent study of start-ups discovered that people aged 55 to 64 accounted for nearly 23% of new entrepreneurs in 2010, compared with under 15% in 1996.
Experience continues to count for a great deal, in business as in other walks of life—or, to borrow a phrase from P.J. O’Rourke, age and guile can still beat “youth, innocence and a bad haircut”. It is one thing to invent a clever new product but quite another to hire employees or build a sales machine. And even when it comes to breakthrough ideas, age may still be an asset. Benjamin Jones of Northwestern University’s Kellogg School of Management and Bruce Weinberg of Ohio State University examined the careers of Nobel prize-winners in chemistry, physics and medicine. They found that the average age at which these stars made their greatest innovations is now higher than it was a century ago. Mr Wadhwa speculates that many of the most promising businesses in future will result from the mating of two subjects that each take years to understand—robotics and biology, say, or medicine and nanotechnology.
Experience may be nothing if it is not linked to mould-breaking creativity. But there are plenty of older people who are capable of breaking moulds. Ray Kroc was in his 50s when he began building the McDonald’s franchise system, and Colonel Harland Sanders was in his 60s when he started the Kentucky Fried Chicken chain. David Ogilvy worked as a chef and a spy before turning to advertising in his late 30s...
The world is swamped with unemployed college graduates. If there are no great entrepreneurs where you live, then move.
Great entrepreneurship requires experiences so that you see more and more. It's the only way to spot entrepreneurial opportunities. You are not going to find these in your room, moping and cursing a world that sucks.
The world is pretty tough these days, but if you are clever and curious you can still carve out an amazing life. Just get off your butt and get experiences. The more the better. Work for one entrepreneur, quit after a year and work for another. Keep doing that until you find an entrepreneurial opportunity that you see for yourself that you can execute.
The Coming Conflict between Those who Produce and Those who Take
The conflict is coming to America, as a result of too much taxation and too much giveaways. Pat Buchanan explains:
The family, cinder block of society, is disintegrating, and along with it, society itself. Writes [Robert] Rector, "The welfare system is more like a 'safety bog' than a safety net."
Heritage scholars William Beach and Patrick Tyrrell put Rector's numbers in perspective:
"Today ... 67.3 million Americans – from college students to retirees to welfare beneficiaries – depend on the federal government for housing, food, income, student aid or other assistance. ... The United States reached another milestone in 2010. For the first time in history, half the population pays no federal income taxes."
The 19th century statesman John C. Calhoun warned against allowing government to divide us into "tax-payers and tax-consumers." This, he said, "would give rise to two parties and to violent conflicts and struggles between them, to obtain the control of the government."
We are there, Mr. Calhoun, we are there
Green on Blue Attack: 2 Americans Killed as Afghan Unrest Enters Fifth Day
NYT reports:
Two American officers were shot dead inside the Interior Ministry building here on Saturday, and NATO responded by immediately pulling all advisers out of Afghan ministries, in a deepening of the crisis over the American military’s burning of Korans at a NATO army base...Although there was no official statement that the shooter was an Afghan, in an e-mail sent to Western officials here from NATO headquarters the incident was described as “green on blue,” which is the military term used here when Afghan security forces turn their weapons on their Western military allies...
The official cautioned that no one was "panicking," but that the initial reaction to the growing hostility from Afghans was to convince more officials that the pace of the American drawdown needed to be hastened, and that sooner the mission was transitioned to one of training and counter-terrorism, the better.
“You look at this as clearly and objectively as you can, what you see is that we’re in a weaker position than we were maybe two or three or four weeks ago,” said the official, who asked not to be identified because he was discussing internal deliberations. “I’m not sure anyone knows the clear way forward. It’s gotten more and more complicated. It’s fraught.”It appears the Afghans have finally had it.
A Completely Dumb Attack on Gold From Warren Buffett
Warren Buffett is out with his annual letter to shareholders of Berkshire Hathaway. He continues his attack on gold. This attack is as dumb and clueless as any I have seen from an oligarch. He writes:
Doug French has explained the period of the tulip bubble:
Tulips, as we all understand now, was not a very wise choice. But what makes it a quite unique episode in monetary history is that it was a period when gold was the rapidly expanding money. In otherwords, people will always attempt to flee a rapidly growing currency regardless of what it is. Buffett doesn't seem to understand this. A flight from a currency into an alternative is not necessarily an "investment choice" it can be an attempt to protect purchasing power during a period of a rapidly expanding money supply, rather than an "investment".
This is why Buffett's choice of tulipmania is such a bizarre choice. Tulip investments during the mania can better be described as a flight into an investment similar to the housing bubble--an attempt to hedge against a depreciating currency by investment, rather than a move into an alternative money.
It is incorrect to say, as Bufffett does, that:
Buffett goes on:
What is going on here is that Buffett doesn't understand Ludwig von Mises' great insight that he called the "regression theorem", all money traced back starts off with use value outside of it being a money.
As Percy Greaves wrote:
Then Buffett goes way off, he writes:
Gold purchasers are not for the most part buying because they expect others to do so, but because they see the Federal Reserve printing more and more money, which means the price of gold will climb in terms of the depreciating dollar. It's absurd for Buffett to argue that a gold "investment" is about expecting others to start buying gold (though this is likely to occur). Gold is bought and held based on Bernanke doing exactly what he has been doing---printing more money.
Buffett goes on:
The second major category of investments involves assets that will never produce anything, but that are purchased in the buyer’s hope that someone else – who also knows that the assets will be forever unproductive – will pay more for them in the future. Tulips, of all things, briefly became a favorite of such buyers in the 17th century.To compare gold to the tulip bubble is simply bizarre.
This type of investment requires an expanding pool of buyers, who, in turn, are enticed because they believe the buying pool will expand still further. Owners are not inspired by what the asset itself can produce – it will remain lifeless forever – but rather by the belief that others will desire it even more avidly in the future.
Doug French has explained the period of the tulip bubble:
As kings throughout Europe debased their currencies, through clipping, sweating or by decree, the Dutch provided a sound money policy, which called for money to be backed one hundred per cent by specie. This policy, combined with the occasional seizure of bullion and coin from Spanish ships on the high seas, served to attract coin and bullion from throughout the world.
The end result was a large increase in the supply of coin and bullion in 1630s Amsterdam. Free coinage laws then served to create more money from this increased supply of coin and bullion, than what the market demanded. This acute increase in the supply of money served to foster an atmosphere that was ripe for speculation and malinvestment, which manifested itself in the intense trading of tulips.It was an influx of gold that caused the tulipmania. When a money, any money, expands rapidly the accompanying price inflation causes not only investors but everyone to seek alternatives to the depreciating value of the expanding money.
Tulips, as we all understand now, was not a very wise choice. But what makes it a quite unique episode in monetary history is that it was a period when gold was the rapidly expanding money. In otherwords, people will always attempt to flee a rapidly growing currency regardless of what it is. Buffett doesn't seem to understand this. A flight from a currency into an alternative is not necessarily an "investment choice" it can be an attempt to protect purchasing power during a period of a rapidly expanding money supply, rather than an "investment".
This is why Buffett's choice of tulipmania is such a bizarre choice. Tulip investments during the mania can better be described as a flight into an investment similar to the housing bubble--an attempt to hedge against a depreciating currency by investment, rather than a move into an alternative money.
It is incorrect to say, as Bufffett does, that:
This type of investment requires an expanding pool of buyers, who, in turn, are enticed because they believe the buying pool will expand still further.What is required is an expanding money supply. When the money supply stops expanding, prices in whatever, tulips or housing, stop climbing. When the gold expansion stopped in Amsterdam, tulip prices stopped climbing. When Bernanke, for a brief period, stopped printing money, housing prices collapsed. Thus, it is also incorrect for Buffet to say:
Owners are not inspired by what the asset itself can produce – it will remain lifeless forever – but rather by the belief that others will desire it even more avidly in the future.The recent housing mania certainly can not be described as a "lifeless forever" product.
Buffett goes on:
The major asset in this category is gold, currently a huge favorite of investors who fear almost all other assets, especially paper money (of whose value, as noted, they are right to be fearful). Gold, however, has two significant shortcomings, being neither of much use nor procreative. True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end.Buffett here is using a variation of the "you can't eat gold" attack on gold. He says it has limited industrial and decorative utility. The first problem with this argument is that Buffett clearly doesn't understand how prices distribute product in an economy. There are lots of things I would like to have decorated in gold: my pen, the surface of my lap top, hell, I liked to drive through a Lincoln Tunnel that was paved in gold, I'd love for my toilet to be made of gold. The reason that these uses aren't occurring is not as Buffett would have you believe that there is limited demand for industrial and decorative utility. It is because gold has stronger demand as an alternative medium of exchange.
What is going on here is that Buffett doesn't understand Ludwig von Mises' great insight that he called the "regression theorem", all money traced back starts off with use value outside of it being a money.
As Percy Greaves wrote:
Mises explains the origin of the objective-use value of money by tracing it back step by step from the point at which it is being valued to the point where the monetary good served only non-monetary uses, an essential point preceding the first use of anything as money.
Then Buffett goes way off, he writes:
What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis.
Gold purchasers are not for the most part buying because they expect others to do so, but because they see the Federal Reserve printing more and more money, which means the price of gold will climb in terms of the depreciating dollar. It's absurd for Buffett to argue that a gold "investment" is about expecting others to start buying gold (though this is likely to occur). Gold is bought and held based on Bernanke doing exactly what he has been doing---printing more money.
Buffett goes on:
As “bandwagon” investors join any party, they create their own truth – for a while.Hah! As Bernanke prints and prints, he creates the truth: Gold is a superior money to central bank managed money.
Friday, February 24, 2012
The Key Thing Poor Countries Should Do
Peter Moore writes in the comments:
In the case of Hong Kong, it also had a Financial Secretary called Sir John Cowperthwaite, a colonial administrator of genius because he did hardly anything to get in the way of life. This from one of a number of educational obituaries about him which can be found online:
"Asked what the key thing poor countries should do, Cowperthwaite once remarked, "They should abolish the office of national statistics." He refused to collect all but the most superficial statistics, believing they led the state to fiddle about remedying perceived ills, thus hindering the working of the market. This caused consternation: a Whitehall delegation was sent to find out why employment statistics were not being collected, but the financial secretary literally sent them back on the next plane [...] He opposed giving special benefits to business; when a group of businessmen asked him to fund a tunnel across Hong Kong harbour, he argued that if it made economic sense, the private sector would pay for it (as indeed it did)."
In the case of Hong Kong, it also had a Financial Secretary called Sir John Cowperthwaite, a colonial administrator of genius because he did hardly anything to get in the way of life. This from one of a number of educational obituaries about him which can be found online:
"Asked what the key thing poor countries should do, Cowperthwaite once remarked, "They should abolish the office of national statistics." He refused to collect all but the most superficial statistics, believing they led the state to fiddle about remedying perceived ills, thus hindering the working of the market. This caused consternation: a Whitehall delegation was sent to find out why employment statistics were not being collected, but the financial secretary literally sent them back on the next plane [...] He opposed giving special benefits to business; when a group of businessmen asked him to fund a tunnel across Hong Kong harbour, he argued that if it made economic sense, the private sector would pay for it (as indeed it did)."
Jim Rogers has a Better Pick for President than Ron Paul
Asked who he would pick for President, of any person dead or alive, Jim Rogers said, Adam Smith. Boooo.
Which means Rogers likely hasn't read Murray Rothbard's take on Smith :
Adam Smith (1723–90) is a mystery in a puzzle wrapped in an enigma. The mystery is the enormous and unprecedented gap between Smith's exalted reputation and the reality of his dubious contribution to economic thought.
Smith's reputation almost blinds the sun. From shortly after his own day until very recently, he was thought to have created the science of economics virtually de novo. He was universally hailed as the Founding Father. Books on the history of economic thought, after a few well-deserved sneers at the mercantilists and a nod to the physiocrats, would invariably start with Smith as the creator of the discipline of economics. Any errors he made were understandably excused as the inevitable flaws of any great pioneer...
'Adam Smith ties' were worn as a badge of honour in the upper echelons of the Reagan Administration.
On the other hand, Marxists, with somewhat more justice, hail Smith as the ultimate inspiration of their own Founding Father, Karl Marx. Indeed, if the average person were asked to name two economists in history whom he has heard of, Smith and Marx would probably be the runaway winners of the poll.As we have already seen, Smith was scarcely the founder of economic science, a science which existed since the medieval scholastics and, in its modern form, since Richard Cantillon. But what the German economists used to call, in a narrower connection, Das AdamSmithProblem, is much more severe than that. For the problem is not simply that Smith was not the founder of economics.The problem is that he originated nothing that was true, and that whatever he originated was wrong; that, even in an age that had fewer citations or footnotes than our own, Adam Smith was a shameless plagiarist, acknowledging little or nothing and stealing large chunks, for example, from Cantillon. Far worse was Smith's complete failure to cite or acknowledge his beloved mentor Francis Hutcheson, from whom he derived most of his ideas as well as the organization of his economic and moral philosophy lectures. Smith indeed wrote in a private letter to the University of Glasgow of the 'never-to-be-forgotten Dr. Hutcheson,' but apparently amnesia conveniently struck Adam Smith when it came time to writing the Wealth of Nations for the general public.Even though an inveterate plagiarist, Smith had a Columbus complex, accusing close friends incorrectly of plagiarizing him. And even though a plagiarist, he plagiarized badly, adding new fallacies to the truths he lifted. In castigating Adam Smith for errors, therefore, we are not being anachronistic, absurdly punishing past thinkers for not being as wise as we who come later. For Smith not only contributed nothing of value to economic thought; his economics was a grave deterioration from his predecessors: from Cantillon, from Turgot, from his teacher Hutcheson, from the Spanish scholastics, even oddly enough from his own previous works, such as the Lectures on Jurisprudence (unpublished, 1762–63, 1766) and the Theory of Moral Sentiments (1759)....
Into this complacent miasma of Smith-worship, Joseph A. Schumpeter's History of Economic Analysis (1954) came as a veritable blockbuster. Coming from the continental Walrasian and Austrian traditions rather than from British classicism, Schumpeter was able, for virtually the first time, to cast a cold and realistic eye upon the celebrated Scot. Writing with thinly veiled contempt, Schumpeter generally denigrated Smith's contribution, and essentially held that Smith had shunted economics off on a wrong road, a road unfortunately different from that of his continental forbears
Is Smith a guy we really want for president?
As for my choice for president from the universe of those dead and alive, it would be Ron Paul, but I do not make this choice lightly. I have a second choice.
I once asked Lew Rockwell what people didn't know about Ron Paul. He thought for a minute and then confidently said that they don't know how good a politician Dr. Paul is. Since then I have watched Dr. Paul from a "political view" and I have to say from the way he has been accumulating delegates to other moves he has made, he is indeed one very shrewd politician. I think he has moves thought out for the future that no one in the Republican political establishment has thought out, and that's what probably really scares the establishment.
Anyone who would want to be president and put the United States back on the track of liberty would have to have a very strong personality, the pressure on such a man to do otherwise would be enormous, and such a person would have to be politically shrewd person to know just how to advance liberty and take apart the state. Ron Paul has those traits. The only competition I think he would have from all political leaders, dead or alive, would be from Ludwig Erhard.
Erhard was a German politician and Chancellor of West Germany from 1963 until 1966. He is notable for his leading role in German postwar economic reform and "Wirtschaftswunder" (German for "economic miracle").
Richard Ebeling explains what happened while Earhard was economics minister of the American zone of the then divided postwar Germany:
A small band of German free-market advocates had survived the war. A leading figure in this group was Walter Eucken, who was a professor at the University of Freiberg. While restricted in what they could say publicly under the Nazi regime, Eucken and his colleagues had maintained a network among themselves with the goal of sharing ideas for establishing a market-oriented economy in the post-Hitler era that they all impatiently awaited. While intellectually isolated from other free-market economists outside Germany, they remained inspired in their thinking by classical liberals like Ludwig von Mises and Wilhelm Röpke, whose writings they read and clandestinely shared.As Ebeling goes on to say, Erhard was not a full free market advocate. He believed in a "social market economy," which Ebeling correctly notes planted "the seeds of new forms of government control and corruption", but Erhard's first move of disbanding the price controls was a very important free market step. It's one of the very few real world examples of rolling back parts of the state.
One of Eucken’s protégés was an economist named Ludwig Erhard. He was appointed economics minister in the American zone in Bavaria in 1946. For two years he used this position as a platform to advocate market reforms. In radio broadcasts he frequently exhorted the German people to accept that they had brought their current tragic circumstances on themselves and only hard work, savings, and self-responsibility could restore their prosperity and gain them a new place among the civilized nations of the world.
In 1948 the British and American zones were combined into one administrative unit, with Erhard as director of economics. In June he instituted a major currency reform to restore monetary stability and to end the inflationary after-effects from the Nazi period. Not only was a new currency put in place, but it was done through a process of reducing the money supply. In June 1948 Germans in the Western zone could exchange ten of the old marks for one new mark.
Shortly after this, Erhard introduced the other essential element of any successful economic-reform project: abolition of the price and production controls. On a Sunday, while all the Allied occupation authorities were out of their offices, Erhard announced on the radio that the next morning virtually all price controls would be abolished. General Lucius Clay, commander of American forces in Germany, called Erhard into his office and said, “Herr Erhard, my advisers tell me you’re making a terrible mistake.” Erhard replied, “Don’t listen to them, General. My advisers tell me the same thing.”
Hoarded goods in short supply suddenly came out of their hiding places now that they could be sold at market-based prices. In the second half of 1948 industrial production increased 46 percent from its June level. And a year later, at the end of 1949, that production was 81 percent above what it had been when the reforms had been implemented in the middle of 1948. After an initial spike in prices when the controls were abolished, by the end of 1950 the greater industrial and agricultural output that was offered on a more open market significantly reduced the cost of living. Germany’s economic-recovery path assured that well into the 1960s its rate of growth in output and productivity would place it far ahead of virtually all the other countries of western Europe, including those, like Great Britain, that had been victors in the war.
Ron Paul understands free markets better than Erhard and is as good a teacher, if not better than Erhard. Dr. Paul certainly has the backbone to stick to his principles against pressure, just as Erhard had the ability to stand up to General Clay. With Erhard being able to create a German economic miracle, with a limited acceptance of free markets, one wonders what would have happened in Germany, if Erhard held the full free market views of Ron Paul, and one wonders what type of United States economic miracle would occur if after the decades of shackles put on the economy, the shackles would be removed one by one by a Ron Paul administration.
No need for a confused Adam Smith to run the country, we have the opportunity for the real thing right in front of us in a candidate running right now, Ron Paul. I can't think of a better qualified person in history
CFR Analyst: Protests Over Koran Burning May Spread Beyond Afghanistan
The American embassy in Kabul, Afghanistan is on lockdown as protests rage in multiple Afghan cities over an incident the U.S. says was inadvertent burning of the Koran at a U.S. military base in Afghan.
"The Embassy is on lockdown; all travel suspended," the embassy announced earlier this week on its Twitter page. "Please, everyone, be safe out there."
The protests sweeping Afghanistan could spread beyond Afghanistan into other Muslim and Arab countries, says CFR's Senior Fellow for Middle Eastern Studies Ed Husain.
"The Embassy is on lockdown; all travel suspended," the embassy announced earlier this week on its Twitter page. "Please, everyone, be safe out there."
The protests sweeping Afghanistan could spread beyond Afghanistan into other Muslim and Arab countries, says CFR's Senior Fellow for Middle Eastern Studies Ed Husain.
Forget the Orient, There are Fortunes to Possibly be Made in Sao Tome, Guinea Bissau, Guinea Conakry, Gambia or Benin
A fascinating discussion between Doug Casey and Louis James:
Doug: Lobo, you were in Africa – the Congo – last time we talked. How did that go?
L: I saw a lot of changes from my previous visit to the DRC in 2006. That brings up an interesting question, as we do invest in companies working in several African countries, and you've described the continent as "a perpetual basket case." What's your take on Africa today? Is it doomed to remain the heart of darkness, or could things be looking up at a last?
[Ed. Note: The reference here is to the Democratic Republic of the Congo (DRC), not the Republic of the Congo (ROC).]
Doug: I think it's very much an open question at this point, as to whether Africa has a dim or bright future. It's all about management, not resources. Africa has always had plenty of resources, but the worst management possible. Resources are actually a liability for most places. The classic examples of places not needing natural resources for success are Japan and Hong Kong. They have essentially zero natural resources, but became immensely prosperous because they had good property rights and predictable laws. On the other hand, you've got countries like Venezuela and Nigeria that have been blessed – or cursed, as the case may be – with great mineral wealth, but are absolute basket cases. And they'll stay that way until the governing philosophy changes.
Success of a society is totally a "people" thing – management. Without social systems that encourage prosperity – which is to say, encourage personal freedom – natural resources are counterproductive. They just become something for the strongest thugs to steal. Since the mineral rights in Africa all belong to the state, the best way to steal the diamonds, gold, oil, or whatever, is to get control of the government. Governments are obstacles to prosperity almost everywhere, but in Africa they are totally counterproductive. They're exclusively vehicles for theft and repression.
All across the continent, every regime – and I can't think of a single exception – became a hellhole after the colonial powers left. They exported nothing but minerals – the farms and plantations all went back to the bush – and imported nothing but crazy ideas and luxury goods for the rulers, mostly from Europe. Then, to compensate, Western governments have shoveled a trillion dollars of "aid" into the continent over the last 50 years. That was all money stolen from poor people in rich countries that ended up lining the pockets of rich people in poor countries. It cemented the poor Africans to the bottom of the barrel. Crucifixion is too good for people who promote foreign aid.
I attribute almost all of Africa's disastrous problems to colonialism. If Europeans came there as traders, it would have been beneficial to everyone. But they came as conquerors, destroyed the existing native cultures, engaged in horrendous wholesale slaughters – the Congo being perhaps the worst example – and imposed alien religions and political systems on the natives.
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