Thursday, May 31, 2012

Hoppe: As a Rule Intellectuals are Worthless Gasbags and Smartasses

Hans Herman Hoppe is out with a new book, Der Wettbewerb der Gauner (“The Competition of Crooks”.

As part of the promotion of the book, Hoppe agreed to be interviewed by Andreas Marquart, misesinfo. Robert Groezinger has produced a English translation of the interview from the original German. Hoppe lets it rip. Here's a few excerpts:

...we’ll probably have to experience national bankruptcy spreading through Portugal, Spain, Italy and ultimately on to Germany. Only then, I fear, will it become clear to everyone what many people already suspect now: that the EU is nothing but a gigantic machinery of income and wealth redistribution, from Germany and the Netherlands to Greece, Spain, Portugal, and so on. But that’s not all. It will also become clear that the same insanity, the same mess, exists even within each individual country: redistribution from Bavaria and Baden-Württemberg to Bremen and Berlin, from Little Town A to Little Village B, from one company or industry to another, from Smith to Jones and so on – and always following the same perverse pattern: redistribution from the more productive countries, regions, places, companies and individuals to those that are less productive or not productive at all. Bankruptcy will bring all of this to light in a dramatic fashion.

And perhaps then, finally, will come the realization that democracy – in whose name all these dirty tricks have been done – is nothing more than an especially insidious form of communism, and that the politicians who have wrought this immoral and economic madness and who have thereby enriched themselves personally (never, of course, being liable for the damages they have caused!), are nothing more than a despicable bunch of communist crooks.
---
The number of productive people is constantly decreasing, and the number of people parasitically consuming the income and wealth of this dwindling number of productive people is increasing steadily. This can’t work in the long run.

That the whole democratic house of cards has not yet completely collapsed speaks volumes about the still tremendous creative power of capitalism, even in the face of ever-increasing governmental strangulation. And this fact also allows us to conjecture about what economic ‘miracles’ would be possible if we had unimpeded capitalism liberated from such parasitism.
---

...my comments were intended to systematically encourage John Doe. To tell him, and this is coming from an intellectual, an insider so to speak, that his popular prejudice against intellectuals – that as a rule they are worthless gasbags and smartasses – is quite right. That there are far too many intellectuals, because the state pays for and subsidises them via taxes taken from rest of us. That this colors and distorts the object and result of their thinking – towards statism. That it is he, the average consumer, who has to pay for the whole wasteful nonsense, and that therefore he has every reason to cry out and be indignant.

---

I’m confident that John Doe is able to realize that these machinations, taking place every day on an almost unimaginable scale, are nothing more than a gigantic case of fraudulent theft.

But the truth is, we don’t hear anything about this fraud from our pretentious, unintelligible and arrogant so-called economic and financial experts on radio, television, and other mainstream media. This is either because they are being paid to consciously withhold or obscure the facts against their better judgment,; or because they were so dumbed down during their time at university, that they are in fact incapable of recognising even the simplest facts and relationships.

---

Read the full interview here.

A New Government Created Debt Bomb

US and European regulators are essentially forcing banks to buy up their own government's debt—a move that could end up making the debt crisis even worse, a Citigroup analysis says, reports Jeff Cox at NetNet.

Cox goes on:
Regulators are allowing banks to escape counting their country's debt against capital requirements and loosening other rules to create a steady market for government bonds, the study says.

While that helps governments issue more and more debt, the strategy could ultimately explode if the governments are unable to make the bond payments, leaving the banks with billions of toxic debt, says Citigroup strategist Hans Lorenzen.

"Captive bank demand can buy time and can help keep domestic yields low," Lorenzen wrote in an analysis for clients. "However, the distortions that build up over time can sow the seeds of an even bigger crisis, if the time bought isn't used very prudently."

"Specifically," Lorenzen adds, "having banks loaded up with domestic sovereign debt will only increase the domestic fallout if the sovereign ultimately reneges on its obligations."

The banks, though, are caught in a "great repression" trap from which they cannot escape.

"When subjected to the mix of carrot and stick by policymakers...then everything else equal, we believe banks will keep buying," Lorenzen said.
This, btw, is one of the problems that I pointed out exists with the Volcker rule, when I wrote:
Bottom line, what the Volcker Rule does is drive banking from the private sector and toward the government sector. Thus, this rule, rather than limiting credit, simply pushes banks to use funds to invest in and provide more liquidity for the government sector.

A Report from Inside the World's Next Super Boom Country: Mongolia

There are huge mineral deposits inside Mongolia and limited government (for now), which could result in the area being a huge opportunity for the super adventurous. David Pilling, Asia Editor for FT, recently spent some time in the country and sent out these tweets about Mongolia (and one tweet about Japan):
My Mongolian fact of the day. 20 years ago, Ulan Bator had 300 cars. Now: 300K (and traffic jams in every direction). Progress or what?
---

The FT prides itself on our scoops. But apparently this guy beat me to the Mongolia story pic.twitter.com/kbnOR1Zm

---

Our man in Japan (1 of 4) got inside Fukushima nuclear reactor No 4 and concluded it's not yet safe http://t.co/2yYBHbe3

---

To recap, I'm in Mongolia for 3-4 days. First visit. Here's a photo from 1 of new tower blocks spring up all over place http://t.co/L9W1BEv1

---

Mongolia sets yr head spinning. Growing 20% a yr (roughly) &likely to continue. GDP per capita $2,000 but cd soon become richest in world

---

Russian influence lingers. Pollster, discussing president's prospects for re-election, said: "I bet 3 cognacs to 1 he will". Why not vodka?

---

I need to eat. Been going since 6am so pretty tired. Food is excellent. I didn't expect since this is national dish http://t.co/Dw85HPcp

---

It's called boodog and here is a recipe for its preparation. I must try before I leave http://t.co/no7qIduH

http://www.mongolfood.info/en/recipes/boodog.html

---

Rare earths here, but more important coal, copper, gold, wind (massive amounts of all). This is the Qatar of Asia

---

3m people & at least $1tn of stuff in ground (and they haven't really started looking yet). You do the math

---

They're advertising London Olympics in downtown Ulan Bator. Is there an ad for Mongolian wrestling in Leicester Sq? http://t.co/X9YEpc6a

---

Right, need to go bed now. Have to get up at 6am tomorrow to prepare for interview with Mongolian president. Wish me luck

---

Morning. I'm up to do a bit of research for an interview in front of a live audience of Mongolia's President Elbegdorj.

---

I've read up abt President Elbegdorj. He studied at Leeds Uni where my dad taught when I was a kid. I'll ask if he's a Leeds FC fan

---

Back in hotel typing up transcript of interview with President Elbegdorj: "To describe democracy in one word: 'learning from your mistakes'"

---

What's in the closet? "Whether the dinosaur of corruption takes hold of Mongolian law, that is the question."

---

this was a picture of the president that I snapped during our interview http://t.co/AoZ4flTe

---

And this is the guy who used to run the show http://t.co/FXbcVqi8

---

Now got to write up presidential interview. Been going for nearly 13 hours, so flagging a bit. Will try to finish in 90 mins or so

---
Made it out to the Mongolian steppe this afternoon. Oh alright then this is a painting
http://t.co/WJMe5G8r

---

6.50am. Lots of shouting & brawling in hotel corridor last night. Pretty wrecked this morning - from disturbance not from shouting &brawling

---

My story on Mongolian president. It's invisible on website. If u didn't know it was there, u'd never find it ;-) http://t.co/eyltMQwF

---

7.20am Grabbing some breakfast. Then off to see "a western diplomat" for background chat. Blue skies outside. Slight chill in air

---

Btw, I passed this building on way back to hotel. Does anyone know if it's Tibetan-style architecture or something else http://t.co/EM5Q9xEl

---

5:48pm Finished my column> here's a teaser: Kuwait 1950. Abu Dhabi 1970. Qatar 1995. Mongolia 2012?

---

I have prospect of a couple of very intriguing interviews. Trying to secure now. One with Mongolian sumo wrestler I used to follow in Japan

---

6pm: Got to run. Meeting people from Oyu Tolgoi copper/gold mine for early dinner. Then one more interview, starting 8.30pm. Talk later

---

11:43pm If you're counting, entering 17th hour. Days long in Asia. Back from interviews. Now need to check column & talk to newsdesk

---

8.10am. This is my column: Steady, Mongolia is not yet the new Qatar http://tinyurl.com/buw3hh8

---

This one goes out to @memabeye. "In 2010, Mongolia’s togrog was the world’s best-performing currency."

---

21.55. Excuse the early sign off, but am off back to HK at 5am tomorrow. I'll leave you a few Mongolian thoughts before I sign off.

---

I didn't get to visit the ger districts, the tented areas that make up more than half of the population of Ulan Bator. That's a regret.

---

I talked to someone from the Zorig Foundation who works in the ger districts. He told me westerners have romantic views about ger life

---

On the steppe, a ger is great. You can put it up in 30 mins, it's cool in summer and warm (because you can burn animal dung) in winter

---

In Ulan Bator, the ger is "probably one of the worst places to live in the world". Its freezing (no animal dung to heat in -40 degrees)

---

There is no running water, no sanitation. Nor are ger dwellers educated to take advantage of new opportunities of mine-fuelled boom

---

So far says Zorig Foundation, "economic boom" has meant pollution, displacement, traffic jams - oh & an incredibly profitable Louis Vuitton

---

My first trip to Mongolia has amazed & enthralled as I hope my tweets convey. Talk next when I get to
HK

How New French Law Will Increase Unemployment among the Unskilled

The new Socialist French government has issued guidelines limiting CEO pay to 20 times that of the lowest paid worker.

So if I am a CEO, I start eliminating as many low paid employees as possible, and I certainly stop hiring them. For me, it becomes about mechanizing low paid work, and hiring only high paid workers.

If I have workers on the payroll earning the French equivalent of $10 an hour, I am getting them off the payroll pronto. And therein lies some of the wackiness of central planning, a new intervention needs to be created to "fix" the untended consequences of the first intervention.

James Altucher Lived with a Trotskyite

James writes:
When I was in college my roommate was a “Trotskyist” like many people in college often are. I’m not even sure what that means. I was working at least 50 hours a week at jobs and struggling to pay all my expenses while taking six courses a semester and 3 courses a summer so I could graduate early and with less debt. His dad was a wealthy doctor so he never sweated it. He was very focused on changing the world. He was upset about “labor” and how it was exploited. I would run into him in the cafeteria where he’d have two plates filled with meals for himself. And all he’d do all day was read about Marxism.

I haven’t heard from him since. But I doubt he changed the world.

The world is made up of individuals. We all suffer. We all go through bad relationships, difficult jobs, hard life experiences, loss, pain. In fact, that’s what most of life is.

But if you slowly work at incrementally improving yourself in the ways I described in an earlier answer then you will make life better for yourself. And as each person makes life better for themselves then incrementally the world becomes a better place to live. We treat with each other with more kindness, more honesty, less betrayal, more humility. If you learn to be fully present with each person you encounter, and when your presence becomes a beacon of light to others, then those people will be uplifted and the world will be a better place.

That is the only way the world will change for the better. No app will do that.
Be sure to check out James' views in his tweetfest, on Greece, on hitting rock bottom and his ideas for someone broke. They are all right here.

Wells Fargo Seizes Stockton, California City Hall

The Stockton City Council announced Wednesday that they will look at bankruptcy contingency plans after Wells Fargo seized the new city hall building.

The city paid $35 million to buy the 8-story building, but was not able to move in because of its money problems, and recently stopped making debt payments all together. This is the fourth building that was repossessed by Wells Fargo; the bank seized three city parking garages for the same reason.

Just wait to financial problems start to put a squeeze on state governments. California and Illinois are high up on the list. They might be able to scrape by for another year or two, but that's it.

(htJohnFrahm)

Ron Paul Is a Golden Multi-Millionaire

The Federal Election Commission today released the latest financial disclosure report for Ron Paul, nothing much has changed from previous filings.

The report shows that Congressman Paul is worth roughly between $2.1 million to nearly $5.2 million. How did he gain most of his wealth? By buying gold stocks when they were cheap. Aside from cash and some real estate, most of his holdings are in gold or silver mining stocks.

He has stakes in companies such as Barrick Gold Corp., Newmont Mining Corp., Pan American Silver Corp. and many more.

Where the Drones Are

Foreign Policy reports:
Obama's policy of killing by remote control is by no means new. Over the last decade, America's overseas use of drones has expanded exponentially in scope, location, and frequency. Beyond their use across the battlefields of Afghanistan, Libya, and Iraq, U.S. drones have been used to target suspected militants and terrorists in Pakistan, Yemen, and Somalia, as well as to conduct surveillance missions over Colombia, Haiti, Iran, Mexico, North Korea, the Philippines, Turkey, and beyond.

Obama Holds Video Conference with European Leaders

President Obama is putting increasing pressure on European officials to resolve the euro crisis. Yesterday in a video conference he talked with the leaders of Germany, France and Italy to help lay the groundwork for action before a Group of 20 summit meeting to be held in June in Mexico, reports Bloomberg.

The ECB money printing and a more central planned eurozone that crony global multi-national firms will love will be launched soon to "save' the EZ from crisis.

Wednesday, May 30, 2012

FLASHBACK: When Obama Ditched the Press in 2008 to Attend a Bilderberg Meeting

Here's a hilarious clip of Robert Gibbs, Obama’s then-press secretary, trying to placate a furious press corp, who found themselves tricked aboard a flight to Chicago, as Obama snuck off to a meeting with the Bilderberg Group.



(htSluggerOtoole)

President of the European Council to Attend Bilderberg Meeting

Infowars.com has the info:
President of the European Council Herman Van Rompuy will join fellow elitists at the 2012 Bilderberg conference this week to discuss the collapsing euro and how the Greek debt crisis threatens to unravel the quest for a European federal superstate.

According to veteran Bilderberg sleuth Jim Tucker, Van Rompuy will be joined by former president of the European Central Bank Jean-Claude Trichet to wargame with other Bilderberg members on how to handle a potential Greek exit from the single currency system.

Van Rompuy’s presence at Bilderberg is particularly noteworthy given the fact that the Belgian attended a dinner organized by the Bilderberg Group in Brussels where he met with top Bilderberg steering committee members just days before he was announced as EU president back in 2009.

Van Rompuy held discussions with Bilderberg chairman Étienne Davignon, who earlier the same year had bragged to the EU Observer about how the Euro single currency was a brainchild of the Bilderberg Group. Van Rompuy also had a meeting with lifelong Bilderberg member Henry Kissinger.

Both Trichet and Van Rompuy have been staunch advocates of the single currency, in line with other Bilderberg members who, as we have highlighted, are desperate to prevent a Greek exit.

They Wouldn't Dare, Would They?

Jesse Livermore reminds:
Greece has a printing press, literally. They have machines to print euros, as ECB outsources that task to the countries.

A Busy Period for the Global Plotters

Not only is there a Bilderberg meeting this weekend in Virginia, but Banque Privée Edmond de Rothschild Europe is throwing an institutional get together in Bratislava, Slovakia this June.

From the conference web site:
Banque Privée Edmond de Rothschild Europe is looking forward to welcoming you to its14th Annual Institutional Seminar in Bratislava. This year's conference theme The Future is Emerging will enable us to listen to the latest insights from our expert speakers on where future growth opportunities lie and how to best take advantage of them. Emerging countries will lead the way ...
Our dedicated online conference portal will provide you with all relevant information on our two days seminar. For the second time, for some of our guests not able to attend the conference, they will be able to follow our speakers' interventions live as we will be streamlining the entire seminar over broadband internet. After the conference all presentations will be made readily available over our dedicated online platform. 
We look forward to sharing with you two interesting days of professional and expert exposés. Our numerous networking opportunities will provide you with the opportunity to meet old friends as well as making new acquaintances.

A Gary Johnson Hate the Fed Ad

A pretty awesome ad, though I was a little confused when the text mentioned a dollar, and a stack of twenties was shown, followed by a stack of fifties. Overall though, pretty powerful.




(ViaLewRockwell)

Answered: Who Works Hardest in the Eurozone

A new poll from the Pew Global Attitudes Project offers some interesting insight into how eurozone members view each other and themselves.

Everyone thinks that Germans are the most hardworking and Greeks the laziest. Everyone, except the Greeks, who think of themselves as the hardest working and the Germans as the laziest.

Also fascinating is that after a slew of votes for Italy, the Greeks, Poles, Czech and Spanish sees their countries as most corrupt.

Here's a chart of the voting results, created by Derek Thompson at Atlantic:


How the Federal Reserve Manipulates Interest Rates and the Money Supply

My post on the eurozone crisis and Ben Bernanke targeting of the Fed Funds rate has resulted in a number commenters asking for specifics on how it's all done. Below is a quick explanation, for a more detailed explanation I recommend Murray Rothbard's book, The Mystery of Banking.

The Federal Reserve manipulates interest rates, generally, by buying and selling Treasury bills. When they buy Treasury bills, they add reserves to the banking system. That is they issue a credit to the bank (primary dealer) that they buy the T-bills from. If the bank doesn't put the credit into excess reserves, the money becomes part of required reserves that the bank lends money out against, which increases the money supply. (The increase in money supply is actually a multiple of the added required reserves--see Rothbard)

When the Federal Reserve sells Treasury bills, the bank (primary dealer) that they sell the T-bills to pays for them with reserves, which drains reserves from the system and decreases the amount of money in the system.

Generally, when the Fed is targeting interest rates, it is doing so to keep interest rates from climbing. This is what occurred during the G. William Miller period I discussed in my earlier post.

During the Miller period, the Fed had to buy huge amounts of Treasury bills to keep rates down. This resulted in a huge increase in reserves, which resulted in exploding money supply, which resulted in soaring prices. Which resulted in higher interest rates. It was a tiger by the tail situation. When Volcker replaced Miller at the Fed, he stopped targeting interest rates and said that instead he would just slow money supply growth (to battle the price inflation)and not care about interest rates. (Rates then soared to double digit levels, some reaching 20% plus, but Volcker was successful in killing the price inflation)

At present, on a very short term basis, Bernanke appears to be targeting the key Fed funds rate at 0.15%. Because there is huge hot money flowing into the U.S. from the eurozone, the Fed has to drain reserves to keep the Fed funds rate at 0.15%. Otherwise the rate would likely drop lower. BUT, once the hot money flow stops (and possibly reverses) the pressure on rates is going to be to the upside. If the Fed keeps it's target at 0.15% for Fed funds, this means they will have to buy Treasury bills to keep the Fed funds rate from climbing higher. Thus, the Fed will be reversing from the draining of reserves to the adding of reserves. And the adding of reserves will likely mean climbing money supply.

Bottom line: A roller coaster economy brought to you by Ben Bernanke by his first draining reserves and his then expanding them is the path we are on.

Another Elitist Hypocrite: This Time about Taxes

First, we had the case of Hawaiian pothead Barack Obama as President enforcing laws that put millions in jail for smoking pot. Now, we have the case of a global elitist bitching about Greeks not paying taxes, when she doesn't pay a penny in taxes on her enormous bureaucrats salary.

Report's the Independent:
The IMF chief Christine Lagarde was accused of hypocrisy yesterday after it emerged that she pays no income tax – just days after blaming the Greeks for causing their financial peril by dodging their own [tax]bills.



The managing director of the International Monetary Fund is paid a salary of $467,940 (£298,675), automatically increased every year according to inflation. On top of that she receives an allowance of $83,760 – payable without "justification" – and additional expenses for entertainment...Stating that she had more sympathy for poor African children with little education than for jobless people complaining about austerity measures in Greece, she said last week: "As far as Athens is concerned, I also think about all those people who are trying to escape tax all the time. All these people in Greece who are trying to escape tax."
Speaking to The Guardian, she added that they could "help themselves collectively" by "all paying their tax," and agreed that it was "payback time" for ordinary Greeks.

Ms Lagarde is entitled, like many diplomats, to receive her income net thanks to the 1961 Treaty of Vienna.

(htJR)

Is Ben Bernanke the New G. William Miller That Will Destroy the U.S Economy?

During the Jimmy Carter administration, G. William Miller became Fed chairman in January 1978 and was removed in August 1979 (A friend of Carter's, Carter made him Treasury Secretary, where he could do less damage).

In November 1978, only 11 months into his term at the Fed, the dollar had fallen nearly 34% against the German mark and almost 42% against the Japanese yen. Price inflation was soaring. In 1979, the CPI has climbed on an annual basis to over 14%. Miler was a disaster as a Fed chairman.

Miller's role in the out of control inflationary economy came about because he targeted interest rates, while at the Fed. This led to a boom in money supply. M2 money growth reached as high as 12% on an annualized basis.

When Miller was removed, Paul Volcker came in and announced that interest rates would no longer be targeted and that money growth would be targeted and slowed. This killed the Miller created price inflation.

It now appears that Bernanke is pulling a type of Miller act, but with more crazed twists and turns.

Under Ben Bernanke we have had some remarkable changes in money growth, already. Here's a chart of quarterly annualized money growth (M2) since Bernanke took over at the Fed.


Things are likely to get even more erratic from here, since Bernanke appears to be making the same mistake that Miller did. For all Bernanke's bells and whistles about Operation Twist and QE this and that, what Bernanke really appears to be doing is like, Miller, instead of keeping an eye on money supply, he is targeting interest rates.

Over the last month, the Fed appears to be targeting the Fed Funds rate at 0.15%.


What's odd about this is that there appears to be very heavy downward pressure on U.S. rates. The 10-year U.S. Treasury yield fell to an all-time low of 1.659% this morning. Some downward pressure might be attributed to Operation Twist, but most of the downward pressure appears to be hot money flowing out of the eurozone.

This comes from the Dow Jones wire:

The benchmark 10-year U.S. Treasury yield sank to an all-time low of 1.659% early Wednesday in New York as fears about the euro-zone debt crisis intensified.

The latest anxieties center around Spain's ability to support its banking system, piling on top of recent worries about Greece's future in the euro-zone bloc. This prompted global investors to seek out safer assets, pushing the 10-year yield below 1.672%, the previous low originally set in February 1946 and matched briefly last September.
So if rates are sinking, but the Fed Funds rate is not, that must mean the Fed has to be draining reserves from the system. And, indeed, they are. The Fed's H.3 release shows that total reserves have declined since mid_April, roughly the start of the latest intensity in the eurozone crisis.

This drain in reserves has been accompanied, as would be expected, by a dramatic slowdown in money growth (M2). According to the latest Fed H.6 release, annualized M2 money growth has declined from 9.8% over the last 12 months to 6.7% over the last 6 months to 4.0% over the last 3 months.

Last Friday, in the EPJ Daily Alert, I explained what is going on and the danger ahead:
What's behind all this? I suspect hot money.

Despite all the hullabaloo about Operation Twist and other Bernanke "tools', Fed policy is being run, the same as in the past, by targeting the Fed Funds rate. A glance at Fed data shows that the NY Fed has been targeting the effective Fed funds rate for some time at 0.15%.

If some hot money from the eurozone has been flowing into the United States (and it likely has), this would put downward pressure on rates in the U.S. Indeed, if you look at the numbers, it would make a lot of sense for this to go on. German government 6-month paper is yielding 0.06%. while comparable U.S. Treasury bills are yielding 0.15%. If you are a wealthy Greek, or Italian or Spaniard, what rate is going to look most attractive to you? Thus, the flow of money into the U.S. paper, which puts downward pressure on U.S. rates. However, if the Fed is targeting 0.15%, then they have to drain reserves to keep the rate at that level.

What's the problem with all this? Aside from the entire idea of the Fed manipulating interest rates in the first place, the manipulation is now being influenced by this overseas hot money. In other words, the reserve drain continues only as long as hot money is flowing hot into the U.S., a reversal of the hot money results in a reversal of Fed actions. As money flow heads out, the pressure on interest rates will reverse and be to the upside, which will cause the Fed to add reserves.

When this hot money reverses itself is difficult to determine. It will depend upon perceived risk in the eurozone, if the panic calms down, then the hot money flow stops and could even reverse itself.

Assuming, the hot money flow continues, this at some point will result in very slow money growth and a return to a very weak economy and stock market in the U.S., which I then anticipate the Fed would counter with more money printing.
Bottom line, Bernanke, like Miller, by tying monetary policy to interest rate targeting is causing wild moves in money supply. Miller's money supply moves were all to the upside. Bernanke's are more erratic. The hot money inflow is causing him to drain reserves and slow money growth at present. It's possible that the drain could result in enough of a slowdown to cause the stock market and economy to head lower once again and cause President Obama to lose in his re-election bid. On the other hand, if things calm down and in the eurozone and the hot money flow stops or reverses itself, the manipulated boom continues with accelerating price inflation.

The eventual outcome is likley to be more money printing by the Fed, but a dip may occur first as a result of the way Bernanke is managing monetary policy. Brace yourselves, the Bernanke roller coaster ride is not over.

Bilderberg Hotel Cancels Alex Jones' Hotel Reservation

Alex Jones was banned from the Westfields Marriott Washington Dulles hotel in Chantilly, Virginia on Tuesday two days before the start of the 2012 Bilderberg conference.

Contacted by Bryan Stolz, Director of Hotel Operations at Marriott International, Jones was told that his room booking was cancelled and that he and his crew would be banned from entering the premises of the hotel.

When Jones asked Stolz if he could come for a hamburger at the hotel’s restaurant on Friday, Stolz laughed and said “yeah, if you can get in.”

Stolz made it clear Jones wasn’t welcome and offered to put him up in a different hotel.

Rockefellers and Rothschilds to Unite

Two of the best-known business dynasties in Europe and the US will come together after Lord Jacob Rothschild’s listed investment trust and Rockefeller Financial Services agreed to form a strategic partnership, reports FT.

Just what the world needs, these two groups working closer together on the road to global domination.

More from FT:
RIT Capital Partners is to buy a 37 per cent stake in the Rockefeller’s wealth advisory and asset management group for an undisclosed sum, giving Lord Rothschild’s London-listed trust a much sought-after foothold in the US.

The transatlantic union brings together David Rockefeller, 96, and Lord Rothschild, 76—two family patriarchs whose personal relationship spans five decades.

17 Year Old Builds a Better Search Engine

Of note, he indicates he didn't gain the skills to create his invention from formal education, but rather from studying on his own---which is how most of us learn about Austrian economics.


Comments Lost

While attempting to delete a spam comment this morning, I accidentally deleted all comments in line for approval. So if you don't see your comment posted, feel free to write the comment again. Sorry about that.

What Would Keynes Think of Krugman?

In the below clip, Friedrich Hayek is not referring to the Keynesian Paul Krugman (Krugman was probably a grad student when this interview took place), but Hayek does specifically call out Keynesians who call for more inflation. Krugman is the king of Keynesian inflationistas. This is not an uncommon type quote to see from Krugman:
In short, far from fearing that more action against uneployment might lead to an uptick in inflation, the Fed should actually welcome that prospect.

Hayek knew Keynes very well. Would Keynes have objected to Krugman's call for more inflation? Hayek clearly thinks so.

Assange Loses Extradition Appeal

Wikileaks founder Juliam Assange has lot his appeal to no be extradited to Sweden for questioning about allegations of sexual offenses, the U.K. Supreme Court has ruled, upholding a lower court ruling and dismissing Assange's appeal.

Assange's legal team immediately raised the possibility that they would request reexamination of the case on another point of law, and the court granted them 14 days to lodge the request, according to IDG News.

Assange supporters fear that, in Sweden, he could face up to a year in solitary confinement awaiting questioning and up to four years in prison if he is charged and subsequently convicted.

They also fear that, from Sweden, he could be transferred to the U.S. to face charges for espionage for publishing various classified government cables.

Tuesday, May 29, 2012

This is Hilarious: Donald Trump versus Wolf Blitzer

If you haven't laughed today, watch this.



(htTravisHolte)

Italian Renaissance Banksters and the Buying of Penance

From Mary Tao at the New York Fed:
During the fourteenth through the sixteenth centuries, many Florentine bankers hired artists to produce devotional paintings and then donated those pieces to the Catholic Church to offset the Church’s disapproval of interest-bearing loans. Since usury was very much frowned upon, this practice of buying penance did not sit well with one Friar Girolamo Savonarola. He was such a vocal critic of the donations that he arranged for bonfires of “vain, lascivious, or dishonest things” (including many Renaissance artworks) in 1497 and 1498. The Medici Bank, the largest bank at that time, had much success in evading the ban on usury; its collapse in 1494 gave Savonarola leverage in his cause. The recent Florentine exhibit Money and Beauty. Bankers, Botticelli and the Bonfire of the Vanities depicts “how the modern banking system developed in parallel alongside the most important artistic flowering in the history of the Western world.”

Signs of Big Trouble: Big Shift in ECB Balance Sheet

Tens of billions of funding support for European banks appears to have shifted to the emergency lending assistance program of the European Central Bank from the long-term refinancing operations, an indication that some European banks may be in dire financial straits, reports CNBC's John Carney.

More details from Carney:
The weekly financial statement of the ECB showed a 21.3 billion euro ($26.8 billion) decline in loans made under the long-term refinancing operations, known as LTROs, and shown on line 5.2 of the statement.

This likely indicates the early repayment of low cost funds provided to banks in Europe. A bank would be forced to make early repayment if collateral for the loans became ineligible because of declines in market value and the bank were unable to offer additional or substitute collateral. Additionally, a bank deemed financially unsound would be ineligible for LTRO loans.

At the same time, the ECB’s financial statement showed that “other claims on euro-area credit institutions denominated in euro” (line 6 in the statement) rose by 34.1 billion euros to 246.6 billion euros ($39.4 billion to $309.9 billion) last week. The emergency lending assistance program, or ELA, is one of a variety assets included on this line item.

What appears to have happened is that one or more large European banks were disqualified from borrowing under the LTRO and are now receiving funds under the ELA.
The EZ is crashing.

The President Disappeared on Saturday and There's a Bilderberg Meeting Coming Up: Coincidence?

A Bilderberg meeting is scheduled from May 30 to June 3 at the Westfield Marriott Hotel in Virginia .  The super elitists are all sure to be there, plotting and plotting.

 RT reminds us what happened the last time they met in Virginia:
Every time a Bilderberg Meeting takes place, important things happen. The last time they met in the US was an election year, 2008 – and the world got Obama. This year they’re back in the US: will they decide who the next president will be?

When in 2008 they gathered from June 5 to 8 in Chantilly, Virginia – just a stone’s throw from the Washington DC – Barack Obama and Hillary Clinton were neck-in-neck in the battle for the Democratic Party’s presidential candidacy.

On June 5 of that year, Barack and Hillary mysteriously “disappeared” for some hours “somewhere in the DC area.” Their agendas blocked out, they clearly sneaked off to “Meet the Bilderbergers.”

The media kept mum about that, save for an Associated Press report on the campaign trail saying that, “reporters traveling with Obama sensed something might be happening between the pair (i.e. Obama and Hillary) when they arrived at Dulles International Airport after an event in Northern Virginia and Obama was not aboard the airplane. Asked at the time about the Illinois Senator’s whereabouts, Obama spokesman Robert Gibbs smiled and declined to comment.” (The AP dispatch “Obama and Clinton meet, discuss uniting Democrats” is, strangely, “no longer available” on their website).

Be that as it may, two days later, Hillary withdrew from the race and Obama became the presidential candidate.

Of note, President Obama disappeared this weekend.. Reporters were miffed. Was it a pre-Bilderberg meeting for the Prez?

On Saturday, West Wing Report had these odd tweets:
President arrived 1:10 ET at Andrews golf course. Playing today with regulars Marvin Nicholson; Walt Nicholson & Pete Selfridge
---
President back at White House. In a breach of longtanding policy, his motorcade departed without hooking up with the waiting press vans.
---
Pool does not know first hand when the president left Andrews, what route he took, or when he arrived at White House
---
Press pool always accompanies the president wherever he goes. Decades-long tradition violated again.

Remember, if the President meets someone outside the White House, it isn't logged in on WH records amd there is no record if the press aren't there to record it.

What Greece Should Do

There are two roads Greece can choose at this point. Greece can abandon the euro and return to the drachma or it can remain in the eurozone.

Staying in the eurozone will mean that the country will be lorded over by bankster operatives. They will provide enough money to keep the country alive, but they will also demand allegiance to their plans of "austerity", which will mean more cuts in government services, higher taxes and better tax collection methods. It won't be pleasant for anyone in Greece.

The hints of a "growth" plan are nothing but code for more inflation and for the propping up of the state apparatus.

But there is a better alternative . That alternative is for Greece to leave the eurozone and return to the drachma.

Here's how this could be done in a way that could put Greece on its way to a miracle economic recovery:

Replace every euro held in Greek banks with drachna, on a one-to-one basis.

Provide every Greek citizen the opportunity to turn in their euros held in the form of cash for drachma,on a one-to-one basis. This window of opportunity should be open for only a week.

The Greek government should default on all its debt---and not pay off any of it, ever. In this way, the major pain would be suffered by those who financed the crazy debt.

The Greek government should then announce that over time it will stop making all other payments, including retirement payments, unemployment payments and payments to all national government employees.

The government should then calculate how much money would be required to give government employees two months severance pay, the unemployed one months pay and those receiving retirement benefits six months of benefits. The government should then print enough drachma to meet these obligations. Yes, I know inflation is theft, but I view this as a necessary evil to keep these people from rioting. Anyone caught protesting the plan in the streets, if they are to receive money from the government under the plan, will be removed from those eligible to receive the money and will be required to pay back any money they received under the program  . The government should then, via fire sale, liquidate all its buildings, land and other properties and pay the money out to all Greek citizens who did not receive money from the employee/unemployment/retirement program.

All taxes at the national level should be abolished. Only municipalities should be allowed to tax, and then only on a per capita basis. All anti-employment laws, including minimum wage laws, should be abolished. All regulations making it difficult for businesses, new and old, to operate,  should be abolished.

The money supply should be frozen at the amount created under this plan. The role of the Greek Treasury should be one of doing nothing but replacing worn bills.

Obviously, this is just an outline of what can be done, details must be filled in. It is an attempt to demonstrate that the situation for the Greeks is not hopeless and that a non-inflationary economic structure can be created  that, with a bedrock of laissez-faire principles, can immediately start moving Greece in the direction of becoming a prosperous country. Freed from the ruinous economic and financial structure created by banksters and other ruling global elite.

A Painless (and Free) Way to Grasp Some of the Central Topics of Ethics

David Gordon is conducting a free online course, What Is Morality? The Ethics of Hazlitt.

David writes:
Henry Hazlitt is best known as an economist, in particular as the author of the brilliant Economics in One Lesson, but he was also an important, though neglected, ethical theorist. His outstanding book in the field is The Foundations of Morality.

I’m going to be offering a one-day course on the book; this will be held on Friday, June 1. In the book, Hazlitt contended that there was no fundamental opposition between morality and self-interest. Like his friend Ludwig von Mises, Hazlitt saw social cooperation through the free market as central to morality.

I’ll discuss the strengths of this way of looking at ethics and also cover Hazlitt’s sharp criticism of Kant’s ethics. As time permits, we’ll also examine what Hazlitt has to say about free will and determinism. Hazlitt’s book is written with his characteristic clarity and reading it offers an almost painless way to grasp some of the central topics of ethics.
Sign up here.

First Reaction to Huerta de Soto

Below I have printed Jesús Huerta de Soto's In Defence of the Euro: An Austrian Perspective, while I consider the piece important in bringing out discussion of flexible exchange rates versus fixed exchange rates versus gold, I can not agree with de Soto's conclusion on the value of the euro.

He writes:
the euro has ended monetary nationalism
This is true, but it has replaced monetary nationalism, with a super central planning for 17 countries.

DeSoto then takes the brave step and says:
for the states in the monetary union, it is acting, even if only timidly, as a “proxy” for the gold standard
Given the propping up the ECB is conducting of the debt of such countries as Spain and Greece, this is a bit hard to swallow.  The distortions are massive, even if the money printing has been sterilized by drains elsewhere.  These distortions simply could't go on under a gold standard. But aside from this propping up activity, de Soto seems to think that there is some type of inherent restraint on money printing because of the euro's very structure. In fact, the limited money printing to date may be the result of the historical accident  of  Merekel-Sarkozy influence over the ECB that may now change with the election of France of Francios Hollande.

Indeed, one must ask, who is in a better position right now relative to the future health of their economies, the  northern eurozone countries, who may in the not too distant future suffer serious price inflation as Hollande leads the ECB into a massive printing scheme or Switzerland, which has remained outside the eurozone?

The obvious answer is Switzerland. No one is fleeing the Swiss franc, many are fleeing the euro.

The more centralized any sector of an economy gets, the more difficult it is to keep stability in such a sector, even the money sector. Political pressures will simply pull the sector in different directions leading to all sorts of distortions that would never occur in a free market. It appears we are about to witness this in the EZ. If the entire experiment doesn't fall apart, massive money printing appears the next step now that power appears to have moved to the southern EZ countries. This is as far from the gold standard as you can get.

In Defence of the Euro: An Austrian Perspective

By Jesús Huerta de Soto

With a Critique of the Errors of the ECB and the Interventionism of Brussels

1. Introduction: The Ideal Monetary System

Theorists of the Austrian school have focused considerable effort on elucidating the ideal monetary system for a market economy. On a theoretical level, they have developed an entire theory of the business cycle which explains how credit expansion unbacked by real saving and orchestrated by central banks via a fractional-reserve banking system repetitively generates economic cycles. On a historical level, they have described the spontaneous evolution of money and how coercive state intervention encouraged by powerful interest groups has distanced from the market and corrupted the natural evolution of banking institutions. On an ethical level, they have revealed the general legal requirements and principles of property rights with respect to banking contracts, principles which arise from the market economy itself and which, in turn, are essential to its proper functioning.[1]

All of the above theoretical analysis yields the conclusion that the current monetary and banking system is incompatible with a true free-enterprise economy, that it contains all of the defects identified by the theorem of the impossibility of socialism, and that it is a continual source of financial instability and economic disturbances. Hence, it becomes indispensable to profoundly redesign the world financial and monetary system, to get to the root of the problems that beset us and to solve them. This undertaking should rest on the following three reforms: (a) the re-establishment of a 100-percent reserve requirement as an essential principle of private property rights with respect to every demand deposit of money and its equivalents; (b) the abolition of all central banks (which become unnecessary as lenders of last resort if reform (a) above is implemented, and which as true financial central-planning agencies are a constant source of instability) and the revocation of legal-tender laws and the always-changing tangle of government regulations that derive from them; and (c) a return to a classic gold standard, as the only world monetary standard that would provide a money supply which public authorities could not manipulate and which could restrict and discipline the inflationary yearnings of the different economic agents.[2]

As we have stated, the above prescriptions would enable us to solve all our problems at the root, while fostering sustainable economic and social development the likes of which have never been seen in history. Furthermore, these measures can both indicate which incremental reforms would be a step in the right direction, and permit a more sound judgement about the different economic-policy alternatives in the real world. It is from this strictly circumstantial and possibilistic perspective alone that the reader should view the Austrian analysis in relative “support” of the euro which we aim to develop in the present paper.

2. The Austrian Tradition of Support for Fixed Exchange Rates versus Monetary Nationalism and Flexible Exchange Rates

Traditionally, members of the Austrian school of economics have felt that as long as the ideal monetary system is not achieved, many economists, especially those of the Chicago school, commit a grave error of economic theory and political praxis when they defend flexible exchange rates in a context of monetary nationalism, as if both were somehow more suited to a market economy. In contrast, Austrians believe that until central banks are abolished and the classic gold standard is re-established along with a 100-percent reserve requirement in banking, we must make every attempt to bring the existing monetary system closer to the ideal, both in terms of its operation and its results. This means limiting monetary nationalism as far as possible, eliminating the possibility that each country could develop its own monetary policy, and restricting inflationary policies of credit expansion as much as we can, by creating a monetary framework that disciplines as far as possible economic, political, and social agents, and especially, labour unions and other pressure groups, politicians, and central banks.

It is only in this context that we should interpret the position of such eminent Austrian economists (and distinguished members of the Mont Pèlerin Society) as Mises and Hayek. For example, there is the remarkable and devastating analysis against monetary nationalism and flexible exchange rates which Hayek began to develop in 1937 in his particularly outstanding book, Monetary Nationalism and International Stability.[3] In this book, Hayek demonstrates that flexible exchange rates preclude an efficient allocation of resources on an international level, as they immediately hinder and distort real flows of consumption and investment. Moreover, they make it inevitable that the necessary real downward adjustments in costs take place via a rise in all other nominal prices, in a chaotic environment of competitive devaluations, credit expansion, and inflation, which also encourages and supports all sorts of irresponsible behaviours from unions, by inciting continual wage and labour demands which can only be satisfied without increasing unemployment if inflation is pushed up even further. Thirty-eight years later, in 1975, Hayek summarized his argument as follows:

Read the rest here.

(htJRoochesr)

Report: Mitt Romney's Son Under Investigation for Insider Trading

The very well connected Roger Stone tweets:
StoneZone: Tagg Romney under investigation for Insider trading.
Tagg is Mitt Romney's oldest son and founder of Solamere Capital. Insider trading is a non-crime conducted by many and a great tool to use against political enemies.

The Neocon Purge of "Ron Paul Types" from the Republican Party

Pat Buchanan fills us in on a cocky Bill Kristol who seems to think that "Ron Paul types" have been purged from the Republican Party and that Kristol will be more than happy to see Ron Paul leave:
"The big story in the Republican Party over the last 30 years, and I'm very happy about this," said Kristol, is the "eclipsing" of the George H.W. Bush-James Baker-Brent Scowcroft realists, "an Arabist old-fashioned Republican Party ... very concerned about relations with Arab states that were not friendly with Israel ... ."

That Bush crowd is yesterday, said Kristol. And not only had the "Arabists" like President Bush been shoved aside by the neocons, the "Pat Buchanan/Ron Paul type" of Republican has been purged.


"At B'nai Jeshurun," writes Weiss, "Kristol admitted to playing a role in expelling members of the Republican Party he does not agree with." These are Republicans you had to "repudiate," said Kristol, people "of whom I disapprove so much that I won't appear with them."

"I've encouraged that they be expelled or not welcomed into the Republican Party. I'd be happy if Ron Paul left.
Most shocking is that Kristol believes that his fellow neocons will hold key war positions in a Romney administration. Buchanan again:
Another source says Kristol predicted that Sen. Joe Lieberman, whose voting record is closer to Socialist Bernie Sanders' than to conservative Jim DeMint's, will be secretary of state in the Romney administration...Joe led the cheers for our last three Middle East wars – and has pushed for two more, against Syria and Iran.
How are Romtarians going to justify a vote for Romney if he plans to put the warmonger Lieberman in as Secretary of State?

Monday, May 28, 2012

Seagulls and Persistence

A couple of winters back, I spent the season in Miami. One afternoon, I grabbed a lunch and sat outside on a bench near a walkway that that bordered Biscayne Bay. While I was eating my lunch, I watched some sea gulls circling the water in front of me. They circled and circled. Every once and awhile they would dive close to the surface of the water, but they never caught any fish in the near hour I was watching them.

I wondered how often, they actually caught a fish. The seagulls all looked healthy to me, so I guess they managed to catch fish often enough. But the circling fascinated me. Evolution, I thought, sure programmed seagulls to not get frustrated and give up easily. I thought to myself that if I ever ran a telephone salesroom, I would set a camera right where I was sitting and film the seagulls circling and circling and circling until one dove and actually caught a fish. I would then get a big flat screen television and put it in front of the salesroom and play the seagulls just circling and circling and circling until that fish was caught. I would play the video over and over again, day after day, hour after hour, to try an ingrain in the salespeople that persistence pays off.

I personally don't have a problem with persistence. My first job in New York City many years ago was with a stock brokerage firm. I was part of a bunch of trainees. We were all given the same thing a phone book and a telephone with two lines, an out going line and a line for incoming calls. Since I had moved to NYC for the job and didn't know anyone in the city, I very quickly came to the conclusion that I better start making a lot of calls if I wanted clients. After two or three weeks of calling on the outgoing line, a call came in on the incoming line. It was the switchboard operator, she asked me if there was something wrong with the other line (my outgoing line), she said the red light on that phone was almost always on at her switchboard. I was too embarrassed at the time to tell her that it was because I was always calling, trying to develop clients, but then I thought about it for a minute and wondered why the lines weren't on all the time for these other guys.It was a big board room, about 60 guys. What the hell were they doing?

After the six month training period was over, I was given a prestigious gig, in a top office. When I asked why it was offered to me, the senior manager told me, "You open the biggest accounts". I had no idea. My circling and circling and keeping the red light on paid off. If I called someone and they weren't interested, I just moved on to the next call, but I never stopped. I heard other guys grumble that you couldn't close an account because of this or that. They had stopped circling. I never did.

Persistence iis important.

Here's James Altucher on persistence:
In early 1994 I created my first website. In late 1994 I did my first corporate website. In 1995 I did my first website for money. I got $17,500 cash for a diamond wholesaler’s website. I went straight to the Chelsea Hotel and gave them the money and paid for my first room (of many) there for a year. I couldn’t believe how rich I was with that money. Stanley Bard, the owner of the Chelsea at the time, looked at the cash and said, “what are you, a drug dealer?” And I felt like one. I was selling crack, heroin, whatever. I felt high. I was so happy. I had made more money than I had ever had in my life. I would wander up and down the stairwells of the Chelsea Hotel hoping I would run into some drug addict who would have sex with me. That persistence never paid off fortunately.


In 1996, we finally incorporated the company doing websites for others. At the beginning of the year we had maybe two or three clients and two or three employees. But we grew. Everyone needed a website. I was still working my fulltime job at HBO but sneaking away for meetings and then hiding my suit before I got back to my cubicle. Finally in 1997 I had to leave HBO to do Reset fulltime. And in 1998 we sold the business.

Along the way I probably got rejected more than 200 times on sales pitches. And I messed up hiring, bribing, sales, investing, we got robbed twice, I messed up on follow-up (with J.P. Morgan, who desperately wanted us to do their website, I just dropped the ball), I messed up everything. I couldn’t get it right. But I felt like we were doing well (we kept growing every month) so I kept at it. In 1997 I tried to sell the company but nobody wanted it. But I kept in touch with everyone and kept sending all potential suitors monthly updates. For about a year, half my job was pitching new clients and half my job was pitching potential people to buy the company. Finally in August, 1998 the time was right and we sold the company. And, by the way, this was my third attempt at starting a company. The other two had failed.

I’ve read so many cases of authors who sold their books door to door for years until finally word of mouth spread and they became bestsellers. John Grisham being a great example. Eckhart Tolle being another. And how many actors spent 5, 10, even 20 years as carpenters, waiters, whatevers, before they got their first big role that put them over the top. Or Thomas Edison trying 9999 times to light a lightbulb before he got it right on the 10000th attempt. Eventually a water dripping on a rock will wither away the rock.
Read the rest here.

Thomas Friedman Right about Something

James E. Miller emails:
In his column today:

"“Obamacare is socialized medicine,” says the Republican Party. No, no — excuse me — socialized medicine is what we have now! People without insurance can go to an emergency ward or throw themselves on the mercy of a doctor, and the cost of all this uncompensated care is shared by all those who have insurance, raising your rates and mine."

Of course the buffoon goes on to praise Obama for ending this by further socializing medicine, but at least he got this part right.

Prescott Bush Talks about Fighting Inflation

Here's a fascinating clip of George H.W. Bush's father Prescott.

At the end of the clip, Prescott talks about fighting price inflation, though please take what he says with a grain of salt since he was a bankster senior partner at Brown Brothers, Harriman.

Prescott,if anything, was a master manipulator, who spent most of his days plotting ways to advance the corporate state. Naomi Wolf reports that:
There was a scheme in the 30's and Prescott Bush was one of the leaders of this scheme, an industrialist who admired fascism and thought that was a good idea - to have a coup in the United States along the lines of the coup they saw taking place in Italy and Germany. Smedley Butler had been involved with violent regime change throughout his career, but he was approached by these conspirators, including Prescott Bush, and he outed them and he testified to Congress that they were planning a coup in the United States - it's in the Congressional record.

The family history is that you can make so much money uniting corporate interests with a fascist state that violently represses people, that's why when I saw the recycling of so much Nazi language, Nazi tactics, Nazi strategies, Nazi imagery in the Bush White House and then finally belatedly people brought to me this history of Prescott Bush's attempted coup and Smedley Butler's revelations - it gives me absolute chill
Also of note, Prescott looks a lot sharper than the son and grandson. He appears charismatic in the clip, far from the stiff his son is, and he appears much brighter than the grandson. Which just goes to show you, once you create the elitist edge, some pretty dull light bulbs can follow, advance, and stay protected inside the cocoon, as long as you have the elitist organization behind you.



(htJosephBrown)

Vermont Tax Collectors Drill Dentist

States are getting desperate for revenue;
Dentist Frank Illuzzi was stunned when Vermont tax collectors began demanding a 6 percent sales tax on the value of toothbrushes and floss he hands out to patients. Senior care facility operator Jay Grimes was similarly surprised to get a $350,000 bill slapping a 9 percent restaurant tax on the meals served to residents in the dining room.
This all falls under a no new tax pledge by the Vermont governor:
Under adamant no-new-tax Democratic Gov. Peter Shumlin, Vermont has added about 10 new tax compliance auditors and has stepped up efforts to scour records in rural areas, and add greater scrutiny to businesses ranging from auctioneers to Internet-based cloud-computing services.
Yeah, right no new taxes, just reinterpret the old taxes!

(htJorisDeDonder)

As Soldiers Come Back in Coffins, CorpoGovernment Operatives Just Spin the Revolving Door

The Project on Government Oversight wrote (in 2004)
The revolving door has become such an accepted part of federal contracting in recentyears that it is frequently difficult to determine where the government stops and the privatesector begins. The practice of senior federal employees going to work for the federal contractorsover which they had authority creates...critical problems: 
(1) It provides a vehicle for public servants to use their office for personal or private gain at theexpense of the American taxpayer; 
(2) It creates an opportunity for government officials to be lenient toward or to favor prospectivefuture employers;
(3) It creates an opportunity for government officials to be lenient toward or to favor former private sector employers, which the government official now regulates or oversees;
(4) It sometimes provides the contractor with an unfair advantage over its competitors due toinsider knowledge that can be used to the benefit of the contractor, but to the detriment of the public;
(5) It has resulted in a highly complex framework of ethics and conflict of interest regulations.Enforcing these regulations has become a virtual industry within the government, costing significant resources, but rarely, as the record shows, resulting in sanctions or convictions of those accused of violating the rules;
According to POGO, in 2002, these were the biggest government contractors:

1. Lockheed Martin

2. Boeing

3. Northrop Grumman (includes TRW)

4. Raytheon5. General Dynamics6. University of California

7. United Technologies

8. Computer Sciences Corporation - CSC

9. Bechtel

10. Science Applications International Corporation - SAIC

11. Carlyle Group

12. TRW (merged with Northrop Grumman in 2002)

13. AmerisourceBergen

14. Honeywell International

15. Health Net, Inc.

16. British Nuclear Fuels - BNFL

17. General Electric

18. L-3 Communications

19. California Institute of Technology

20. BAE Systems

(htBobEnglish)

Must View: The Importance of Staying Ahead of Price Inflation

The below video clip on silver and inflation is absolutely brilliant.



Is silver still a good investment now? Although there are periods when price inflation slows, the continued trend is, over the long haul, for more and more inflation. This means the purchasing power of silver will continue to advance. Further, Ron Paul told me that he thinks silver in the future will climb faster than gold. His argument is that gold is getting so expensive that many people won't be able to afford it and will thus buy silver instead, I couldn't agree more. Tuck away those silver coins, but also don't forget about nickels.

The current composition of a nickel is 75% copper and 25% nickel. The metal value in the nickel is now just slightly more than five cents. As price inflation climbs, the metal value will climb and at some point nickels with the current metal composition will disappear from circulation just like the silver dimes, quarters and half-dollars did, and will be worth much more than their five cent face value. What is most important about holding on to nickels is that if you need cash in a pinch, they will still be worth at least five cents. Always be wary of salespeople who tell you about an investment that can't go down in value, but holding on to nickels is one of the very few that actually is so.

On Legalizing Marijuana: Mitt Romney VS. Ron Paul

Put Romney in the Obama camp. Only Ron Paul is the consistent advocate of freedom, among the three.



(htTravisHolte)

Protester Accuses Tony Blair of War Crimes (Investigation Called for by the Court)

The investigation will not be as to whether Tony Blair is a war criminal, but as to how the protester managed to get into the court.

Fed to Money Market Funds: Get Your Money Out of Europe

How near the cliff are things in Europe? The Federal Reserve is telling money market funds to pull money out of Europe.

During an interview with WSJ, Philadelphia Fed President Charles Plosser said:
The Fed and regulators have tried to stress to money market funds, for example, to reduce their exposure to European financial institutions.
This warning is in sync with comments made to me by a former senior Treasury official. Clearly, U.S. officials are very concerned about the eurozone blowing up. How concerned? This Keynesian former senior Treasury official asked me in something close to exasperation, "How would the Austrians handle this situation?"

That said, any eurozone crisis is not likely to have significant impact in the U.S. in terms of panic. The Fed will print whatever is needed to prop up and prevent any run on U.S. banks. Plosser said as much:
The swap lines we have with the European Central Bank are one way to support U.S. dollar funding in Europe. I don’t think a flood of liquidity is a huge problem. That would be manageable. The bigger problem is if it dries up for everybody. The Fed still has the tools it used during the crisis. We have the discount window and we have the ability to lend to financial institutions at a penalty rate against good collateral. And we have on the shelf some of the tools we used during the crisis: the Term Auction Facility and longer-term lending through the discount window to help mitigate that. So I think we have the tools at our disposal if they become necessary.
Amazingly, in the interview, Plosser correctly warns that the trillion dollars plus sitting in excess reserves could become a major problem. This is the first time I have heard this from a Fed official:
The inflation risk we have is longer term. The problem is that as the U.S. economy grows we have provided substantial amounts of accommodation. We have $1.5 trillion in excess reserves. Inflation is going to occur when those excess reserves start flowing into the economy. When that begins to happen we’ll have to restrain it somehow. The challenge for the Fed is will we act quickly enough or aggressively enough to prevent that from happening.

It may be a challenge politically when we have to start selling assets, particularly if we have to start selling (mortgage backed securities) to shrink the balance sheet and to prevent those reserves from becoming money.
Note well: The Fed selling assets means the Fed would be pushing up interest rates.

Print this post out and tack it to your computer, this is the most accurate analysis I have ever seen by a Fed official and it describes the exact truth as to when the Fed will start pushing up rates. It's when that money starts flowing out of excess reserves. And Plosser is also correct in indicating that it will be very difficult, for political reasons, for the Fed to push rates up high enough fast enough to battle the price inflation at that time. That's why at some point down the road, we are likely to experience quickly accelerating price inflation and interest rates.

Robert Higgs on War

From an interview conducted by Paul Craig Roberts:
PCR: From your extensive research into previous U.S. wars, have you drawn any conclusions that shape your thinking about the present situation?

RH: One conclusion stands out: from the Civil War onward, engagement in war has left Americans less free when the war was over than they had been before the war. In countless ways, the warfare state has proved inimical to the preservation of liberty, just as patriots such as James Madison warned us long ago that it would. War brings higher taxes, greater government debt, increased government intrusion in markets, more pervasive government surveillance, manipulation, and control of the public. Going to war is the perfect recipe for expanding the size, scope, and power of the federal government. You have to wonder why so many conservatives, who claim to cherish liberty, enthusiastically embrace the government's schemes for plunging the nation into war.

PCR: Many claim that whatever war's risks to civil and economic liberties, it still generates definite economic benefits.

RH: That claim represents a prime example of what sound economists call the broken-window fallacy. Despite many current myths about so-called war prosperity, war is always an economic disaster. The resources used for war purposes cannot be used for alternative purposes; there's no free lunch, and the Keynesian arguments that imply one are just bad economics. I have spent years demonstrating that even World War II, which allegedly rescued the economy from the Great Depression, did nothing of the sort. Participation in the war simply substituted one kind of economic deprivation--a worse kind--for another. Genuine prosperity resumed only after the war ended.

Murray Rothbard on War

From an interview with Murray Rothbard:
The State thrives on war – unless, of course, it is defeated and crushed – expands on it, glories in it. For one thing, when one State attacks another State, it is able through this intellectual bamboozlement of the public to convince them that they must rush to the defense of the State because they think the State is defending them.


In other words, if let’s say, Paraguay and Brazil are going to get into a war, each State – the Paraguayan government and the Brazilian government – is able to convince their own subjects that the other government is out to get them and loot them and murder them in their beds and so forth, so they are able to induce their own hapless subjects to fight against the other State, whereas in actual practice, of course, it is the States that have the quarrel, not the people. The people are outside the quarrels of the State and yet the State is able to generate this patriotic mass war hysteria and to call everybody up to the colors physically and spiritually and economically and therefore, of course, aggrandize State power permanently.


Most conservatives and libertarians are very familiar with – and deplore – the increase in State power in the American government in the last 50 or 70 years, but what they don’t seem to realize is that most of these increases took place in giant leaps during wartime. It was wartime that provided the crisis situation – the spark – which enabled the States to put on so-called "emergency" measures, which of course never got lifted, or rarely got lifted.


Even the war of 1812 – seemingly a harmless little escapade—was evil, and also in the domestic sense, in that it ruined the Jeffersonian Party for a long time to come, it established Federalism which means monopoly State-capitalism in essence, it imposed a central bank, it imposed high tariffs, it imposed domestic federal taxation, which never existed before, internal taxation, and it took a long time to get rid of it, and we never really did get back to the pre-War of 1812 level of minimal State power.


Then, of course, the Mexican war had consequences of slave expansion and so forth. But the Civil War was, of course, much worse – the Civil War was really the great turning point, one of the great turning points in the increase of State power, because with the Civil War you now have the total introduction of things like railroad land grants, subsidies of big business, permanent high tariffs, which the Jacksonians had been able to whittle away before the Civil War, and a total revolution in the monetary system so that the old pure gold standard was replaced first by greenback paper, and then by the National Banking Act – a controlled banking system. And for the first time we had the imposition in the United States of an income tax and federal conscription. The income tax was reluctantly eliminated after the Civil War as was conscription: all the other things – such as high excise taxes—continued on as a permanent accretion of State power over the American public.


The third huge increase of power came out of World War I. World War I set both the foreign and the domestic policies for the twentieth century. Woodrow Wilson set the entire pattern for foreign policy from 1917 to the present. There is a total continuity between Wilson, Hoover, Roosevelt, Truman, Johnson and Nixon – the same thing all the way down the line.


Q: You’d include Kennedy in that?


A: Yes Kennedy, right. I don’t want to miss anybody. Every president has been inspired by Woodrow Wilson. It was reported that Richard Nixon’s first act when he came into the White House was to hang a picture of Woodrow Wilson in front of his desk. The same influence has held on domestic affairs. As a matter of fact if I had to single out – this is one of my favorites pastimes – the biggest SOB in American history in the sense of evil impact – I think Woodrow Wilson is way, way at the head of the list for many reasons. The permanent direction which Woodrow Wilson set for foreign policy included the permanent collective security concept, which means America has some sort of God-given role to push everybody around everywhere and set up little democratic governments all over the world, and to suppress any kind of revolution against the status quo – that means any kind of change in the status quo either domestic or foreign. In the domestic sphere the corollary was the shift from a relatively laissez-faire economy – corrupted as it was by the Civil War subsidies it was still and all a relatively laissez-faire capitalism – a deliberate shift to in essence a so-called corporate state, what openly became a Corporate State in Mussolini’s Italy and Nazi Germany.

A Noam Chomsky Response to Ron Paul

Noam Chomsky discusses Ron Paul's view  on what caused Osama bin Laden to attack America.


Sunday, May 27, 2012

The Nouveaux Statists Party On in Über-Washington

Time's Andrew Ferguson has an important piece in the current issue of the magazine that details the many signs of how the nouveaux-estatist feast off of taxpayer money as government continues to expand, despite the overall struggling economy. Here are key excerpts from the article that should shock you at to what is going on in Washington D.C. (And this report doesn't even include reports of the use of a date rape drug by a senior executive at a major D.C. think tank):
The Passenger Bar, about 12 blocks from the White House, is just beginning the first seating of the night in its Columbia Room, a semisecret speakeasy behind an unmarked door in the back. Speakeasies are very fashionable in Washington at the moment—bars within bars, inner sanctums set aside for the most discriminating palates. But the Columbia Room is a particularly hot ticket. If you’re lucky, you’ll get a reservation a few days in advance. For $67 a head, an expert bartender serves a three-course tasting of cocktails. He carves a thick slice of lemon rind, places his hands slightly above and 10 inches back from the cocktail glass and with a snapping motion sends a scattering of lemon drops across the icy surface of what one magazine calls “the best martini in America.”

The Passenger’s motto? “God save the district.” The sentiment is easy to understand, for these are good times in Washington and the seven counties that surround it. Even as the nation struggles, the capital has prospered, making it a magnet for young hipsters but leaving its residents with only a tentative understanding of how the rest of the country lives. “It’s nice,” goes the old joke about Miami, “because it’s so close to the United States.” Well, Washington is very nice these days.
----
Every week brings fresh evidence of continuing prosperity: a new restaurant, a new nightclub, another restored 19th century townhouse in a previously dodgy neighborhood selling for $1 million or more. Start-ups are hiring through Craigs­list, and just opened lobbying firms have no trouble collaring clients. Storefronts that stood abandoned five years ago fill with pricey gourmet-food shops like Cowgirl Creamery, a cheese­monger that has opened its only store outside Northern California on F Street downtown. Its Mt. Tam cheese goes for more than $25 per pound. It’s organic.

Another Northern California import, a limousine service called Uber, launched in December after great success in San Francisco and New York City. “The growth here has been unique in our experience,” says Rachel Holt, who oversees Uber’s burgeoning D.C. operation. Uber is Web-based and cashless: customers call for limos with a smart-phone app and pay with a credit card on file. It’s also deluxe. Riders expect nothing lower on the limo food chain than a Town Car, with offerings going up to Mercedes and beyond. Holt says with some ­surprise that locals are using Uber as everyday conveyance for commuting and shopping.
---
Recently Washington passed San Jose in Silicon Valley to become the richest metropolitan area in the U.S. Since the 1990s, says economist Stephen Fuller of George Mason University, the region has led the nation’s metropolitan areas in overall employment rate. The median household income in the metro area in 2010 was $84,523, according to calculations by Bloomberg News, nearly 70% over the national median household income of $50,046. Nine of the 15 richest counties in the country surround Washington, including Nos. 1, 3, 4 and 5. Per capita income in D.C. is more than twice that in Maine. All this explains why Gallup’s Well-Being Index rates D.C. as the most satisfied large metropolitan ­area in the U.S.
---
...the Washington economy is an illusion, for each of its business sectors is to some degree a creature of the region’s single great industry—the federal government. According to a 2007 report by the Tax Foundation, for every dollar in taxes Washington sends to the federal government, it receives five in return. Fuller says that over the past 30 years, the federal government has spent $860 billion in the D.C. region, two-thirds of that since 9/11.
---
Why the boom? The size of the nonmilitary, nonpostal federal workforce has stayed relatively stable since the 1960s. What has changed is not the government payroll but the number of government contractors. It’s estimated that, thanks to massive outsourcing over the past 20 years by the Clinton and Bush administrations, there are two government contractors for every worker directly employed by the government. Federal contracting is the region’s great growth industry. A government contractor can even hire contractors for help in getting more government contracts. You could call those guys ­government-contract contractors.

Which means government hasn’t shrunk; it’s just changed clothes (and pretty nice clothes they are). The contractors are famous for secrecy; many have job titles that are designed to bewilder. What is it, after all, that an analyst, a facilitator, a consultant, an adviser, a strategist actually does to earn his or her paycheck? Champions of the capital’s Shangri-la economy like to brag of ­Washington’s knowledge workers.

Peter Corbett isn’t so sure about the wisdom of D.C.’s version of the knowledge economy. Corbett heads a social-media marketing company, with corporate clients that have famous names. Most of his work involves nonprofit foundations that have flocked to Washington to be close to the fount of grants and tax breaks. He did a single project for the federal government and then swore it off for good. He describes his first meeting at the Pentagon. “There are 12 people sitting around the table,” he says. “I didn’t know eight of them. I said, ‘Who are you?’ They say, ‘I’m with Booz Allen.’ ‘I’m with Lockheed.’ ‘I’m with CACI.’ ‘But why are you here?’ ‘We’re consultants on your project.’ I said, ‘You are?’ They were charging the government $300 an hour, and I had no idea what they were doing, and neither did they. They were just there."
---
The optimism of über-Washingtonians so far survives the unspoken worry about a coming age of austerity, in which government spending cuts would end the high life that Washingtonians have come to expect. They are right to be optimistic. The two most plausible deficit-reduction proposals—one by President Obama, the other by the Republican-controlled House Budget Committee—each calls for the government in 2021 to spend a trillion dollars more than it spends today.

The full article is here. (subscription required)

(htTaylorConant)

Greek Tax Flow Collapse

Greece’s public finances could collapse as early as next month, leaving salaries and pensions unpaid unless a stable government emerges from the June 17 election, according to Lucas Papademos, the technocrat prime minister who left office after this month’s inconclusive vote.

Papademos warned that conditions were deteriorating faster than expected with cash flow likely to turn negative in early June amid a sharp fall in tax revenues and a loosening of spending controls during two back-to-back election campaigns. Mounting anxiety that Greece is headed for further political instability and a possible exit from the euro has prompted many Greeks to postpone making tax payments ,reports FT.

The looming cash crunch was revealed on Sunday in an eight-point document published by the Greek newspaper To Vima.

The ECB will step in to prop up Greece in the very short-term, with the likelihood that Greece will replace the euro with a new drachma within weeks.

Memorial Day: Why Are BBQ Costs Rising?

Dollars held by those overseas continue to flow back into the U.S.. In other words, foreigners are now able to bid against us for goods and services, in larger and larger quantities.

Another Politician Taking Credit for a Dubious Economic "Comeback"

It's Governor Chris Christie of New Jersey and Paul Krugman nails him:
One real problem with living in New Jersey is that the state’s two major cities are, of course, New York and Philadelphia — which means that even if you live here, policy and politics reporting tends to be sparse. So it wasn’t until the latest budget fiasco surfaced that I even knew that Christie was running on the theme of the “Jersey Comeback”.

And now that I know, I wonder what on earth he’s talking about. Here’s job growth in three mid-Atlantic states since Christie took office. We’re the blue line at the bottom:

Lawyers to Multinationals: Get Your Money Out of Greece

One day soon, those who have money in Greek banks accounts may wake up and find that they have devalued drachmas in their accounts instead of euros. The advice lawyers are giving multinationals is to get their money out of Greece now. NYT reports:
Under European Union law, Greece cannot leave the euro. That is the theory. But in practice, any protection the law offers investors could be difficult to enforce, according to lawyers trying to protect their corporate clients against the upheaval sure to follow if Greece were to default on its debts and adopt a new currency.

So their advice is blunt: Remove cash and other liquid assets from Greece and prepare to take a short-term hit on any other investments.

“My personal view is that it is irrational for anyone, whether a corporation or an individual, to be leaving money in Greek financial institutions, so long as there is a credible prospect of a euro zone exit,” said Ian M. Clark, a partner in London for White & Case, a global law firm {where Rudy Giuliani once worked]that has a team of 10 lawyers focusing on the issue.
Vodafone, the mobile phone operator, and GlaxoSmithKline, the pharmaceuticals company, say they are “sweeping” money out of Greece and into British banks each evening, reports NYT.

This panic money flowing out of Greece is not likely to stop. Thus, Greece is likely to act sooner than later to convert euros to drachma. But it will require a coordination with Greek police and military. If Greeks wake up one morning and find their accounts have drachma in them instead of euros, all hell could break loose on Greek streets.

Definition:Libertarian Voting

Voting: the act of participating in a government sponsored election in the hope that the least criminal of two criminals will get elected and result in the criminal spending part of his time in office advancing your freedom.

Demand is So Strong for Government Program Paying Farmers Not to Plant Crops That Some Were Turned Away

Pay people enough not to do things, anything from working to planting crops, and they won't.

More farmers than expected applied to put their land in a government program that pays the farmers not to plant crops and not all of the acres could be accommodated, the U.S. Department of Agriculture said Friday.

The USDA accepted 3.9 million new acres into the Conservation Reserve Program, or CRP, in the latest sign-up period and turned away 600,000 acres, reports WSJ.

Of course, this is all mad central planning used to buy votes, under the guise of protecting the farm land. WSJ writes:
The USDA is anxious to enroll new acres in the program that is aimed at protecting environmentally sensitive land because on Sept. 30 the contracts that keep about 6.5 million acres of potential farm land idle will expire. Contracts take land out of production, thus conserving soil, for either 10 or 15 years. 
About 30 million acres are now idled under the program, but the 6.5-million-acre exodus will be the largest ever. The USDA spends about $1.8 billion a year on the program, paying “rent” to land owners. 
“By reducing water runoff and sedimentation, CRP protects groundwater and helps improve the condition of lakes, rivers, ponds, and streams,” according to the USDA. “Acreage enrolled in the CRP is planted to resource-conserving vegetative covers, making the program a major contributor to increased wildlife populations in many parts of the country.”
What we really have here is  a case of poorly defined property rights. If lakes, rivers. ponds and streams were privately owned, it is unlikely that the owners would allow runoff on to their properties, unless they were properly compensated.

But further, amazingly, a lot of the USDA payout appears to be going to pay farmers not to plant crops on land that they aren't likely to plant anyway:
 A guaranteed return on land is appealing to farmers, especially if the land isn’t well suited for planting crops, said Todd Davis, a senior economist with the American Farm Bureau Federation.

That this type of stuff goes on, without major outrage, shows you how far away the country is from being a free market-private property country.