15 April 2011

Idiot Monetarists

Usually I can't find a whole lot of fault with the authors over at National Review Online, but this one takes the cake.  

Anyone who is stupid enough to advocate actually making the Federal Reserve's mandate to literally, make nominal inflation, doesn't have a brain or an understanding of the words free and market.  Go read the article (and if you are like me, it'll make you practically go mad).  But once you're done, enjoy yourself and give my unfiltered and raw feed back a read from my comment the other day. 

Pull this lever, turn this knob, and prime that pump! Credit, credit, and more credit! Yes, more liquor in the punch bowl is what we need! After all, the party isn't wild enough with the strippers, Cuban cigars, LSD, and cocaine, we must have more punch!

Monetarists are all the same Keynesian, yet just by another name. Neither understand John Maynard's true economic principles of government should save money in the good years, to be able to inject the savings in a downturn to take up the slack of spending by the private sector in a non-money fueled inflation like the one that Mr. Beckworth advocates for.

The mere fact that Mr. Beckworth would consider making the Fed's mandate to litterally manipulate the already manipulated GDP number, goes beyond anything that is liberty minded, and down and outright imposing of tyrannical control of the money supply. Carte blanche to actually cajole the money supply into a permanent "mark to fantasy" of the entire economy would enslave the entire country into a debt prostitute lifestyle. Strong words, I am aware, but nessecary when combating idiot wonks who think the right people and right policy will fix our problem.

Errrrnt, wrong! Sorry, no policy will work until the actual free market wins out, debt defaults happen, credit write-offs and write-downs occur, and we can actual figure out the non-manipulated price of goods, services, and commodities. Besides, with every expansion in the monetary base by the Federal Reserve, we have ALWAYS seen a dramatic rise in the price of oil, accompanied shortly thereafter by a prolonged recession / stagnation. Meaning, even the Fed can't fight the Austro-Hungarian economic cycle.

Meddlers work in Washington, because they only know how to meddle. Wonks work for meddlers because the wonks have the brains the meddlers wish they could have to provide the logistics to implement their ends. Of course, the means are one in the same, the people.

Precious Metals Trend

I've been seeing a lot of mainstream/dino-media saying that precious metals are over bought (of course yours truly doesn't even have any horded, so I do welcome a sell off).  However, as the investing saying goes, the trend is your friend (provided it isn't a bubble). 

So, reading something like this from the Daily Reckoning, backed up with this from the Telegraph, it seems like gold is not yet reaching consumer saturation, at least from a sound money perspective.  

Thieves will obviously steal anything of value, and insurance companies must limit their liability to settle their customers losses (else it doesn't fit their business models).  It is ironic that the institutional investors of insurance companies (at least in England) think the trend is still up, when they consider the remote possibility of telling their customers to check their policies and update their coverage limits.  The more coverage, the more risk, and thus the more you pay which makes sense.  That said, you have to think that if the InsCos want more money in policy form to cover your gold jewelry and coins, what does that say about the actual trade itself? 

Sprawl of the Slums

Author's Note:  This is months old, but just now getting around to releasing it.  Hope it was worth the wait.

If you have ever visited FerFAL's blog (old or new), he has many times talked about the plight that is a socioeconomic collapse of society due to government mismanagement and rampant inflation.  With this, comes things like urban slums, shanty towns, squatting and other forms of communal ownership of property that may or may not be through purchase or legal transfer. 

From Business Insider comes an article that highlights slums from around the world via sat photos.  (A USA version of this article can be found here). 

At any rate, FerFal is always talking about slums and the disease, filth, and crime that comes with them.  These sat photos certainly put the towns into perspective from a geographical stand point.  Any person with common sense an a basic understanding of demographics would quickly assume that crime is a problem, but so too there would be an environmental impact as well.  When population densities hit multi-thousands of people in put a few square miles (or kilometers), no wonder FerFAL often writes about trash, poor drinking water, and waste water and sewage problems.

These pictures have to call into question the claims of environmental-wackos that economic growth is what contributes to pollution and green house gases.  Just looking at the population densities and to know what countries these slums are in, it isn't hard to see that there is a negative environmental impact associated with recessions or depressions.  Which, if we extrapolate our common sense thinking, means that economic growth and sound private sector business profits fund the tax coffers which help governments to pay for environmental "mitigation" projects as a way to find balance between business and planet.

I'd say that these type of slum cities are worse from an ecological health stand point.  I can only imagine that when you have population densities this high in cities that are marginally 1st world countries, the lack of  running water and the waste water control are probably BIG problem.  Not to mention the amount of physical refuse that is generated and probably just piled around without collection and safe disposal.  I would also venture to guess that since these kind of places don't have much in the way of central planning and zoning, meaning that none of these cities manages their storm water runoff to account for erosion and sediment (thus impacting downstream health).

While environmentalism push groups like to clamor that the USA and it's consumption is the problem, in reality, first world countries that have economic might, can do some good for the environment through conservation projects.  Obviously, we can sit here and debate about tax revenues and proper use thereof, but the point being, economic growth allows a population to take into account some projects of nobility to preserve open space and the environment.  That is something of a contradiction to my limited government stance, but there is no reason that the government and business can't co-op to be able to achieve a mutually beneficial society.  The problem is, as is exampled here, unchecked growth is a negative to eco-health, but unchecked government intervention (and crony capitalism) can cause an economic decline that allows for a degradation of society into the cheapest means of living, often resulting in the most egregious, negative environmental impact. 

As an avid hunter and sport fishermen, no one understands more the balance that is necessary to the survival of the human populace and the planet as we know it.  The problem that is generated by those on the left is there outright assault on economic and human progress in the "name" of the planet.  After all, the unintended consequences of protectionist environmental practices and ineffective monetary policy can be and are, quite catastrophic. 

Dump the Mac's (Freddie & Fannie)

What is the biggest centrally planned US market?  Housing of course.  Fannie and Freddie are New Deal era companies born out of "necessity" only to become behemoth bureaucracies.

So, what is the solution to fixing the ever evolving housing problem?  Simple, let the market work and get the bureaucracies out of the way.

Declining Standard of Living

If you followed the news here in the states, instead of across the pond, you would think everything is hunky dory.  Of course, we know that our dollar buys a lot less these days. 

Unfortunately for the Brits, their Pound buys a lot less every day as well.  To the tune of about 1 Pound a day.  Yikes!  As the blog article states, it gives a whole new meaning to the term "bank robbery."  Watching negative interest rates eat at your bank savings is depressing.  I'm in that boat myself. 

Of course, life isn't without risks, since the precious metal trade also has downside risk as well

Zero Hedge Week in Review

Some interesting things from Zero Hedge that I think are worth reading. 

The Con of the Decade:  A guest post with a logical explanation for why inflation will not turn hyper-inflationary, based upon the "other side" of the trade.  Meaning, debt is an asset to those who hold it to earn the interest.

FBI Raids Chuck E. Cheese:  I thought I had blogged about this before, but perhaps not.  I suggest you read the back story from the Daily Reckoning first, before reading the satire of von NotHaus' conviction.  I mean, if someone wanted to giving a silver coin that is meant to represent a US Quarter Dollar (but is .999 pure silver and a metal content value of say, oh, like $15), wouldn't you accept that as payment on goods and services?  Read the satire, it is funny, in a somewhat scary way.

Misery Index All Time High:  This one is from 3/29.  Oops.  I told you dear reader I had a back log of posts.

$1,800 Gold By October: Ben?  Is that you!?!

TEOTWAWKI preps inflation, 47% in 6 months:  Enough said.

And...last one for the week, which is more survival / prep minded here: Keeping Capital in a Depression

Of course, you don't need me to read www.zerohedge.com.

One Year Later: BP Oil Spill

A look back through pictures from the Telegraph from one year ago regarding the Deep Horizon accident.

While the above link isn't really a "Finance Friday" topic by itself, the industry, the fall out, the continued lack of drilling permits as a result of the ever moving "rule" target by the Interior Department, has certainly been one cause for oil to head back above $100 a barrel.  Not the sole reason, but one of the reasons and certainly one that can find blame with the Obama appointee Ken Salazar.

Have the processes and safety protocols really improved?  It is hard to say.  I plead ignorance as to the current impact upon the Gulf of Mexico and its ecosystem because both the enviro-wackos and the right have their respective spins on the issue.  The one thing I do know is that we are witnessing government central planning stall the plans of private business to the point that it has wreaked havoc upon the market.  While the cash that finances the industry is fungible to where geo-political and environmental concerns aren't as big of a concern, US based companies continue to loose the capital necessary to explore, extract, and mitigate the environmental costs associated with oil production.  Not to mention the roughnecks who are unemployed or forced to travel to foreign lands to make an honest living, or the rig builders who have now lost productivity to await the new regulations.

As usual, what the government doesn't know, it attempts to regulate and thus, snuffs it out of existence. 

Finance Friday Blitz, Coming Today

Well, actually, a ton of posts period coming.  Like Uncle, sometimes we need a break.  My problem is, I need a break, plus I go through info overload. 

Google reader feeds stack up, get skimmed, sped read, and the interesting ones usually end up here to be blogged, discussed, or opined upon.  That doesn't always happen at the first part of the month because of the accounting cycle.  It's one of the reasons that when Foxtrot Uniform asked to write his "OpEd," I just offered him the chance to be a regular contributor (hopefully plugging in some gaps here and there when he has interest and time).

At any rate, as things come to a slower rate in the final 1/2 or 1/3 of the month, I tend to put out more work.  So now you understand if things get a bit backed up and not written as much as they should.