As we celebrate our own Independence Day, we would be wise to realize the concept doesn’t only apply to us: every nation on earth makes a very big deal out of one day in the year, set aside for touting the virtues of their particular land, its history, its heroes, and its subtle beauties. Each time Washington announces this or that nation has violated “international norms,” and threatens to exercise its imperial prerogatives, the world’s hackles rise. Every presumption of our own superior ability to decide what is best for the world at large — no matter how “enlightened” and representative of “modernity” — is deeply resented by the targets of our self-righteousness.
Had the regime underststood what the internet would mean– the destructon of official media and the proliferation of unofficial thinking, booming web commerce instead of brick and mortar stores, etc.–it never would have allowed it to come into existence. Given their typical mistake–they are always trying to catch up to the market–surely the smartest minds in the state stay up late thinking of how to wreck the internet in ways that will not undermine the state through public anger. Here is the latest scheme from beloved neocon Richard Posner. This government judge proposes outlawing linking without prior permission, to destroy Google news and other aggregators that necessarily have no government-approved gatekeepers, and all unapproved web media. In particular, Posner–a crazed IPnik as well–also wants to protect government’s beloved newspapers, as if any young person would then pick up one of these expensive, hand-staining pieces of federal propaganda. So what would happen if Posner got his way (impossible, I guess, given all the great hackers, etc.)? We’d all link to foreign sites only, which would then cover US goings-on even more fully, because they would want the traffic. The Washington Post, the New York Times, and all the rest of the CIA’s house organs would continue to decline until they are bailed out by some Obama stimulus, thus making clear what has long been the case, that they serve the state.
Ron Paul's legislative history is a lesson in principled failure. Among the bills he has co-sponsored: ending U.S. cooperation with the United Nations, a repeal of antitrust law "to restore the inherent benefits of the market economy," and stripping the government of the right to set a minimum wage. Just last week, he again introduced a bill "to repeal the Gun-Free School Zones Act of 1990," which would presumably make schools less safe but which would reinforce our right to bear arms. For Paul, ideology almost always trumps politics.
None of these bills, I should note, have picked up much support. And Paul's track record with economic legislation isn't any better. His perennial efforts – shifting the country back toward a gold standard, abolishing the personal income tax, and dismantling the Federal Reserve – are nonstarters. They so change the very fabric of this country that Paul can't marshal his colleagues to his side.
Which is why Paul's most recent legislative accomplishment is so impressive. He has rallied the majority of the House to support his new cause: an audit of the Federal Reserve. Legislators are sick of not knowing what's going on inside Bernanke's fortress, especially as the Fed becomes further enmeshed in the nation's fiscal policy. Paul's little bill has become emblematic of a larger movement, one that could spell trouble for Obama's troubled regulatory plan. Ron Paul – always an enemy of regulation – is now an enemy of Obama. And a mighty powerful one at that.
The Mercatus Working Paper series now includes the following, co-authored with Gene Callahan: "The Role of Ideal Types in Austrian Business Cycle Theory." An earlier version was presented at the SEA meetings last November, as well as at the Wirth Institute Conference in October. Gene and I thank a number of commenters at both events as well as referees at Advances in Austrian Economics, where the paper will appear next year, for their suggestions.
... IS IT OKAY TO SPEAK CANDIDLY ABOUT WHAT IS REALLY GOING ON IN THE STOCK MARKETS?
"There is a problem structurally in the equity markets that nobody wants to talk about. There is intervention. There is manipulation going on. No one has exact proof of what's going on. But it's out there."
The lions of Wall Street - who couldn't manage their own affairs - are put in charge of ours!
"Robert Hormats, Vice Chairman of Goldman Sachs, is to be installed as Under Secretary of Economics, Business, and Agricultural Affairs. This comes as one more, probably unnecessary reminder of the total control exercised by Wall Street over the Obama administration’s economic and financial policy....
Among the familiar Wall Street faces that Hormats will encounter in his new post will that of Deputy Secretary of State Jacob Lew, lately Chief Financial Officer of Citigroup Alternative Investments Group which lost $509 million in the first quarter of 2008 alone."
The interrogation booth is a six-by-six room with plywood walls, plastic chairs, and a table. Today, my fourth day in the country, my partner is Bobby, a corn-fed boy from Nebraska.
I sit beside him in front of a human skeleton. Abu Ali, a Sunni. Bitterness leeches out of him. Our interpreter, Hadir, stands in the far corner. The ’terp looks reluctant to speak.
Bobby glances at Hadir, though we’re supposed to maintain eye contact with our detainee.
“What did he say?”
Hadir frowns. Then, in a perfect mimic of Abu Ali’s tone, says, “You came to my country. You Americans ruined our lives and now you want to help me?”
Bobby nods, “Yes, we can help you. Don’t you want to see your family again? Help us help you.”
He does not reply. Bobby had warned me beforehand that Abu Ali is a hard case. He hasn’t given anything up, despite numerous interrogations.
“Abu Ali, what would you do if I gave you a knife?”
“I would slit your throat and watch you die.” His gaze on me is even.
“Just because I’m an American? Even though I mean you no harm?”
Hadir translates, “You created this hell we are living in.”
Bobby changes the subject. “Abu Ali, why don’t you tell Matthew why you joined al-Qaeda?”
“It goes back to when you Americans first invaded,” he begins. “Sunni and Shia lived as neighbors. My mother is Shia. She converted to Sunni when she married my father. There was harmony. But you Americans removed Saddam. We lost our protection. America doesn’t care about Sunnis. You let the Shia militias kill my people.”
“What do they want?”
“Power. Dominance. I owned a clothing store. One day, I came to the store and found a note. ‘Pack your things and leave. You have 48 hours or you will die.’ The bottom of the page had the symbol of the Badr Corps.”
He lets that sink in. We stare at each other.
“What did you do?”
“I did what I had to do to save my family. I lost my shop. My livelihood. I returned to the mosque of my childhood. It was there I met fellow Sunni willing to fight for our people.”
I lean forward in my chair. I try to act earnest and sympathetic. “Abu Ali, why al-Qaeda? Why not one of the Sunni groups like Ansar al Sunna?”
“You Americans had wiped them out. Without al-Qaeda, we had nothing.”
“So do you believe in al-Qaeda’s goals?”
Abu Ali sizes me up. “No, I am Iraqi. I only want back my home.”
WHY THE GROWTH IN THE MONETARY BASE ASSURES INFLATION...
EVEN IN ADVANCE OF FRACTIONAL RESERVE BANKS LENDING...
"At the end of August 2008, the monetary base began its record-setting expansion from the $842 billion level to its $1.8 trillion peak in May of 2009. In fact, by January 2009 the base had already made the majority of its move, as it exploded to $1.7 trillion. "
QUESTION ONE:
How did the price of gold react to this monetary expansion?
"The dollar price of gold increased from just under $840 an ounce to $980 from the end of August 2008 thru the end of May 2009 time frame. That means gold rose over 16% while the US dollar declined just over 14% against the yellow metal.
An increase in the monetary base is much the same as a huge discovery in a commodity. Let's say there was a major oil discovery in the Gulf of Mexico that was very easily accessible and doubled the existing proven reserves. No one would argue that the price of oil would not react negatively. The price would drop instantly upon the announcement as traders and investors began to factor in the imminent increased supply. The majority of the price decline may not occur until all the oil was drilled and available for consumption. But as long as there was a high probability that the discovered oil would soon hit the market, the price should drop.
It's the same with a buildup in the monetary base. The increased bank reserves account for a latent huge increase in monetary velocity and inflation. Although a huge increase in inflation levels should not occur until the base money was loaned into existence and pervaded through the economy, the value of the dollar would drop in anticipation of that fact. The Fed has now availed banks of a doubling in high powered money and until it is removed the potential for massive inflation exists. In light of that fact, investors have taken down the value of the dollar against gold and most hard assets."
QUESTION TWO:
Is it reasonable to believe that Bernanke and the Fed can unwind this increase in the monetary base before it has done its inflationary harm?
No.
"...it would be politically and economically devastating for the Fed to dump $800 billion of Treasuries in addition to the $3.25 trillion they must sell in fiscal 2009."
"SPECTACULAR VIEWS" OF THE INTERNATIONAL SPACE STATION THIS WEEKEND!
Over the 4th of July weekend, Americans will have "spectacular views" of the International Space Station as it makes several passes over the country, NASA said Tuesday. The space station orbits Earth every 90 minutes in a constantly changing pattern. It is brighter than any stars in the sky right now, typically visible near dawn and just after dusk, weather permitting.
It will be almost directly over head during some passes this weekend, according to a NASA statement.
The trick is knowing when and where to look. SPACE.com's Satellite Spotting Guide has full details.
Telescopes are not useful, because the station moves across the sky too quickly, appearing much like other satellites but brighter, sometimes seeming like an airplane on approach to landing. Binoculars, however, can prove useful and might allow a glimpse of some of the station's structure.
The orbiting outpost is visible because it reflects sunlight. It is 357 feet long, about the length of a football field including the end zones, and 45 feet tall. Its reflective solar arrays are 240 feet wide, a wingspan greater than that of a jumbo jet, and have a total surface area of more than 38,000 square feet.An international crew of six astronauts, including American flight engineer Michael Barratt, is aboard the complex conducting research and continuing its assembly. Other crew members are from Russia, Europe, Canada and Japan.
The political establishment’s response to the global warming doubts raised by EPA researcher, Alan Carlin, is remarkable. The mantra chanted by one EPA official - and dutifully echoed across the media - is that Mr. Carlin “is not a scientist.” This fact, of course, has not kept Al Gore from becoming the patron saint of the environmental religion. (Gore received his PhD in which of the recognized sciences?)
An assertion of this sort is evidence of the anti-intellectualism that has metastasized across academia and spread to other venues of expression. Universities have become so dominated by an insistence upon the inviolability of the “turfs” of various disciplines as to make one unworthy to speak on matters of which he or she has not been certified to utter opinions by fellow academics. There was once a time - many decades ago - when a “liberal arts” education was regarded as a means of introducing people to a wide range of subject areas that would permit them to think and speak intelligently on various matters affecting their lives. Collective thinking - which now permeates college campuses - rejects such an idea, conferring subject matter monopolies according to one’s acknowledged “expertise.”
When my “In Restraint of Trade” book was first published twelve years ago, an academic reviewer from a respected history department spent most of his time acquainting his readers with the fact that I taught in a law school and not a history department. The review ended up being little more than a strident defense of turf, and a condemnation of my efforts to focus attention on matters unfamiliar to historians.
I enjoy watching Jonathan Hoenig every Saturday morning on Fox News’ “Cashin’ In” program on investment analysis. He is a consistent advocate of free-markets, individual liberty, and private property. He recently stated that humans “must think in order to survive,” but that we have recently been “outsourcing” this function to others. Such a practice now prevails on university campuses, and helps to explain why academia is a source of so little original and meaningful thinking. Don’t wonder about what anything means: the “experts” whose jobs are dependent upon advancing the agendas of the political establishment will explain it all to you!
Read Karl Denninger at Market-Ticker.org on a changing reporting requirement.
... the ability of people (like you and I) to see the fact that a handful of banks, most specifically Goldman Sachs, constitute the majority of NYSE trading volume - and they're trading for their own book, not for customers, will no longer be disclosed.
This "back and forth trade" between a handful of institutions is nothing more than the old "pump and dump" game that has been played in the OTC market forever - and almost always screws the individual investor.
This is no different than you and I selling a house back and forth between us repeatedly, each time at a higher price. We both appear to be geniuses as we're both making a "profit", right? Well, no. One of us is destined to take a horrifying loss if we do not find a sucker to make the final transaction with.
The embedded scam is that real gains require real parties at interest and not a closed system of a couple of guys passing an asset back and forth in a transparent attempt to "bait" someone else into becoming the sucker to offload that asset to.
The parallels to the housing bubble are not coincidence. There is no "value" being created nor is there any actual value appreciation taking place when people pass an asset back and forth at ever-higher prices. Only when there are lots of parties participating on their own, organically, does a market truly exist and does value align with price. Otherwise the so-called "price" is nothing other than a cheap parlor trick.
Obama is expanding the homeowner bailout so that underwater homeowners with a 125% LTV ratio can refi more easily through Fannie and Freddie.
Before your LTV ratio could only be 105%, because, well, as we've learned, fat loans relative to value are more likely to go bad.
As many have described it, Obama's solution to the housing crisis is: more subprime loans. Like the original subprime loans, they're really only going to work out of home prices grow rapidly over the next few years, otherwise you're looking at the perpetuation of people living underwater in their homes.
Just hours after her husband Bernie Madoff was sentenced to 150 years in prison for masterminding a $50 billion Ponzi scheme, Ruth Madoff expressed shock and dismay at her husband's behavior, telling reporters, "This is not the man I owned nine homes with."
"When you spend hundreds of millions of dollars with someone, you think you know him," she said. "I guess I was wrong."
Mrs. Madoff said she was kept "totally in the dark" about her husband's activities because he used a clever cover story: "He told me he was hiking the Appalachian Trail."
BusinessInsider.com: The International Energy Agency released its mid-year oil market report this week. It helps explain the recent behavior of oil prices.
First, demand is dropping, which is what caused the price collapse. Second, however, production is also collapsing--even faster than demand.
The other factor in the recent price increase, according to the IEA, is the weak dollar.
(Bloomberg) -- Swiss banks are shutting the accounts of Americans as the U.S. Internal Revenue Service accelerates the hunt for tax dodgers.
UBS AG and Credit Suisse Group AG, the country’s biggest banks, have told Americans to move their money into specially created units registered in the U.S., or lose their accounts. Smaller private banks such as Geneva-based Mirabaud & Cie. are closing all accounts held by U.S. taxpayers.
While the banks declined to say how many people are affected, more than 5 million Americans live abroad, including about 30,000 in Switzerland, according to estimates from American Citizens Abroad in Geneva. Swiss banks must register with the Securities and Exchange Commission to provide services for those customers.
“My bank doesn’t want to do that, so we wouldn’t accept an investment account for a U.S. person,” said Pierre Mirabaud, chairman of Mirabaud & Cie. and the Swiss Bankers Association, during a lunch at the American International Club of Geneva.
SEC registration means clients don’t enjoy the protection of Swiss banking secrecy laws, which make it a crime for money managers to disclose the names of clients without their consent.
... AND MISH EXPLAINS WHY HE MUST NOT BE REAPPOINTED!
"Bernanke is a disingenuous liar with a memory problem. He is also an economic dunce who does not understand the cause of great depression nor could he spot a housing/credit bubble visible to nearly every blogger in the country. However, like his mentor Greenspan, Bernanke believes that every problem can be cured by throwing money at it. Finally, he is a creative, political power grabbing hack who gives memorable speeches about throwing money out of helicopters."
