Let Greece and the entire Eurozone default

The best thing that could happen to the Europeans is to have their nation-states default on their debt. The sooner it does, the better.

Unfortunately, there are people who are under the illusion that this can be stopped and insist on more bailouts. I believe that is misguided. Whether they like it or not, Europe will go into recession. It is not a question of if but of when the recession will occur.

In years to come, people will closely examine why the statesmen failed the proletariat. I have faith that future generations will be able to point to the printing of money as the source of malinvestment and recessions. There is no more boogeyman nor foreign invader. The source of the economic problem is found in government monopolization of money and the selective distribution of cheap money to the rich. Historians will have no choice but to link the century of warfare with the century of the failed central banking experiment.

The sooner the default, the sooner the economy can approach stability. Private investors will shy away from trusting government borrowing. Creditors will be more critical when they accept borrowers. Malinvestment will slow down and resources will be invested more astutely.

Back to the present.
The affluent Europeans will know what it is like to be economic refugees and they will feel for a long time in their own native land. Canadians should prepare themselves for massive immigration from Europe. We will be going back to our roots.

No Free Trade from China

A while ago, I wrote about the perverted application of the theory of competitive advantage in a post called Everything we ignore about Free Trade. I want to be clear: I love free trade.

What I hate is the fact that free trade does not exist and everybody ignores injustice in the economy. Recent international events constantly demonstrate that we do not have international free trade. In China, local citizens are protesting the construction of a coal-fired plant where they live. The Chinese stooges who work for the government are beating them into submission.

There may be nothing that anybody can do to stop the evil Chinese government. However, we should not delude ourselves into thinking that the cheap junk we get from Chinese factories demonstrates the benefits of industrialization for them and the benefits of free trade for us.

The truth is that we benefit from both outright theft and our ignorance of the truth.

Peter Schiff: How to silence an economist…

Embarrassing! Listen to how they fumble the ball! Nobel Prize Laureates in Economics (Christopher Sims and Thomas Sargent) and can not answer any general questions about economics in the US, Europe or in Latin America.

Peter Schiff: How to silence an economist: Ask him a question about the economy.

Chris Hedges identifies who is conservative

After being badgered rudely by the idiotic Kevin O’Leary on CBC, Chris Hedges identifies who is conservative:

“Those who are protesting the rise of the corporate state are, in fact, on a political spectrum, the true conservatives because they are calling for the restoration of the rule of law.”

“This sounds like Fox News.”

At the end of the interview, the host thanks him for joining them and Hedges throws off his earphone with a final well-deserved jab: “It will be the last time.”

I rarely pay attention to the CBC but what a shame that their actors have alienated a very intelligent and responsible journalist.

Californians want to identify GMO foods

There will be a ballot initiative in California with the hopes of making it mandatory for foods with Genetically Modified Organisms to be labelled as such.

CAVEAT: Personally, I do not care much one way or the other. I am not afraid of eating GMO foods. However, I have severe objections to the nature of their business model such that, if I had my druthers, the GMO market would not likely exit. In simple terms, I do not believe in patenting anything much less organisms but that is an argument for a different day.

Unlike the super-natural foods crowd, I doubt that the general public will care if this ballot initiative is adopted. People will pick up a package, read GMO on the label, compare prices and keep buying the same old junk. Initially, the mandatory labelling will have the opposite effect of a death blow. Rather than rejecting GMOs because of safety concerns, people will have less fear of GMOs after learning how much of them they have been eating all along!

Regardless of where you fall on the politics of this issue, I think it is only responsible to ask why it is that GMO labelling is not already happening voluntarily. If GMOs are a good thing, why not let it be known? I think the reason GMO labelling is not already pervasive is because the general public would be horrified to know that big business has such a stranglehold on the agricultural market. If there is going to be a death blow to the GMO industry, it will arise from the public revolting against so much control over nature and God’s bounty — not because people think GMOs are dangerous.

Public dissent in American monetary policy

Dissent in The Federal Reserve’s monetary policy is becoming public. Finally, the otherwise-insulated crony capitalists are feeling market pressure! There is hope to believe that monetary policy will change before everything crashes and burns.

Until August, no Fed decision since 1992 had caused as many as three dissents on the policy committee. Economists say the level of disagreement isn’t surprising: It’s far from clear what more, if anything, the Fed should be doing to help lift the economy out of a low-growth, high-unemployment rut.

This dissent would not be news if it was not serious.

Maybe one day, all honest economics classes will teach that printing money does not create wealth.

Gov. Rick Scott steals from the poor to give to the rich

I knew something stank and it was not just the dead rat my cat delivers to me on a daily basis. What a buffoon. Here is a politician who pretends to champion a hard line against drug abuse and targets the poorest of the poor so that he can appear to prevent wasting taxes. What happens? His program wastes more money in a hypocritical display of trying to save money.

When I first read about this twisted nonsense today, from every angle, it seemed too absurd even for the anti-welfare crowd. [CAVEAT: I do not believe in welfare mainly because I do not believe in taxation. That is a different story altogether. There is no point me using this opportunity to preach charity.] For an anti-welfare guy myself, I must say that I felt a little sick to my stomach learning that these poor people had to fork out the $30 themselves. I had just come back from grocery shopping and I had spent $60 for the coming week.

Not to get too weird on you all but people on welfare spending their welfare money on drugs does not bother me much at all. Starving them is not going to help. However, putting the boot to drug dealers will help. If the statesmen really honestly wanted to fight The War On Drugs, they could put a stop to it overnight. The police know all of the who, what, where, why and how. It does not stop because there is just too much money to be lost by stopping the drug trade.

A keel-hauling is in order and it has to start from the top. I predict that this stupid mandatory drug testing program will continue to yield 98% drug-free rates but as long as Gov. Scott is in office, the program will never stop. Here is why:

Scott’s sale of the company comes as he attempts to distance himself from repeated conflict-of-interest questions about whether the company he started in 2001 — and hoped to develop into a national chain — would benefit from the aggressive health care changes he wants state lawmakers to approve.

First, I was angry. Now, I am fuming. This is crony-capitalism at its worst. The free marketeers keep demanding less government intrusion in the market place and they are right, as far as I am concerned. The socialists point to this cronyism and say: “See! See! The free market is failing! We have to regulate the market!” but they fail to recognize that we do not live in a free market.

I want a free market. I want the backroom thievery of Rick Scott to stop. I want his pharma-friends to starve. They leach out more corporate welfare than all of the poor welfare recipients combined! The money saved by stopping all of the corporate welfare would make it so that poor people would not need hand outs.

I have to go out and cool off. Hat tip to Jane for bringing attention to this story.

Roubini spreading gold nonsense

Good grief. I used to find Nouriel Roubini to be interesting several years ago but then he went wacko. His latest hysterical attack against the use of gold as currency is absurd.

When I pay somebody with legal tender that is any higher than a $20 bill, the first thing they usually do is take a closer look at it to see if it is fake. The hold it up to the Sun. They scan it with blue light. The rub it between their fingers. Somebody even smelled it once. I found out the other day that photocopied $5 bills are becoming very common in tip jars at establishments that usually have dim lighting. That is a pity. Anyway, That is our legal tender for you.

Counterfeit bills appearing in circulation is not the problem with fiat money. The real problem is the central bank increasing the money supply with nothing to back it.

If you pay me with a gold coin, I can test it to see if it is debased too. That may not be easy to do but it can be done. I can weigh it. I can measure its volume. Here is the beauty of using a precious metal: the government debasement of the money supply is on par with the debasement by a common crook. The government just can not hide its debasement the money supply.

Where Roubini is being disingenuous is by omitting the fact that people were forced to accept the King’s debased gold. Such extreme coercion can not happen today with debased metal.

The other good thing about precious metals is that it costs money to extract them. So, a person who wants to increase his wealth has a choice: dig or get a job and trade. It just makes no economic sense to fear an inflation of the gold supply.

One more thing about the monetization of precious metals is that nobody holds a monopoly upon what precious metals people will accept. Currencies will compete. Some people will trade gold. Other people will trade silver or whatever else.

Does that mean people will walk around carrying bags of gold in their pockets? No. They will keep using their plastic cards and trade private notes. However, at the end of the day or week or month, they will likely walk into their bank branch and demand to see their bars of gold in the vault to make sure there is no funny business going on. Heck, private vaults will probably spring up on the market to compete with banks!

A $1.6B Middle Finger

We get it, B.C. You’re ticked off at the Liberals and you want to punish them. The fact that you’re throwing common sense, rationality and self-interest out the window is beside the point. You want to stick it to deceitful politicians. I get that.

But I don’t get stabbing your fiscal stability in the neck.

If you do a quick search of The Politic (the search box is down at the bottom of the right hand column), you’ll see that I have a beef with the idea of a harmonized sales tax. I don’t like the fact that it conceals the source of each part of the tax (though this could be alleviated by having retailers display the taxes separately while keeping all the other wonderful aspects of the HST), but c’mon man, that’s no reason to throw a tantrum when Gordon Campbell dupes you (and I know about tantrums, though my three-year-old is more reasonable when I tell she can’t have a chocolate cookie).

Consumption taxes are good. They’re less distortionary than so many other taxes. They reduce transaction costs. And if you build in the right mechanisms, they’re a hella lot more fair. And, oh yeah, the B.C. HST did that. The reach of the sales tax was, arguably, further reaching than your beloved PST, but the rebates (read: money in your pocket) that would be issued would out-weigh the inconvenience of having to pay more at the cash.

But I get it. The Liberals went about the wrong way, and you just hate it when politicians lie to you. Of course, you don’t seem to mind when Bill Vander Zalm lies to you (though, if that’s the worst thing he’s ever done…), but at least he lets you get some self-righteous populous rage on. Not like those darned elites pretending like they know better than you… oh, wait.

And that’s the point, right? Fiscal sensibility, balanced budgets, economic security, a simplified and fair tax code… that’s all meaningless compared to sticking it to the man. Bra-vo.

So, do you realize how much you’re in the hole for? Did you really think about what will have to be done to switch back to your archaic, sentimental PST? Do you realize you owe the rest of us 1.6 freakin’ Billion dollars? It was mentioned on Twitter that 1.6 million people voted in this act of grandstanding referendum, so that’s $1000 per vote that you owe us.

And to the BC NDP and its supporters, what on earth have you done? Sure, the federal NDP recently ran a fiscally irresponsible campaign, but, damn, if thye didn’t build up the NDP brand like no one else. I think they actually made people forget what ruinous policies the NDP actually stands for. But you wouldn’t let that spoil your fun. The Liberals needed to suffer and you needed to prove your economic illiteracy. Are you, in fact, blind to the reality that you need to expand your tax base to fund all the goodies you want to buy? Do you not realize that the HST was, on balance, a fairer and more efficient way to achieve that?

And to BC voters, do you feel good? Are reveling in the pain Gordon Campbell is, no doubt, feeling as parades around London? Do you think that everything will just be fine, because you’ve slain the bogeyman that is the overbearing elites? Do you actually understand what you’ve done? No matter how good it feels to rebuke the public servants who think so little of you, you have just dealt a major blow to the province that, I assume, you love so dear.

So, yeah, that big ol’ middle finger you thrust in the face of the ruling Liberal party, you just shoved it in your own eye.

Stockwell Day sugar-coats Canadian monetary policy

Stockwell Day is tooting his own horn on the CBC:

Neither individuals nor nations can dig themselves out of debt by plunging further into it. And you don’t encourage workers to work harder by punishing their efforts with higher tax brackets.

Sounds good, right? The only problem is that Jim Flaherty and Mark Carney have been demanding an increase in credit and monetary expansion for the past few years. They are getting it too. The Conservatives are not following what Stockwell Day is suggesting.

I know. Conservatives will just say that they are following a balanced approach but that is nonsense. The Bank of Canada sustaining interest rates near zero is just a devious way to slowly redistribute wealth from the working class to the parasitic elite without anybody noticing.

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