By Winton Bates, on May 29th, 2009
Some New Zealanders might say that this is a question that only an Australian could ask, but it seems to me to be a good way to raise the issue that I want to discuss. (I hope that when I look back on this in a few days time it will still seem like a good idea!)
The ratings that I am writing about are the ladder of life ratings from the Gallup World Poll – the top step of the ladder represents the best possible life and the bottom step represents the worst possible life. But I could be referring to any of a range of surveys that ask people to place a numerical rating on how happy they are or on how satisfied they are with their lives.
I do not intend to argue that New Zealanders have a peculiar propensity to over-rate their satisfaction with their lives. The issue I want to discuss is what it means when surveys show that New Zealanders are just as satisfied with their lives as people in the U.S. even though average incomes in NZ are only about two-thirds of the U.S. level. I propose to compare the impact of income differences and other factors on the survey measures of subjective well-being in order to enable readers to consider whether the impacts attributable to income differences provide an accurate measure of its impact on the quality of lives.
It is now possible to make fairly accurate comparisons of the impact of income and other factors on average ratings of subjective well-being at a national level. Recent research by John Helliwell, Christopher Barrington-Leigh, Anthony Harris and Haifang Huang has shown that a high proportion of differences in average life evaluations between countries can be explained statistically by differences in a relatively small number of variables reflecting social, institutional and economic circumstances of life (See Table 3, ‘International Evidence on the Social Context of Well-being’, Working paper 14720, NBER, 2009). The most important variables are income (log of per capita GDP), friends (the proportion of survey participants who have relatives or friends they can count on for help when they are in trouble), freedom (the proportion who satisfied with their freedom to choose what they do with their lives) and corruption ( responses to questions relating to whether corruption is widespread throughout government and business).
In the Figure below I have used these research results to show reasons why average survey measures of subjective well-being in several countries differ from the U.S. ratings.
The net differences from U.S. ratings are shown next to the label for each country. If you focus on New Zealand you can see that the perception of NZers that their country is relatively free of corruption outweighs the negative impact on survey responses of the fact that average incomes in NZ are substantially lower than the U.S. average.
If you consider that corruption is as big a problem in the U.S as, for example, in Greece, you might think that this provides an accurate depiction of the relative impacts of income differences and corruption on the quality of life in New Zealand and the U.S. However, when I look at the expert ratings of corruption levels in Transparency International’s corruption index, the U.S. doesn’t look too bad. The rating of the U.S. in this index (7.3) is lower than Denmark and NZ (both on 9.3) and Australia (8.7) but well above Italy (4.8) and Greece (4.7). (It is also interesting that Greeks do not perceive that their corruption problem to be any worse than that in he U.S. and that NZers do not perceive themselves to be as free of corruption as the Danes).
The point is that the influence of various factors on the survey ratings of quality of life depends on the way they are perceived. Americans are sensitive to corruption in their society and they don’t like it. The ratings are more like emotional responses than dispassionate evaluations. It seems to me that self-reports of how people feel about their lives tell us about their emotional state, which is an important influence on well-being but is not identical to it.
One way to test survey ratings is to ask ourselves to what extent we would be prepared to rely on them in making decisions affecting our own well-being. It seems to me that income may be more important to people when they make decisions affecting their our well-being than when they answer questionnaires about the quality of their lives. If you were in Europe contemplating a choice between moving your family to either the U.S. or NZ, would you consider the importance of differences in average income levels to be adequately reflected in survey ratings of the quality of life?
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By Eldon Mast, on May 29th, 2009
Strong demand for communications equipment, machinery and fabricated metal led an upbeat durable goods report for April. Overall orders jumped by 1.9%.
Most analysts were wrong and had expected only a rise of 0.4%.
The bounce in new orders was broad but was led by communication equipment which alone was up 6.9 percent. Significant new orders were also seen for fabricated metals, machinery, primary metals, and electrical equipment. The monthly upward momentum was the best since December 2007.
The report also comes at a time when the cost of shipping raw materials has now jumped almost vertically. The Baltic Dry Index is up 377% from its December low.
Additional good news on the employment front posted on Thursday. New claims for unemployment continue to fall as does the 4 week moving average. The new data further solidifies Bob Gordon’s assertion that the latest (and several weeks past) peak in claims will be the clear marker for this recession’s end.
By Bron Suchecki, on May 29th, 2009
From a recent Zerohedge blog post:
James Brigagliano, co-acting director of the SEC’s Division of Trading and Markets, said dark pools could impair price discovery by drawing valuable order flow away from the public quoting markets. “To the extent that desirable order flow is diverted from the public markets, it potentially could adversely affect the execution quality of those market participants who display their orders in the public markets,” he said.
To remedy this, the SEC, Brigagliano suggested, may impose post-trade reporting requirements on dark pools. “While full pre-trade darkness is an important element of the business models of some dark pools, it does not appear that some form of improved post-trade transparency would be likely to interfere with those business models,” he said. “Indeed, uniform and accurate trade reporting practices could help establish a fairer playing field because those dark pools that report their volumes accurately won’t be disadvantaged in comparison to those that inflate their volume.”
I wonder if the SEC’s interest in transparency extends to the gold market? One very simple transparency measure would be to breakdown central bank gold holdings into
a) physical bars under the control of the central bank;
b) physical bars on deposit with outside counterparties;
c) unallocated deposits with outside counterparties; and
d) leased out.
For more information on the games played by central banks on reporting their gold “holdings”, see Golden Sextant’s Déjà Vu: Central Banks at the Abyss
By Eldon Mast, on May 28th, 2009
Consumer confidence is surging, investment fear is subsiding, and brave buyers are wading back into the existing home market.
On Wednesday the National Association of Realtors said that sales of existing homes rose 2.9 percent. The annual rate now stands at 4.68 million homes, up from the 4.55 million annualized rate in March.
The results were higher than most economists’ had forecast.
Continued low home prices and historically low interest rates continue to attract investors and owner-occupied buyers. First time home buyers are continuing to enjoy an $8,000 tax credit from the stimulus package passed earlier this year.
In related retail market reporting, the recent consumer confidence surges are also translating to retail strength. On Wednesday the ICSC-Goldman report showed strong sales in the week ending May 23. Same-store sales were up 0.8 percent in that week with year-on-year sales up 0.5 percent — both readings were two of the best weekly jumps of the year.
By Vipin Veetil, on May 28th, 2009
An Economic Times article today, titled “Slums and economic stimulus”, says
“If slum dwellers could be given property rights that are heritable but inalienable to the land on which they now have their make-shift homes, if these title deeds provide for being used as collateral, then immediately all of these people become eligible for drawing on the new housing loans…
The grant of property titles to the urban poor is again already part of India’s public policy. The Jawaharlal Nehru National Urban Renewal Mission (JNNURM) explicitly advocates security of tenure at affordable costs as the first of a seven-point charter for the urban poor, which means housing improvement through assignment of property rights.
This recommendation in JNNURM has in turn been influenced by the experience of countries of Latin America of assigning property rights in favelas and barrios, Turkey in 1983 for its slums called gecekondu and the accepted logic that titles to homesteads is an effective route to improving housing and environment conditions in poor urban localities. Efforts at “social housing” through parastatals like state housing boards have not been able to address the problem in any large scale. ”
A great idea I think, unfortunately the author gets all mixed up with the nonsense of fiscal stimulus and government intervention. The basic idea is that slum dwellers dont invest in their property because there is no guarantee of being able to retain the future payoffs from their investments. Also, private firms cant buy large tracts of slum land to develop it. Hence poverty sustains itself.
This also explains why many slum dwellers would rather buy a TV than build a toiled, when the government goons come to break down your home, you can run with a TV but the toilets got to be left behind.
De Soto “Mystery of Capital” is a good book to begin with. He essentially argues that lack of property and contracts mean that literally billions of dollars worth of property is simply lying dead, instead of being entrepreneurially transformed into productive resources. The other side of the coin is the “Mystery of Labor”, why do the poor remain poor despite working hard for long hours. Its partly because they cant invest their small savings in high payoff projects. And partly because they cant borrow money despite having high payoff ideas. Both problems originate from lack of property titles, which means they cant back their contractual obligations and banks dont have a safeguard to lend against.
And of course there is nothing new in this. The whole history of industrialization can be captured in two words (1) property and (2) contracts (needless to say, the socialists and fascist at Delhi University dont teach this). Private property is merely a system where it is legal for people to help themselves!
Lastly, we dont need to worry too much about how to allocate property rights to slum dwellers in India. The Dharwi Slum Authority in Mumbai already has designed some kind of finger print reader or biological mapping device which they use to establish who lives where, and then use the information to reallocate land. Instead of this whole reallocation process, why not just assign property rights.
And if the socialists amongst us are not convinced enough, I propose an experiment. Choose any slum in India, and allocate property rights to the residents. And then compare this area to other slums five years hence. That ought to dispel any doubts.
  
By Bron Suchecki, on May 28th, 2009
In an interview with Tim Treadgold for the Eureka Report, Mark Creasy makes a point about watching the stocks, not flow, of gold:
Scrap gold, and even mine-supply, aren’t really the big players in the (gold) market. There’s about 160,000 tonnes of gold in existence, and the world produces about 2000 tonnes of freshly-mined gold a year, and about 1000 tonnes is generated as scrap. The total amount of mined gold and scrap is less than 1% of the overall gold market. The mine supply isn’t all that important in the gold price. It’s all about sentiment. The people who will influence the value of that 160,000 tonnes are the biggest shareholders, and they are the central banks, which own about 30,000 tonnes.
Gold is a bit like a company which has a dominant shareholder. If everyone believes the dominant shareholder is selling the price drops like you wouldn’t believe. A major influence is how people see the biggest shareholders handling their gold.
…
The best way is look at gold is not on the peripheral, say the scrap market or even mine supply; it’s to ask what are the big shareholders doing. In the past we’ve seen big holders such as the Bank of England and the Swiss National Bank selling, and people think we’re out of this. When they see a big new buyer, people want in.
Now Mark’s point that the flows are peripheral is not to say that they do not have an influence on the price. In the long run, if we have passed a “peak gold” moment (a subject of an upcoming post) then flows reduce and stock levels out which, in the face of increasing demand, is bullish for price. Significant changes in flows can also tip the balance of the buying and selling volumes of the holders of the 160,000t stock.
Probably the biggest influence classical “flow” supply/demand analysis by WGC and GFMS has on price is via perception of its effect on price rather than any actual effect due to the physical volume of the metal. Consider that Mark’s point about stocks has one problem – how do you measure the position of gold “shareholders”? How much volume of gold will be bid and offered to the market at each price level? Even if you can poll all the holders, the so constructed supply/demand curves of the “stock” will change over time in response to events. This is Mark’s “sentiment”.
Now why “flow” supply/demand is so dominant is due to the fact that it is (relatively) nice and easy to measure. Sentiment is not. Therefore there is a bias towards the numbers, the measurable 3000t flow and away from (or complete disregard for) the unmeasurable 160,000t stock.
As Richard Maybury notes in his recent article:
… it is so important to see the economy not as a machine but as an ecology. Machines don’t feel, they don’t have fear, or joy, or optimism. But people, biological organisms, do have feelings. They do fear, and their fears can change instantaneously. The human ecology, especially these days, is driven very largely by emotions.
As an investor it is important to remember that while “flow” supply/demand numbers from WGC or GFMS do have an effect, it is not the entire story and one should be cautious of the resulting mechanistic analysis. If “fears change instantaneously” then the movement of the 160,000t stock will overwhelm the annual supply/demand balance.
There is a bit of circularity or feedback in that perception of annual flows impact sentiment of the holders of stock. Also note that instantaneous change can occur either way – if fear decreases then supply of the stocks will push the price down.
Big upward price moves will occur when the sentiment that gold stock holders have is what is commonly called “strong hands” coincides with “weak hands” of holders of dollars. Focusing on annual mine supply or a drop in Indian jewellery demand isn’t going to help you identify that move.
By Thersites, on May 27th, 2009
Franklin Delano Roosevelt proposed a “Second Bill of Rights” during his State of the Union Address in 1944. He noted that while “under the protection of certain inalienable rights…our nation has grown in size and stature, however—as our industrial economy expanded—these political rights proved inadequate to assure us equality in the pursuit of happiness….true individual freedom cannot exist without economic security and independence. “Necessitous men are not free men.” People who are hungry and out of a job are the stuff of which dictatorships are made.” He argued that we “cannot be content, no matter how high that general standard of living may be, if some fraction of our people—whether it be one-third or one-fifth or one-tenth—is ill-fed, ill-clothed, ill-housed, and insecure.” Under the auspices of “economic security and independence,” FDR laid out the following list of rights for the American people:
The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;
The right to earn enough to provide adequate food and clothing and recreation;
The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;
The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;
The right of every family to a decent home;
The right to adequate medical care and the opportunity to achieve and enjoy good health;
The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;
The right to a good education.
During and after FDR’s presidency, many programs were taken up to establish these so-called rights. The US government implemented a minimum wage with the hopes of providing people with a baseline level of income to be able to pay for life’s necessities, and created unemployment insurance so that people would have sufficient money to purchase goods when they lost their jobs. They created agricultural subsidies to protect farmers. They implemented all sorts of regulations and restrictions to stop (certain) companies from dominating their competitors. They created HUD and devised the CRA to force lenders to finance housing for those who were less well off, to ensure the “American dream of home ownership.” They provided healthcare for the old and poor. They created Social Security to allow the old to receive checks after they were retired. They expanded public education and pushed for everyone to receive a college degree. They empowered the Federal Reserve to flatten the business cycle and protect against recessions.
Today, King Obama looks to be finishing off the dirty work of the progressives of the last century. He is pushing for “fair” credit card charges, universal healthcare, onerous governmental control of business under the guise of environmental protection, government control of college loans and empathetic justices who understand the concerns of everyone who is not white, male or wealthy.
Essential to the justification for this platform is FDR’s argument that there be equality in the pursuit of happiness, and that “individual freedom cannot exist without economic security and independence.” What those like FDR and Obama mean is that there is not equality as an outcome of the pursuit of happiness, i.e. equality of condition. By economic security and independence, FDR and the King mean that people need safeguards so that they can keep their jobs, pay for products and be comfortable in retirement.
All of the ends that these progressives seek seem admirable, but the means to achieve them end up making it impossible for the ends to be obtained. Nobody wants to see masses of unemployed, sickly or uneducated people. But the government policies implemented to protect against these problems – to guarantee the “rights” listed above – end up leaving people unemployed, unhealthy and uneducated. They impoverish the citizens by destroying the inalienable rights that even FDR admits allowed the US to gain its strength as the world superpower.
It was not economic security or independence that allowed our country to thrive, but a system in which people voluntarily traded and had the opportunity to innovate and take entrepreneurial risks. Failure, not economic security, had to be a motivator because there was no safeguard against it; no notion of being too-big-to-fail. If you failed, you simply had to pick up and try again. The Federal Reserve in attempting to protect against failure ends up leaving the people economically insecure by decreasing their purchasing power and savings through inflating the money supply, and by incentivizing people to allocate resources improperly through the manipulation of money and credit which leads to the painful boom and bust cycle. The moral hazard created by providing safeguards against failing, be it in business or in one’s own life ends up weakening the people.
Economic security and independence come as a result of our rights to life, liberty and property, not the other way around. The best thing the government can do to ensure these rights, the rights that lead us to maximum wealth, the fullest employment for those who seek it, the best and cheapest medical care and the most practical and affordable education is simply to protect its citizens from attacks on their individual rights. Individual rights, not entitlements. Entitlements beget more entitlements. Entitlements breed laziness in the citizenry. Entitlements cause people to take things for granted. Freedom is the one thing that cannot be taken for granted. As Reagan put it, “Freedom is never more than one generation away from extinction. We didn’t pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same.”
If you disagree with this in principle, then look at the results of the governments’ policies, those policies representing the antithesis of freedom. The US populace is probably dumber than it has been at any other time in history, even though a greater number of people are graduating from public high schools and attending colleges than ever before. Our economy teeters on the brink of collapse. Our government is larger, more intrusive and more corrupt than it has ever been. It is also effectively bankrupt minus its monopoly power to print money; interesting that it can have this monopoly power while also protecting people from “unfair business competition and domination by monopolies at home or abroad.”
Other examples of government failures abound. Amtrak is a money-loser, as is essentially all public transportation. If public transportation is not a money-loser, then I would venture to guess that it still isn’t as cheap or efficient as private alternatives. The US postal service is nowhere near as effective as FedEx. The DMV is a joke. The purchasing power of our dollar has decreased by over 95% since being under full control of the Federal Reserve, and we have had more frequent recessions than prior to the Fed’s creation. In countries with nationalized healthcare, we see that the price of better-quality, private healthcare increases, while public healthcare services leave people waiting sometimes for months on end for essential medical procedures. People flee to the US if their lives are in danger with good reason. If King Obama gets his way, they will have nowhere to flee anymore. Ironically, when it comes to almost every sector of our economy, while economists would have you believe that government corrects market failures, it appears that we would be far better if markets corrected government failures.
In the final analysis, there is not one good or service that the government provides that is cheaper and better than the equivalent one in the private sector, with the caveat that in terms of defense, only the government can coordinate the forces necessary to effectively protect us. And even then, the government outsources weapons development and certain tactical supports to private defense companies. And even then, the government screws up at times in the way it carries out its wars.
I want to reiterate that only the market can provide the people with the best goods and services at the best prices. This is the same for credit as it is for housing as it is for healthcare. If you take the market out of the equation and try to centrally plan, in the end you impoverish society and leave a nation to anarchy and revolution. Through a dictatorship, which is what the Second Bill of Rights effectively creates (a tyrannical government), you create the unemployed and the hungry that FDR speaks of.
With the burgeoning deficits at the state and national levels, the impending tsunami of inflation and the undermining of the rule of law and protection of life, liberty and property by our leaders, it looks as if in their quest to grant us the Second Bill of Rights, they have also destroyed the rights granted to us by an authority higher than that of our politicians, our natural ones.
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By Trace Mayer, on May 27th, 2009
Disclaimer: This article neither constitutes nor should it be relied upon as legal, investment or tax advice.
Almost everyone uses the dollar to calculate, plan and settle transactions in the United States and beyond. Likewise feet or meters are commonly used to calculate, plan and construct many building and engineering projects.
If units of length were mired in definitional chaos then the buildings and other contraptions humanity builds would be unsound, unstable and prone to chronic failure. But when it comes to units of monetary calculation the current worldwide state of definitional chaos, a floating illusion currency system, is taken for granted. Therefore, is it any surprise then that the current worldwide monetary system is unsound and unstable resulting in a chronically failing system?
IRS V. KAHRE
Robert Kahre, a dutiful Atlas, is once again being leeched by immoral tax eaters in United States District Court. Earlier in 2007 he was harassed because of his use of a particular type of legal tender. In his construction business Kahre used gold and silver instead of the predominant brand of paper tickets.
Two years earlier nine people were tried with Kahre for over 160 counts and there was not a single conviction. As if in complete disregard for the principle of res judicata he is once again being assailed by parasites. At issue is how Kahre is to define the dollar because a $50 gold coin and a $50 Federal Reserve Note do not have equal purchasing power.
WHAT IS A DOLLAR?
Dr. Edwin Vieira, J.D. holds four degrees from Harvard and practices law before the United States Supreme Court. I highly recommend reading Dr. Vieira’s entire essay, What Is A Dollar?, which is quoted only in small part here:
2. Do the present monetary statutes intelligibly define the “dollar’”?
Unfortunately, the present monetary statutes do not define the “dollar” in an intelligible fashion.
a. Federal Reserve Notes. Most people associate the noun “dollar” with the Federal Reserve Note (”FRN”) “dollar bill,” engraved with the portrait of President George Washington. This association is mistaken.
No statute defines – or ever has defined – the “one dollar” FRN as the ”dollar,” or even as a species of “dollar.” Moreover, the United States Code provides that FRNs “shall be redeemed in lawful money on demand at the Treasury Department of the United States * * * or at any Federal Reserve bank.”4 Thus, FRNs are not themselves “lawful money” – otherwise, they would not be “redeemable in lawful money.” And if FRNs are not even “lawful money,” it is inconceivable that they are somehow “dollars,” the very units in which all “United States money is expressed.”5
b. United States coins. The situation with coinage is more complex, but equally (if not more) confusing. The United States Code provides for three different types of coinage denominated in “dollars”: namely, base-metallic coinage, gold coinage, and silver coinage.
c. Currency of “equal purchasing power”. The UnitedStates Code provides no answer to this perplexing question. Indeed, it mandates that the question should not even be capable of being asked. For the Code commands that “the Secretary [of the Treasury] shall redeem gold certificates owned by the Federal reserve banks at times and in amounts the Secretary decides are necessary to maintain the equal purchasing power of each kind of United States currency.14
The term dollar is used in Article 1 Section 9 Clause 1 and the Seventh Amendment. Neither the slave-trade faction nor the right to trial by jury would have accepted these provisions without a clear definition of what the dollar is.
Therefore, their support of these provisions inferentially establishes what a literal reading of them straightforwardly suggests: to wit, that the noun “dollar” refers, not to a mere name applicable to whatever Congress whimsically might decide thereafter to call a “dollar,” but instead to a particular coin so familiar in American experience as to be beyond political transmogrification. … Obviously, Jefferson’s free-market, scientific approach is a world apart from the arbitrary way in which Congress has set up the mutually incompatible and internally irrational sets of silver, gold, and base- metallic coins that exist today.
2) The Coinage Act of 1792. Little more than a year after Hamilton’s Report, Congress enacted its principles into law.
Section 9 of the Coinage Act of 1792 contained the monetary definitions for the United States monetary system and defined
DOLLARS or UNITS – each to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver.
Section 19 provides the death penalty for government officials who debase the coinage.
THE RON PAUL EFFECT
During the 2008 Republican Presidential Primaries it was often cited that Congressman Ron Paul has not accomplished anything regarding legislation during his decades in Washington. Well, Dr. Paul is a like Spanish Moss that clings to a roadside sign, refusing to go away and as a result has harrowed the ground and laid powerful seeds for helping the American people with how to buy silver and gold.
To my knowledge the only legislation he has introduced that has been approved and enacted is Public Law 99-185 and Public Law 99-61 which provide under 31 United States Code 5,112:
(e) - Notwithstanding any other provision of law, the Secretary shall mint and issue, in quantities sufficient to meet public demand, coins which— (1) are 40.6 millimeters in diameter and weigh 31.103 grams; (2) contain .999 fine silver; (3) have a design— (A) symbolic of Liberty on the obverse side; and (B) of an eagle on the reverse side;
(h) – The coins issued under this title shall be legal tender as provided in section 5103 of this title.
(i) (1) Notwithstanding section 5111 (a)(1) of this title, the Secretary shall mint and issue the gold coins described in paragraphs (7), (8), (9), and (10) of subsection (a) of this section, in quantities sufficient to meet public demand, and such gold coins shall— (A) have a design determined by the Secretary, except that the fifty dollar gold coin shall have— (i) on the obverse side, a design symbolic of Liberty; and (ii) on the reverse side, a design representing a family of eagles, with the male carrying an olive branch and flying above a nest containing a female eagle and hatchlings; (B) have inscriptions of the denomination, the weight of the fine gold content, the year of minting or issuance, and the words “Liberty”, “In God We Trust”, “United States of America”, and “E Pluribus Unum”; and (C) have reeded edges.
Dr. Paul has given America an easy path for clearing up the monetary chaos and it would require the adoption of gold and silver as currency in ordinary daily transactions. This would be extremely easy with digital commodity currency services like GoldMoney. Dr. Vieira has even authored a bill for States to use in adopting the use of digital gold and silver currencies as legal tender. But instead it appears that America will choose the hard path. JOHN LAW PROVOKES THE FRENCH REVOLUTION
Harvard Professor Niall Ferguson wrote on page 149 of The Ascent Of Money:
Not surprisingly, some people began to anticipate a depreciation of the banknotes, and began to revert to payment in gold and silver. Ever the absolutist, Law’s initial response was to resort to compulsion. Banknotes were made legal tender. The export of gold and silver was banned as was the production and sale of gold and silver objects. By the arrêt of 27 February 1720, it became illegal for a private citizen to possess more than 500 livres of metal coin. The authorities were empowered to enforce this measure by searching people’s houses. Voltaire called this ‘the most unjust edict ever rendered’ and ‘the final limit of a tyrannical absurdity’.
As Congressman Ron Paul said on 19 May 2009 before the Congress:
The sad part of all this is that we have forgotten what made America great, good, and prosperous. We need to quickly refresh our memories and once again reinvigorate our love, understanding, and confidence in liberty. The status quo cannot be maintained, considering the current conditions. Violence and lost liberty will result without some revolutionary thinking.
We must escape from the madness of crowds now gathering. The good news is the reversal is achievable through peaceful and intellectual means and, fortunately, the number of those who care are growing exponentially.
Of course, it could all be a bad dream, a nightmare, and that I’m seriously mistaken, overreacting, and that my worries are unfounded. I hope so. But just in case, we ought to prepare ourselves for revolutionary changes in the not-too-distant future.
The pattern is common. Like the scoundrel John Law the ultra-scoundrel King George issued Writs of Assistance which provoked the American Revolution. When those exercising monetary rights are punished under penalty of death by criminal gangs costumed in government regalia then the reaction by the populace is usually the legitimate use of deadly force in self-defense. Perhaps there is a need after all for survivalism in the suburbs as the probability of disturbing events increases.
CONCLUSION
American monetary jurisprudence is in utter disarray being mutually incompatible and internally irrational. Criminal gangs costumed in government regalia are strutting around with their IRS hats harassing, intimidating and threatening with deadly force completely peaceful producers who are acting completely within the bounds of the internally irrational law.
The Great Credit Contraction has begun and will likely lurch from the financial to the economic to the social to the political to the geo-political and most likely culminate in geo-strategic chaos. Dr. Vieira has authored a suitable bill States could adopt to help America find her way home with less pain. These undesirable future realities need not unfold. If the costumed criminal gangs that swore to uphold the United States Constitution had a shred of integrity and honored their oath then much of the misery could easily be avoided.
But while the baton, taser, assault rifle or stealth bomber may be used in lieu of conversation words will always retain their power. Ideas can only be overcome by other ideas. Words proffer the instruments to meaning. Equity, freedom, justice, peace and prosperity. These are not mere words; they are vantage points.
As fiat currency acts like the common stock of the issuing nation and because during this decade the FRN$ has been evaporating at an ever increasing pace against the ancient metal of kings it is no surprise that the probability for ‘revolutionary changes’ is increasing. As the situation intensifies the purchasing power of gold will continue increasing while the purchasing power of the FRN$ will continue evaporating.
Disclosure: Long physical gold and silver with neither a position in the problematic GLD and SLV ETFs nor any association whatsoever, except perhaps that of victim via assault and robbery, with any of these aggressive sociopathic criminal gangs costumed in government regalia.
P.S. Because individuals are endowed with certain unalienable rights and because the people use those rights to create governments therefore it follows that people should not be afraid of their governments but that governments with their silly little costumes should be afraid of the people.
By Bron Suchecki, on May 27th, 2009
Some useful observations on the gold market in a recent Unqualified Reservations blog entry:
One trivial example of a liquid, functioning prediction market that does not, and cannot, produce accurate predictions is the gold futures market. The gold futures market is a large, active and efficient market in future gold, but in hindsight it demonstrates little or no predictive power. The cause is not at all obscure: since both gold and dollars can be stored at minimal cost, a variety of arbitrage strategies bind the gold futures market to the much larger dollar-futures market (ie, the market for loans). The price signal is real, but it is conveying much more subtle data than the market’s net opinion of whether gold will go up or down.
…
Again, the market for future gold does not function as a prediction market, because it is bound by arbitrage to the market for spot gold and the market for future dollars. At least one of these so-called markets is substantially the product of official intervention.
By Eldon Mast, on May 26th, 2009
This week the government’s data showed that unemployment actually fell in 21 states in April. Additionally 11 states saw their unemployment numbers hold steady rather than rise. Given that the unemployment rate rose in 46 states in March, the April state numbers are further evidence that the labor market is stabilizing.
Here are highlights from 10 of those 21 states where employment is improving…
- Missouri saw the biggest drop in unemployment, with it’s rate falling 0.6 percent to 8.1 percent in April.
- Wisconsin’s unemployment rate fell to 8.8 percent, compared to 9.4 percent in March.
- Arizona’s jobless rate fell to 7.7 percent in April, down slightly from its 7.8 percent reading in March.
- Colorado’s unemployment rate also dropped a tenth of a percentage point in April from the previous month. It was the first month-to-month decrease in the state since October 2007. The April statewide rate registered 7.4 percent.
- The unemployment rate fell to 8.1 percent in April from 8.2 percent in March in Minnesota. It was the first rate decline in a year for that state.
- California’s jobless rate improved slightly from 11.2 percent in March to 11.0 percent in April. In the San Francisco area including San Mateo and Marin counties, the unemployment rate fell to 8.3 percent in April from 8.6 percent in March. In addition to the rate drop, San Francisco, which has one of the state’s strongest labor markets, also added jobs in April. Further, unemployment fell from 11.3% to 11.0% in Los Angeles County.
- Indiana’s unemployment rate dropped slightly to 9.9 percent in April from 10.0 the month before. Notably unemployment rates fell significantly in most of northeast Indiana in April, compared with March. Specifically Allen County’s jobless rate fell to 9.5 percent in April from 10.8 percent in March.
- Florida’s jobless rate in April was 9.6 percent, two-tenths of a percentage point below March’s revised rate of 9.8 percent.
- Wisconsin’s unemployment rate fell in April to 8.8 percent, compared to 9.4 percent in March.
- New York State’s unemployment rate fell from 7.8 percent in March to 7.7 percent in April. In the Big Apple unemployment also declined, dropping from 8.1 percent in March 2009 to 8.0 in April 2009. Outside of New York City, the unemployment rate was 7.4 percent in April 2009, down from March’s 7.6 percent.
As employment continues to improve in coming months, you’ll be the first to remember that it was the peak in initial claims for unemployment that marked the 2008-2009 recession’s end.
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