BRICs Abandoned by Locals

Fund Outflows Reach 1996 High

By Michael Patterson, Julia Leite and Rajhkumar K Shaaw 

The 2.5 million rupees ($45,984) Nirav Vora had in the Indian stock market six years ago have plunged by 72 percent. Now the 39-year-old father of two in Mumbai, who depends on investment income for his livelihood, is plowing money into government bonds.

“The confidence of small investors is rock bottom,” Vora said by phone on Feb. 26. “They have no faith in the markets.”

Vora’s exit from equities is being repeated across the biggest emerging markets as disappointing profits and growing state intervention cause stocks to trail global shares for a fourth year. Trading by Brazilian individuals has dropped to the lowest level since 1999, exchange data show. Russian mutual funds posted 16 straight months of outflows, the most since at least 1996, and withdrawals in India are the biggest in more than two years. Chinese investors emptied more than 2 million stock accounts in the past 12 months.

After amassing unprecedented wealth during 14 years of world-beating economic expansion, citizens of the so-called BRIC countries are losing their appetite for shares even as U.S. households return to stocks. While the Dow Jones Industrial Average (INDU) is trading at an all-time high, the MSCI BRIC (MXBRIC) Index remains 37 percent below its 2007 peak as economic growth disappoints investors and policy makers do little to improve the treatment of minority shareholders.

‘Steady March’

“This is a somewhat steady march to the exit,” Michael Shaoul, the chairman of New York-based Marketfield Asset Management, which is wagering shares in Brazil, India and China will fall, said by phone on Feb. 27.

The four-country MSCI gauge fell 0.3 percent at 10:14 a.m. in London, bringing its 2013 drop to 0.7 percent. That compares with an 11 percent gain for the Dow Average and a 6.8 percent increase in the MSCI All-Country World Index (MXBRIC). The Shanghai Composite Index has climbed 0.4 percent and Russia’s Micex Index (INDEXCF) advanced 2.2 percent. India’s S&P BSE Sensex index is little changed, while Brazil’sBovespa Index (IBOV) has retreated 6 percent.

The last time individuals in Brazil and India were this pessimistic, the nations’ benchmark equity indexes fell more than 10 percent in 12 months, data compiled by Bloomberg show. Local selling hasn’t reached levels of “capitulation” that signal market bottoms, said Shaoul, whose $6.9 billion MainStay Marketfield Fund (MFLDX) beat 99 percent of peers tracked by Bloomberg in the past year.

Why Socialists Loathe Tolkien's Shire?

Tolkien would have loathed our brave new world with government of thought and deed by state regulation and acronym

By DAVID PLATT

A cinematic juggernaut has just rolled into town. With the first film in the new Hobbit trilogy, its director, Sir Peter Jackson, has embarked on a quest to repeat his Lord of the Rings omnispectacular. Over the next few weeks we may have to become accustomed to images of Baggins in Burger King and Mordor in McDonald’s. The media hype which all this marketing guff engenders will no doubt cause our literary and cultural custodians to remind us (with that form of detached ennui which they have perfected) that Tolkien is no more than a sort of reactionary Harry Potter. Philip Pullman was therefore right to denounce it all as “infantile” and Richard Eyre justified when he termed Middle Earth the “Kingdom of Kitsch”. Jim Naughtie will continue to sigh when any reference to J.R.R. Tolkien is made on the Today programme—and Mark Lawson will tell BBC Radio 4 audiences that this form of bread and circuses isn’t a patch on Ken Loach’s recent outing into poverty among Asian minorities in Bootle.

But wait. Things are not as they seem. There is an agenda here. There usually is when it comes to popular culture—but in the case of Tolkien we are looking at big politics. For the author of The Lord of the Rings, The Silmarillion and The Hobbit was the greatest conservative writer of the second-half of the 20th century. No—not in an Ayn Rand sense, nor in the raw modernist style embraced by T.S. Eliot or Wyndham Lewis. Rather, Tolkien combined remarkable talents for story-telling and philology with a matching ability to communicate conservative values and images with unequalled popularity. His pre-history of the West is dominated by hereditary structures and a settled social order that appealed to the nostalgia of a postwar generation. He was clearly doing something right, given that Rings has sold more copies than almost any other work of fiction in history. It has been voted the nation’s favourite novel in England, Australia, the US and even Germany.

It is this astonishing success that underlies the fierce hostility one encounters from a literary and cultural establishment dominated by the liberal Left (notwithstanding the brief counter-cultural popularity which Rings had in the 1960s). While by no means all on the Right “get” Tolkien (the poet John Heath-Stubbs called it “a combination of Wagner and Winnie-the-Pooh”), all too often those who should know better are simply carried along by an ill-informed deference to established critics who shout louder. Too many conservatives simply do not engage in this area of cultural politics—and then naively wonder at general elections why the broadcast media is pumping out an undercurrent of left-wing assumptions which have scarcely moved on since 1945.

Reductionism Undermines Both Science and Culture

Applied gigantism coupled to an abject neglect of human scale, leads to urban dystopia

by Ramray Bhat and Nikos Salingaros 

Reductionistic thinking, which is the philosophy of contracting complex systems in science and society to smaller or single causalities, is dangerous. With this contraction comes an indifference towards uncovering and appreciating complex explanations and the variability contributed by the context. In the sciences, reductionism leads to the unfortunate skewing of effort and funding towards what are promoted as “basic” questions, and the neglect of disciplines that are most likely to help humanity by acting on practical scales. The effects of reductionism in society are even more alarming. Reductionistic thinking leaves little room for variety, cultural traditions, living urban environments, or religion, thus reducing our worldview to a sterile minimalism bereft of several of the most glorious achievements of evolved human civilization. There is also the additional and more practical consequence: reductionism is responsible for leading us towards societal collapse.

Notwithstanding the continued imagery of the wild-haired scientist untouched by surrounding happenings and upheavals, science has intensely contributed to, and at times rewritten, social and political histories. Among the more contentious of its contributions is the philosophy of reductionism. Thus physicists in the earlier part of the last century were prone to investigating the dynamics of atoms and everything smaller than them, as if matter and all its wonderful properties could be explained only through protons and neutrons, later moving on to quarks and other such elusive elementary constituents. Similarly, much of biology in the latter half of the twentieth century was devoted to understanding and developing the tools for understanding the workings of genes, to the extent that Richard Dawkins advocated a worldview wherein it is the genes that live and evolve, using individuals and their anatomies as vehicles for perpetuation (Dawkins, 1990).

Advances in both material physics and biology have exploded these myths and shown that explanations of how inanimate and animate things work, and are made, cannot simply be broken down into their components. The very idea of any component being elementary has lost its nineteenth-century meaning, where the whole could be put together straightforwardly from elementary mechanical parts. Mechanisms are in fact intricate and layered, and interactions between components contribute as much, if not more, as the components themselves. Moreover, the environmental context also matters and is an intrinsic part of structure and function. Nevertheless, the reductive mindset refuses to go away. What’s more, like all the different ways by which science and technology have come to dominate our lives, the reductionist worldview now influences how we think about anything and everything.

What Will Become Of Chavez's Gold Hoard?

Physical gold is modestly short of priceless to a criminal

by Peter Christian Hall

In August 2011, while undergoing cancer treatments that ultimately failed him, Venezuela’s President Hugo Chávez began withdrawing 160 tons of gold from U.S., European and Canadian banks. “It’s coming to the place it never should have left. ... The vaults of the central bank of Venezuela, not the bank of London or the bank of the United States. It’s our gold,” he said on national television as crowds cheered armored trucks carrying an initial bullion shipment to the central bank.

While Chávez suggested the gold repatriation might forestall a Libya-style seizure of Venezuela’s assets by Western powers he had antagonized, IHS Global Insight analyst Diego Moya-Ocampos told Reuters it might stymie potential claims by foreign corporations seeking compensation for nationalizations they had endured. Central Bank of Venezuela President Nelson Merentes said it was “an act of financial prudence and sovereignty” intended to guard against problems in the international markets.

The shipments, conducted by air after much talk of alternate delivery modes, concluded five months later in a celebratory caravan. (Germany’s doing it, too: Berlin has ordered repatriation of 674 metric tons of gold, worth $34 billion, from Paris and New York.)

The Caracas hoard would today be valued at around $9 billion, were it not for the fact thatVenezuela has been selling it — about $550 million worth in the first eight months of 2012, according to the International Monetary Fund. Did further sales follow over the past six months, with proceeds partly paying for the public largesse that helped fuel Chávez’s victorious up-from-the-sickbed presidential run?

Hint: Even with the additional cash from gold sales, Venezuela’s foreign exchange reserves hit a five-year low in September, three weeks before Chávez won a narrower-than-customary victory over Henrique Capriles, who will represent the opposition in a presidential election to be held on April 14.

‘Zionist’: the worst insult in the world

Among the Western chattering classes, ‘the Zionist’ has replaced 'the Jew' as the cause of the world's ills

by Tom Bailey 

Speaking to the Jewish Chronicle newspaper recently, UK Labour Party leader Ed Miliband reportedly claimed to be a Zionist. The article in the JC read: ‘Ed Miliband: “I’m a Zionist and oppose boycotts of Israel”.’

However, Miliband’s self-identification as a Zionist lasted less than 24 hours. He has since clarified that he was responding in the affirmative to the question ‘Are you a Zionist?’ with the answer ‘Yes, I am a supporter of Israel’. He would not actually describe himself as a Zionist, though, he now says.

It seems Miliband is prepared to proclaim his support for Israel as a Jewish state. He supports the idea of that state as a homeland for the Jews. Yet the ideology that is associated with the creation of the state and with the larger project of creating a permanent Jewish homeland - Zionism - is something he is reluctant to sign up to.

The reason for Miliband’s reluctance is pretty obvious: Zionism is no longer simply a term denoting a particular ideology. A Zionist is no longer just someone who supports the creation of a Jewish homeland. Rather, Zionism has become a term of abuse, the worst term of abuse there is in modern, right-thinking circles; the word Zionism is now used to denote something deeply sinister, something beyond the pale of bien pensant civilisation. A Zionist is now imagined as an evil shadowy figure, eating babies while playing puppetmaster of world politics.

Stitching up press freedom behind closed doors

Giving into blackmail never solved anything

by Mick Hume 

One minute reports suggest that the leaders of Britain’s main political parties are finally getting ‘close to agreement’ on a new system of press regulation, the next we are told that talks have ‘broken down’ again. Whatever the latest twists, the one certainty is that the hard-won freedom of the press from state supervision, fought for over centuries of public political struggle, is now in danger of being stitched up and sacrificed quietly, behind closed doors.

The main drivers behind this attempt to tame the press have been the Labour Party and its allies in the Hacked Off lobby. These illiberal forces have tried to turn history on its head by claiming that regulating the press, long the ambition of kings and tyrants, is now a ‘radical’ cause for ‘ordinary people’. To pursue their crusade for statutory regulation, they have proved willing to hold democracy to ransom, threatening to disrupt the political process via a handful of peers in the House of Lords unless they get their way.

A brief summary of the tortuous legal and political shenanigans as we know them to date. In his report last November, Lord Justice Leveson proposes that a tough new ‘independent’ press regulator must be backed by statute. Labour, the Lib Dems and Hacked Off demand that Leveson’s proposals be implemented in full. Tory prime minister David Cameron says he wants to implement Leveson’s plans for taming the press, but balks at the notion of a new law to help do so.

In an effort to escape the corner they have thus painted themselves into, the Tories then propose that, instead of a parliamentary law, the new regulator should be recognised by a Royal Charter. As pointed out previously on spiked, if anything this is potentially even worse than statute, evoking shadows of the old system of the Crown licensing of the press. Labour and the Lib Dems have suggested that they might accept a Royal Charter as an alternative to statutory-backed regulation – but only if it is embedded in statute!

As these top-level negotiations have dragged on into 2013, the high-handed pro-regulation lobby has opted for more direct action. First Labour peers, led by Lord Puttnam and backed by others from all corners of the House of Lords, attached an amendment effectively creating a Leveson law to the Defamation Bill that was going through its final stages in parliament. Cameron then indicated that he would rather drop the entire bill to reform the dreadful libel laws than allow such a press law to be created via the backdoor.

Outraged by the prime minister’s refusal to do as he was told, the pro-regulation ‘rebels’ then threatened to attach a Leveson amendment to every piece of legislation in the House of Lords, whether it was about energy policy or business regulation, until the government allowed a press regulation law to pass. This is effectively an act of political blackmail, which would hold the entire parliamentary process to ransom until the government agreed to their terms.

This week, it appeared that the blackmailers might be close to success, with Cameron reportedly agreeing to a compromise deal. Under this new plan, a statute would be passed that did not refer specifically to Leveson or the press, but which underpinned more broadly the status of all Royal Charters. Thus we would be left with statutory regulation of the press in all but name. Latest reports suggest that Cameron has now had second thoughts, broken off talks with Lib Dem deputy prime minister Nick Clegg and Labour leader Ed Miliband and decided to publish the Tories’ plans for a Royal Charter on Monday. We shall see.

Here we go again

Latest Greek Aid Tranche To Be Delayed After Troika Talks Break Down

Here we go again. As we reported yesterday, Greece was due to present to the Troika "how to cut a massive 150,000 public sector jobs: a move which will result in an immediate surge in public unrest, and an exponential jump in strike activity.... Greece is locked in talks with international creditors in Athens about shrinking the government workforce by enough to keep bailout payments flowing. Identifying redundant positions and putting in place a system that will lead to mandatory exits for about 150,000 civil servants by 2015 is a so-called milestone that will determine whether the country gets a 2.8 billion-euro ($3.6 billion) aid installment due this month. More than a week of talks on that has so far failed to clinch an agreement." Fast forward to today when we learn that any hopes a last minute solution would materialize, allowing the monetary spice to flow and the €2.4 billion loan to be paid, were just dashed following a breakdown in talks between Greece and the Troika. Deja vu all over again.

From Kathimerini:

Troika representatives are due to leave Athens on Thursday with no final agreement having been reached with the coalition on a range of structural reforms but with the Greek side insisting that the pause in the talks will not lead to complications in the disbursal of its next loan tranche from the eurozone and International Monetary Fund.

Talks between Prime Minister Antonis Samaras and officials from the IMF, European Commission and European Central Bank lasted for a couple of hours on Wednesday night but there no conclusion was reached on matters including the reduction of civil servant numbers and a payment plan for firms and individuals who owe social security contributions.

Who can forget the perpetual Greek optimism, which spun every development, no matter how bad, as very good. For those who have, here is a reminder:

Despite the apparent impasse in the discussions, Finance Minister Yannis Stournaras insisted that the two sides were edging toward a deal and that Greece’s next loan tranche of 2.8 billion euros was not in danger.

“There has been significant progress in the talks with the troika,” Stournaras told journalists after leaving the talks at the Maximos Mansion, in which he also took part.

“The negotiations will continue when the troika representatives return. There is no issue with the loan tranche,” he added.

Destructive Creation

Aesthetics are not science

by Theodore Dalrymple 

When I was a small boy adults used to say to me, ‘If you ask a silly question you’ll get a silly answer.’ This irritated my nascent sense of logic: for if I genuinely did not know the answer to my question, how could I possibly be expected to know that it was silly? And could anything be silly in the absence of knowledge that it was? This was my childish equivalent of Socrates’ or Plato’s doctrine that no one does wrong willingly: a doctrine that does not accord with my clinical experience as a doctor, let alone with my experience of life. But at the time, the accusation of silliness seemed to me worse than merely wrong: it was unjust. I did not appreciate at that age that there could be such a thing as a responsibility to know, even if one did not.

One of silliest questions I have ever heard, and heard often, is why some or many countries are poor. This is to get everything exactly the wrong way round, as if Man were born rich and had somehow to achieve poverty. Of course, it is possible for those who were formerly rich to become poor, for example by improvidence or the spoliation of others; but immemorial poverty requires no explanation. It is wealth that needs explaining, mankind not having been born in marble halls with a silver spoon in its mouth.

I once bought a slender volume entitled Why Bad Dogs? This set out to explain why some dogs barked incessantly, bit the postman, wouldn’t walk to heel and so forth. I am such a dog-lover that I find it difficult to put myself in the place of those who dislike dogs, but still I wondered whether the question asked by the title was the correct one. Dog-lover as I am, I am not the Rousseau of dogs; I do not think that canine nature, untouched by association with humans, is good; and if I were writing the Social Contract for Dogs, I should not begin ‘Dogs are born good, but everywhere they bark.’       

Clearly it is important to frame one’s questions correctly if one wants a real answer: often one does not, for the interrogative is not always used simply to obtain information but also to confound and irritate, as every child knows. The other day I came across a book published in 1937 by A R Powys, one of the Powys family that produced so many writers, mostly unread today, though some were well-known in their day and John Cowper Powys still has his devotees. His brother, A R Powys (1882 – 1936), was an architect and preserver of ancient buildings who also wrote essays on architecture, and one of them in the book that I came across, From the Ground Up, was titled Origins of Bad Architecture. This is a question that has long troubled me, so much so that my wife says I have become something of a bore on it. Whenever I see an eyesore in otherwise beautiful surroundings, which is often, I remark upon it, whereupon my wife, who agrees that the twentieth century was an urban aesthetic disaster, tells me I should clam down (eyesores make me angry) because what is done is done, and working myself up about it will do the landscape no good and will do me harm.

Underrated

Jonathan Swift

By DANIEL JOHNSON

What is the greatest and most universally loved book ever written in Ireland — wilder than Wilde, more shocking than Shaw, more experimental than Joyce, more disillusioned than Beckett, more humane than Heaney? 

The book is, of course, Gulliver's Travels. Its author wrote his own Latin epitaph,  best translated by another Anglo-Irishman, Yeats: "Swift has sailed into his rest;/Savage indignation there/ Cannot lacerate his breast." Jonathan Swift's indignation against the follies of mankind was indeed so extreme that he has been savaged himself ever since, by critics who have seen his works as misanthropic and misogynist, the revenge of an embittered man thwarted in his poetical, political and ecclesiastical ambitions. Swift was so scandalous on every level — from the gruesome irony of A Modest Proposal to the scatological reductio ad absurdum of all that polite society held dear in The Lady's Dressing Room — that his exile from literary London to the Deanery of St Patrick's, Dublin, has been posthumously extended: hence his present neglect in our schools and universities. David Womersley's definitive new edition of Gulliver's Travels, the latest of 18 volumes of Swift's works published by Cambridge University Press, is thus a major step towards his academic rehabilitation and even vindication.

Yet not only the English-speaking peoples, but the whole civilised world has embraced Gulliver's Travels since its first publication in 1726. The fact that many who have not read it wrongly suppose it to be a children's book, and that children do indeed enjoy at any rate the first two parts, reveals its author's genius. Adapted and bowdlerised more than almost any other literary classic,Gulliver has survived and, though countless modern writers, whether of magical realism or teenage fantasy fiction, owe Swift an unconscious debt, the original still surpasses all imitations.

Hitler's Superman

Hustlers, Climbers and other Intellectuals

Martin Heidegger: The philosopher embraced Nazism yet was rehabilitated after the war

By SIMON HEFFER

Perhaps only if one is under mortal terror can one understand why highly civilised people endorse extreme dictatorships. One thinks of the fear in which Stalin forced Shostakovich to live; or the obedience that Furtwängler and Richard Strauss chose to show to the Nazi regime. Yet how does one explain why civilised people who not merely have the capacity for thought, but whose life is thinking, embrace evil? In her new book Hitler's Philosophers (Yale, £25) Yvonne Sherratt explores, among other things, this conundrum. She does not merely look at those who, literally, should have known better but who threw themselves and their learning behind the Nazis. She also looks at those, mainly but not exclusively Jewish, who maintained a sense of intellectual and moral integrity and took against Hitler, and shows what happened to them. It is, in the end, a peculiarly unedifying story, though exceptionally well told.

The industry that portrays and describes the Third Reich is now considerable, with many authors and publishers regarding the subject as inexhaustible. This aspect of Hitler's terror — how he sought to control the thought processes first of academia and then, presumably, of the rest of Germany who would defer to the eminent philosophers in the Reich's universities — has been insufficiently explored.

Dr Sherratt describes the influences on Hitler before he rose to power — notably Houston Stewart Chamberlain, from the Wagner family circle in Bayreuth, Feuerbach, Schopenhauer and (insofar as he could understand him) Nietzsche. Hitler does not really seem to have understood philosophy. Had he done so he would have recognised Chamberlain as a charlatan and seen that his reading of Nietzsche was superficial and selective. This leads inevitably to the main problem with Hitler: of all "his" philosophers, he was the philosopher-in-chief. Since his principal tract was the ragbag of prolix bigotries that is Mein Kampf, we know how warped and inadequate the quality of his "thought" was, and how little qualified he was to judge others.

Designing Men vs. Spontaneous Order

Dedicated to Tyrants of all persuasions

By David Henderson

"The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder."

This is VI.II.42 from Adam Smith, The Theory of Moral Sentiments.

Why do I quote it? Because it's an answer to a commenter on some previous blog posts of mine. This commenter defended the existing laws that require people to spend substantial time as residents in a hospital before becoming doctors. I criticized those laws. The commenter, zdc, then wrote:

So, you think you can design an improved (not sure if this means in terms of outcomes or costs or what) system.

I answered that I don't think I can design an improved system. Why did he think that I thought I could? It's because he's stuck in the "man of system" or "design" paradigm. Over the years, various governments have designed a particular system. I criticize the idea that they get to design it. Then zdc assumes that means that I think I should be able to design it.

But I'm not a designer. I'm a person who believes in spontaneous order. That is, I think that people should be free to come up with other systems and I'm willing to predict that they will. As an economist, I could speculate about what they will come up with, but there's a good chance that my predictions would be wrong. Where zdc and I probably agree is that if I were to design such a system, it would be a disaster.

Fortunately, I don't need to design a system.

So what do I propose? Letting people come up with their own systems. And my prediction, which I'm fairly sure of, is that they would come up more than one.

Consider an example from outside medical care. Imagine that back in the 1960s, the government had given IBM a legal monopoly on computers. Imagine that some economist came along and said, "I think we shouldn't have a legal monopoly on computers." Then zdc's counterpart back then would likely have said, "Oh, yeah? Then tell me how you can make computers better." The economist would have had to admit that he couldn't. Then zdc's counterpart would likely have declared victory, confident that because the economist couldn't predict what kind of computers would be built in the absence of a legal monopoly, letting IBM have a legal monopoly on computers would clearly have been the right policy.

The Idiotic Posthumous Cult of Hugo Chávez

To pretend that the overall record of Chavezism has been positive is an insult to the Venezuelan people

By Bernard-Henri Lévy

The death of Hugo Chávez, followed by his elaborate funeral, has unleashed a wave of political idiocy, and thus of disinformation, of a magnitude not seen in some time.

I will not dwell—because this much is well known—on Chávez the “friend of the people” whose closest allies were bloody-handed dictators: Ahmadinejad, Bashar al-Assad, Fidel Castro, and, formerly, Gaddafi.

Nor will I dwell long, because this, too, is public knowledge, on the Chávez whose pathological anti-Semitism over his 14-year rule drove two thirds of Venezuela’s Jewish community into exile. (It is hard to image that this Chávez is viewed by a minister in François Hollande’s government in France as a “cross between Léon Blum and de Gaulle.”) Was not Chavez the devotee of the conspiracy theories of Thierry Meyssan, the disciple of Argentine Holocaust denier Norberto Ceresole, who professed his surprise that Israelis “like to criticize Hitler” even though they “have done the same and perhaps worse”? How was a Jew in Caracas expected to react upon seeing his president stigmatize a minority made up of “descendants of those who crucified Jesus Christ” and who had, according to Chávez, “made off with the world’s wealth”?

What is less known, something that we will regret overlooking as the posthumous cult of Chávez swells and grows more toxic, is that this “21st-century socialist,” this supposedly tireless “defender of human rights,” ruled by muzzling the media, shutting down television stations that were critical of him, and denying the opposition access to the state news networks.

What is less known, or deliberately not mentioned by those who would make of Chávez a source of inspiration for a left that seems to lack it, is that this wonderful leader, seemingly so concerned with workers and their rights, tolerated unions only if they were official. He allowed strikes only if controlled or even orchestrated by the regime. And, up to the end, he prosecuted, criminalized, and threw into prison independent trade unionists who, like Ruben Gonzalez, the representative of the Ferrominera mineworkers, refused to wait for Bolivarism to be fully realized before demanding decent working conditions, protection against mining accidents, and fair wages.

What has been omitted from most of the portraits broadcast during these sessions of global mourning—and what must be remembered if we want to avoid seeing post-Chavezism turn into an even worse nightmare—is the repression of the Yukpa Indians of the Sierra de Perija, carried out in the name of “cultural integration”; the targeted assassinations, covered up by the regime, of those of their chiefs who, like Sabino Romero in 2009, refused to bow down to Chávez; and, generally, the putting to sleep of democratic and popular movements that did not have the good fortune to be on Chávez’s agenda. Take women’s issues. It must not be forgotten that the rights of women suffered dramatic regressions during El Comandante’s reign. And would it be unfair to the deceased leader to observe that two provisions of family law—one protecting women victims of domestic violence; the other, divorced women—were repealed by the regime for being too petit-bourgeois by the standard of the prevailing machismo?

A Lesson From My Grandfather

Government Debt Is Self-Reinforcing

by Bill Bonner

I got a lesson in the importance of macro thinking again last night. Exploring an old family desk, we came upon a cache of my grandfather's letters. He had come back from World War I and begun a business supplying coal to the ships that used Baltimore's harbor.

It was a good business in the 1920s. Less good in the 1930s. And no business at all in the 1940s. His letters are marked by disappointment. "Sales down." "Too much inventory." "Sluggish business." And there are some letters in the 1930s expressing hope that "things will pick up when the country goes back to work."
The country did go back to work in the 1940s. Every factory in Baltimore turned on the lights and fired up its engines. Ship traffic increased... including hundreds of new ships that took troops and war material overseas.
But it was too late for my grandfather. Ever since Winston Churchill converted the British Navy to oil, the handwriting had been on the wall for coal as a fuel for ships. Oil was denser. And more convenient.
The density of fuel is important, especially for the navy. It gives ships greater range and more power. And it frees up space for guns and transport.
Coal was doomed. And so was my grandfather's business. He must have seen it too. He was in the wrong place at the wrong time. Either his macro analysis failed...or he was unable to do anything about it.
The big picture in the 1930s and 1940s was dominated by war. Now it is dominated by money -- specifically by the actions of central banks. Never before have major central bankers embarked on such a bold program of monetary activism. If this succeeds, it will be one for the record books. If it fails, it will be one for the history books. Specifically, it will become another important entry in the History of Financial Disasters.
If it turns into a disaster, it will be traced to President Nixon's decision to break the link between gold and the dollar in 1971. The new, elastic currency would stretch. And recently, under government pressure to finance deficits and "stimulate" lackluster economies, central bankers have been pulling hard.

Money Printing Goes Global
The first quantitative easing (aka debt monetization) program in the U.S. began in November of 2008. Then it was viewed as an emergency measure to "stabilize" the system.
But the private sector continued to de-leverage. Unemployment stayed high. A second round of monetary easing followed to relieve investors' fears and otherwise grease the skids. This happened as the eurozone fell into a squabble and a funk about how to handle its own debt problems. Whether it was true or not, analysts concluded that whatever good QE2 might have done, the crisis in Europe overshadowed it.
"Operation Twist" emerged in September 2011. The Fed used the proceeds from sales of shorter-term debt to buy longer-term debt. The idea was to lower yields along the curve and therefore keep borrowing costs in the economy ultra low. The Fed deemed this critical to the housing industry as well as to major capital investments. It was about this point that the European Central Bank, under Italian Mario Draghi, joined the action with its own Long-Term Refinancing Operations (1 and 2).

What Happens When Half The World Stops Making Babies

We are now in the middle of perhaps the greatest demographic change in recorded history.

Part of the greatest demographic change in recorded history. China’s population has stopped growing, and is about to shrink quickly.

By Mike Seccombe

On October 31, 2011, the United Nations held an unaccountably cheery media event at its New York headquarters, to mark the occasion of the world’s population passing seven billion.

It was a statistically questionable exercise, for it acknowledged that no one could be sure of the planet’s exact population on any given day. The UN called it “symbolic”.

The question is why, if they were going to celebrate any major demographic development with such faux-certainty, did the powers that be at the UN not make it the really important one, the one which gives some hope for this overcrowded planet.

I mean this one: half the population of the world now lives in countries where those of childbearing age are having fewer than two children on average.

That’s a development so significant that it’s worth saying again, in a different way. The fertility rate of half the world is below replacement level.

We can’t be sure exactly when the world reached this tipping point, any more than we can be sure exactly what the total population is, but the UN stats indicate it came a little after we reached the seven billion. If we wanted to be “symbolic” we could say it happened today.

Pregnant Indian women at a maternity ward in Nawanshahr. By mid-century India will be the world’s most-populous country.

The precise date is unimportant. What is important is that we are now exactly in the middle of perhaps the greatest demographic change in recorded history. Human numbers have grown almost uninterrupted — other than during for a couple of brief downturns occasioned by disasters such as the black plague — for thousands of years.

Biology and the scriptures urged us to be fruitful and to multiply. Now, quite suddenly in relative terms, half the people of the world have decided not to multiply.

This is not to say population has peaked. Half the world is still reproducing at more than replacement rate, and there is a lag of about 30 years, or one generation, between the time that fertility falls and the time population does.

What has peaked is the rate of population growth. It took just 12.5 years for the world’s population to grow from four to five billion, 11.8 years for it to grow from five to six, but it has taken almost 13 years to grow to seven billion.

Drinking from the EU gravy boat

The EU’s propaganda budget from 2014 to 2020 will come to €229 million

The charm offensive against young and old continues apace with a substantial budget

By David Atherton

Guy Bentley wrote recently in these pages about ‘sock puppet charities’ – that is, government-funded ‘charities’ that lobby for more government money (read: taxpayer money) to put towards their stated aims. This phenomenon was first brought to my attention by Chris Snowdon, Fellow of the Institute of Economic Affairs, in his outstanding publication: ‘Sock Puppets: How government lobbies itself and why’.

Just this month, Snowdon has brought out another tour de force: ‘Euro Puppets: The European Commission’s Remaking of Civil Society’, this time exploring how ‘sock puppets’ dip their spoon in the EU gravy boat.

The EU seems to be pleasing no one at the moment; but not for want of trying. Indeed, the charm offensive against young and old continues apace with a substantial budget.

Some three years ago now, I was passing through London Victoria station and came across a brightly-coloured stand asking young people whether they were interested in learning a foreign language. At the helm was a German lady, Ms. Judith Schilling, who is ‘School Liaison and Publications Manager’ of the European Commission in London – so more to do with getting on message than being able to count further than un, deux, trois in French. As I put it to her at the time: why am I paying my taxes so the European Union can pay for propaganda, for my subjugation?

See Ms. Schilling here too at an education fair. Not too much to take out of context when she says:

“We offer to the teachers the resources produced by the European Commission in London... We will never succeed in convincing people (of) the value of being a member of the EU if we do not start early enough with the young people, before they form prejudices and [are] misinformed by other sources.”

Well you can’t fault her English, it is infinitely better than my German.

Giving out pencil cases emblazoned with the EU’s logo is evidently just petty cash on the balance sheet.

That’s the whippersnappers sorted; but what about the grownups?

Snowdon has identified think tanks, civil society groups, and charities noted for their pro-EU credentials that have been “handpicked” to lobby for more EU government, larger EU budgets, and EU regulation. As he quotes from the Europe for Citizens’ programme:

“The current ‘Europe for Citizens’ programme (2007-2013)...gives citizens the chance to participate in making Europe more united, to develop a European identity, to foster a sense of ownership of the EU, and to enhance tolerance and mutual understanding.”

He gives the example of Women in Europe for a Common Future which had €1.2 million plus another €135,000 from national governments at their disposal in 2011. Amazingly, 93 percent of its funding comes this way, forcing one to conclude that if it had to stand on its own two feet it could afford little more than a WordPress blog and a few branded lanyards.

But what is more worrying is that the EU’s propaganda budget from 2014 to 2020 will come to €229 million; clearly, Women in Europe for a Common Future has competition. 

That is one big gravy boat.