Let's Dream A Grand Dream For Greece

The case of Japan

By Nathan Lewis

In 1949, Japan was a wreck. Four years had passed since the end of World War II, but the economy was still moribund. The major cities, flattened and burned during the war, remained mostly unreconstructed. Only two trains a day ran on the most important rail line, between Tokyo and Osaka. Hyperinflation made normal commerce impossible. What industrial assets remained after the war, such as electricity generation plants and factories, were being stripped by the occupying army as “reparations,” and shipped overseas. The previous government was disbanded, and a new constitution, and a new government, were established. People were on the brink of starvation.

This was the beginning of one of the greatest economic advances of the twentieth century.

In comparison, Greece’s problems are trivial. Banks are insolvent? That is nothing but paper accounting. Try having your major cities bombed to rubble, and a generation of young men slaughtered on islands in the Pacific. Government default? So what. Hyperinflation? Nowhere to be seen. Starvation? Hardly. Occupation by a hostile foreign military? Not on anyone’s list of worst fears.

The End of the Debt Supercycle

It's Time to Make the Hard Decisions

By John Mauldin

Back in the 1930's, Irving Fisher introduced a concept called the 'debt supercycle.' Simply put, it posits that when there is a buildup of too much debt within an economy, there reaches a point where there simply is no other available solution but to let it rewind.

What are they thinking ?

It's The Leadership Stupid

by Mike Krieger

It’s the first time we have power with people that don’t have courage.  The people on top have power without courage.  You cannot find any other society like it.  Take the knights.  The knights were people who of course, their trade was risking their lives.  In theory, The President of the United States was supposed to be first in battle.  Not someone pushing a button.  The only way you can have a safe society is by moving these types of people (that risk nothing personally and take all the upside) out of their positions.  Making them more accountable.

- Nassim Taleb (in this fantastic interview )

From our perspective, this is a critical idea. As we have said for several years, we do not see Iran as close to having a nuclear weapon. They may be close to being able to test a crude nuclear device under controlled circumstances (and we don't know this either), but the development of a deliverable nuclear weapon poses major challenges for Iran.

Moreover, while the Iranians may aspire to a deterrent via a viable nuclear weapons capability, we do not believe the Iranians see nuclear weapons as militarily useful. A few such weapons could devastate Israel, but Iran would be annihilated in retaliation. While the Iranians talk aggressively, historically they have acted cautiously. For Iran, nuclear weapons are far more valuable as a notional threat and bargaining chip than as something to be deployed. Indeed, the ideal situation is not quite having a weapon, and therefore not forcing anyone to act against them, but seeming close enough to be taken seriously. They certainly have achieved that.

- Stratfor  “Considering a U.S.-Iranian Deal,” January 24th, 2012

A strange coincidence

45% Of Greeks Have Never Used The Internet

If one were to consider that nearly half the population of a given country has never had the pleasure of killing otherwise efficient time with the likes of Facebook, and other fad internet sensations, one would assume that the efficiency of the population would be far higher than other places whose citizens spend every waking hour gazing at a monitor. One would be wrong. As the following chart from Eurostat via Goldman shows, about 45% of the Greek population has never used the internet. Surprisingly the balance of the PIIGS is not far behind, with Portugal, Italy and Spain hot on Greece heels (which 5 years ago had two thirds of its population never interact with the web). Is it possible that sitting in front of a computer, uploading millions of pics and "liking" this and that does indeed do miracles for globalization and corporate efficiency? 

The Cradle of Civilization is rocking amid an array of winds and storms

A History Lesson In Crisis

by Tyler Durden

With the world ever more lethargic daily, as if in silent expectation of something big about to happen (quite visible in daily trading volumes), it is easy to forget that just about a year ago the Mediterranean region was rife with violent revolutions in virtually every country along the North African coast. That these have passed their acute phase does not mean that anything has been resolved. And unfortunately, as BMO's Don Coxe reminds us, it is very likely that the Mediterranean region, flanked on one side by the broke European countries of Greece, Italy, Spain (and implicitly Portugal), and on the other by the unstable powder keg of post-revolutionary Libya and Egypt, will likely become quite active yet again. Only this time, in addition to social and economic upheavals, a religious flavor may also be added to the mix. As Coxe says: "Today, the Mediterranean is two civilizations in simultaneous, rapidly unfolding crises.

To date, those crises have been largely unrelated.

A republic, if you can keep it

The Revolution of 1913

By Bill Bonner

Readers will scarcely have given any thought to the fact that they have never lived in the system of government argued for by Madison, Jay, and Hamilton in the Federalist Papers.

“It may come as a shock …” wrote John Flynn, “to be told that [you] have never experienced that kind of society which [our] ancestors knew as the American Republic …” Flynn, the editor of the popular weekly the Saturday Evening Post, had already come to this conclusion in 1955. In his book The Decline of the American Republic, Flynn observed that Americans needlessly “live in the war-torn, debt-ridden, tax-harried wreckage of a once imposing edif ice of the free society which arose out of the American Revolution on the foundation of the U.S. Constitution.”

An empire needs a source of income sufficient to fund its military campaigns, regulatory regimes, and domestic schemes. It also needs a strong central authority to direct its ambitious new programs. In one short 12-month span, a year the writer Frank Chodorov calls the “Revolution of 1913,” the empire got the tools it needed. That year—the same year European countries abandoned the gold standard in preparation for World
War I—the old Republic ceased to exist.

WHERE THE MONEY COMES FROM

A lynch mob with PhDs

Banker-bashers

 The mad political pursuit of ‘evil’ Fred Goodwin confirms that bankers are to posh commentators what paedos are to tabloid hacks.

By Brendan O’Neill 

The mad pursuit of Fred Goodwin and his ill-gotten knighthood confirms that bankers are the new paedophiles. Bank bosses are to posh commentators what paedos were to hacks at the News of the World - wicked creatures one can rail against in order to feel puffed-up and Good. Yes, the broadsheet bruisers and opportunistic politicians calling for Fred the Shred’s scalp might not use foul phrases like ‘kiddie fiddler’ and they might pepper their output with serious-looking graphs and pie charts, but don’t be fooled - behind the erudite veneer there lurks the old tabloid desire to project society’s sins on to one moral misfit and cast him out of decent society.

Dumb as a rock

19 Crazy Things That School Children Are Being Arrested For In America

With each passing year, the difference between America's prisons and America's public schools becomes smaller and smaller.  As you read the rest of this article, you will be absolutely amazed at some of the crazy things that school children in America are being arrested for.  When I was growing up, I don't remember a single police officer ever coming to my school.  Discipline was always handled by the teachers and by the principals.  But today, there are schools all over the country that have police officers permanently stationed in the halls.  Many other schools will call out police officers at the drop of a hat.  In the classrooms of America today, if you burp in class, if you spray yourself with perfume or if you doodle on your desk, there is a chance that you will be arrested by the police and hauled out

The Problem with Privatization

It's about competition
By Steven Horwitz

Classical liberals commonly favor “privatization” of many government activities.  Their case, of course, is that the private sector would provide goods and services at lower cost and of higher quality than government can.  Since classical liberals are right about this, why do I think there’s a problem with privatization?

The answer is that the call for privatization does not get at the real reason the private sector works better than the political sector.  The great advantage of the private sector is not private ownership per se but that private owners compete with one another.  Classical liberals would do better to contrast not the “private” and “public” sectors, but the “competitive” and “monopolistic” sectors.  If the goal is efficiency in delivering the goods, private ownership is a necessary but not a sufficient condition.  Instead of calling for the “privatization” of government services, classical liberals should be calling for “de-monopolization.”

Private Monopoly

The Breakdown of the Kremlin Clans

Russia's Shifting Political Landscape 

One of the issues causing -- and prolonging -- Russia's current political instability is the complete breakdown of the Kremlin's power clans.

By Stratfor 

When Prime Minister Vladimir Putin came to power in 1999, he began creating a complex organization comprising many ambitious and powerful people to help him rule the country. Putin understood that he would need a mix of people who could handle Russia's need for tight security and control in the short term but strategize for a more modern and liberal economy in the future -- seemingly conflicting aims, but Putin saw both as necessary to address the problems facing the country.

Though there are countless small groups and loyalties among those in the Kremlin, Putin's system can be divided essentially into two clans -- the siloviki and the civiliki. Two very ambitious (and at times ruthless) men ran these clans: Deputy Prime Minister Igor Sechin,

The German Dilemma

Germany's Role in Europe and the European Debt Crisis

By George Friedman

The German government proposed last week that a European commissioner be appointed to supplant the Greek government. While phrasing the German proposal this way might seem extreme, it is not unreasonable. Under the German proposal, this commissioner would hold power over the Greek national budget and taxation. Since the European Central Bank already controls the Greek currency, the euro, this would effectively transfer control of the Greek government to the European Union, since whoever controls a country's government expenditures, tax rates and monetary policy effectively controls that country. The German proposal therefore would suspend Greek sovereignty and the democratic process as the price of financial aid to Greece.

Strange things are happening on the Nile ...

Egypt caught in spiral of disaster
 

By Victor Kotsev 

Many things that are hard to believe - or explain - happen in Egypt; unfortunately, it all looks more like a spiraling nightmare than a fairy tale in the last year or so. The latest violence on Wednesday, which resulted in at least 74 dead and over 1,000 wounded, and which The New York Times described as "the deadliest soccer riot anywhere in more than 15 years", is a fitting example of that. 

The calamity came in the wake of another large brawl on Tuesday, between members of the secular opposition and Muslim Brotherhood supporters who reportedly attempted to block their march against the military government of the Supreme Council of the Armed Forces. Over 70 people were wounded in the clashes. [1] 

The social and political foundations of culture

The Politics of Johann Wolfgang Goethe

by Hans-Hermann Hoppe

This year marks the 250th birthday of Johann Wolfgang von Goethe. Most Europeans know that he was the greatest of all German writers and poets and one of the giants of world literature. Less well known is that he was also a thorough-going classical liberal, arguing that free trade and free cultural exchange are the keys to authentic national welfare and peaceful international integration. He also argued and fought against the expansion, centralization, and unification of government on grounds that these trends can only hinder prosperity and true cultural development. Because of his relevance to the ongoing construction of Europe, I'd like to nominate Goethe as the European of the millennium.

Born in 1749 in the free imperial city of Frankfurt am Main into an upper-middle-class family, Goethe studied law in Leipzig and Strasbourg. However, on receiving his doctorate and practicing briefly as a lawyer, he set out on a spectacularly successful career as poet, dramatist, novelist, lyricist, artist, and critic of architecture, art, literature, and music. He was also a natural scientist and a student of anatomy, botany, morphology, and optics.

Where does credit go when it dies?

Life – and Death Proposition

​               ​              Where do we go when we die?

                            We go back to where we came from

                            And where was that?

                            I don’t know, I can’t remember

                                                        - Virginia Woolf, “The Hours”

By William H. Gross

I don’t remember much of this life, and like Virginia Woolf, nothing of the herebefore. How then, could I expect to know of the hereafter? I know at least that we all exist at and of the moment and that we make up those moments as we go along. I became a grandfather for the first time a few months ago and proud son Jeff asked for some fatherly advice as to how to go about raising his baby daughter Caroline. “We all do it in our own way, Jeff, you’ll make it up as you go along,” I said. Parenting, and life itself, is one giant experiment. From those first infant steps, to adolescent peer testing, flying from and departing the parental nest, gene replication and family building of our own, maturity and acquiescence, aging, decay and inevitable death – we experiment as best we can and make it up as we go along. 

The moral disorientation of Western secular culture

How atheism became a religion in all but name

It was only a matter of time before someone proposed an ‘atheist temple’, given the religious-like zealotry and dogma of the New Atheists.

by Frank Furedi 

There was a time when it was very dangerous not to believe in God. In ancient Athens, Socrates was hounded and eventually executed for questioning the city-state’s gods. Throughout most of history, to be ‘godless’ was considered a form of moral decadence deserving punishment. In the seventeenth century, even John Locke, the great liberal philosopher who promoted the idea of religious toleration, regarded atheism as intolerable. He said atheists should not be tolerated because ‘promises, covenants, and oaths, which are the bonds of human society, can have no hold upon an atheist’.

Last Exit Gutenberg

$5 Trillion and Change

Obama's four years have seen the four highest deficits since 1946.

The political strategy behind Obamanomics was always simple: Call for "stimulus" to rescue the economy, run up the debt with the biggest spending blitz in 60 years, and then when the deficit explodes call for higher taxes. The Congressional Budget Office annual review released yesterday shows this is all on track.

Big Brother Loves You!

The debasement of paper money certainly continues

“All within the state, nothing outside the state, nothing against the state.”                                          - Benito Mussolini

by DETLEV SCHLICHTER

Those who have eyes to see and ears to hear will have noticed the accelerating trend towards interventionist policies and assertive state action all around us. This is not a conspiracy theory circulating on the internet. It is a phenomenon that is now so blatantly obvious that it makes the headlines in the highbrow pro-establishment media: The Economist and the Financial Times are talking openly about the trend towards “repression” and “national capitalism” as if it was simply the latest fashion in crisis management. A century ago, Randolph Bourne pointed out that “war is the health of the state”. It turns out that so is economic crisis.

Politicians, bureaucrats and many of their claqueurs in the media have drawn conclusions that are conveniently in their own interests: to them the crisis is evidence that things cannot be left to the markets, to consumers, to greedy bankers, and the spontaneous interaction of the public. If the state does not regulate and control everything, chaos ensues. We need more government. More control. More regulation. More oversight.  Politicians and bureaucrats need more power.

F - for Fake

Counterfeit Money, Counterfeit Policy

By CHARLES HUGH SMITH

What is the difference between printing money and counterfeiting? There is none.

Counterfeiting is illegal because it is the false creation of value. The counterfeiter takes low-value paper and turns it into high-value money, which is fundamentally a claim on the real productive value of the economy that issues the currency and recognizes it as a proxy means of exchanging that productive value.

Counterfeiting is illegal because the counterfeiter creates no additional value--he creates only the proxy for value. Creating real value--adding meaningful goods or services to the economy--is tedious, hard work. How much easier to simply transform near-worthless paper into a claim on actual goods and services.

Greek Exhaustion Syndrome

A view from the top

By John Mauldin

One of my very good friends had a small private dinner this week with the chairman of a major German bank, who remarked, with a sense of gallows humor, that he thought he could get his fellow German banks to chip in enough money to give to Greece to just make them go away. They really have Greek Exhaustion Syndrome.

He also thought Portugal would eventually would have to leave, and said he thought he would take a haircut on Irish debt. Italy and Spain will somehow make it. At least that is the view from the top of the German bank pyramid.

Portuguese interest rates are soaring. Without life support from Europe, they cannot keep up their borrowing at rates that will allow them to recover. While they are gamely trying to reduce their deficit, austerity is reducing their GDP and thus their tax revenues. They will have no choice but to default at some point.

Τhe Parable of the Talents

The Transformation of Banking

"With a healthy economic foundation, society should be getting get wealthier and wealthier at a pace that exceeds even that of the Gilded Age, when 10% and 15% growth was common and the human population began to thrive as never before"

By Jeffrey Tucker

There is a scene in the Parable of the Talents in which the returned master berates the shabbiest of his three servants. Discovering that he had buried his seed capital in the ground, the master says: “You should have put my money on deposit with the bankers, so that when I returned I would have received it back with interest.” The servant is then thrown outside “into the darkness,” where he faces “weeping and gnashing of teeth.”

In today’s world, burying that money might have been the better idea. Otherwise, the servant would have paid fees for depositing, withdrawing and transferring and would have earned no interest at all, and the money would have depreciated in value the whole while. It’s enough to cause you to weep and gnash your teeth.