In the meantime, the debasement of paper money continues

What gives money value, and is fractional-reserve banking fraud?

by DETLEV SCHLICHTER

I thought I should address a couple of points that I consider to be misconceptions and that frequently come up in discussions with the audience or other speakers when I present my views on the fundamental problems with fiat money. I am not always in a position to correct these misconceptions right then. They are often woven into questions on other points and I have to leave them uncommented as not to disrupt the flow of the debate. My book is, I believe, quite clear on these points, so I could simply refer people to Paper Money Collapse. But, for whatever reason, it is still the case that many in my audience make inferences from similar arguments to my arguments, and I fear that some of the differences between these positions might get overlooked. These differences are not unimportant, and I think it is worthwhile to highlight and clarify them.

The first point is related to the question what gives money its value? The second point is, is fractional-reserve banking fraudulent and should it be banned on the basis of property rights?

Why Nations Fail

Poverty is the norm. Prosperity is the exception.

If you start in the city center of Nogales Santa Cruz and walk south for a while, at some point you see houses become much more run down, streets turn decrepit. You have crossed the Mexican border into Nogales, Sonora. Though the two cities are made of the same cloth and were once united, now there are sharp differences between the two. Those in the north are about three times as rich, have access to much better health care, stay in school much longer and of course take part in a much more democratic political process than their cousins in the south. The differences between the two halves of Nogales are a micro, tiny version of huge differences in prosperity and living standards we see around the world. Take Mexico as a whole, for example: it has less than one quarter of the GDP per capita of the United States. Take Peru; it has about one seventh of the GDP per capita of the United States. Or take Ethiopia, Haiti, Somalia or the Congo, each of has less than one thirtieth of the GDP per capita of the United States. 

The Pope's Cuba Gamble

The visit may turn out to be a gross miscalculation 

By MARY ANASTASIA O'GRADY

With only a week to go until Pope Benedict XVI is scheduled to make the second papal visit to Cuba in 14 years, joyful anticipation ought to be buoying the island's Christians. But for those brave soldiers of Christ who have stood up against political repression, the prevailing mood is deep frustration.

For 53 years, Cuba's totalitarian regime has made life hell for the population. But Castro also has spared no expense in running a clever international propaganda campaign. Regime survival has depended on East German-style repression covered over by a smiley face for international consumption. It has worked, and Cuban human-rights defenders have suffered their indignities with little moral support from the outside world.

The Parable of the Broken Traffic Lights

Bad signals

By Steven Horwitz

Suppose on some sunny afternoon in a large city somewhere in the western world, a man discovers on awaking from a two-hour nap that several hundred car accidents had occurred in the city while he slept.  He wonders why.  First he considers the possibility that the weather was the cause, but the gorgeous afternoon sun pushes that thought aside.  The odds of many hundreds of cars having simultaneous mechanical problems seems infinitesimally small, so he rules that out as well.  He ponders the question further and eventually asks himself whether the drivers in that fair city just had a bout of group psychosis or mass delusion.  The odds of that also seem pretty low.

A Coriolanus in Our Future?

A side of Shakespeare the classroom never prepared us for 

By Joe Sobran

A little tired of politics? Of course you are. We all are. Well, I have a treat for you: Shakespeare’s least-known great play, Coriolanus, the story of a brave and honest (though not always amiable) man who hates politics with all his heart. It’s a tragedy fraught with magnetic eloquence and unexpected lessons for our own time.
I discovered it in 1962, when I was 16, through Richard Burton’s thrilling recording of it. Long before he became famous for, well, other stuff, Burton had made the role his own on the stage, and this recording is still the gem of my large collection. Vocally, nobody, not even the great Olivier, could have topped Burton’s astoundingly resonant performance (which Olivier himself saluted as “definitive”). Listen to it once, and I guarantee you’ll never forget it. The play reveals a side of Shakespeare the classroom never prepared us for. Sweetest Shakespeare, fancy’s child? Warbling his native woodnotes wild? Not hardly.

In Praise of Hedging

The global economy slides into a "hard landing." 

Hedging against catastrophic loss is common-sense, and becomes more so as risk rises.

By Charles Smith

As a general observation, those with less wealth tend to be unhedged and those with more wealth tend to be hedged. In other words, hedging matters. Hedging has a clubby investment-speculation sound, but it basically means "insurance."

Since there is a risk your vehicle could be damaged in an accident or stolen, you buy auto insurance to limit your loss should either of those unfortunate but not uncommon "bad things" occur.

Human Sacrifice in Modern Religions

Drug Humans, Give Them Cat Eyes, Murder Infants

BY R. CORT KIRKWOOD     

If the proposal that murdering infants with so-called “after-birth abortion” isn’t enough to ring the alarm bells about the state of higher learning, perhaps this one is: An alleged philosopher at New York University wants to combat “climate change” by drugging or genetically engineering humans.

In the world S. Matthew Liao envisions, we would be repulsed by eating meat, begat miniature children, and see in the dark through cat eyes.

The professor’s theory is that by changing human beings at the genetic level, or giving them drugs, he can alter them to combat climate change and help the environment. He even believes he can alter a man to make him more charitable.

Liao’s describes his Brave New World in a paper for Ethics, Policy & Environment, which he detailed in an interview with The Atlantic, a leftist magazine.

Α grease-stain on the carpet

The One Way Ticket from "Tokyo Story" to Manga

By Spengler 

A Japanese government study that should have shaken the psychology profession to its shoelaces went through the news media with a mild degree of titillation last month. Almost a third of Japanese boys aged 16-19 and three-fifths of girls say that they have no interest in sex. That is daunting, for all the world's cultures have believed that women enjoy sex more than men, as the Greek seer Tiresias told the gods according to Ovid. 

The hormones of late adolescence evidently rage in vain against some cultural barrier that makes young Japanese "despise" sexual relations, according to the Japan Family Planning Association's report [1]. The whole edifice of liberal social policy should have tumbled upon the news, which refutes Freud's premise that libido is the driving force in human character. For 60 years, the sexual revolution insisted that repressed desire is the root of all evil. It turns out that the ultimate victim of sexual revolution is sex itself. 

Watch What You Say

NSA's Library of Babel

                                            1984 was used as an instruction manual

By James Bamford 

The spring air in the small, sand-dusted town has a soft haze to it, and clumps of green-gray sagebrush rustle in the breeze. Bluffdale sits in a bowl-shaped valley in the shadow of Utah’s Wasatch Range to the east and the Oquirrh Mountains to the west. It’s the heart of Mormon country, where religious pioneers first arrived more than 160 years ago. They came to escape the rest of the world, to understand the mysterious words sent down from their god as revealed on buried golden plates, and to practice what has become known as “the principle,” marriage to multiple wives.

Today Bluffdale is home to one of the nation’s largest sects of polygamists, the Apostolic United Brethren, with upwards of 9,000 members. The brethren’s complex includes a chapel, a school, a sports field, and an archive. Membership has doubled since 1978—and the number of plural marriages has tripled—so the sect has recently been looking for ways to purchase more land and expand throughout the town.

But new pioneers have quietly begun moving into the area, secretive outsiders who say little and keep to themselves. Like the pious polygamists, they are focused on deciphering cryptic messages that only they have the power to understand. Just off Beef Hollow Road, less than a mile from brethren headquarters, thousands of hard-hatted construction workers in sweat-soaked T-shirts are laying the groundwork for the newcomers’ own temple and archive, a massive complex so large that it necessitated expanding the town’s boundaries. Once built, it will be more than five times the size of the US Capitol.

Printing Money and Prosperity

The Perils of Money Printing's Unintended Consequences

Marc Faber does not mince words. He believes the money printing policies of the Federal Reserve and its sister central banks around the globe have put the world's currencies on an inexorable, accelerating inflationary down slope.

The dangers of money printing are many in his eyes. But in particular, he worries about the unintended consequences it subjects the populace to. Beyond currency devaluation, it creates malinvestment that leads to asset bubbles that wreak havoc when they burst. And even more nefarious, money printing disproportionately punishes the lower classes, resulting in volatile social and political tensions. 

Not Solving the Greek Debt Crisis Might Just Solve the Greek Debt Crisis

Greece and Germany should keep kicking that can! 

Everybody assumed that when Greece defaulted, Europe would fall apart. Last weekend, Greece defaulted. And Europe's still around. What if extend-and-pretend actually works?

By Matthew O'Brien
Greece and the euro zone are the Sid and Nancy of currency unions. We know these crazy kids are going to break up eventually -- so why not go ahead and get it over with already? The answer is that neither side is prepared for their inevitable divorce. The Germans have roughly a trillion reasons to keep Greece around for now. And the Greeks, for their part, still want to stay in the euro zone. The prospect of bringing back the drachma simply terrifies many of them. It shouldn't. Greece's recent managed default shows that leaving the euro, though ignominious, wouldn't need to be the end of the world.

A Greek exit from the euro zone seems a fait accompli. It has little to do with Greece's genuinely profligate government spending, and everything to do with Greece's labor costs. Greece's wages are simply too high to compete with the rest of Europe, particularly Germany. There's usually a simple remedy for this: devalue the currency. But euro membership precludes Greece from doing that. Instead, Greece is being forced to go through an "internal devaluation" -- econospeak for cutting wages. The resulting sky-high unemployment is socially unsustainable. And, as Meg Greene points out, it's unlikely to improve much within the next decade.

The Frozen Future

Freedom and compulsion are mutually exclusive social resources 

The Power of One

By Dr Zero

The Liberty movement is a rising tide of resistance to the all-consuming State.  It has captured the attention of independent voters made nervous by the fabulously expensive failure of Obama-style socialism.  But what can it say to those who already depend on the State for their provenance, including a growing payroll of government employees, and those who depend on welfare entitlements?

I would invite those dependents to think about the future.

Freedom and compulsion are mutually exclusive social resources.  Greater compulsion comes at the expense of freedom, and vice versa.  Every society employs a mixture of these resources.  Even the most classically liberal nation would still have laws, which the government must enforce.  The use of compulsion to prevent murder is not tyranny.

You Know Harry

The Third Man 

by Joseph Sobran

For my money, the greatest movie ever made is The Third Man, first released 60 years ago and re-released with restored footage (11 minutes had been cut from the U.S. version). Usually praised as a "classic thriller," it's much more than that: it's a study of evil that bears repeated viewings.

Rarely has a film been blessed by such a perfect combination of direction (Carol Reed), script (Graham Greene), cinematography (Robert Krasker), music (Anton Karas), and excellent casting, right down to the creepy minor characters.

We've embargoed our own oil supplies

Scarce Oil? U.S. Has 60 Times More Than Obama Claims

By JOHN MERLINE

When he was running for the Oval Office four years ago amid $4-a-gallon gasoline prices, then-Sen. Barack Obama dismissed the idea of expanded oil production as a way to relieve the pain at the pump.

"Even if you opened up every square inch of our land and our coasts to drilling," he said. "America still has only 3% of the world's oil reserves." Which meant, he said, that the U.S. couldn't affect global oil prices.

It's the same rhetoric President Obama is using now, as gas prices hit $4 again, except now he puts the figure at 2%.

Silence this infidel

Defending free speech

By ROWAN DEAN
"Mark Steyn is a bigoted, bullying, brazen, egotistical, unfunny, crass, self-serving Islamophobe and right-wing homophobe with the wit of a Soviet drains inspector and the sartorial understatement of a deposed Middle Eastern dictator, whose tedious views and repetitious anecdotes leave the listener feeling depleted of insight and starved of intellectual oxygen."

Actually, none of the above is true (apart from the sartorial bit — even Gaddafi would have thought twice about the gold tie and orange handkerchief combo) but the good news is I’m totally confident that The Spectator Australia’s and the IPA’s recent celebrity guest — who dazzled Australia with appearances on Alan Jones,Counterpoint, Q&A and a sold-out speaking tour to promote his book After America— won’t sue me for defamation. Plagiarism, maybe, if I nick any of his jokes, which I would dearly love to. But defamation, no. That’s the beauty of free speech. It’s a doddle when you’re addressing people who are secure in their convictions, passionate in their attitudes yet happy to confront diversity of opinion. Free speech only gets tricky when you’re dealing with religious zealots or (just as bad) government bureaucracies who, when taking offence, threaten to imprison or kill you in order to ensure your silence.

Beyond Surrealism Part II

UN consultant: Ban Dante's Divine Comedy

byJoel Gehrke

Dante's Divine Comedy should be banned from Italian schools as a racist and Islamophobic text rather than esteemed as one of the greatest achievements of Western poetry, according to a human rights organization that acts as a consultant for the United Nations. 

"We want to expunge the Divine Comedy from the Ministry of Educations’ scholastic curriculum, or at least require the necessary commentary to shed light on the text," Valentina Sereni, president of Gherush92, told Adnkronos News Agency. 

Beyond Surrealism Part I

U.N. to investigate U.S. voter ID Laws

This is really the last straw. It is time to get out of the United Nations: “UN rights council delves into US voter I.D. laws.”

The United Nations Human Rights Council is investigating the issue of American election laws at its gathering on minority rights in Geneva, Switzerland. This, despite the fact that some members of the council have only in the past several years allowed women to vote, and one member, Saudi Arabia, still bars women from the voting booth completely.Officials from the NAACP are presenting their case against U.S. voter ID laws, arguing to the international diplomats that the requirements disenfranchise voters and suppress the minority vote.

A Country in Denial

Watch Bernanke’s ‘Little’ Inflation Capsize U.S.

By Amity Shlaes

A little is all right. That’s the message Federal Reserve Chairman Ben S. Bernanke has been giving out recently when asked about the evidence of inflation in the U.S. recovery.

Sometimes Bernanke doesn’t even go that far. He simply says he doesn’t see inflation. The Fed chairman recently described the prospects for price increases across the board as“subdued.”

 “Sudden” is more like it. The thing about inflation is that it comes out of nowhere and hits you. Monetary policy is like sailing. You’re gliding along, passing the peninsula, and you come about. Nothing. Then the wind fills the sail so fast it knocks you into the sea. Right now, the U.S. is a sailboat that has just made open water, and has already come about. That wind is coming. The sailor just doesn’t know it.

The right way to make money

If you focus on making money, you end up making a lot of bad decisions 

by RUSS ROBERTS 

People are making fun of this piece by Greg Smith where he talks about his disillusionment with the culture at Goldman Sachs. Smith claims the only focus at GS is making money and people openly disdain the customer. He’s being mocked for thinking it could possibly be otherwise.

But I was reminded of this 1950 quote from George Merck who was president of the pharmaceutical company:

"We try never to forget that medicine is for the people.  It is not for the profits.  The profits follow, and if we have remembered that, they have never failed to appear."

If you focus on making money, you end up making a lot of bad decisions. Paradoxically, if your goal is to make money, it’s better to think about making a great product, making the customer happy and so on with the constraints of making money along the way. The best corporate cultures encourage excellence, not the bottom line. The bottom line matters of course, but if that’s your focus your long-run results may be quite poor. No corporation that I know of has as its motto: make as much money as possible! And I don’t think it’s just public relations. A great corporation with great profits gets its workers to focus on the consumer and uses other mechanisms to make sure the employees don’t bankrupt the company by being too generous with prices or quality.

The Making of an Adolescent Elite

Privilege: Top of the Class

By Austin Bramwell 

Status has always been hereditary. A warlord establishes a dynasty; a merchant buys a title; a politician gets his son elected to office. The desire to pass power, rank, and wealth down to one’s descendants is a universal that human institutions have always flexed to accommodate. Even communist dictators have consolidated rule within their families.

Americans have a rich, if forgotten, history of aristocracy. Royalist cavaliers flourished in Virginia; the Dutch granted patroonships in New York; armigerous families reproduced the feudal system in Maryland. The last manorial estate in the United States did not break up until 1840s.