Looking forward for the next miracle

 Old things are better than new things, because they've got stories in them

Things to do today

“I've suffered loss in my career for not being obedient.

Believe me, the loss was little compared to the fear all of you stomach every day.

When the sun sets, I can sing ‘My Way’ with Elvis, Frank Sinatra, and Francis Coppola.

What is your anthem?”

- john milius

Taking a stroll

 We’re all just walking each other home.

The Little Things ? The Little Moments ?

 They are not little

Things we love to hate or love

We lose ourselves in things we love. 

We find ourselves there, too.

Queen of lilac, queen of blue

People are not of symmetrical importance in each others memories.

Options

 The past is never dead. It’s not even past

A few tips about 2016

You've got to know when to hold 'em
Know when to fold 'em
Know when to walk away
And know when to run 
You never count your money 
When you're sittin' at the table 
There'll be time enough for countin' 
When the dealin's done.

Sailing along for the ride

 It’s never fifty-fifty. It’s always seventy-thirty, or sixty-forty.

Forward into the past

Meanwhile at a small Balkan country 

This time is different

A short comment on Greek elections

Still looking for an avalanche

Like any dealer he was watching for the card

That is so high and wild

He'll never need to deal another

One of these days

What was the last time you did something for the first time ?

CENSORSHIP IS BEING OUTSOURCED TO THE MOB

Two recent cases Down Under show how dangerous Twittermobs can be.

By BRENDAN O’NEILL

One of the curious things about the twenty-first-century West is that it feels deeply censorious even though, historically speaking, there isn’t a huge amount of state censorship. Yes, many Western societies have anti-‘hate speech’ laws, debate-choking defamation statutes, and a host of methods for regulating the raucous press, all of which limit how daring or just downright offensive we can be. But we don’t exactly live under nightmarish Orwellian regimes that pass laws explicitly designed to silence political opinions, or to punish anti-Christ iconoclasm, or to criminalise people found in possession of indecent novels or art. How do we explain the existence of an almost unprecedented culture of censoriousness in the absence of too much old-style state censorship?

It’s because censorship has been outsourced to the mob. Censorship is alive and well; it’s just that today it is enforced, not so much by brute law and the copper’s boot, but by mobs of self-styled guardians of acceptable thought.

The illiberal job that was once done by the state and its offshoots - the policing of thought and the punishment of outré speech - is now increasingly done by informal intolerant networks. Outsourcing has been all the rage among Western states in recent years. They’ve outsourced responsibility for aspects of policing, for the guarding of prisoners, even for the fighting of wars, as we saw with the use of mercenary outfits in the West’s conquering of Iraq. Now, the moral authority to decree what can and can’t be uttered in the public sphere has been outsourced, too, passed from the government to moral lynch mobs, noisy cliques of non-state censors. The relatively small amount of explicit state censorship today shouldn’t be taken as a sign that we live in a more free society, but rather speaks to something quite terrifying - that the state doesn’t really need to enact laws that police our words at a time when there are so many mobs willing to do that dirty work on its behalf.

In Australia over the past week, there have been two striking examples of outsourced censoriousness, which reveal how this new phenomenon works and how damaging it can be.

In the first case, a Georgian opera singer, Tamar Iveri, was hounded out of Opera Australia (OA) after it was revealed she once made homophobic comments on her Facebook page. Ms Iveri had been due to perform in OA’s production of Otello, which opens in Sydney next month. But then someone exposed that, a year ago, she had said on FB that she was glad Georgian protesters had spat on Gay Pride marchers in Tbilisi, and had asked the Georgian president not to let into Georgia what she called the ‘West’s faecal masses’ - that is, homosexuals. Oz’s left-leaners, small-L liberals and artsworld inhabitants decided that such a person was not fit to perform in Australia, and so they used their considerable influence - their newspaper columns, their social-networking pages, the financial leverage of their patronage of the arts, which they made clear could be withdrawn - to put pressure on OA to drop Ms Iveri. They won. Ms Iveri was cast out, dumped by OA on the basis that her views were ‘unconscionable’. And thus was Australian opera made morally pure once more.

Read more : http://www.spiked-online.com/freespeechnow/fsn_article/censorship-is-being-outsourced-to-the-mob#.U7ima9fg_h4

Incredible confusions, Part 2

Of interest and the dangerous habit of suppressing it

By Detlev Schlichter 

The idea that the charging of interest is unethical and should be banned has a long tradition in the history of human civilisation. It seems to have played a role at some point in all the major religions, certainly in Christianity, Judaism and Islam, and it is today promoted most strongly by advocates of Islamic banking.

As an economist I cannot (and should not) comment on matters of religion. Religion and economics deal with completely different aspects of human existence. Religion is about ‘ultimate ends’ and ‘personal values’. Economics does not deal with ends but with means. Economics does not tell anybody what his or her values should be. Contrary to what is frequently claimed – usually by those who do not understand economics – economics does not tell you that you should strive for more material goods and more services at your disposal.

But it so happens that we live in a world in which most people have personal aims or goals that involve having at least a certain material wealth, and in which most people prefer the possession of more material goods to less material goods; and the science of economics – for economics is a science, and in fact an objective, wertfreie (value-free) science – can then explain why people have a better chance of achieving these (material) aims if they use such social institutions as the division of labor, private property, trade, money, and many others. Additionally, the science of economics can show how these social institutions work, demonstrate the laws and regularities inherent in them, and can develop rules for their most appropriate use. Economics is purely about the means of social cooperation for the attainment of material goals. It never concerns itself with ultimate ends.

If most of the population became Buddhist monks tomorrow and would lose any interest in accumulating material wealth, would happily withdraw into monasteries and dedicate themselves to meditation, none of the principles and laws of economics would have suddenly become less true or invalid. The law of comparative advantage as articulated by David Ricardo would be as true on that day as on any other. The laws of economics would still apply just as the laws of gravity would. Of course, the interest in economic studies would probably diminish rapidly but that is all. Or, not quite all: Society would also be rapidly impoverished in material terms – even to the point of mass starvation –, and this the economist can ascertain with certainty, although nothing can be said about any compensating gains in spiritual wealth, of course.

If you believe that your God demands that if you lend money you should not charge interest, than there is nothing that I, as an economist, can say to you – other than, maybe, give me a call whenever you have some extra cash. The point at which I can – and should – comment is when you were to claim in addition that the observance of this rule would lead to a more stable and better functioning economy, that the non-charging of interest would not diminish society’s wealth but even increase it, or that the resulting economic structure would at least conform better to some generally accepted notion of fairness. Here we have reached a point where debate has become possible, not because I, as an economist, have intruded onto the religious ground of values and ultimate ends but because the advocate of religion has intruded onto the economists’ ground of the study of the laws for wealth creation.

Read more at : http://detlevschlichter.com/2013/02/incredible-confusions-part-2-of-interest-and-the-dangerous-habit-of-suppressing-it/

Incredible confusions Part 1

‘Positive Money’ and the fallacy of the need for a state money producer

By Detlev Schlichter

I am usually inclined to encourage the inquiry of the fundamental aspects of money and banking. This is because I tend to believe that only by going back to first principles is it possible to cut through the thicket of widely accepted but deeply flawed theories that dominate the current debate in mainstream media, politics and the financial industry. From my own experience in financial markets I can appreciate how convenient and tempting it is in a business context, where quick and easy communication is of the essence, to adopt a certain, widely shared set of paradigms, regardless of how flimsy their theoretical foundations. Fund managers, traders and financial journalists live in the immediate present, preoccupied as they are with what makes headlines today, and they work in intensely collaborative enterprises. They have neither the time nor inclination to question the body of theories – often no longer even perceived as ‘theories’ but considered accepted common wisdom – that shapes the way they view and talk about the outside world. Thus, erroneous concepts and even outright fallacies often remain unquestioned and, by virtue of constant repetition, live comfortably in the bloodstream of policy debates, economic analysis, and financial market reportage.

This goes a long way in explaining the undeserved survival of a number of persistent modern myths: deflation is the gravest economic danger we face; Japan has been crippled by deflation for years and would grow again if it only managed to create some inflation; lack of ‘aggregate demand’ explains recessions and must be countered with easy monetary policy; and money-printing, as long as it does not lead to higher inflation, is a free lunch, i.e. we can only expect good from it. None of these statements stand up to scrutiny. In fact, they are all utterly absurd. Yet, we can barely open a newspaper and not have this nonsense stare us in the face, if not quite as bluntly as stated above, than at least as the intellectual soil from which the analysis or commentary presented has sprung. Deep-rooted misconceptions can only be dismantled through dissection of their building blocs and a discussion of basic concepts.

The dangers of going back to basics

However, going back to basics and to first principles, analyzing critically the fundamental aspects of our financial system, is not free of danger. Here, too, lies a minefield of potentially grave intellectual error, and when things go wrong here, at the basic level, the results and policy recommendations derived from such analysis are bound to be nonsensical too, if not even more nonsensical than what the mainstream believes. In this and the following essays I am going to address some of the erroneous notions at the fundamental level of money and banking that seem to have gained currency in the public debate of late.

I get periodically confronted with these confusions through readers’ comments on my website. Some of the questions and suggestions expressed there reveal the same, or very similar, errors and misunderstandings, and these often seem to have their origin in other publications circulating elsewhere on the web. Among them are the following fallacies, in no particular order:

§  The idea that the charging of interest, or in particular the charging of interest on money, is a fundamental problem in our financial system.

§  The notion that there must be a systematic shortage of money in the economy because banks, through fractional-reserve banking, bring into circulation only amounts of money equivalent to the principal of the loans they create but not the necessary amount to pay the interest on these loans.

§  The notion that it is a problem that money-creation is tied to debt-creation (again, as a consequence of fractional-reserve banking) and that it would be possible and advantageous to have the state issue money directly (debt-free) rather than have the banks do it.

§  The idea that schemes are feasible that allow the painless shrinkage or even disappearance of the national debt.

 All these ideas are nonsensical, based on bad economics and fundamental logical flaws, and to the extent that they entail policy proposals, these policies, if enacted, would not only not give us a stable and more prosperous economy but would surely lead to new instabilities or even outright chaos.

None of these misconceptions originate, or even resonate, as far as I can tell, with the ‘mainstream’. The mainstream– the financial market professionals, the central bankers, financial regulators, and the media – remain resolutely uninterested in dealing with fundamental questions of money and banking for the reasons given above. Here, the discussion continues to centre on how the economy can be ‘stimulated’ more, what ‘unconventional’ policies the central banks may still have up their sleeves, and if the central banks need new targets or better central bankers. Icebergs or no icebergs, these deckchairs need re-arranging.

Read more at :

http://detlevschlichter.com/2013/01/incredible-confusions-part-1-positive-money-and-the-fallacy-of-the-need-for-a-state-money-producer/

The Great War And Its Terrible Aftermath

Sarajevo Is The Fulcrum Of Modern History

By David Stockman

One hundred years ago today the world was shook loose of its moorings. Every school boy knows that the assassination of the archduke of Austria at Sarajevo was the trigger that incited the bloody, destructive conflagration of the world’s nations known as the Great War. But this senseless eruption of unprecedented industrial state violence did not end with the armistice four years later.

In fact, 1914 is the fulcrum of modern history. It is the year the Fed opened-up for business just as the carnage in northern France closed-down the prior magnificent half-century era of liberal internationalism and honest gold-backed money. So it was the Great War’s terrible aftermath—–a century of drift toward statism, militarism and fiat money—-that was actually triggered by the events at Sarajevo.

Unfortunately, modern historiography wants to keep the Great War sequestered in a four-year span of archival curiosities about battles, mustard gas and monuments to the fallen. But the opposite historiography is more nearly the truth. The assassins at Sarajevo triggered the very warp and woof of the hundred years which followed.

The Great War was self-evidently an epochal calamity, especially for the 20 million combatants and civilians who perished for no reason that is discernible in any fair reading of history, or even unfair one. Yet the far greater calamity is that  Europe’s senseless fratricide of 1914-1918 gave birth to all the great evils of the 20^th century— the Great Depression, totalitarian genocides, Keynesian economics,  permanent  warfare states, rampaging central banks and the exceptionalist-rooted follies of America’s global imperialism.

Indeed, in Old Testament fashion, one begat the next and the next and still the next. This chain of calamity originated in the Great War’s destruction of sound money, that is, in the post-war demise of the pound sterling which previously had not experienced a peacetime change in its gold content for nearly two hundred years.

Not unreasonably, the world’s financial system had become anchored on the London money markets where the other currencies traded at fixed exchange rates to the rock steady pound sterling—which, in turn, meant that prices and wages throughout Europe were expressed in common money and tended toward transparency and equilibrium.

This liberal international economic order—that is, honest money, relatively free trade, rising international capital flows and rapidly growing global economic integration—-resulted in  a 40-year span between 1870 and 1914 of rising living standards, stable prices, massive capital investment and prolific  technological progress that was never equaled—either before or since.

During intervals of war, of course, 19^th century governments had usually suspended gold convertibility and open trade in the heat of combat.  But when the cannons fell silent, they had also endured the trauma of post-war depression until wartime debts had been liquidated and inflationary currency expedients had been wrung out of the circulation. This was called “resumption” and restoring convertibility at the peacetime parities was the great challenge of post-war normalizations.

The Great War, however, involved a scale of total industrial mobilization and financial mayhem that was unlike any that had gone before.  In the case of Great Britain, for example, its national debt increased 14-fold, its price level doubled, its capital stock was depleted, most off-shore investments were liquidated and universal wartime conscription left it with a massive overhang of human and financial liabilities.

Yet England was the least devastated. In France, the price level inflated by 300 percent, its extensive Russian investments were confiscated by the Bolsheviks and its debts in New York and London catapulted to more than 100 percent of GDP.

Among the defeated powers, currencies emerged nearly worthless with the German mark at five cents on the pre-war dollar, while wartime debts—especially after the Carthaginian peace of Versailles—–soared to crushing, unrepayable heights.

In short, the bow-wave of debt, currency inflation and financial disorder from the Great War was so immense and unprecedented that the classical project of post-war liquidation and “resumption” of convertibility was destined to fail.  In fact, the 1920s were a grinding, sometimes inspired but eventually failed struggle to resume the international gold standard, fixed parities, open world trade and unrestricted international capital flows.

Only in the final demise of these efforts after 1929 did the Great Depression, which had been lurking all along in the post-war shadows, come bounding onto the stage of history.

Read more at : http://davidstockmanscontracorner.com/sarajevo-is-the-fulcrum-of-modern-history-the-great-war-and-its-terrible-aftermath/

This time is really, but really, different

These Fake Rallies Will End in Tears

By Detlev S Schlichter

Investors and speculators face some profound challenges today: How to deal with politicized markets, continuously “guided” by central bankers and regulators? To what extent do prices reflect support from policy, in particular super-easy monetary policy, and to what extent other, ‘fundamental’ factors? And how is all this market manipulation going to play out in the long run?

It is obvious that most markets would not be trading where they are trading today were it not for the longstanding combination of ultra-low policy rates and various programs of ‘quantitative easing’ around the world, some presently diminishing (US), others potentially increasing (Japan, eurozone). As major U.S. equity indices closed last week at another record high and overall market volatility remains low, some observers may say that the central banks have won. Their interventions have now established a nirvana in which asset markets seem to rise almost continuously but calmly, with carefully contained volatility and with their downside apparently fully insured by central bankers who are ready to ease again at any moment. Those who believe in Schumpeter’s model of “bureaucratic socialism”, a system that he expected ultimately to replace capitalism altogether, may rejoice: Increasingly the capitalist “jungle” gets replaced with a well-ordered, centrally managed system guided by the enlightened bureaucracy. Reading the minds of Yellen, Kuroda, Draghi and Carney is now the number one game in town. Investors, traders and economists seem to care about little else.

“The problem is that we’re not there [in a low volatility environment] because markets have decided this, but because central banks have told us…” Sir Michael Hintze, founder of hedge fund CQS, observed in conversation with the Financial Times (FT, June 14/15 2014) [1]. “The beauty of capital markets is that they are voting systems, people vote every day with their wallets. Now voting is finished. We’re being told what to do by central bankers – and you lose money if you don’t follow their lead.”

Liberty or Equality?

The Founding Fathers knew that you can’t have both

by Myron Magnet

With the fulminating on the left about inequality—“Fighting inequality is the mission of our times,” as New York’s new mayor, Bill de Blasio, summed up the theme of his postelection powwow with President Barack Obama—it’s worth pausing to admire anew the very different, and very realistic, modesty underlying Thomas Jefferson’s deathless declaration that all men are created equal. We are equal, he went on to explain, in having the same God-given rights that no one can legitimately take away from us. But Jefferson well knew that one of those rights—to pursue our own happiness in our own way—would yield wildly different outcomes for individuals. Even this most radical of the Founding Fathers knew that the equality of rights on which American independence rests would necessarily lead to inequality of condition. Indeed, he believed that something like an aristocracy would arise—springing from talent and virtue, he ardently hoped, not from inherited wealth or status.

In the greatest of the Federalist Papers, Number 10, James Madison explicitly pointed out the connection between liberty and inequality, and he explained why you can’t have the first without the second. Men formed governments, Madison believed (as did all the Founding Fathers), to safeguard rights that come from nature, not from government—rights to life, to liberty, and to the acquisition and ownership of property. Before we joined forces in society and chose an official cloaked with the authority to wield our collective power to restrain or punish violators of our natural rights, those rights were at constant risk of being trampled by someone stronger than we. Over time, though, those officials’ successors grew autocratic, and their governments overturned the very rights they were supposed to protect, creating a world as arbitrary as the inequality of the state of nature, in which the strongest took whatever he wanted, until someone still stronger came along.

In response, Americans—understanding that “kings are the servants, not the proprietors of the people,” as Jefferson snarled—fired their king and created a democratic republic. Under its safeguard of our equal right to liberty, each of us, Madison saw, will employ his different talents, drive, and energy, to follow his own individual dream of happiness, with a wide variety of successes and failures. Most notably, Federalist 10 pointed out, “From the protection of different and unequal faculties of acquiring property, the possession of different degrees and kinds of property immediately results.” That inequality would be a sign of the new nation’s success, not failure. It would mean that people were really free.

The democratic republic that the American Revolution brought into being, however, contained the seeds of a new threat to natural rights, Madison fretted. Yes, the new nation will operate by majority rule, but even democratic majorities can’t legitimately overturn the fundamental rights that it is government’s purpose to safeguard, no matter how overwhelming the vote. To do so would be just as grievous a tyranny as the despotism of any sultan in his divan. It would be, in Madison’s famous phrase, a “tyranny of the majority.” As Continental Congressman Richard Henry Lee put it, an “elective despotism” is no less a despotism, for all its democratic trappings.

How would such a tyranny occur? Almost certainly, Madison thought, it would center on “the apportionment of taxes.” Levying taxes “is an act which seems to require the most exact impartiality, yet there is perhaps no legislative act in which greater opportunity and temptation are given to a predominant party, to trample on the rules of justice. Every shilling with which they overburden the inferior number is a shilling saved to their own pockets.” How easy for the unpropertied many to expropriate the wealth of the propertied few by slow erosion, decreeing that they should pay more than a proportionate share of the public expenses. How seductive for the multitudinous farmers to levy taxes on the much smaller number of merchants or bankers or manufacturers, while exempting themselves. How tempting for the majority who have debts to transfer money secretly and silently away from the minority who are their creditors by debasing the currency, so that the real value of what they owe steadily shrinks, as Madison well remembered from the ruinous inflation of the Revolutionary War years. And a year before the Constitutional Convention, Madison recalled, the debt-swamped farmers of western Massachusetts had cooked up, in Shays’s Rebellion, still more “wicked and improper” schemes for expropriating the property of others: trying to close the courts at gunpoint to prevent foreclosures on their defaulted mortgages and even demanding the equal division of property.

So as chief architect of the Constitution, designed to give the federal government sufficient power to protect citizens’ basic rights—above all, the power to tax, whose lack under the Articles of Confederation had made the Revolutionary War longer and grimmer than it would have been if Congress had had sufficient means to buy arms and pay soldiers—Madison proceeded with his heart in his mouth, fearful that such augmented power made a tyranny of the majority all the more possible. His main challenge at the Convention, as he saw it, was to guard against precisely that outcome. So while four of the 18 specific powers that Article I, Section 8 of the Constitution gives Congress concern the levying of taxes and the borrowing and coining of money to “provide for the common Defence and general Welfare of the United States”—taxes that “shall be uniform throughout the United States”—eight of the rest deal with spending only for military and naval purposes, while the “general welfare” powers extend only to building post offices and post roads; establishing federal courts; protecting intellectual property by copyrights and patents; and regulating bankruptcies, naturalization, and interstate and foreign commerce. Not content merely to limit and define explicitly the federal government’s power, Madison made sure that the Constitution divided it up among several branches, limiting the power that any single individual or official body could wield and putting each jealously on guard against any other’s attempt to seize a disproportionate share. Moreover, all these officials (except the judges) were elected representatives of the people: they were the agents through whom Americans, who had no rulers, governed themselves.

But why was the liberty that Madison so mightily struggled to protect so precious? Americans knew how grievous its opposite was, both from the enslaved blacks they saw all around them as well as from their knowledge that their own forebears had fled British persecution of non-Anglican Protestants or European persecution of all Protestants, denied even freedom to express their own beliefs. They knew what man could inflict on man. But of all the Founders, Treasury secretary Alexander Hamilton gave the most positive, eloquent, and inspiring answer to that question—though, in fact, he thought that he was answering a question about economics. Illegitimate, orphaned, and poor, Hamilton dreamed big dreams as a teenage clerk, sitting on his countinghouse stool on a small West Indian island whose only business was sugar and slaves. Ambition burned within him, along with a keen but unformed sense of his own talent. He knew he could be something other than he was. But what or how, he didn’t foresee. Maybe a war would come, he daydreamed, and give him his chance.

Read more at : http://www.city-journal.org/2014/24_2_liberty-or-equality.html

A War Between Two Worlds

No easy way out 

By George Friedman

The murders of cartoonists who made fun of Islam and of Jews shopping for their Sabbath meals by Islamists in Paris last week have galvanized the world. A galvanized world is always dangerous. Galvanized people can do careless things. It is in the extreme and emotion-laden moments that distance and coolness are most required. I am tempted to howl in rage. It is not my place to do so. My job is to try to dissect the event, place it in context and try to understand what has happened and why. From that, after the rage cools, plans for action can be made. Rage has its place, but actions must be taken with discipline and thought.

I have found that in thinking about things geopolitically, I can cool my own rage and find, if not meaning, at least explanation for events such as these. As it happens, my new book will be published on Jan. 27. Titled Flashpoints: The Emerging Crisis in Europe, it is about the unfolding failure of the great European experiment, the European Union, and the resurgence of European nationalism. It discusses the re-emerging borderlands and flashpoints of Europe and raises the possibility that Europe's attempt to abolish conflict will fail. I mention this book because one chapter is on the Mediterranean borderland and the very old conflict between Islam and Christianity. Obviously this is a matter I have given some thought to, and I will draw on Flashpoints to begin making sense of the murderers and murdered, when I think of things in this way.