In the beginning, God did not create a communal hierarchy, and did not want to be the “puppet master” or grand central planner of we who are made in the likeness of God. Therefore put plainly: although God is the overall owner of all things, to a large degree what happens on this earth is not up to Him.
The exercise of this human dominion on earth is another term for free will.
The scriptures teach that “God is love” – and love always honours the free will of others, never seeking to manipulate or to impose. In order to truly honour free will, it is necessary to offer a free choice with all its consequences. Therefore, God made such a choice available to Adam and Eve.
To make the choice genuinely free, there could be no interference and therefore God was not physically present or visible at the time. The awful consequences of making an evil choice, although made clear to them in advance, were not immediately visible either. Here is the record of that event:
Now the serpent was more cunning than any beast of the field which the LORD God had made. And he said to the woman, “Has God indeed said, ‘You shall not eat of every tree of the garden’?”
And the woman said to the serpent, “We may eat the fruit of the trees of the garden; but of the fruit of the tree which is in the midst of the garden, God has said, “You shall not eat it, nor shall you touch it, lest you die.”
Then the serpent said to the woman, “You will not surely die. For God knows that in the day you eat of it your eyes will be opened, and you will be like God, knowing good and evil.”
So when the woman saw that the tree was good for food, that it was pleasant to the eyes, and a tree desirable to make one wise, she took of its fruit and ate. She also gave to her husband with her, and he ate. (Genesis 3:1-6)
The story of the tree, the fruit and the serpent is well known around the world: A wrong choice was made by both Adam and by Eve at the tree, after listening to a reptile inhabited by Satan – a lesser created being who, with his cohorts, had made his own evil choice long before. The rest is world history – things were to become a lot harder, a mixture of good and evil depending upon the interaction and results of ongoing everyday free will choices.
So it would seem to follow that, if at any time government was going to be instituted by God in response to sin, then surely the ideal place would have been at the time of the first sin – immediately after the “fall” of Adam and Eve his wife.
However, the record shows that it was not… God had in fact already instituted the resilient family framework. Had that not been the best institution for the problems of a fallen world, our Creator would surely have been well aware of it.
The Family Framework
Eve had been taken from the side of Adam, literally a part of him. Originally, this was not a master/slave arrangement; it was a partnership – one a natural leader and one a natural helper. But even with selfishness and sin now in the world, God made clear that there was no alternative to this established order by acknowledging that sinful men would inevitably subjugate their women:
“In pain you shall bring forth children; your desire [shall be] for your husband, and he shall rule over you.” Genesis 3:16
At the fall, God could easily have modified this by establishing some kind of commune/government type arrangement. But where improper subjugation exists, it is far better kept to a minimum and not offered an unlimited path of expansion. Such misbehaviour is restrained and limited best when kept at the lowest possible level: At least a mistreated woman could normally escape back to her father’s house if things became intolerable, or else become a domestic helper, or in a worst case scenario look for some other escape route.
But today’s ever expanding governments have done their utmost to destroy the decentralised authority of the home. They will use and exaggerate every incident of domestic failure and abuse as an excuse to establish their own subjugation, while covering up systemic abuse – especially of children in state social systems. Even official abuse figures are fudged – for example, violence by transient partners against an earlier partner’s children is often attributed to the “family”.
Some women have welcomed the growth of the welfare state as a ”liberation” from the moral responsibility that comes with being a mother, bearing children and respecting the natural leader of the home. But many such women are even more abused, abandoned and much the worse off for transient relationships with irresponsible men. They have in effect, married the state and their children have grown up fatherless, often on government housing estates – a lost and emotionally damaged underclass.
There have been many negative social consequences in a culture that trivialises sex in this way, and separates it from family life. In the absence of natural fatherly affection, and sometimes in combination with sexual abuse, not the least of these consequences is a greater susceptibility to sexual disorientation.
Truth or Consequences
Those who advocate sexually loose behaviour in the name of personal rights, entirely fail to consider the rights of third parties not present at the pleasurable moment. Such rights are always violated – be it the right of fathers, mothers, wives, husbands, future spouses, or of dependants, who may suffer terribly from a broken home.
More even than these victims, there is also a potential new third party to consider: The dependent life that the act may bring into the world a short time later – along with financial, emotional and social dependency for many years after that.
Of course, such basic knowledge as this is instinctive. So much so in fact, that counteracting this instinct is intensive work requiring continual indoctrination and personal “mind games” to dull the obvious. This ongoing indoctrination is a primary role of the Hollywood sex cult and of the mainstream media.
Angry, self-righteous support for state social welfare systems is typically one such mind game – a moral and conscience redirection exercise by those who would accommodate or practice loose sexual behaviour, while seeking to absolve themselves from the associated duties and consequences.
The perverse social systems that undergird it all are now coming to an end as the bills to pay for them are finally coming due. But social attitudes will not change so quickly – it will take time and moral re-education to restore a natural social order. That process will take even longer if Christian churches do not themselves re-evaluate their faith in government power and recommit to the principles of the true kingdom of God, in order to take their proper place of leadership and instruction.
This is so especially among religious “social conservatives” whose doctrines superficially appear to uphold morality but in reality empower the state.
Religious Politics, Left and Right
The word “conservative” can be anchored to varying reference points in the past. The type referenced here, is the current prevailing political “social conservative” worldview.
Social conservatism has increasingly come to propose that the same governments which have led people down the dark path of social destruction, are the anointed saviours to lead the people back again – through external micromanagement of their personal lives, by getting the right people in office. But note well that the worst enemies of Jesus were not the sexually immoral sinners – the social “liberals” of the day.
Religious statism is in fact an ancient tradition: “Social Conservatives” are the modern day Pharisees, who would use every real or perceived secondary moral violation as justification for replacing the primary personal jurisdiction established at creation with their own authoritarian, police state control.
But if there is to be genuine Christian concern for family life, then it is important to hear the words of Jesus:
“…beware the leaven of the Pharisees and the Herodians“.
The “Herodians” of the time represented Herod – in an overt and direct appeal to secular politics as an end in itself, especially through “bi-partisan” solutions with the Pharisees and Sadducees: On the one (Right) political hand, were the strict religious Pharisees. But on the other hand, there also existed the more secular Sadducees – who barely even believed in a spiritual realm. They, in other words, were the religious Left. There were doctrinal disputes and infighting, but the power base of both the religious Left and religious Right was based upon backing by Herod and ultimately, Caesar.
The Pharisees and modern puritan dictators in particular, are as dangerous today as they were back then – simply because they use a veneer of morality to justify their craving for power. They appear to be righteous and seem to offer an alternative to decadence. Yet the same satanic agenda of hate and improper control is at work as it is in those of the Left who would more overtly dissolve the family and natural institutions of social welfare.
Natural Social Welfare
The truth is, for all his faults it is rare to find a husband who, at heart, cares nothing for his wife and children. It is in his self-interest and natural to do so – his part in an instinctive and very real social contract.
There will always be some brutes – married or not – but even so, there can be absolutely no adequate replacement for the family as an institution, which is not much more socially destructive. Even legitimate secondary institutions such as extended family, church, neighbours and private charities can only act as effective social safety nets when they respect this primary principle of the family framework.
We see this point underlined in some detail by Paul in the Book of 1 Timothy, Chapter 5 where, notably excluded from the text is any mention of praying for or seeking state provision:
“…if any widow has children or grandchildren, let them first learn to show piety at home and to repay their parents; for this is good and acceptable before God…. if anyone does not provide for his own, and especially for those of his household, he has denied the faith and is worse than an unbeliever… If any believing man or woman has widows, let them relieve them, and do not let the church be burdened, that it may relieve those who are really widows.”
Here, the duty and means of Christian social provision is clearly laid out by Paul, under direction and inspiration of the Holy Spirit. Therefore, to the extent that the state “supports” by “relieving” extended families, churches and neighbours of these God-given responsibilities, it is in reality an evil which undermines them.
Moreover, such a system creates a cycle of dependency: As the state produces nothing, it can only rob other families, further diminishing their financial ability to fulfil primary or secondary responsibilities as natural welfare institutions.
Our search for the divine creation of government at the point of origin of sin has been a failure.
When government replaces family, then gradually even the sense of family responsibility is lost until, like today, the instinctive response to ever increasing social problems is to lobby for a larger, “fairer” share of the government cake. Always, this is at the expense of others from whom it must be taken by force. Because unlike the true God, who gives and creates, the State can only take and destroy.
Our conclusion has to be that government clearly was not instituted at the “Fall” to mitigate sin; it is rather an organised manifestation of sin and as such, can only magnify its effects.
There is an English writer who is going around telling all and sundry that I made a pass at his wife. Now, Englishmen are known not to get too excited about such matters, but in this case the man is simply showing off. I can’t for the life of me think what else this is all about, because I have never met his wife, or if I have, I have certainly never made the slightest pass at her. Although this is not very gallant on my part, when I was informed what that creep was going around accusing me of, I asked what the wife looked like. “Not someone you’d actually make a pass at” was the kindest of judgments.
Never mind. The reason I write about this individual, who has never had the courage to come up to me with his complaint, is because at an earlier age I would not be crying foul in this august journal. I would have challenged him to a duel, he would have had the choice of weapons, and I would most likely have kneecapped him or run him through the shoulder, allowing him to live out the rest of his days in painful awareness that one should get their facts right before going around blackening men’s names. Alas, those days—or dawns, rather—are long gone. Mind you, it could also have gone the other way round. It could have been the poor little Greek boy who ended up dead, but judging from what would happen in a fight today, I think I would have been the favorite 200 years ago.
A duel came to mind because of this crybaby’s whining, but it also has to do with a new book called Touché: The Duel in Literature, by John Leigh. Duels among writers come in very handy. They have an opening, a dramatic middle, and a conclusive finish. Novelists love duels. I believe it was Joseph Conrad who wrote the short story on which that wonderful Ridley Scott film The Duellists was based. Harvey Keitel was simply terrific in portraying a crazed French officer who keeps challenging a fellow captain in Napoleon’s army until he gets his comeuppance. Leigh writes that the first duel was between Achilles and Hector, the noblest Greek versus the noblest Trojan. Neither of them were writers, that’s for sure, but what the hell, all warriors are writers, at least in my book. Pushkin, of course, the greatest poet ever, died in a duel instigated by him against a French officer serving in the tsar’s army, over the latter’s flirting with the poet’s beautiful wife. Pushkin was mistaken. D’Anthès married Pushkin’s wife’s sister, trying to avoid a duel, but still Pushkin persisted. They used to say he was as jealous as Othello and twice as dark. The Frenchman shot first and aimed low, hitting the poet’s leg and severing an artery. Russia’s greatest died a painful death three days later. D’Anthès lived until the early part of the 20th century.
A report on Malaysian Airlines MH17 air disaster in Ukraine last year by a group of old-hand aviation security experts maintains that the Boeing might have been downed by an Israeli Python air-to-air missile.
The report was leaked via the private LiveJournal account of Albert Naryshkin (aka albert_lex) late on Tuesday and has already been widely discussed by social media communities in Russia.
The authors of the investigative report have calculated the possible detonation initiation point of the missile that hit the passenger aircraft and approximate number and weight of strike elements, which in turn designated the type and presumed manufacturer of the weapon.
Malaysian Airline Boeing 777-200 performing flight MH17 from Amsterdam to Kuala Lumpur on July 17, 2014, crashed on the territory of Ukraine near the village of Grabovo, killing all 283 passengers and 15 crewmembers aboard.
The aircraft disintegrated in the air and the debris of MH17 were scattered across an area of about 50 sq. km.
The external view of MH17 hull pieces indicates that “fragments of the pilots’ cockpit have suffered specific damages in the form of localized puncture holes and surface dents typical for hypervelocity impacts with compact and hard objects,” the report says, stressing that similar damage could be found on the inner side of the cockpit.
The report specifically points out that chips of the body coat around the holes in the fragment are typical of wave effects created by hypervelocity impacts.
Some damage, though larger and less clustered, could be found near the air-scoop of the left-wing engine of the aircraft.
The nature of the damage allows for the identification of the source as a high-explosive fragmentation warhead from a modern anti-aircraft weapon, claims the report.
Apart from the large puncture holes, the debris of the nose and the cockpit of the aircraft bear a large number of scattered micro-craters resulting from the impact of high-velocity dust and tiny debris, such as an unburnt blasting agent and elements of the ordnance that accompany a shock wave from a blast that occurred very close to the target. In the case of MH17, the pilots’ cockpit.
The report says that as a rule, the initial speed of the striking elements of modern anti-aircraft weapons vary between 1,500 and 2,500 meters per second.
Altogether, the experts considered photos of five fragments of the cockpit and left port of the flight MH17, on which they counted some 230 “battle-damage” holes and punctures.
All this considered, the experts claim that the exact zone of the blast impact could be established with a fair degree of accuracy.
The warhead of the missile exploded very close to the cockpit, to its left side at a distance of 0.8-1.6 meters from the cockpit windows, exactly opposite the sliding window of the aircraft commander.
The dimensions and character of the puncture holes left by the strike elements allegedly allow their size and form factor to be established, which in its turn makes it possible to identify the type of weapon used in a particular case.
The cross dimension of absolute majority, 86 percent, of the 186 hull holes studied by experts measure between 6 and 13mm, with explicit maximum of them having cross dimension of 8mm.
This fact brought the expert group to a conclusion about the size of the strike elements of the warhead. If the warhead had been armed with two types of strike elements, the majority of the holes would have been of two types, the reports notes.
The strike element has been established of being a rectangular block measured 8mm x 8mm x 6mm, with margin of error of 0.5 mm, a high probability it was made of steel and an estimated weight of 3 grams each. The total number of such elements should have varied between 2,000 and 4,000.
The bulk of the strike elements are estimated between 4.88 – 14.8 kilograms.
The report confutes the argument of Russia’s Almaz-Antey military concern that early claimed that “intricate shape”double-t steel fragments, similar to those used in warheads of surface-to-air Buk missile systems, have been extracted from the debris of MH17 flight.
Howwever, the double-t strike elements of a Buk missile weigh 8.1 grams, more than twice as much as a single damage fragment among those that pierced MH17’s hull. Thus, according to the report, the hypothesis about a Buk missile system being involved in the crash is “most probably incorrect.”
With 95 percent probability, the group of experts estimates the weight of the missile’s warhead (explosives plus strike elements) that shot down MH17 of being between 10 and 40kg.
This led the experts to determine the exact type of the weapon used against Malaysian Airlines flight MH17.
The report says that that Soviet- and Russian-made surface-to-air missile systems use more powerful warheads than the established maximum 40kg, as is the case with MH17.
Moreover, Soviet- and Russian-made air-to-air missiles which have a similar 10-40kg warhead capability use other types of strike elements within one warhead – obviously not the case with MH17.
A whole range of existing foreign air-to-air missiles have corresponding warhead characteristics, yet lack of physical elements of the missile used against MH17 prevented experts from establishing the exact type of the weapon used.
Still, the circumstances and conditions of the assault allowed experts to make certain assumptions.
The missile that attacked MH17 had a passive radar homing head, which explains why the missile exploded so close to the cockpit. Under the radar-transparent nosecone of a Boeing 777-200 there is a surveillance radar station operable during the flight, so most likely the missile homed on to this radar as the target.
Apart from a radar homing head, the missile could also be equipped with an advanced, matrix type, imaging IR seeker, which enables the missile to determine the size and the type of the target and choose for attack its most vital element. For a huge Boeing aircraft, that’s the cockpit.
A simulation of the missile attack has proved that missiles with that type of guidance choose to attack a big passenger plane from the front hemisphere.
There are four air-to-air missiles that fit the description established by the experts, namely: French Magis-2, Israeli Shafrir, American AIM-9 and Israeli Python – all short-range.
The first three have been struck off the list for various reasons, including type of warhead or guidance system specifications. The Python deserved a closer look.
The Python is equipped with a matrix-imaging IR seeker. It enables a relatively moderate power warhead to effectively engage big aircrafts. The warhead is armed with a set of ready strike elements. Even more importantly, some open military sources suggest that in early 2000s a number of Sukhoi Su-25 assault fighter jets we refurbished to use fourth and fifth generation Python missiles, which look very similar to the Su-25’s standard air-to-air R-60 missile.
The unofficial report leaked in LiveJournal has become yet another one among many other unofficial versions presented over the year that has passed since the catastrophe occurred on July 17, 2014.
The Dutch Safety Board that has been heading an international investigation into the cause of the crash is due to release its official report in October.
Reprinted from Russia Today.
I live in Texas, I pay taxes to the IRS, and I follow every law required of me. I am not looking for any trouble from the U.S. government. That said, my family and I have elected to sever ourselves from the cancerous monster that is Washington D.C. every chance we get.
We don’t vote or honor the state in anything we do. My money is completely outside of the U.S. banking system, via precious metals, digital currency, and whole life insurance contracts, which is nothing more than two private parties in a financial agreement. The stocks I own are in Canada or international businesses listed here in the U.S.
I wish the U.S. and its citizens the very best, but when it comes to the statists and banking elite — who ultimately form an oligarchy — I try to ignore and resist the beast in every way I can.
Over the past few months, I have felt in my heart the need to openly state exactly what mom and dad believe and what we desire for our family. These are just some basic principles. It’s not like a cult, religion, or government pledge, but more like a private business with a mission statement and declaration. My fear as a father is that without some sort of a family declaration, the dark fruits of the empire may become appealing, since as the kids age, they will come under an enormous amount of peer pressure to accept the statist mindset.
While researching family legacy and families that have found ways to become more than just a blood line, but friends as well, I discovered that it is actually quite normal to express in writing who the family is, much like a business or new government.
When you come into my home, the first thing you will see is a sign that reads: “This is my family, THIS is my country.” I have personally always felt a very strong bond with my family, so much so that I have come to despise the wealth stealers who take from them. Every penny taken from me through income taxation, is money that won’t be spent on a higher quality of life for my wife and children.
Ricordo a tutti i lettori che è in vendita il mio libro "L'Economia E' un Gioco da Ragazzi". Manoscritto incentrato sulla diffusione delle idee della Scuola Austriaca attraverso spiegazioni e analisi semplificate e dirette. Una presentazione adatta ad un vasto pubblico, a dimostrazione che per capire l'economia non è necessario un gergo tecnico ma solo logica e buon senso. Il libro è disponibile sia su Lulu.com sia su Scribd.
da Zero Hedge
Mentre tutti gli occhi sono puntati sulla Grecia, le banche italiane stanno annegando nei crediti inesigibili.
Probabilmente il vero pericolo per l'area dell'euro non è tanto la Grecia, quanto due dei suoi pesi massimi: la Francia e l'Italia. Una piccola nota sulla stampa europea ci ricorda che non tutto va bene, almeno non in uno di questi paesi, soprattutto nel comparto bancario (attualmente questa è una "notizia da ultima pagina", ma ha grande potenziale per passare alla prima).
Dalla nota leggiamo quanto segue:
Roma – A causa della recessione degli ultimi anni e dei fallimenti aziendali, in Italia il totale dei prestiti in sofferenza ha continuato a crescere. Secondo l'associazione bancaria italiana, ABI, le sofferenze erano pari a €193.7 miliardi a maggio, €25.1 miliardi in più rispetto allo stesso mese nel 2014. Si tratta del livello più alto sin dal 1996.
I crediti in sofferenza rappresentano il 10.1% di tutti i prestiti concessi dalle banche italiane, come ha ricordato l'ABI martedì. Il rapporto dell'ABI, inoltre, afferma che le piccole e medie imprese continuano ad essere pressate dai crediti inesigibili, quindi ci vorrà molto tempo prima che le banche possano vedere uno spiraglio di sole in questa brutta situazione. Le aziende italiane sono attualmente alle prese con gli effetti della più lunga crisi economica sin dalla seconda guerra mondiale e spesso non sono in grado di rimborsare i loro prestiti.
Se ci possiamo fidare della nostra calcolatrice, questo significa che i prestiti non performanti nel sistema bancario italiano sono aumentati di circa il 14.9% rispetto allo scorso anno – non un anno di crisi acuto, ciononostante l'economia in Italia ha continuato a contrarsi leggermente.
Come mostra il seguente grafico (purtroppo siamo stati in grado di ottenere questa versione un po' datata), gli NPL italiani erano pari a €165 miliardi nel primo trimestre 2014. A questi si devono aggiungere tutti i tipi di prestiti che sono incagliati o sub-standard, ma non hanno ancora raggiunto lo status "effettivo" di NPL. Sono tutti riassunti sotto il termine di prestiti deteriorati.
Mentre le banche italiane stanno annegando negli NPL, e più in generale nel debito inesigibile (dall'immagine qui sopra possiamo dedurre che il nuovo totale è vicino ai €350 miliardi), il suo governo è sepolto sotto una marea più grande di debiti. Naturalmente il debito del governo è considerato "privo di rischio" nel bizzarro universo in cui siamo entrati da quando la BCE ha deciso di aderire alla folle stampa monetaria globale. Si noti che stiamo inquadrando questa decisione della BCE verso la fine del 2011, poiché i suoi sforzi monetari sono iniziati ben prima del "QE ufficiale" (in precedenza c'è stato il LTRO, il TLTRO, i diversi programmi d'acquisto di bond coperti, un programma d'acquisto di ABS, il SMP e il presunto "OMT").
Tuttavia, l'Italia non è il paese peggiore nella zona Euro quando si parla di prestiti in sofferenza del sistema bancario. Il grafico seguente ci mostra le percentuali di sofferenze bancarie (prestiti in sofferenza da 90+ giorni) sul totale dei crediti bancari in diversi paesi.
Non a caso la Grecia è al primo posto, seguita dall'Irlanda, dalla Slovenia e dall'Italia. Nella maggior parte di questi paesi è stata presa una serie di misure (soprattutto attraverso la creazione di "bad bank") per tenere il problema sotto controllo. L'Italia sembra essere scomparsa dal radar, ma rappresenta una potenziale polveriera – soprattutto una volta che la recente pseudo-ripresa indotta dal pompaggio monetario, imploderà in un altro bust.
Se si pensa alle cose in modo corretto, la Grecia in realtà è solamente uno spettacolo secondario. La zona Euro rimane piena d'incidenti annunciati e alcuni di loro hanno il potenziale per diventare veramente giganteschi. L'Italia ha un doppio problema di debito ed è probabilmente solo una questione di tempo prima che diventi ancora una volta qualcosa di cui preoccuparsi – questo porrebbe le banche del paese in una situazione insostenibile, dato che hanno accumulato una grande quantità di debito sovrano sin dall'inizio del 2012.
Finché la BCE continuerà a pompare ogni mese €60 miliardi di denaro fiat nel sistema, questi problemi riusciranno in qualche modo ad essere tenuti a bada. Tuttavia c'è un prezzo da pagare, poiché il pompaggio monetario distorce i prezzi e falsifica il calcolo economico, che a loro volta portano ad investimenti improduttivi e a consumo di capitale che vengono mascherati da "ripresa economica". La struttura su cui poggia tutto questo debito diventa sempre più debole.
[*] traduzione di Francesco Simoncelli: http://francescosimoncelli.blogspot.it/
Within the last decade, the consumer demand for subcompact .32 or .380 caliber pocket pistols has skyrocketed to the point that the majority of handgun manufacturers now produce their own offerings in this arena. Ruger is no exception. The Lightweight Compact Pistol .380 is not only the smallest firearm in Ruger’s ever expanding arsenal, it’s one of the tiniest hammer-fired pocket pistols available from any manufacturer on the marketplace.
Ruger markets the LCP, which is not to be confused with its slightly larger brother the LC380, as either a defensive backup weapon or as a concealed EDC (everyday carry) piece. Ruger is a company I’ve always held immense respect for, but I can’t help question if there is a genuine role for these tiny pocket pistols in today’s modern era. Why would I go with a tiny, underpowered .380 as a defensive weapon when I could just as easily conceal carry a larger pistol in a more potent caliber such as a 9mm or a .45 ACP? I decided to find the answer to that question with the LCP.
The LCP I used for testing is a standard, 6+1 model with a Crimson Trace laser sight added.
Ruger has received some criticism for the LCP, with some claiming it’s a rip-off of the incredibly similar Kel-Tec P-3AT .380 that hit the marketplace a few years earlier. Nevertheless, it’s no secret that Ruger is known for producing durable and high quality products, so I would be naturally hesitant to discount the LCP as a rip-off of anything. The LCP is about an ounce heavier than the Kel-Tec version and features different amenities, such as an external slide stop and an extractor that’s in the same vein as a Glock.
At 9.4 oz (with the magazine empty) and with a grip that can only accommodate two of my fingers even with the magazine extension, there is no doubt that the reason the Ruger LCP feels so lightweight is because of the glass-filled nylon frame. In stark contrast to many other pocket pistols like a Colt Mustang, the hammer doesn’t protrude out of the LCP, allowing you to draw quickly without the risk of snagging the pistol on your clothing.
I’m always comforted knowing I’ll be shooting what I’m aiming at, and considering how miniscule the sights are on the LCP, the Crimson Trace is a more than welcome addition. The laser’s trigger is located on the front end of the grip, and is easily activated by just a light press of the finger.
Most people don’t think they need to worry about dehydration. To them, dehydration is something that happens to travelers in the desert when they run out of water.
But there is a chronic form of dehydration that does not have the sudden and intense nature of the acute form.
Chronic dehydration is widespread in the present day and affects everyone who is not drinking enough liquid.
This list of 13 symptoms will inspire you to go get a glass of water, and then another, and another.
After each symptom the list below will show how lack of fluid affects the issue.
- Fatigue, Energy Loss: Dehydration of the tissues causes enzymatic activity to slow down.
- Premature Aging: The body of a newborn child is composed of 80 percent liquid, but this percentage declines to no more than 70 percent in an adult and continues to decline with age.
- Excess Weight and Obesity: We may overeat because we crave foods rich in water. Thirst is often confused with hunger.
- High and Low Blood Pressure: The body’s blood volume is not enough to completely fill the entire set of arteries, veins, and capillaries.
- Cholesterol: When dehydration causes too much liquid to be drained from inside the cells, the body tries to stop this loss by producing more cholesterol.
- Constipation: When chewed food enters the colon, it contains too much liquid to allow stools to form properly, and the wall of the colon reduces it. In chronic dehydration, the colon takes too much water to give to other parts of the body.
- Digestive Disorders: In chronic dehydration, the secretion of digestive juices is less.
- Gastritis, Stomach Ulcers: To protect its mucous membranes from being destroyed by the acidic digestive fluid it produces, the stomach secretes a layer of mucus.
- Respiratory Troubles: The mucous membranes of the respiratory region are slightly moist to protect the respiratory tract from substances that might be present in inhaled air.
- Acid-Alkaline Imbalance: Dehydration activates an enzymatic slowdown producing acidification.
- Eczema: Your body needs enough moisture to sweat 20 to 24 ounces of water, the amount necessary to dilute toxins so they do not irritate the skin.
- Cystitis, Urinary Infections: If toxins contained in urine are insufficiently diluted, they attack the urinary mucousmembranes.
- Rheumatism: Dehydration abnormally increases the concentration of toxins in the blood and cellular fluids, and the pains increase in proportion to the concentration of the toxins.
Recommended Daily Amount:
Every day you lose water through your breath, perspiration, urine and bowel movements. For your body to function properly, you must replenish its water supply by consuming beverages and foods that contain water.
So how much fluid does the average, healthy adult living in a temperate climate need?
The Institute of Medicine determined that an adequate intake (AI) for men is roughly 3 liters (about 13 cups) of total beverages a day. The AI for women is 2.2 liters (about 9 cups) of total beverages a day.
Reprinted from Ready Nutrition.
KINGSTON, NY, 15 JULY 2015—Go back to 1964 when America was drafting all eligible young men to fight the Vietnam War. Do you remember why America launched the war in which some 60,000 US troops and 3 million-plus Vietnamese would be killed?
We were told by Washington that it was to stop the spread of communism. If we didn’t stop them from taking over Vietnam, countries throughout the region would fall under communist rule like dominoes. “We seek an independent non-Communist South Vietnam … Unless we can achieve this objective … almost all of Southeast Asia will probably fall under Communist dominance,” declared Secretary of Defense Robert McNamara in March of 1964.
The rest is history. America lost the war and Southeast Asia did not fall to communism.
How times have changed.
On July 7, President Obama met with Vietnamese Communist Party leader Nguyễn Phú Trọng at the White House in the hopes of strengthening economic and military ties between the two nations. After their meeting, Mr. Obama touted “the enormous potential” of the Trans Pacific Partnership trade deal he is promoting and of which Vietnam is a member.
Agree or disagree with the controversial trade pact or the warming of relations between the two nations, by every quantitative and qualitative measure, peace is proving more profitable than war.
Just a week after the Vietnamese party leader’s White House visit, America, along with six major nations, struck a deal to end the harsh economic sanctions against Iran that have severely restricted its economic growth. Iran – a part of George W. Bush’s Axis of Evil and America’s arch villain since the overthrow of the Shah, the ensuing Iranian Revolution and the infamous American Embassy hostage crisis in 1979 – is now suddenly “open for business.” That is, however, if the United States Congress and pressure from Israel does not scuttle the deal.
In fact, with peace comes prosperity.
For example, a Rand Corporation study released in June projects that a two-state peace treaty between Israel and Palestine would boost the Israeli economy by more than $120 billion and the Palestinians would gain $50 billion. A continuation of violence, however, would cost Israel some $250 billion in lost economic opportunities and a 46 percent per-capita gross domestic product fall for Palestinians.
Without question, the facts prove that peace is more profitable than war.
While Greece is now dominating the debt default stage, the real tragedy is playing out much closer to home, with the downward spiral of Puerto Rico. As in Greece, the Puerto Rican economy has been destroyed by its participation in an unrealistic monetary system that it does not control and the failure of domestic politicians to confront their own insolvency. But the damage done to the Puerto Rican economy by the United States has been far more debilitating than whatever damage the European Union has inflicted on Greece. In fact, the lessons we should be learning in Puerto Rico, most notably how socialistic labor and tax policies can devastate an economy, should serve as a wake up call to those advocating prescribing the same for the mainland.
The U.S. has bombed the territory of Puerto Rico with five supposedly well-meaning, but economically devastating policies. It has:
1. Exempted the Island’s government debt from all U.S. taxes in the Jones-Shaforth Act.
2. Eliminated U.S. tax breaks for private sector investment with the expiration of section 936 of the U.S. Internal Revenue Code.
3. Required the nation to abide by a restrictive trade arrangement.
4. Made the Island subject to the U.S. minimum wage.
5. Enabled Puerto Rico to offer generous welfare benefits relative to income.
While passage of such politically popular laws seems benign on the surface (and have allowed politicians to claim that their efforts have helped the poorest Puerto Ricans), in reality they have deepened the poverty of the very people the laws were supposedly designed to help. The lessons here are so obvious that only the most ardent supporters of government economic control can fail to comprehend them.
By exempting U.S. citizens from taxes on interest paid on Puerto Rican sovereign debt, Washington sought to help the Puerto Rican economy by making it easier and cheaper for the Island’s government to borrow from the mainland. As a result, Puerto Rican government bonds became a staple holding of many U.S. municipal bond funds. As with Fannie Mae and Freddie Mac bonds a decade ago, many investors believed that these Puerto Rican bonds had an implied U.S. government guarantee. This meant that the Puerto Rican government could borrow for far less than it could have without such a belief. However, this subsidy did not grow the Puerto Rican economy, but simply the size of the government, which had the perverse effect of stifling private sector growth.
In contrast to the tax-free income earned by Americans who buy Puerto Rican government bonds, those with the bad sense to lend to Puerto Rican businesses were taxed on the interest payments that they received. Businesses could have used the funds for actual capital investment (that could have increased the Island’s productivity), but instead the money flowed to the Government which used it to buy votes with generous public sector benefits that did nothing to grow the Island’s economy or put it in a better position to repay. That problem was left for future taxpayers who no politician seeking votes in the present cared about.
This dynamic is almost identical to what happened in Greece, where low borrowing costs, made possible by the strong euro currency and the implied backstop of the European Central Bank and the more solvent northern European nations, permitted the Greek government to borrow at far lower rates than its strained finances would have otherwise allowed.
Taxing Private Investment
Perversely, as the U.S. government made it easier for the Puerto Rican government to borrow, it made it harder for the private sector to do so. In 2006 the government ended a tax break that exempted corporate profits earned on private sector investment in Puerto Rico from U.S. taxes. As a result, U.S. businesses that had been making investments and hiring workers on the Island pulled up stakes and moved to more tax-friendly jurisdictions. The result was an erosion of the Island’s local tax base, just as more borrowing (made possible by triple tax-free government debt) obligated the remaining Puerto Rican taxpayers to greater future liabilities.
The Jones Act
The Jones Act, a 1920 law designed to protect the U.S. merchant marine from foreign competition, has had a devastating effect on Puerto Rico, and should be used as a cautionary tale to illustrate the dangers of trade barriers. Under the terms of this horrible law, foreign-flagged ships are prevented from carrying cargo between two U.S. ports. According to the law, Puerto Rico counts as a U.S. port. So a container ship bringing goods from China to the U.S. mainland is prevented from stopping in Puerto Rico on the way. Instead, the cargo must be dropped off at a mainland port, then reloaded onto an expensive U.S.-flagged ship, and transported back to Puerto Rico. As a result, shipping costs to and from Puerto Rico are the highest in the Caribbean. This reduces trade between Puerto Rico and the rest of the world. Since a large percentage of the finished goods used by Puerto Ricans are imported, the result is much higher consumer prices and fewer private sector jobs. Even though median incomes in Puerto Rico are just over half that of the poorest U.S. state, thanks to the Jones Act, the cost of living is actually higher than the average state.
The Federal Minimum Wage
In 1938 the Fair Labor Standards Act subjected Puerto Rico to a federal minimum wage, but it was not until 1983 that a 1974 act, which required that the Island match the mainland’s minimum wage, was fully phased in. The current Federal minimum wage of $7.25 per hour is 77% of Puerto Rico’s current median wage of $9.42. In contrast, the Federal minimum is only 43% of the U.S. median wage of almost $17 per hour (Bureau of Labor Statistics (BLS), May 2014). The U.S. minimum wage would have to be more than $13 per hour to match that Puerto Rico proportion. The disparity is greater when comparing minimum wage income to per capita income.
The imposition of an insupportably high minimum wage has meant that entry level jobs simply don’t exist in Puerto Rico. Unemployment is over 12% (BLS), and the labor force participation rate is about 43% (as opposed to 63% on the mainland) (The World Bank). A “success” by the Obama administration in raising the Federal minimum to $10 per hour would mean that the minimum wage in Puerto Rico would be higher than the current medium wage. Such a move would result in layoffs on the Island and another step down into the economic pit. I predict that it could bring on a crisis similar to the one created in the last decade in American Samoa when that Island’s economy was devastated by an unsustainable increase in the minimum wage.
It will be interesting to see if our progressive politicians will have enough forethought and mercy to exempt Puerto Rico from minimum wage increases. But to do so would force them to acknowledge the destructive nature of the law, an admission that they would take great pains to avoid.
In 2013 median income in Puerto Rico was just over half that of the poorest state in the union (Mississippi) but welfare benefits are very similar. This means that the incentive to forgo public assistance in favor of a job is greatly reduced in Puerto Rico, as a larger percentage of those on public assistance would do better financially by turning down a low paying job. Because of these perverse incentives not to work, fewer than half of working age males are employed and 45% of the Island’s population lived below the federal poverty line (U.S. Census Bureau, American Community Survey Briefs issued Sep. 2014). According to a 2012 report by the New York Federal Reserve Bank, 40% of Island income consists of transfer payments, and 35% of the Island’s residents receive food stamps (Fox News Latino, 3/11/14).
In other words, Puerto Rico’s problems are strikingly similar to those of Greece. Its government spends chronically more than it raises in taxes, its economy is trapped in a regulatory morass, and its economic destiny is largely in the hands of others.
The solutions to Puerto Rico’s problems are simple, but politically toxic for mainland politicians to acknowledge. Puerto Rico must be allowed to declare bankruptcy, the Federal incentive for the Puerto Rican government to borrow money must be eliminated, Puerto Rico must be exempted from both the Jones Act and the Federal Minimum wage, and Federal welfare requirements must be reduced. Puerto Rico already has the huge advantages of being exempt from both the Federal Income Tax and Obamacare, so with a fresh start, free from oppressive debt and federal regulations, capitalism could quickly restore the prosperity socialism destroyed. With the current incentives provided by Acts 20 and 22 (which basically exempt Puerto Rico-sourced income for new arrivals from local as well as federal income tax – see my report on America’s Tax Free Zone) and with some additional local free market labor reforms, in a generation it’s possible that Puerto Ricans could enjoy higher per capita incomes than citizens of any U.S. state.
If Washington really wanted to accelerate the process, it should exempt mainland residents from all income taxes, including the AMT, on Puerto Rico-sourced investment income, including dividends, capital gains, and interest related to capital investment.
“One woman, who declined to give her name but said she is almost 80, invested RMB 20,000 ($3,200) when the market was at 5,000 points. “I’ve lost two thirds of my money,” she said, her voice cracking. “I really want it back and when I get it, I will never invest in the stock market again.”
“..These elderly investors were entering the back half of their lives at the moment when China began to embrace reform. “Old people often don’t understand economics,” says Nie Riming, a pensions expert at the Shanghai Institute of Finance and Law. “They are easily duped.”
– From ‘A bull market with Chinese characteristics’ in The Financial Times, by Tom Mitchell, Gabriel Wildau and Josh Noble, 11 July 2015.
A man may be extremely intelligent, but mankind, as a whole, is pig-ignorant. We are all fools. To put it another way, we can, as individuals, gain much knowledge and perhaps even wisdom during a lifetime, but the likelihood of that knowledge and wisdom persisting through generations may well be vanishingly small.
How else to explain the festival of incompetence currently barrelling its way through the financial markets ?
“It couldn’t happen here,” conclude western investors as they watch the increasingly desperate machinations of the Chinese authorities, for example, as they attempt to put a floor under stock prices. Desperate, as in ridiculous, desperate, Basil Fawlty-ish lengths to prevent reality from crashing in upon a deflating stock market bubble.
Government buying stock to support the market ? Check.
Government halting trading in half the stocks on the market ? Check.
Government banning large shareholders from selling for six months ? Check.
Government suspending any further IPOs ? Check.
Government slashing interest rates ? Check.
Government ordering companies to buy their own shares ? Check.
The FT’s James Kynge reports:
“On Sunday, the new graduates of Tsinghua University are set to gather in their smartest attire to celebrate degrees from one of China’s most prestigious institutions, a place that has fostered generations of political leaders. Just after the ceremony starts – according to a written agenda – the graduates must “follow the instruction and shout loudly the slogan,
‘revive the A shares, benefit the people; revive the A shares, benefit the people’.”
“It couldn’t happen here..”
Apart from western governments bailing out their own bad banks, or creating trillions of dollars, pounds and euros of ex nihilo money and using that money to suppress interest rates and bond yields and currencies, and boost their own stock markets..
“Nobody knows anything,” was William Goldman’s sardonic assessment of Hollywood in his classic memoir on the movie business, ‘Adventures in the screen trade’.
In finance, things are subtly different. “Nobody learns anything,” appears to be the mantra. If one generation happens to stumble upon knowledge – probably involuntarily, and learnt at great cost – then the next generation scampers blithely away from it and on towards some fresh disaster.
From ‘America’s Great Depression’ by Murray Rothbard:
“Mr. Hoover met the challenge of the Great Depression by acting quickly and decisively, indeed almost continuously throughout his term of office, putting into effect “the greatest program of offence and defence” against depression ever attempted in America. Bravely he used every modern economic “tool,” every device of progressive and “enlightened” economics, every facet of government planning, to combat the depression. For the first time, laissez-faire was boldly thrown overboard and every governmental weapon thrown into the breach. America had awakened, and was now ready to use the State to the hilt, unhampered by the supposed shibboleths of laissez-faire. President Hoover was a bold and audacious leader in this awakening. By every “progressive” tenet of our day, he should have ended his term a conquering hero; instead he left America in utter and complete ruin – a ruin unprecedented in length and intensity.
“What was the trouble ? Economic theory demonstrates that only governmental inflation can generate a boom-and-bust cycle, and that the depression will be prolonged and aggravated by inflationist and other interventionary measures. In contrast to the myth of laissez-faire, we have shown [here] how government intervention generated the unsound boom of the 1920s, and how Hoover’s new departure aggravated the Great Depression by massive measures of interference. The guilt for the Great Depression must, at long last, be lifted from the shoulders of the free-market economy, and placed properly where it belongs: at the doors of politicians, bureaucrats, and the mass of “enlightened” economists. And in any other depression, past or future, the story will be the same.” [Emphasis ours.]
There’s a line in ‘Macbeth’ when the protagonist, beginning to understand the havoc he has caused, starts to succumb to exhaustion:
“I am in blood
Stepp’d in so far that, should I wade no more,
Returning were as tedious as go o’er..”
Precisely as Rothbard predicted, the politicians, bureaucrats and “enlightened” economists of the euro zone are now coming to terms with their own terrible legacy in the form of Greece. Return, or go on ? Either choice requires wading through an unconscionable deal of blood.
Mario Draghi at the ECB gave us the phrase “whatever it takes”. Now the policy chiefs of China are running with it.
This is the most absurd global financial situation we can remember. There may have been wilder outbreaks of mass fatuous behaviour – as Adam Smith could easily have said, there’s a great deal of absurdity in a market. But we have long held that if you don’t understand the rules of the game, best not to play the game. Doing anything in credit markets today involves making a macro market call that is fundamentally impossible. All debt markets have become speculative arenas courtesy of central bank activity. Participating in stock markets today absolutely requires a margin of safety (and a strong stomach). But value, we believe, does exist out there – provided you have a manager with the geographical flexibility and mandate to look for it. If your fund manager simply tells you that stock markets are too expensive, he’s looking in the wrong places; time to find a new manager.
Reprinted with permission from The Cobden Centre.
Many ascribe to government the unique and exalted right to overrule and therefore to undermine the independent authority of all individuals and of all secondary institutions; of creating and enforcing new law; even of decreeing life and death at the whim of the current leader.
In summary, they teach a divine approval for actions of violence or actions backed by the threat of violence, which would otherwise be unthinkable for ordinary, moral human beings subject to the laws of God. In effect, government is given a “007” moral license to kill; a “24/7” license to steal; and a “666” licence to number, monitor, register and regulate every aspect of life.
Surely, such an enormous and momentous creation – one that would have a prevailing effect in so many areas of daily life – must have some point of inauguration? Particularly among those claiming to believe the Bible, it can hardly be satisfactory to just assume this belief in a “divine right of governments” because they exist as a fact of life in a fallen world…
A simple search should quickly uncover that great day celebrating Heaven’s launch of a new and enormous ship, “The State” into the ocean of mankind. Books of theology and inspiration should be written about the event, analysing each aspect of a wonderful new and all powerful creation of God.
But where is that moment to be found?
And why are there innumerable books and theories based upon the assumption of that event having occurred, but none about the actual event?
In fact, despite the theological gymnastics that many with letters after their name are well capable of; and despite the fact that they all insist that Romans 13, particularly the first verse, refers to a moment when government was created or “ordained” by God – there seems to have been little or no desire to ask when or where any such event took place.
So then, we will work our own way forward – by asking that big question at key checkpoints in the Biblical history of mankind…
Did God create government? And if so, then exactly where and when was the state as an institution “ordained” by God?
To find the answer to that question, we must start at the very beginning…
Perhaps, in theory, God could have created a group hierarchy, with wise master humans and humble servant humans. Together, as a group, they could have constituted a general resemblance or image of God.
Outside of the group, a free human without the covering authority of a wiser master would have been “alienated” and unable to succeed without damaging themselves and the whole. The free person would have been rebellious, out of place and selfish – something “the whole” could not tolerate.
Yet, if government was instituted in the beginning, there is certainly no mention of it in the relevant early chapters of Genesis. Indeed, a centralised group hierarchy is not a concept conveyed by the Genesis record at all, but rather by communism – and in fact, all forms of collectivism or statism.
It is, nevertheless, an idea that came to prominence in recent times under a cloak of Christianity:
The history of “Messianic Communism” is covered in some detail by the late, great economist Murray Rothbard in his two volume work, “An Austrian Perspective on the History of Economic Thought”. In it, Rothbard quotes a pamphlet issued by the Anabaptists of Munster, northern Germany in 1534:
“For not only have we put all our belongings into a common pool under the care of deacons, and live from it according to our need; we praise God through Christ with one heart and mind and are eager to help one another with every kind of service.
And accordingly, everything which has served the purposes of selfseeking and private property, such as buying and selling, working for money, taking interest and practising usury … or eating and drinking the sweat of the poor … and indeed everything which offends against love – all such things are abolished amongst us by the power of love and community.”
Rothbard goes on to detail the reign of terror that was to follow under their leader, Jan Bockelson:
“Bockelson assured his subjects that he and his court were only the advance guard of the new order; soon, they too would be living in the same millennial luxury. Under their new order, the people of Münster would forge outward, armed with God’s will, and conquer the entire world, exterminating the unrighteous, after which Jesus would return and they would all live in luxury and perfection. Equal communism with great luxury for all would then be achieved.
Greater dissent meant, of course, greater terror, and King Bockelson’s reign of “love” intensified its intimidation and slaughter. As soon as he proclaimed the monarchy, the prophet Dusentschur announced a new divine revelation: all who persisted in disagreeing with or disobeying King Bockelson would be put to death, and their very memory blotted out.”
The even more hard core, secular version of communism, which would later lead to the death of millions, was soon to follow in the footsteps of Messianic communism – by going just a little further down the same dark path.
But in reality, collectivism plays no part in the creation record – and instead of creating a commune, God began with an individual. In creating this person, He began by establishing the most primary principle of human existence:
“Let Us make man in Our image, according to Our likeness”
The implications of that creative command should not be glossed over. It is not prideful to accept the love, value and honour that God has bestowed as a gift. According to that creative Word, each person is like a mirror image of God, albeit a limited one – a conscious eternal being of similar form and attributes, able to create, to envision, to think ahead, to hope, to believe, and most of all – because “God is love” – to love others as we do ourselves.
Along with that likeness to God, came the capacity to make independent free will decisions, an unfathomable attribute which goes far beyond mere animal instinct. In the earthly realm at least, this amazing characteristic is unique to human beings, and it is directly related to another attribute bestowed at creation, one which is often translated “dominion” – and means to “rule absolutely or rigorously, to have controlling power over”.
And so, of human beings, Genesis 1 bears witness that God also commanded:
“…Let them have dominion …over all the earth”
Accordingly, each human person has been given charge over all other things on earth – self government – with the notable implicit exception of each other. Another word for this dominion would be “sovereignty”. We are created from the beginning to be absolute “sovereign individuals” over our own affairs, on our own domain or portion of this earth, as an irrevocable and unconditional bestowal by the ultimate Sovereign, God.
- Any analysis of human behaviour, theology, economics, civil order or any other sphere of life will be fundamentally flawed… if it does not start from the premise that human beings have been individually bestowed with this dominion on earth by God.
- Any understanding of the nature of God – in dealing with human beings and our affairs on this earth – will be flawed, if it does not start from the premise that God will always and fully uphold this principle of our dominion – along with all other principles established in the beginning, including inheritance.
Through exercising this personal dominion, each person can freely choose to interact and submit to agreements with others – or with God. This therefore introduces the basic but secondary rights and jurisdictions inherent in marriage, family household, property, business and church.
Outside of these principles, no party can rightfully exercise dominion over another, without violation of the original created order. On a small scale, we call those who do so anyway, “busybodies”. When the same behaviour grows in scale and in numbers, the word becomes “government”.
Being a busybody, or “meddler in other people’s affairs” as one translation puts it, is ranked in the Bible alongside the offences of murder and theft, because such violations go hand in hand. It may not often be heard from church pulpits, but it is clearly written in 1 Peter 4:15:
“…let none of you suffer as a murderer, a thief, an evildoer, or as a busybody in other people’s matters“
Scientists have outlined their alarmingly unhelpful tips on how to survive the earthquake that will hit the Pacific Northwest.
The killer quake along Cascadia, a fault line which runs from Cape Mendocino, California, to Vancouver Island, Canada, is 72 years overdue, according to peer-reviewed studies.
The ‘Big One’ will hit when Juan de Fuca, a 700-mile chunk of the Pacific Ocean, slides under Canada and America, causing the entire coastal region to sink at least six feet.
When – not if – it arrives, it is unlikely the people of coastal Oregon, Washington and California will be able to escape.
But if they want to try, there are a few tips they should keep in mind.
Run, don’t drive, to higher ground, says Kevin Cupples, the city planner for the town of Seaside, Oregon, in an interview with the New Yorker.
The force of the quake will cause liquefaction, when solid ground acts like liquid, across vast swathes of the porous region.
In the areas that aren’t ‘liquefied’, the highways will likely be crumpled by landslides, with 30,000 avalanches set to hit Seattle alone.
Citizens will have a 20-minute interval to climb to the highest altitude possible before the full force of the tsunami hits, scientists predict.
Their alert will be when dogs start barking.
The first sign the quake is coming will be a set of compressional waves, only audible by dogs. Then there will be the quake, then 20 minutes later, the tsunami.
Geographers estimate that many could survive just by walking – however, they need to be going at least 3.5mph.
If everyone ups their average speed from 2.5mph to 3.5mph, the death toll drops to 15,970. About 70 per cent of them would be in Washington, nearly 30 per cent in Oregon and only 4 per cent in California.
62 years later, the aftermath is still troubling global politics.
Operation Ajax was a pivotal moment in US and world history. It was the first time the CIA overthrew a government.
Yet even today the US government would rather not talk about it. That’s why it remains an unknown story for many Americans.
The year was 1953. The objective was to oust Mohammad Mossadegh, the elected leader of the Majlis, Iran’s parliament.
Mossadegh was not a communist or a radical Islamist. He didn’t follow any objectionable ideology. Instead, he was a secular nationalist. But he was inconvenient.
Like many Iranians, he was proud of his Persian heritage. (Until 1935, Iran was still known as Persia.) Persia once was an imperial civilization, like Rome. Twentieth-century nationalists channeled that glorious past, and they were keen on independence.
So it’s no surprise Mossadegh was earnest about ridding the country’s politics of foreign influence.
At the time, Great Britain was the most active outside power in Iran.
For decades the British had enjoyed a sweetheart oil deal struck with a former, corrupt Iranian leader. It allowed them to control Iran’s petroleum industry and, by extension, the country’s entire economy.
To nationalists like Mossadegh, this was intolerable and infuriating. It would be like China getting a sweetheart deal from President Obama for control of the US auto industry. No red-blooded American would stand for such a thing.
It was the early 1950s. The smoke from World War II, a war that killed over 60 million people, still lingered. The horrors were fresh in everyone’s mind. Access to oil had been a decisive factor in that war. Had Hitler succeeded in securing his supply in 1942, the world might look very different today.
It was a concept not lost on the British. If any country wanted to win a big war, it needed oil. Lots of it. It was a matter of life and death.
Iran was a major source of oil for the British. Access to it was a strategic military asset of the highest order. One the British would not give up for any price.
Mossadegh understood this. He concluded that the only way to claw back the oil industry was to nationalize it. On May 1, 1951, he did just that. Shortly afterward, he stated:
Another important consideration is that by the elimination of the power of the British company, we would also eliminate corruption and intrigue, by means of which the internal affairs of our country have been influenced. Once this tutelage has ceased, Iran will have achieved its economic and political independence.
The British were not about to give up. They hatched a plot to regain their influence in Iran. But they couldn’t do it alone. They would need help from the US. But the US just wasn’t interested. So the British undertook a campaign to paint Mossadegh as a communist.
The Brits played America’s Cold-War fears like a piano. They convinced the US government that the commies were making inroads in Iran. Given that Iran was just south of the expanding Soviet Union, the story was plausible… but not true.
In the end, it worked. The Americans came on board. Operation Ajax was born. The objective: overthrow Mossadegh’s elected government and replace it with something more pliable.
MI6, the UK’s foreign spy agency, and the CIA would organize the coup. Kermit Roosevelt, a grandson of former US President Teddy Roosevelt, was the CIA officer in charge.
The goal was to return the monarchy of Mohammad Reza Shah Pahlavi (also known as “the Shah”) to power. (In Farsi, the Persian language, “shah” means “king.”)
The CIA and MI6 used classic methods of subterfuge. They paid Iranian goons to pose as communists and wreak havoc in Tehran, the Iranian capital, and vandalize its business district. The police couldn’t restrain them, and the violence grew.
The coup plotters knew such events would disgust ordinary Iranians, who were fearful of communism. It would cause them to demand action. That action would include the Iranian military stepping in. As part of the plot, the CIA and MI6 had corrupted key Iranian generals for just this moment.
As if on cue, the generals took charge and deposed Mossadegh’s government. The Iranian people didn’t resist. Instead, they cheered. They thought the military was saving them from a violent communist revolution.
Mossadegh’s government was out of the way. The coup’s operatives in the Iranian military had seized power. The path had been cleared for the Shah.
The Shah knew he owed his position to the US and UK. What they giveth, they could taketh away. The Shah was more than willing to do whatever the US and UK wanted him to do. Operation Ajax was a success… but it would not be an enduring one.
The Iranian people would eventually figure out what really happened. Many of them would come to despise the Shah as a puppet of a foreign power. To maintain his position, the Shah became more despotic… which only fed the opposition.
In 1979, 26 years after Operation Ajax, a popular uprising overthrew the Shah. A power struggle ensued, and Ayatollah Khomeini’s Islamist forces prevailed. The Islamic Republic of Iran was born. This time, it was an anti-American government that came to power. Decades of animosity followed, and it continues to this day.
It’s unthinkable to most that the Islamic Republic of Iran could offer any sort of investment opportunity. Many find the mere mention of the country distasteful.
There’s another country that most would have considered unthinkable to invest in at one time. Many got hot under the collar just at the mention of its name too: the People’s Republic of China.
If you had followed their thinking, you would have missed out on one of recent history’s most powerful economic booms. That’s precisely why you should ditch the conventional wisdom when it comes to thinking about profiting from Iran. If you don’t, you could be letting a once-in-a-generation opportunity pass you by.
Recently, I discussed investing in Iran with legendary investor Jim Rogers. He told us:
I bought Iranian shares in 1993, and over the next few years, [they] went up something like 47 times, so it was an astonishing success.
That was then. Now, additional sanctions make investing directly in Iran off limits to Americans and most Europeans. But that could soon change.
The conclusion of the negotiations on Iran’s nuclear program means the economic floodgates will open. Persia will once again be open for business. It would be a big deal: Iran’s $370 billion economy is by far the largest still excluded from the international financial system.
Iran has the world’s third-largest proven oil reserves (10% of the world’s total) and the second-largest proven natural gas reserves (17% of the world’s total). A tremendous amount of wealth is waiting to be developed.
Iran’s economy is not all about natural resources. The country is home to advanced nanotechnologies and the Middle East’s largest car manufacturer. Its young population of 78 million yearns for iPhones and other Western products, and there’s enormous built-up demand. That demand is getting ready to explode like Mt. St. Helens.
European and Asian companies have been scrambling to Tehran to line up business deals.
In short, the opening of Iran is a massive opportunity.
Even if the West doesn’t lift the sanctions, Iran will simply turn to the East to do business. Either way, the Iranian economy is on course to experience one of the greatest booms in recent history. It’s on a scale the world hasn’t seen since the opening of China. Opportunities like this don’t happen every day, every year, or even every decade.
But for the average American, Iran is at the bottom of the list of potential investment destinations. That’s what more than 30 years of hostility and charter membership in the “Axis of Evil” will do.
The sentiment couldn’t get any worse. As a contrarian, that’s just how I like it. But only if there is a solid reason to believe that the negative sentiment is misplaced. In the case of Iran, I am certain that it is.
In the not-so-distant past, I used to live in the United Arab Emirates… right across the Persian Gulf from Iran. Being there gave me the chance to see the country firsthand.
On the Ground in Iran
Hands down, Iran is the most fascinating country I’ve ever been to.
I’ve been to almost every country in the Middle East. Iran stands out for a number of reasons. Unlike most other states in the Middle East, Persia is not an artificial construct. By race, religion, and social history, it is a nation. And European bureaucrats didn’t dream up Iran by drawing zig-zags on a map. The map reflects the geographic reality of a country with natural, fortress-like, mountain borders.
For an American, getting there isn’t easy. But that’s part of the allure.
You can’t simply hop on a flight to Tehran from New York, like you would to Vancouver or London. You can’t enter the country unless the Iranian government has granted you permission in advance. And they take their careful time.
The US has no diplomatic relations with Iran. There is no Iranian embassy or consulate in the US at which to apply for a visa, but there is an Iranian interests section in the Pakistani embassy in Washington, DC, that can handle such requests. I was living near Dubai at the time, so it was easier for me to go to the Iranian consulate there.
But you can’t just drop in to the Iranian consulate and apply for a tourist visa. You have to work with an authorized service to assist you in the process, which is what I did. After I submitted my paperwork and waited a number of weeks, and then waited another couple of weeks, the Iranian government approved my application.
I immediately noticed that the Iranian visa in my passport was not the kind of cheap stamp you often get from Third-World countries. Instead it carried holograms and other anti-counterfeiting features. Things that are associated with documents from developed countries. It was a clue that Iran, a seemingly isolated and underdeveloped place, was more sophisticated than I had expected.
Sanctions have disconnected Iran from the international financial system. Your ATM and credit cards won’t work there. You need to bring cash (US dollars or euros work best) and exchange it for Iranian rials. Iranians also have increasingly returned to gold as a store of value and medium of exchange. This is no surprise. People in all corners of the globe have used gold this way for thousands of years.
As soon as my flight landed in Tehran, my Iranian “tour guide” greeted me. The Iranian government requires that minders accompany Americans at all times. It’s a result of the Iranian government’s not-necessarily unreasonable paranoia. They’d like to prevent Operation Ajax 2.0.
Having a mandatory tour guide wasn’t all bad. Mine was a dual American-Iranian citizen named Ali. Ali had spent a lot of time in California and spoke perfect American English. He took me everywhere I wanted to go. At the end of some days, Ali would let me go off on my own. This gave me the chance to explore Tehran’s affluent northern suburbs and legendary bazaar.
No matter where I went, everyone was genuinely kind and hospitable… even after figuring out I was American. Not what you would expect for a place known for its “Death to America” chants. It became obvious the average Iranian harbors no hatred for Americans. (For more on what life is really like in Iran, I’d suggest you watch travel writer Rick Steves’ video, Rick Steves’ Iran.)
The trip to Iran helped solidify my belief that the country is the ultimate contrarian opportunity. It revealed the reality hiding behind the frenzied sentiment of conventional thinking. It was just waiting for the right catalyst. And now that catalyst is at hand. The conclusion of the nuclear negotiations and the relaxation of sanctions will release all the massive, built-up economic potential.
The rationale for profiting from the opening of Iran is clear. Finding a practical way to do so is not. There is a way, however… and a good one. One that is easily accessible through any brokerage account to US investors and is completely legal for them.
Reprinted with permission from Doug Casey’s International Man.
The preposterous Gong Show in Brussels over the weekend was the financial “Ben Tre” moment for the Euro and ECB. That is, it was the moment when the Germans—–imitating the American military on that ghastly morning in February 1968——set fire to the Eurozone in order to save it.
Some day history will judge good riddance……..but that get’s ahead of the story.
According to an American soldier’s first hand recollection of the Vietnam event, it was a Major Booris who infamously told reporter Peter Arnett, “It became necessary to destroy the town to save it”.
After the massacre of Greek democracy in the wee hours Monday morning, Angela Merkel said the same thing—even if her language was a tad less graphic:
It reflects the basic principles which we’ve followed in rescuing the euro. It now hinges on step-by-step implementation of what we agreed tonight.”
Now no one in their right mind could think that lending another $96 billion to an utterly bankrupt country makes any sense whatsoever. After all, the Greek economy has shrunk by 30% since 2008 and is wreathing under what is objectively a $400 billion public debt already in place today.
That figure follows from the fact that on top of Greece’s acknowledged $360 billion of general government debt there’s at least another $25 billion loan embedded in the ELA advances to the Greek banking system. The latter is deeply insolvent, meaning that some considerable portion of the $100 billion ELA currently outstanding is not an advance against good collateral in any plausible banking sense of the word, but merely a backdoor fiscal transfer from the ECB to keep Greece’s financial shipwreck afloat.
Likewise, as I demonstrated Friday, given the even deeper deep hole into which the Greek economy has tumbled during the last six months, the fiscal targets extracted from Greece under this weekend’s demarche are utterly ridiculous. Indeed, even if the targeted primary surpluses of 1,2,3 and 3.5% of GDP are miraculously reached through 2018, upwards of $15 billion of budget deficits after interest accruals would be incurred anyway, and a lot more than that if there are material budget shortfalls, which is a virtual certainty.
So even before the latest dose of Troika economic punishment further debilitates its economy, Greece at this very moment has a de facto public debt of $400 billion sitting atop $200 billion of GDP.
Here’s the bottom line. Merkel has no better answer for how dropping $96 billion of new debt on a country with a 200% public debt ratio will save the euro than did Major Booris when he dropped approximately 10,000 gallons of napalm on Ben Tre in order to “save” the town. In both cases, a doomsday machine had been set in motion, and the designated officers of the state mechanically and blindly carried out a mindlessly destructive next step.
In the instant case, the doomsday machine is the Euro and, more precisely the rogue central bank in Frankfurt that stands behind it. In fact, the real ill is not a common currency per se—-something that Europe actually had on a de facto basis before 1914 under the fixed exchange rates of the gold standard. The latter, in effect, was a common currency because French francs, British sterling, Dutch guilders and the rest were interchangeable at a constant rate—-an arrangement which helped produce a multi-decade spurt of prosperity that the old continent has not seen before or since.
No, the problem is the rampaging printing press of the ECB. The latter has fundamentally falsified the price of debt, and thereby unleashed throughout Europe a deadly brew of phony economic growth in the early years and then egregious fiscal profligacy when the growth bubble cratered after the 2008 crisis.
During its initial eight years, the ECB expanded its balance sheet at a torrid14% annual rate. And that’s ironic because the original remit of the ECB was a Friedmanesque “price stability” single mandate.
That didn’t happen, of course, as the European consumer price level rose by 21% during the same eight years (2.4% per annum) in which the ECB’s printing press was running red hot. Uncle Milton would have been rolling in his grave, and, in fact, beforehand had pronounced the euro a disaster waiting to happen.
So rather than delivering consumer price stability, what the ECB actually did during that period was to create a giant artificial bid for euro debt, thereby driven the yields far below their true economic levels. That is, the ECB deeply subsidized newly issued Eurozone government borrowings.
Not surprisingly, Greece, Portugal, Spain, Italy and even France feasted heartily. But then Europe’s phony credit fueled growth stopped, causing the nominal GDP growth rate to decelerate sharply.
Since the eve of the financial crisis, nominal GDP in the Eurozone has crawled forward at a mere 0.9% annual rate. That represents a 75% reduction from the pre-2008 rate and is a reflection of the crushing burden of debt, taxes and the dirigisme of the Brussels superstate and national policies alike.
Accordingly, it quickly became evident that Europe was swimming naked as a fiscal matter, and that the ECB’s cheap money regime had eviscerated the 60% debt-to-GDP target of the EU treaty. Even after averaging in the fiscal rectitude of Germany and some of its northern compatriots, the EU-19 debt ratio has climbed steadily toward the 100% of GDP mark since the financial crisis.
What was needed all along was an honest bond market, and one which priced the debt of each of the 19 fiscal jurisdictions in the Eurozone based on their own budget facts, economic trends and governance records and risks. That requirement almost materialized when the original Greek debt crisis broke out in 2009-2010, and the yields on the so-called PIIGS debt soared.
But that proved to be the last gasp of a real bond market because in short order Brussels and Frankfurt shut it down in the name of defending the misbegotten euro. This bond market destruction effort took the form of a double whammy of falsification.
First, a false debt sequestration chamber (i.e. the various bailout funds) was erected by Brussels and the IMF and into it was stuffed hundreds of billions of the sovereign debt of Greece, Ireland, Spain and Portugal. This occurred during 2010-2012 when PIIGS debt was being dumped furiously, and appropriately so, by European banks, bond funds and financial speculators as the extent of fiscal breakdown in these states became sharply apparent.
In hindsight, this original euro bond crash was a gift from the economic gods. That’s because facing a closure of the public debt markets, each of the PIIGS would have had to work out its own internal fiscal solvency plan without edicts, mandates, inspectors, and meddlesome interventions from the troika apparatchiks, and without the incremental “bridge loan” debt that these bailouts entailed.
Stated differently, bond market discipline is fully compatible with national sovereignty and democratic fiscal governance. Indeed, it is a requisite in the European context.
As it happened, however, Merkel was hoodwinked into believing that the original bond sell-off was the work of the same malevolent Anglo-Saxon “speculators” who purportedly caused the great financial crisis of 2008. So the EU superstate, she was told, had to take on the job of “banker” to the fiscally weaker members of the monetary union in order to buy time, defeat the speculators and preserve the financial stability of the Eurozone.
Unfortunately, Merkel and her coterie are monetary ignoramuses and therefore bought this tommyrot hook, line and sinker. So doing, they were utterly blind to one glaring reality. Namely, that the crashing global credit bubbles of 2008 and the euro bond crash of 2010 and after had the same cause.
In both instances central bank financial repression had caused government bonds to be underpriced and global investors to desperately scramble for yield (including exotic securitized mortgage product in the first instance and PIIGS bonds in the second). It also enabled Wall Street and London speculators to surf these financial bubbles on the back of cheap carry from the central bank pegged money market. So doing, the speculators were able to buy hand over-fist those securities which were rising and then sell with a vengeance these same mis-priced securities when the various bubbles burst.
In short, the desperate need back then was to shutdown the heavy-handed Keynesian central banker intrusions in the debt and money markets; permit the issuing governments to default; require the imprudent bankers holding the impaired debt to take steep losses; and to thereby put the bond market vigilantes back in charge of public fiscal discipline—–one state at a time.
Needless to say, the troika bailouts had the opposite effect. By compressing bond spreads toward a German common denominator, they destroyed price discovery and national fiscal sovereignty. The troika bankers, therefore, had to become heavy-handed agents of fiscal governance, meddling in the minutest details of national budget accounts; and, also, self-appointed economic reformers intruding into the very warp and woof of domestic commerce and the labor and product markets and practices of the borrowers.
This massive intrusion was necessary in order to cover-up a Troika lie and delusion. The lie was that the debt of Greece and the other PIIGS was not being mutualized, and that the loans and guarantees issued by the bailout funds were first cousins to commercial bridge loans that the borrowers would in due course repay.
In the same vein, the delusion was that the market oriented “reforms” stipulated by the Troika would unleash higher GDP growth rates among the borrowers, thereby permitting them to grow out from under their Troika bridge loans after a period of externally enforced fiscal retrenchment.
This means that the Troika MOUs were not based on the assumption that “austerity” per se was a policy tonic. That charge is just a Keynesian canard that has gotten endless resonance in the financial press—–as in MarketWatch’s specious headline this morning proclaiming, “Greece offers evidence that austerity doesn’t work”.
Actually, it proves nothing of the kind. What it does prove is that superstate bureaucrats operating by dictate and remote control cannot reengineer national economies sufficiently to meaningfully elevate economic growth rates; and to thereby enable fiscally insolvent state borrowers to grow out from under their unsustainable debts. Indeed, that is just a variant of the supply side delusion of GOP orators in the US.
To some considerable degree this Europeanized form of the Laffer Curve was the subtext during last weekend’s Gong Show of political bullies, economic ignoramuses and superstate apparatchiks in Brussels. Here’s how they finally instructed the hapless Greeks to manage their crushing $400 billion of debt. Why among other things, their final missive required:
…….adopt more ambitious product market reforms with a clear timetable for implementation of all OECD toolkit I recommendations, including Sunday trade, sales periods, pharmacy ownership, milk, bakeries, [over-the-counter pharmaceutical products in a next step], as well as for the opening of macro-critical closed professions (e.g. ferry transportation)…….
If your weren’t aware of the Troika’s grow-your-way-out-of-debt delusion you would think this whole thing was some kind of giant hoax. After all, is it really possible that the assembled might of 327 million citizens of the Eurozone-18 are telling the 11 million inhabitants of Greece that they must open the restricted professions of engineers, notaries, actuaries, and bailiffs, and must liberalize the market for tourist rentals and ferry transportation?
Or that they are also being told exactly how to reform their utility capacity based payments system and other electricity market rules. And this is being ordered so as to avoid the deadweight economic losses which occur when electric power plants operate below their variable costs or netting of the arrears between power provides and the utility distribution system provides erroneous economic signals, among other things.
In the same vein, there are edicts to alter the operating specifications for running a bakery, the rules for owning a pharmacy, the methods by which milk is sold and marketed, and it get crazier from there.
The rationale for all of this mind-boggling meddling in local commerce and economic life, of course, is the Laffer Curve. The Greeks are to be jack-hammered into more market-oriented economic habits so that Greece can grow its way out from under its debt and thereby become a sturdier debt mule while under the Troika’s ministrations.
That’s all absurd of course. But it’s what happens when a superstate becomes a fiscal banker and lies to its constituencies about the financial costs and risks of underwriting what were plain old bad debts in the first place. Indeed, when you destroy honest bond markets you eventually end up with Stalinist governance in the name of the free market!
The implications of that truth are doubly ironic. First, the real policy of the Troika was not “austerian” as gas-bags like Professor Krugman constantly importune; as indicated, it is actually a European version of the Laffer Curve—–that is, fiscal redemption through supply side magic and a bigger denominator of GDP to generate incremental tax revenues and thereby shrink the ratio of debt to national income.
The second irony is that almost all of the labor and product market reforms advanced by the Troika are good free market concepts that would enable greater efficiency and productivity over time, and thereby stimulate a larger pie of national income. However, the skunk in the woodpile is that the crypto-communist labor laws of Italy and Spain and the crony capitalist product market cartels and restrictions which thwart efficiency in Greece and throughout much of Europe are for better or worse a product of the democratic process.
As free traders used to say about protectionist quota and tariffs, if some benighted parliaments abroad decide to fill their harbors with rocks in order to keep out cheaper foreign goods that is their right to be stupid; it does not warrant closing American harbors in response and thereby punishing domestic consumers and markets in retaliation.
Yet, by the same token, the domestic stupidity that causes the Greek parliament to hang on to retail trade restrictions that prohibit price discounting and competition except during specially designated winter and summer “sales periods” does not justify the preemption of domestic legislative sovereignty. If the Greeks wish to legislate themselves into a lower standard of living in return for the perceived social stability and benefits of dirigisme—-that is their democratic prerogative.
Stated differently, the Eurozone is fatally flawed monetary union; it is not a sovereign state with plenary Federal preemption. Therefore, the Brussels conceit that it can be a Laffer-Curve style banker to the PIIGS is fundamentally mistaken. If any sovereign state of the EU can’t pay its debts, those debts need to be written off or restructured. With the passage of time and the trauma of realized losses in the government bond markets, there would be less debt issued and more fiscal rectitude apparent even among social democracies of the old world.
Unfortunately, the Franco-German alliance that has driven the EU bailout regime has now dug itself into a deep corner of lies and delusions. What Greece does prove—-and Spain, Portugal, Italy, Ireland and France, too—-is that quasi-socialist welfare states in the contemporary European setting can never grow out from under excessive debt. Supply side reform is a snare and a delusion into terms of debt carrying capacity, and is political dynamite if coercively imposed from above via superstate preemption of domestic governance.
All of this should have been apparent from the get-go, but is surely evident now after a half-decade of failed Troika bullying. But the Troika bankers-cum-reformers are now trapped because they have continuously lied to their own parliaments about the risk of the PIIGS bridge loans and the prior bailouts of the private investors who originally held their debts.
Were France to seek funding for the EUR 72 billion of Greek debt it has underwritten (including its share of ECB advances) or Germany the EUR 95 billion or Italy the EUR 63 billion or Spain the EUR 44 billion——governments would fall in no time. The incipient nationalist-populist uprising that is already roiling European politics would erupt into a stampede of upheaval.
And this is where the second falsification——Mario Draghi’s “whatever it takes” ukase—comes into the picture. The Eurozone would have blown to bits during the original 2010-2012 crisis, and notwithstanding the extensive bailout facilities, had not the ECB committed itself to massive monetization of the PIIGS debt—-debts that real investors did not wish to hold even at the elevated rates which materialized during the crisis. These soaring rates were indeed the off-ramp to bankruptcy because these states were, in fact, bankrupt.
Yes, it took nearly two years for the ECB to actually get its big fat $70 billion monthly bid into the marketplace. But that was immaterial. The fast money gamblers bet that the ECB would eventually commence a massive bond buying campaign and were more than happy to front-run the resulting euro bond bubble.
That the speculators who rode the Draghi bubble made hundreds of billions of profits buying PIIGS debt on 95% repo, and were then positioned to sell their bonds back to the ECB at the first sign of a market break, is a deplorable consequence of the ECB’s version of bubble finance. But the real ill is that the weak-kneed, hypocritical and often corrupt politicians of the peripheral countries were enabled to falsely claim victory without significantly rectifying their own fiscal insolvency.
Spain is the poster-boy on this front. After the mid-2012 Draghi ukase, it did not significantly shrink its state budget or reform its tax and regulation addled economy. By the end of Q1 2015 its real GDP was still 6% smaller than during early 2008. Accordingly, its debt ratio rose sharply and is now pushing up against 100% of GDP.
Needless to say, the above blindingly obvious fiscal deterioration——under which Spain’s public debt has risen by a staggering $650 billion during the last three and one-half years of “austerity” administered by the blatantly corrupt and thoroughly dishonest Rajoy government——–had no impact whatsoever on the pricing of Spanish 10-year bonds after the Draghi ukase. By the end of March this year the debt of the quasi-bankrupt Spanish state was trading at 1.0%, reflecting a blatantly artificial stampede of Spain’s public debt first into the hedge fund parking lots, and eventually into the vaults of the ECB.
There is no possibility of honest fiscal governance in a social democracy like Spain when its debt price is blatantly falsified per the above. Indeed, at this very moment the Spanish government is back into the market with a massive $15 billion issue, attempting to surf on the debt market wavelet generated by Monday’s Greek bailout headlines.
To be sure, the Keynesian commentariat and ECB apologists are now proclaiming that Spain is fixed——perhaps just like Greece was last August when its government issued 10-year debt at under 5%. The point is, however, that the modest rebound in Spain’s current account and uptick in its employment and GDP figures is a rounding error in the scheme of things. Another recession is surely coming to Europe, and perhaps sooner rather than latter. Since Spain’s budget deficit in 2014 was still 5.8% of GDP, how in the world will its fiscal accounts survive another recessionary blow?
They won’t. The Troika bankers will be all over Spain like a wet blanket, extinguishing another European democracy and fueling radical popular movements like Podemos—just as it has already done in Greece.
And a cascade around the European periphery of that mode of Stalinist governance may not be too far down the road. In a few days it will be blatantly obvious that the Germans have occupied Greece in every meaningful sense of the word save the actual bivouacking of uniformed troops.
A German/troika agent will place a custody lien on every airport, train station, port, power plant, electrical distribution grid, ferry boat, bus line, tourist attraction and public park, forest and island for which the Greek state still holds title. Even then, it will not amount to close to the $50 billion of collateral demanded.
Likewise, within days the entire banking system of Greece will be taken over by the ECB, meaning that depositors—-especially those above the EUR 100,000 guarantee threshold —–will be given a goodly haircut.
In short, Greece will become an outright debtors’ colony and its government will function as page-boy legislators for the Troika occupiers. Needless to say, political and social upheaval will erupt when the full extent of the Tsipras surrender becomes evident, and the resulting political contagion will spread throughout the length and breadth of Europe as Greece implodes.
In due course, the euro will collapse and the baleful Keynesian money printers’ regime in Frankfurt will be repudiated and dismantled. But not before European democracy has a brush with death, and European prosperity is extinguished for a generation.
Reprinted with permission from David Stockman’s Contra Corner.
PARIS – The Dow rose 75 points yesterday.
The press reported “growing confidence.” Investors believe the cronies have things under control.
In China, the government has had some success in arresting the plunging stock prices, thanks to a barrage of interventions.
And Greece and its creditors have kicked the can down the road so many times most investors are losing interest.
The Greatest Conflict of Our Time
But the Great Zombie War goes on…
Even Pope Francis has got involved… (More on that below.)
It is the great conflict of our time. It will determine who runs the world economy – free markets or cronies? It will also determine whether the world’s people get richer… or poorer.
Neither zombies nor cronies create wealth. They focus on redistributing it… to themselves.
And as long as they are in charge, global economic growth rates will be slow… or negative.
Here’s the latest on what has happened in Japan’s zombie economy. From Bloomberg:
Prime Minister Shinzo Abe came to power vowing to drag Japan out of deflation and stagnation. His logic was that rising prices would drive higher salaries and increased consumption.
More than two years on, prices are rising, but wages adjusted for inflation have sunk to the lowest since at least 1990.
That’s right. The Japanese – advised by Paul Krugman – have wiped out a quarter-century of wage growth.
Like the poor, zombies will always be with us. But the more of them there are… the harder it is to support them.
They fight tooth and nail to hold onto their ill-gotten gains. But as the economy slumps, there are fewer gains to be gotten.
Hillary Cracks the Whip
Yesterday, the battles were largely a “war of words” in which all the words were either dishonest or ignorant.
Presidential hopeful Hillary Clinton came out on the side of the cronies; no surprise there. She had these dishonest words:
Many Americans are making extra money renting out spare rooms, designing websites, selling products that they designed themselves at home, or even driving their own car…
…raising hard questions about workplace protections and what a good job will look like in the future.”
She went on to say that she would:
…crack down on bosses that exploit employees by misclassifying them as contractors or even steal their wages.
Greek Zombies Take to the Streets
The new economy – the non-zombified economy – wants to treat workers as independent business people, contractors, and partners, rather than employees.
Uber, Lyft, Airbnb, Internet-based consultants and freelancers – all allow people to work as they please, without punching a clock or submitting expense reports.
People work where they want… when they want… and how they want. But the cronies and zombies want to put a stop to it.
These new businesses “violate health regulations, labor regulations, zoning regulations,” they say.
And if they can’t find some regulations that are being violated, they’ll write some more. After all, that’s what regulations are for!
And now, Hillary is proposing to “crack down” so she can keep working people where she can control them – as wage slaves.
Zombies in the Vatican!
Meanwhile, Pope Francis is like the typical foot soldier in any war. He has no idea what the war is all about.
He thinks he sees injustice – the fact that some people have more stuff than others. And he believes there is a solution: Governments need to do something!
We have searched the published reports; we can find no way to explain or understand the Pope’s pensées.
He believes wealth inequality is the result of greed and that it creates a kind of “new colonialism,” whatever that is supposed to mean.
The rest is like so much random obiter dicta, slogans, and clichés – there’s no real meaning in them.
What is the harm in being poor? As long as you have a roof over your head, enough food to eat, and cable TV, you’re okay.
Poverty is an honorable estate. And there is no reason why we should all have the same amount of stuff.
None of us knows how much stuff God wants us to have… or how much is actually good for us. And Jesus was on the other side. For him, less was more, because the rich would have trouble getting through the “eye of the needle”… and so forth.
And where is the evidence that intervention helps? Would more money do the poor any good? Would they be happier? Healthier? Would their souls go to Heaven more readily?
No one knows.
So, why bother?
It must be that having more stuff is an end in itself. This may be what people really want, but it is a strange thing for a Pope to suggest.
And so, God’s man in St. Peter’s has taken the zombie colors.
And that’s a big boost to the zombie side…
There’s nothing they would like better than to have their motives cloaked in universal “greed”… their methods hidden in the swirling dust of “anti-capitalism”… and their future assured by more regulation and income distribution.
Reprinted with permission from Bonner & Partners.
In a collectivist society, “offenses” aren’t defined by behavior, but rather by identity. This is compellingly illustrated by cases of Antonio Darden and Elaine Huguenin, New Mexico residents and business owners who, acting in the service of their principles, exercised their property rights by refusing service to potential customers.
Darden operates a hair salon in Santa Fe, where Republican Governor Susana Martinez has been a regular customer. Darden announced in 2013 that Martinez was no longer welcome in his shop because she didn’t support legal recognition of same-sex marriage. Nor would he share his secret hair coloring formula with the Governor, something he was willing to do for other clients.
“Normally I sell the formula to people if they want to go to a different salon that is cheaper,” Darden explained. “I normally give the formula to clients if they’re moving out of state because I care about my clients. But I would not give that formula to her.”
Not content to withhold his services from Martinez, Darden – a gay rights activist — sought to discourage his competitors from taking her money, as well: “I have talked with some of the other hairstylists who’ve emailed me…. They’re major salons here in Santa Fe and they told me they’re following suit with me and she is not welcome in their salons either.”
Darden earned plaudits, rather than rebukes, for discriminating against Martinez – that is to say, exercising his plenary right as a business owner to refuse service to a would-be customer for any reason he considered suitable, including her views on contemporary political issues.
In 2007, Huguenin, a wedding photographer, was approached via email by a woman who wanted to purchase her services for a same-sex commitment ceremony. Huguenin politely declined, explaining: “As a company, we photograph traditional weddings, engagements, seniors, and several other things [sic] such as political photographs and singer’s portfolios.” Asked for clarification, she stated – without elaboration – that “we do not photograph same-sex weddings.”
Vanessa Willock, the woman who made the inquiry, described Huguenin’s reply as “an expression of hatred.” Huguenin and her husband are devout Christians who subscribe to the conventional view of marriage, but said nothing about their religious views – or their opinion of same-sex unions – in the correspondence with Willock. At the time of this correspondence, the State of New Mexico did not license or recognize same-sex marriages. On the basis of what was in the record, Huguenin simply declined to provide her services at a ceremony the State of New Mexico didn’t deem legitimate.
Like Darden, Huguenin was discriminating in her choice of customers. Unlike Darden, once she had decided to forego an opportunity to make a profit she didn’t seek to discourage her competitors from extending their services to Willock and her partner. The couple very quickly located another wedding photographer who was willing to provide services – in a ceremony that took place out of state.
Owing entirely to the identity of the would-be customers as members of a specially protected class, Huguenin was prosecuted by the New Mexico Human Rights Commission, which imposed a $7,000 penalty on her. Most of that money was given to the women whose business Huguenin declined. This meant, in effect, that the state government compelled her to pay for a ceremony that the same state didn’t regard as legitimate.
The Human Rights Commission, an executive branch agency, ruled that Huguenin’s refusal of service violated the New Mexico Human Rights Act, the purpose of which (in the words of the state supreme court) is “to promote the equal rights of people within certain specified classes.” (Emphasis added.) In substantive terms this means that business owners can refuse service to some would-be clients, but not to those who are designated members of a specially protected class.
Susana Martinez would have qualified for “protected” status as a Latina, but not as someone who espoused political and moral views out of favor with the bien-pensants. Thus Darden was permitted to discriminate against Martinez on the latter basis, and publicly advertise his reasons for doing so, without facing the prospect of punishment.
It has never been proven that Huguenin discriminated against Vanessa Willock and her partner because of their “sexual orientation.” Owing to the identity of the supposed victims, their perception of the incident was taken as definitive, and Huguenin – who neither injured nor defrauded the couple – was punished for hurting their feelings.
Where some people are assigned to “specially protected” classes, equal protection under law cannot exist. Thus it is appropriate that controversies of this kind are generally dealt with not through criminal or civil courts, but through administrative bodies, of which the Soviet-style entity called the New Mexico Human Rights Commission is typical.
Philip Hamburger, the Maurice and Hilda Friedman Professor of Law at Columbia Law School, insists that “administrative law” is more honestly described as “extralegal power.” Administrative agencies exercise power “not through law, but outside of it,” Hamburger explained in an address outlining the themes of his recent book, “Is Administrative Law Unlawful?”
Administrative agencies exist in defiance of the constitutional separation of powers, improperly consolidating functions that were intended to remain discrete. In the New Mexico case described above – as in the more recent case involving a $135,000 damage award against bakers in Oregon who declined when asked to make a wedding cake for a lesbian couple – an executive branch agency exercised a quasi-judicial function. In this way, notes Professor Hamburger, “an agency can be prosecutor, judge, and jury.”
This very common procedure is the modern equivalent of what was called the “inquisitorial process” in the Middle Ages. Hamburger contends that this routine abuse of power was the “original danger the Constitution sought to prevent.”
Predictably, the legal doctrines justifying the use of administrative law (both at the federal and state levels) were devised during wartime. In its ruling in the 1944 case Yakus v. United States, the US Supreme Court found nothing amiss in the exercise of legislative power by FDR regime’s Price Administrator. Despite the fact that Article One of the US Constitution specifies that “All legislative power herein granted” was to be exercised exclusively by Congress, the Court pretended that an executive branch agency or official could carry out legislative tasks provided that Congress “sufficiently marks the field within which [the official] is to act so that it may be known whether he has kept within it in compliance with the legislative will.”
More concisely put: Once Congress has unlawfully delegated legislative tasks to an administrative agency, the latter can do whatever it can get away with. The US District Court for the District of Columbia invoked Yakus in its 1971 Amalgamated Meat Cutters et al v. US ruling upholding Richard Nixon’s imposition of wage and price controls by executive order.
As summarized by one legal commentator, the key holding in Amalgamated Meat Cutters was that “aggressive separation of powers is seen as an impractical impediment to modern governance.” Separation of powers is one of the central principles of constitutional governance – or so we were told, and many of us believed, until exposure to Lysander Spooner’s insights disabused at least some of us of the idea that the Constitution could actually protect individual liberty.
Both of those rulings dealt with the exercise of legislative power by the executive branch. The extra-constitutional delegation of judicial power to “commissioners” actually began much earlier, and grew dramatically during the 1850s. Administrative officials like Commissioner Brad Avakian, the Oregon functionary who imposed the $135,000 damage award in the Sweetcakes by Melissa case, can trace their institutional pedigree to the commissioners who enforced the Fugitive Slave Act.
Although they had “concurrent jurisdiction with the judges of the Circuit and District Courts of the United States,” and some of them were magistrates, the office of “commissioner” was not part of the judiciary. Like contemporary administrative bodies, the Fugitive Slave Commissions existed outside of the constitutional scheme and exercised powers in defiance of the supposed limits imposed by the Constitution.
The decision of a commissioner, wrote Chief Justice Roger Taney in United States v. Ferreira (1851), “is not the judgment of a court of justice. It is the award of a commissioner.” This principle applied to the commissioners who ruled on claims filed under the Fugitive Slave Law. Under that measure, any black person could be arrested by a marshal or bounty-hunter on the basis of an affidavit filed by someone describing himself as a slave “owner.”
As someone “to whom … service or labor may be due,” the claims of a slave “owner” was treated as self-ratifying. As an inducement to render the “correct” ruling, slave commissioners were paid $10 when they upheld a claim, but only $5 on the rare occasions they dismissed one. The rulings were almost always made on the basis of identity: A self-identified “owner” was part of a class enjoying special protection, while a black individual was assumed to be part of a class from whom “service” was required.
As Spooner observed, a slave commissioner, “instead of being one of the judges of the United States … is, in law, a mere hired kidnapper, employed and paid by the slave-hunter – and everybody has a right to treat him and his decisions accordingly.”
Public denunciations of the Fugitive Slave Act inspired defenders of the measure to perform cadenzas of theatrical outrage over such impious rebellion against the “rule of law.”
Whig Senator Joseph R. Underwood of Kentucky rebuked what he called the “arrogance and folly” of those who condemned “the legislation of the majority, and … threaten[ed] resistance and defiance in consequence of an alleged conflict with the law of God.” Whatever moral scruples people had over slavery, Underwood maintained, “It is a duty to submit to the powers that be, and to render unto Caesar the things which are Caesar’s” – which in this case meant facilitating the rendition of black people into the custody of “owners” to whom their “service was due.” Even if the Fugitive Slave Act and similar measures were considered iniquitous, “until repealed, they must be obeyed, or it is the end of government.”
Senator John Bell of Tennessee discerned “a fanaticism of liberty as well as a fanaticism of religion” among opponents of the Fugitive Slave Act, whom he accused of undermining “the best system of laws ever devised by man.”
Positivist homilies about the supposed duty to submit to the law resonated from pulpits, and editorials devoted to the same theme blackened broadsheets. The rhetorical themes of that era are easily transposed into our own. One suitable recent example was provided by a “progressive” commentator writing in defense of the proposition that administrative bodies can compel Christian business owners to provide services for same-sex weddings, irrespective of their religious scruples because they don’t really own their business, their labor, or their property.
When Christian (or, presumably, Jewish or Muslim) entrepreneurs “choose to open a business and make a profit on that business in this country, they do so with the understanding that they must abide by the laws of the land,” pontificated the writer. “That means zoning laws, tax laws, health and safety laws, and yes, nondiscrimination laws … [because] they are Americans. And even Jesus said, `Render unto Caesar what is Caesar’s.’”
For his part, “Caesar” isn’t bound by nondiscrimination laws, and – as Christian entrepreneurs in New Mexico and Oregon have discovered – Caesar can redefine and expand his powers at whim and apply them capriciously.
Purely on the basis of identity, Caesar – acting through “administrative law” — can designate some people as members of “specially protected classes” to whom “service is due,” and then compel those not so designated to provide that service, notwithstanding the prohibition on involuntary servitude found in the Thirteenth Amendment.
Consider this question: What Oregon law specifies that $135,000 is a reasonable penalty for the supposed offense committed by a baker who declines to make a wedding cake for a lesbian couple? The Oregon Equality Act of 2007, which was supposedly violated by Aaron and Melissa Klein, contains no provision for punitive damages of any kind.
The “law” that was used to inflict this judgment on the Kleins was conjured into existence by an “administrative law judge” working on behalf of an executive branch agency presided over by an elected official who acted as the “final arbiter” of a dispute in which his own agency was the plaintiff.
Under what Oregon is pleased to call the “law,” Commissar Avakian had the discretion merely to issue an order demanding that the Kleins provide the service they had withheld, which would have violated the prohibition against involuntary servitude while leaving them financially viable. Rather than doing so, Avakian and his comrades selected a punishment calculated to destroy the couple’s business, while potentially depriving their family of their home and leaving them enslaved by non-dischargeable debt for the foreseeable future.
As social schisms grow more pronounced and cultural conflict becomes more acute, some pundits have suggested that America may succumb to a second civil war. While it’s to be hoped that this is mere hyperbole, there’s no honest way to deny that the Tolerance Industry has helped resurrect the legal regime that precipitated the last one.
Playboy once asked author Ray Bradbury why science fiction was the “purview of young men.” His response is worth recalling now that Ellen Pao has resigned as Reddit’s CEO amid a censoring scandal.
There are two races of people—men and women—no matter what women’s libbers would have you pretend. The male is motivated by toys and science because men are born with no purpose in the universe except to procreate. There is lots of time to kill beyond that. They’ve got to find work. Men have no inherent center to themselves beyond procreating. Women, however, are born with a center. They can create the universe, mother it, teach it, nurture it. Men read science fiction to build the future. Women don’t need to read it. They are the future.
Young men take risks (invent the future) to win over young women (the future). They conquer frontiers to be worthy. America was once that frontier, but with illegal immigration and restrictive housing policy, she’s filling up. The few frontiers that remain are in the mind. Science fiction, Steve Sailer has written, was the new gateway to that “final frontier.” But even that frontier is fading. NASA is grounded and appeasing Muslims while SpaceX rockets are blowing up.
Where are the places for young men to imagine the future in a filled-up frontier? They have but two choices: videogames, where there are infinite worlds to explore and conquer; or the Internet, where there are unimaginable fortunes to be made from weaponizing social science and software. With everything to lose, these young men are fighting back against corruption (#Gamergate) and censorship (Reddit revolt). Aristotle argued that the human sciences were capable of infinite progress because man’s mind was capable of infinite thought. As aging boomers increasingly regulate the world of stuff and atoms, the Internet—that home for infinite thought and bits—is the only place where that freedom frontier is possible.
Ricordo a tutti i lettori che è in vendita il mio libro "L'Economia E' un Gioco da Ragazzi". Manoscritto incentrato sulla diffusione delle idee della Scuola Austriaca attraverso spiegazioni e analisi semplificate e dirette. Una presentazione adatta ad un vasto pubblico, a dimostrazione che per capire l'economia non è necessario un gergo tecnico ma solo logica e buon senso. Il libro è disponibile sia su Lulu.com sia su Scribd.
di David Stockman
Se c'è ancora necessità di una qualche prova per dimostrare come il mercato stia morendo a causa della ZIRP, allora possiamo guardare ai 15 minuti di violenti trading quando è diventato chiaro che la FED non avrebbe aumentato i tassi a giugno. Senza scordarci del rigor mortis monetario — l'ultimo spasmo di qualcosa che è già morto, ma ancora non lo sa.
Certamente le teste di legno sell-side non hanno la minima idea di quello che dicono quando affermano che non esiste una bolla nelle azioni. Perché non ci sarebbe? Perché le valutazioni sono sono in linea con i multipli storici, ci viene detto, e, inoltre, la FED manterrà bassi i tassi d'interesse per molto tempo.
Questo tipo di affermazione è sia vuota che sconsiderata. Con il possibile "rialzo dei tassi" spostato a settembre, i tassi d'interesse del mercato monetario saranno stati bloccati allo zero per 81 mesi consecutivi. Questi lemming pensano davvero che si possa andare avanti ancora per molto — 90 o 100 mesi — senza che i robo-trader si accorgano infine della capitolazione della FED?
Allo stesso modo, non hanno capito che il casinò è saturo di migliaia di miliardi di carry trade i quali inizieranno a sfaldarsi una volta che inizierà la normalizzazione dei tassi d'interesse?
Quando mai gli speculatori si sono ritirati in modo ordinato e, soprattutto, perché l'attuale bolla finanziaria si dovrebbe sgonfiare meno violentemente di quella dotcom nel 2000 e di quella immobiliare/Wall Street nel 2008?
Cioè, dopo anni di acquisti con denaro preso in prestito, pronti contro termine, o opzioni finanziarie, i giocatori d'azzardo a Wall Street presto saranno costretti a vendere per liquidare posizioni che diventeranno sempre meno redditizie man mano che i tassi d' interesse saliranno. In effetti, carry trade negativi sono ormai quasi una certezza.
Oltre a questo, perché mai un investitore dovrebbe lanciare i dadi fino all'ultimo minuto, quando le valutazioni sono già alle stelle e quindi estremamente vulnerabili ad un drastico ribasso? Secondo gli ultimi calcoli del Wall Street Journal, gli utili annuali delle compagnie nell'S&P 500 sono stati di $99/azione.
Questo è importante perché:
- rappresenta un calo del 6% rispetto al picco di $106 registrato nel terzo trimestre 2014;
- si tratta di una misura onesta degli utili perché la contabilità GAAP è certificata dalla SEC;
- significa che il multiplo PE del prezzo di chiusura di oggi è di circa 21.5X, occupando in tal modo la sezione più alta della sua storia.
E questa non è neanche metà della storia. Così come è possibile annegare in un fiume con una profondità media di due piedi, i multipli PE medi possono oscurare i gorghi profondi nascosti negli indici azionari popolari.
È per questo che il grafico qui sotto è importante. A differenza della solita roba sell-side, esamina il multiplo PE mediano, non la media ponderata, per le migliaia di titoli quotati sul NYSE. In una parola, il livello di valutazione non è mai stato così alta sin dal 1950; e il 21X indicato nel grafico è in realtà quasi il 23X sulla base del 10% di guadagno dal giugno 2014.
E qui arriviamo al nocciolo della questione. Anche se fosse vera la tesi secondo cui i multipli PE sarebbero in linea con il trend storico, il punto sarebbe ancora fasullo. Perché i tassi di capitalizzazione riguardo gli utili societari dovrebbero scendere, non salire, in un mondo in cui la crescita sostenibile è praticamente scomparsa; dove i margini di profitto sono ai massimi storici e destinati ad una correzione; e dove i tassi d'interesse non hanno altra via se non quella verso l'alto.
E nonostante la recente agitazione circa la necessità di un doppio pompaggio della stagionalizzazione dei risultati del PIL per il primo trimestre, l'andamento dei fondamentali macro è semplicemente terribile. Per esempio, il tasso di crescita delle vendite reali durante i sette anni sin dal picco pre-crisi, è stato un anemico 1.1% rispetto al 2.5% durante i sette anni dopo il 2000 e al 3.5% nel corso del mezzo secolo dopo il 1950.
Quello che esce da una rapa non è sangue, e ben presto se ne accorgeranno tutti. Allora perché gli utili dovrebbero essere valutati ad un massimo storico quando l'economia americana sta ora crescendo solo ad un terzo del suo tasso storico?
Alla vigilia della crisi nel dicembre 2007, il BLS riferì la presenza di 138.4 milioni di posti di lavoro. Il mese scorso quello stesso numero era di 141.4 milioni, il che significa che sono stati creati solo 3 milioni di posti di lavoro nel corso degli ultimi 88 mesi. Anche in questo caso val la pena ricordare i dati del passato, con i 6 milioni di nuovi posti di lavoro dopo il picco del 2000 e i 13 milioni nei sette anni dopo il 1990.
Inoltre, non solo il tasso di crescita dei posti di lavoro si sta sgonfiando — 34,000 al mese nella cosiddetta ripresa attuale rispetto ai 70,000 e 155,000 al mese negli ultimi due cicli — ma la qualità di cui è composto continua a deragliare.
Vale a dire, l'economia statunitense ha effettivamente perso 2 milioni di postiti lavoro a tempo pieno sin dal dicembre 2007 — da 72 milioni a 70 milioni solo nel rapporto di aprile. Di conseguenza i 3 milioni in più nel conteggio totale, sono interamente attribuibili ad un aumento di 2 milioni nel settore del part-time — ristoranti, bar, vendita al dettaglio e servizi personali — e di 3 milioni nel Complesso SIS (salute, istruzione e servizi sociali) dipendente dalle tasse.
Né i multipli PE da capogiro sono compatibili con l'andamento debole degli investimenti in beni materiali. Il tasso lordo degli investimenti rispetto al picco pre-crisi è inferiore all'1% annuo; e il tasso netto, al netto degli ammortamenti, è ancora il 20% al di sotto del livello del 1999!
Quindi c'è solo una cosa che sta mantenendo il mercato ai livelli esorbitanti di oggi: gli spasmi indotti dalla FED in quei pochi robo-trader che non sono stati ancora scollegati dal supporto artificiale della banca centrale statunitense. Continuano ad agitarsi ogni volta che la FED sembra intenzionata a tirarsi indietro.
Alla fine, però, anche il politburo monetario resterà a corto di scuse e inganni. Quando la liquidità smetterà di scorrere e tutto si acquieterà, ci sarà un pandemonio nel casinò, ed ecco perché.
Negli ultimi 33 anni è stata gonfiata una grande bolla finanziaria nonostante ci siano state tre interruzioni — 1987, 2000 e 2008-09. Di conseguenza, il valore di mercato di azioni, obbligazioni e altri debiti si è disallineato dal reddito nazionale.
Nel 1981 il mercato finanziario era il doppio del PIL. Da allora, il valore di mercato delle azioni aziendali è aumentato del 17X e il debito totale del 20X.
Di conseguenza, oggi i mercati finanziari sono capitalizzati cinque volte al di sopra il reddito nazionale. Questa è una bolla elefantiaca. Ed è per questo che gli spasmi nel mercato, come quelli di ieri, stanno segnalando che il rigor mortis monetario sta rapidamente facendo il suo corso.
[*] traduzione di Francesco Simoncelli: http://francescosimoncelli.blogspot.it/
Economia del benessere: una ricostruzione
Preferenza dimostrata e libero mercato
La tesi di questo saggio è che la veglia funebre di tutta l’economia del benessere è prematura, e che questa può essere ricostruita con l’aiuto del concetto di preferenza dimostrata. Questa ricostruzione non avrà comunque alcuna somiglianza con gli edifici “vecchio” e “nuovo” che l’hanno preceduta. In realtà, se la tesi di Reder è corretta, il tipo di resurrezione del paziente da noi proposta potrebbe essere considerata da molti più infausta del suo decesso.56
Si rammenta che la preferenza dimostrata elimina le fantasie ipotetiche sulle scale di valori individuali. L’economia del benessere finora ha sempre considerato i valori come valutazioni ipotetiche di “stati sociali” ipotetici. Invece la preferenza dimostrata considera i valori solo in quanto rivelati dall’azione scelta.
Consideriamo ora eventuali cambiamenti che si verifichino nel libero mercato. In tale contesto un cambiamento è intrapreso volontariamente da entrambe le parti. Quindi, il fatto stesso che uno scambio ha luogo, dimostra che entrambe le parti beneficiano (o, più correttamente, si aspettano di beneficiare) dallo scambio. Il fatto che entrambe le parti abbiano scelto lo scambio dimostra che entrambe ottengono un beneficio. Libero mercato è l’espressione che indica l’insieme di tutti gli scambi volontari che si svolgono nel mondo. Poiché ogni scambio dimostra un beneficio unanime per entrambe le parti coinvolte, dobbiamo concludere che il libero mercato beneficia tutti i partecipanti. In altri termini, l’economia del benessere può affermare che il libero mercato aumenta l’utilità sociale, attenendosi ancora all’impostazione della Regola dell’Unanimità. 57
Ma che dire dello spauracchio di Reder: l’invidioso che odia il maggior benessere degli altri? Nella misura in cui egli ha partecipato al mercato, rivela che gli piace e beneficia dal mercato. Per il resto a noi non interessano le sue opinioni sugli scambi effettuati dagli altri, dal momento che le sue preferenze non sono dimostrate attraverso l’azione e sono quindi irrilevanti. Come sappiamo che questo ipotetico invidioso perde utilità a causa de gli scambi di altri? Interpellare la sua opinione verbale non è sufficiente, perché la sua asserita invidia potrebbe essere uno scherzo o un gioco letterario o una deliberata bugia.
Siamo quindi condotti inesorabilmente alla conclusione che i processi del libero mercato conducono sempre ad un aumento dell’utilità sociale. E, come economisti, possiamo dire ciò con assoluta validità, senza impegnarci in giudizi etici.
Il libero mercato e il “problema della distribuzione”
L’economia in generale, e l’economia del benessere in particolare, sono state afflitte dal “problema della distribuzione”. Si è sostenuto, ad esempio, che le affermazioni sull’aumento dell’utilità sociale nel libero mercato vanno tutte bene, ma solo all’interno dell’ipotesi di una data distribuzione del reddito.58 Poiché i cambiamenti nella distribuzione del reddito verosimilmente danneggiano una persona e ne beneficiano un’altra, si ritiene che, in caso di cambiamenti nella distribuzione, non sia possibile affermare alcunché circa l’utilità sociale. E la distribuzione del reddito cambia continuamente.
Nel libero mercato, tuttavia, non esiste una “distribuzione” separata [dalla produzione, n.d.t.]. Le disponibilità monetarie di una persona sono state acquisite proprio perché i suoi servizi, o i servizi dei suoi predecessori, sono stati acquistati da altri sul libero mercato. Non esiste un processo distributivo separato dai processi di produzione e scambio del mercato; di conseguenza il concetto stesso di “distribuzione” diventa privo di significato sul libero mercato. Poiché la “distribuzione” è semplicemente il risultato del processo di libero scambio, e poiché questo processo beneficia tutti i partecipanti nel mercato e aumenta l’utilità sociale, ne consegue immediatamente che anche i risultati “distributivi” del libero mercato aumenta no l’utilità sociale.
Le obiezioni dei critici, comunque, si applicano ai casi di intervento dello Stato. Quando lo Stato prende da Piero e dà a Paolo, sta effettuando un processo di distribuzione separato. In questo caso esiste un processo separato dalla produzione e dallo scambio, e quindi il concetto acquisisce significato. Va aggiunto che tale azione statale ovviamente e palesemente beneficia un gruppo e ne danneggia un altro, violando così la Regola dell’Unanimità.
Il ruolo dello Stato
Fino a poco tempo fa l’economia del benessere non ha mai analizzato il ruolo dello Stato. Va detto che l’economia in generale non ha mai prestato molta attenzione a questa fondamentale questione. Temi specifici, come la finanza pubblica o i controlli di prezzo, sono stati investigati, ma nella letteratura economica lo Stato in sé è stata una figura defilata. In genere è stato considerato, in maniera imprecisa, come il rappresentante in qualche modo della “società” o della “gente”. La “società”, però, non è un’entità esistente; è solo un utile stenogramma per indicare un insieme di tutti gli individui esistenti.59 In ogni caso, l’area, largamente inesplorata, dello Stato e delle azioni dello Stato può essere analizzata con i potenti strumenti della Preferenza Dimostrata e della Regola dell’Unanimità.
Lo Stato si distingue dalle altre istituzioni della società per due caratteristiche: 1) esso, ed esso solo, può interferire attraverso l’uso della violenza con gli scambi di mercato, reali e potenziali, di altre persone; e 2) esso, ed esso solo, ottiene le sue entrate attraverso un’esazione forzosa, garantita dalla minaccia della violenza. Nessun altro individuo o gruppo può legalmente agire in questi modi.60 Ora, che cosa accade quando lo Stato, o un criminale, usa la violenza per interferire con gli scambi di mercato? Supponiamo che lo Stato proibisca ad A e B di effettuare uno scambio che essi vorrebbero intraprendere. È chiaro che le utilità di A e B sono state ridotte, perché viene loro impedito, attraverso la minaccia della violenza, di effettuare uno scambio che altrimenti avrebbero effettuato. Dall’altro lato, vi è stato un aumento di utilità per i funzionari statali che impongono tale restrizione, altrimenti non lo avrebbero fatto. Come economisti in questo caso non possiamo quindi dire alcunché sull’utilità sociale, dal momento che, in conseguenza dell’azione statale, alcuni individui hanno chiaramente guadagnato e altri chiaramente perso utilità.
Si giunge alla stessa conclusione nei casi in cui lo Stato costringe C e D a effettuare uno scambio che essi non avrebbero intrapreso. Di nuovo, le utilità dei funzionari statali aumentano. E almeno uno dei due partecipanti (C o D) perde utilità, perché almeno uno non avrebbe voluto effettuare lo scambio senza la coercizione statale. Anche in questo caso l’economia non può dire alcunché sull’utilità sociale. 61
Concludiamo quindi che nessuna interferenza statale negli scambi può mai aumentare l’utilità sociale. Ma possiamo dire qualcosa in più. L’essenza dello Stato è che solo esso ottiene le sue entrate attraverso l’esazione forzosa delle imposte . Tutti i suoi atti e le sue spese successive, quale che sia la loro natura, si basano su questo potere impositivo. Abbiamo appena visto che, quando lo Stato costringe qualcuno ad effettuare uno scambio che egli non avrebbe voluto effettuare, costui perde utilità in seguito alla coercizione. Ma la tassazione è proprio tale scambio coercitivo. Se ciascuno avesse pagato la stessa somma allo Stato in un sistema di contribuzione volontaria, allora non ci sarebbe stato bisogno della costrizione rappresentata dalle imposte. Dato il fatto che quindi per le imposte è usata la coercizione, e basandosi tutte le azioni statali sul potere impositivo, deduciamo che: nessun atto dello Stato può aumentare l’utilità sociale.
Dunque l’economia, senza impegnarsi in qualsivoglia giudizio etico e seguendo i principi scientifici della Regola dell’Unanimità e della Preferenza Dimostrata, conclude che: 1) il libero mercato aumenta sempre l’utilità sociale; e 2) nessun atto dello Stato può mai aumentare l’utilità sociale. Queste due proposizioni sono i pilastri della ricostruita economia del benessere.
Gli scambi fra le persone possono avere luogo o volontariamente o sotto la costrizione della violenza. Non esiste una terza modalità. Se dunque gli scambi di libero mercato accrescono sempre l’utilità sociale, mentre nessuno scambio obbligatorio e nessuna interferenza possono aumentarla, possiamo concludere che la salvaguardia di un mercato libero e volontario “massimizza” l’utilità sociale (purché non si interpreti “massimizzare” in senso cardinale).
In genere, anche gli economisti più rigorosamente Wertfrei hanno voluto riservarsi un giudizio etico: si dichiarano liberi di raccomandare qualsiasi cambiamento o processo che aumenti l’utilità sociale sotto il vincolo della Regola dell’Unanimità. Qualsiasi economista che segue questo metodo dovrebbe a) sostenere il libero mercato in quanto sempre benefico e b) evitare di sollecitare qualsiasi azione statale. In altre parole, dovrebbe diventare un sostenitore dell’ “ultra” laissez-faire.Riconsiderare il laissez-faire
È stato molto tipico deridere l’“ottimistica” scuola francese del laissez-faire del diciannovesimo secolo. Di solito la loro analisi “economica del benessere” è stata respinta in quanto ingenuo pregiudizio. In realtà i loro scritti rivelano che le loro conclusioni di laissez-faire erano post-judices – erano giudizi basati sulle loro analisi, e non preconcetti della loro analisi.62 Fu la scoperta del beneficio sociale generale proveniente dal libero scambio a condurre alle rapsodie sul processo di libero scambio nei lavori di autori come Frédéric Bastiat, Edmond About, Gustave de Molinari e l’americano Arthur Latham Perry. Le loro analisi sull’azione dello Stato erano molto rudimentali (tranne nel caso di Molinari), ma, per condurli a una posizione di laissez-faire puro, necessitavano solo di una premessa etica a favore dell’utilità sociale.63 Il modo in cui trattano lo scambio può essere rintracciato in questo passaggio dell’ormai trascurato Edmond About: “Ora, ciò che è ammirevole nello scambio è che esso beneficia le due parti contraenti. […] Ciascuna delle due, dando ciò che ha in cambio di ciò che non ha, fa un buon affare. […] Ciò accade in ogni scambio libero e onesto. […] Di fatto, se vendi, se compri, compi un atto di scelta. Nessuno ti costringe a cedere uno qualsiasi dei tuoi beni in cambio dei beni di un altro”. 64
L’analisi del libero scambio alla base della posizione di laissez-faire ha subìto un generale oblio in economia. Quando viene presa in considerazione, è generalmente respinta in quanto “semplice”. Ad esempio, Hutchison definisce “semplice” l’idea dell o scambio come mutuo beneficio; Samuelson la considera “semplicistica”. Forse è semplice, ma nel la scienza la semplicità di per sé non è certo una colpa. L’aspetto importante è se la dottrina è corretta; se è corretta, allora il rasoio di Occam ci dice65 che, quanto più è semplice, meglio è.
Il ripudio del semplice sembra avere le sue radici nella metodologia positivista. In fisica (riferimento del positivismo) il compito della scienza è di andare oltre l’osservazione di senso comune, costruendo una complessa struttura che spiega i fatti di senso comune. La prasseologia, invece, inizia considerando assiomi alcune verità di senso comune. Le leggi della fisica hanno bisogno di complicate verifiche empiriche; gli assiomi della prasseologia sono riconosciuti evidenti da tutti in base alla riflessione. Risultato di ciò è che i positivisti si sentono a disagio in presenza di verità universali. Invece di gioire della capacità di fondare la conoscenza su una verità universalmente accettata, il positivista la respinge in quanto semplice, vaga o “ingenua”. 66
L’unico tentativo di Samuelson di confutare la posizione di laissez-faire consisteva in un breve rinvio alla presunta confutazione classica di Wicksell.67 Anche Wicksell però respinse l’approccio degli “economisti dell’armonia” francesi senza argomentare, e si dedicò a un lungo esame della formulazione di Leon Walras, di gran lunga più debole. Walras cercò di provare la “massima utilità” derivante dal libero scambio in termini di utilità cardinale interpersonale e così rimase completamente esposto alla confutazione.
Va inoltre evidenziato che il teorema della massima utilità sociale non si applica a qualsiasi tipo di concorrenza “perfetta” o “pura”, o anche alla “concorrenza” in contrapposizione al “monopolio”. Si applica semplicemente a qualsiasi scambio volontario. Si potrebbe obiettare che la creazione di un cartello volontario volto ad aumentare i prezzi peggiora la condizione di molti consumatori, e quindi la tesi dei benefici dello scambio volontario dovrebbe escludere i cartelli. Tuttavia non è possibile per un osservatore confrontare scientificamente i risultati, in termini di utilità sociali, prodotti sul libero mercato in un periodo di tempo e in quello successivo. Come abbiamo visto sopra, non possiamo determinare le scale di valori di una persona lungo un dato periodo di tempo. Figuriamoci quanto sia ancor meno possibile per tutti gli individui! Dal momento che non possiamo scoprire le utilità delle persone nel tempo, dobbiamo concludere che, quali che siano le condizioni istituzionali dello scambio, per quanto grande o piccolo sia il numero dei partecipanti al mercato, il libero mercato massimizzerà sempre l’utilità sociale. Perché tutti gli scambi sono scambi effettuati volontariamente da tutte le parti. Supponiamo che alcuni produttori formino volontariamente un cartello in un dato settore industriale. Questo cartello effettua i suoi scambi nel Periodo 2. L’utilità sociale è ancora massimizzata, perché, di nuovo, nessuno scambio è alterato dalla coercizione. Se, nel periodo 2, lo Stato dovesse intervenire per proibire il cartello, non potrebbe aumentare l’utilità sociale, perché il divieto danneggia palesemente i produttori.68
Tratto da Rothbardiana
Traduzione di Piero Vernaglione
56 “La teoria del benessere (e argomenti collegati) degli anni Trenta e Quaranta è stata in larga misura un tentativo di evidenziare la molteplicità e l’importanza delle circostanze in cui il laissez faire risultava inadeguato”. Ibid.
57 Haavelmo critica la tesi secondo cui il libero mercato massimizza l’utilità sociale perché tale tesi “ assume” che gli individui “in qualche modo si mettono d’accordo” pe r prendere una decisione ottimale. Ma il libero mercato è esattamente il metodo attraverso cui il “mettersi d ’accordo” ha luogo! V. Trygve Haavelmo, “The Notion of Involuntary Economic Decision,” Econometrica (January 1950): 8.
58 Sarebbe più corretto dire una data distribuzione della ricchezza [assets] monetaria.
59 Su questo errore del collettivismo metodologico, e sul più ampio errore del realismo concettuale, v. l’eccellente analisi di Hayek, Counter Revolution of Science, pp. 53 e segg.
60 Anche i criminali agiscono così, ma non possono farlo in conformità alla legge. In un’analisi prasseologica, e non giuridica, si applicano le stesse conclusioni ad entrambi i gruppi.
61 Non possiamo esaminare qui l’analisi prasseologica dell’economia generale, che mostra che, nel lungo periodo, per molti atti di interferenza coercitiva, lo stesso aggressore perde utilità.
62 The Theory of Economic Policy in English Classical Political Economy (London: MacMillan, 1952) di Lionel Robbins è fedele alla tesi secondo cui gli economisti classici inglesi erano veramente “scientifici” p erché non sostenevano il laissez-faire, mentre gli ottimisti francesi erano dogmatici e “ metafisici” perché lo sostenevano. Per affermare ciò Robbins abbandona il suo approccio prasseologico di venti anni prima e adotta il positivismo: “Il test finale per stabilire se un’affermazione è metafisica (sic) o scientifica è […] se argomenta dogmaticamente a priori oppure appellandosi all’esperienza”. Naturalmente R obbins cita esempi tratti dalle scienze fisiche per sostenere questa erronea dicotomia. Ibid., pp. 23-24.
63 Gli scritti di Bastiat sono molto diffusi, ma la sua analisi sul “benessere” era complessivamente inferiore a quelle di About o di Molinari. Per una brillante analisi dell’azione dello Stato, v. Gustave de Molinari, The Society of Tomorrow (New York: G.P. Putnam and Sons, 1904), pp. 65-96.
64 Edmond About, Handbook of Social Economy (London: Straham, 1872), p. 104. Anche ibid., pp. 101-12; e Arthur Latham Perry, Political Economy, 21st ed. (New York: Charles Scribners’ Sons, 1892), p. 180.
65 Terence W. Hutchison, A Review of Economic Doctrines, 1870-1929, p. 282; Samuelson, Foundations of Economic Analysis, p. 204.
66 Per un esempio di questo atteggiamento v. la critica a Counter Revolution of Science di Hayek da parte di May Brodbeck, in “On the Philosophy of the Social Scien ces,” Philosophy of Science (April 1954). Brodbeck si lamenta del fatto che gli assiomi prasseologici non sono “sorprendenti”; se però lei proseguisse l’analisi, potrebbe scoprire che le conclusioni sono abbastanza sorprendenti.
67 Knut Wicksell, Lectures on Political Economy (London: Routledge and Kegan Paul, 1934), 1, pp. 72e segg..
68 Sulla base dell’economia generale, più che dell’economia del benessere, è anche possibile affermare che la creazione di un cartello volontario, se profittevole, beneficerà i consumatori. In tal caso, i consumat ori, come i produttori, sarebbero danneggiati dal divieto statale del cartello. Come mostrato sopra, l’economia del benessere dimostra che nessuna azione statale può aumentare l’utilità soci ale. L’economia generale dimostra che, in molti casi di azioni statali, anche coloro che guadagnano nell’immediato, perdono nel lungo periodo
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