October 10, 2012 Leave a comment
September 7, 2012 Leave a comment
David Weidner wrote a piece for MarketWatch: “Fool’s Gold Standard.”
It was standard stuff, i.e., a combination of economic stupidity, attempted cleverness, and the rhetoric of contempt.
It deserves my special treatment, which I reserve for mainstream media journalists who hate the idea of a world not run by the Federal Reserve and who try to be clever. Weidner is not clever.
Let me explain. I quote him verbatim and in context.
He begins with this:
Every few decades the nation has a financial panic, and in doing so questions its mode of currency. Should we be on a gold standard, or not?
I ask: Why does the nation continue to experience these panics? Also, when? I recall no financial panic comparable to 2008 in the past 70 years. There was the S&L crisis of the mid-to-late 1980s. Government regulation of the industry caused this crisis.
Let us review chronology. Jesse Helms’ in 1980 called for a gold commission to study gold. A Democrat Congress passed it, and Jimmy Carter signed it. It was held in 1982, four years before the S&L crisis began. It was a dead issue by 1986.
Also, no one in Washington suggested a return to gold in 1982, other than Ron Paul. No one suggested it in 2008, other than Ron Paul.
So, the article begins with a false premise: a supposed relationship between financial panics and calls for a gold standard.
There was price inflation, 1971-1980, but no financial crisis. That decade of price inflation was the result of the policies of the Federal Reserve System under Arthur Burns and G. William Miller. Those policies resulted from Nixon’s unilateral killing of Bretton Woods on August 15, 1971. He killed the gold exchange standard, itself a Keynesian imitation of the post-World War I gold exchange standard (1922 Genoa Conference), itself a government-manipulated counterfeit of the pre-World War I gold coin standard, which had ended in 1914.
This post-financial crisis era is no exception. The Republicans have just put a plank in their party platform that called for the formation of a gold commission, a move that’s generating some buzz on Wall Street.
It is generating no buzz anywhere. The platform is taken seriously by no one, especially Speaker of the House John Boehner. It merely reflects that Ron Paul scared the Republican Establishment this time. He did not in 1982.
September 5, 2012 Leave a comment
Barack Obama cares about Barack Obama far more than he does about either Israel or Iran. And as far as Barack Obama is concerned, delaying the coming war between Israel and Iran until after the election is what is best for Barack Obama. Just think about it. If Israel attacked Iran right now, who would that please? It would mostly please hardcore Republicans, and they are not going to vote for Obama anyway. To independents and liberals, Obama would look like a guy that couldn’t stop war from happening in the Middle East. If the U.S. showed support for the Israeli attack, that would greatly discourage his anti-war supporters from going to the polls. If the U.S. did not show support for the Israeli attack, Obama would potentially lose many of the Jewish voters that he desperately needs in swing states such as Florida. A war between Israel and Iran is a no-win situation for Obama right now, and as I wrote about yesterday, the Obama administration has been trying to discourage Israel from attacking Iran for weeks. Well, now it is being reported in major international news sources that a deal has been reached between Obama and Israel. Obama is going to publicly declare what the “red lines” are that will cause the U.S. to strike Iran’s nuclear program, and the U.S. military is going to send some of their most advanced bunker busting bombs to Israel. Those bombs will come in very handy in getting at the Iranian nuclear facilities that are hidden underground. In return, Israel has apparently agreed to delay the attack on Iran until after the election. So would Barack Obama really play politics with war in the Middle East? Of course he would. Barack Obama is obsessed with winning a second term and he would make a deal with just about anyone if it will get him closer to his goal.
The Israelis really did not want to go ahead with an attack on Iran without U.S. support anyway. They feel like time is running out to stop Iran from becoming a nuclear power, but without the support of the United States it would have been hard to justify an attack to the rest of the world.
So in the end, it looks like both sides are going to get what they want. At some point there will be an attack on Iran’s nuclear program, and Obama gets it delayed until after the election.
According to Fox News, Israeli officials have admitted that they have been involved in talks with the Obama administration about Iran’s nuclear program….
Israeli officials said Tuesday they are in close discussions with the United States over how to deal with the Iranian nuclear program, seeking to ease tensions that have emerged between the two allies over a possible Israeli military strike against Iran.
The dialogue, in which Israel is looking for President Barack Obama to take a tough public position against Iran, suggests the odds of an Israeli attack in the near term have been reduced.
But I have not found a U.S. news source that is reporting on the details of the deal that has apparently been reached. The following is from an Israeli news source….
September 3, 2012 Leave a comment
Even as Greece desperately tries to avoid defaulting on its debt, U.S. companies are preparing for what was once unthinkable: that Greece will soon be forced to leave the eurozone.
Bank of America Merrill Lynch has looked into filling trucks with cash and sending them over the Greek border so clients can continue to pay local employees and suppliers in the event money is unavailable. Ford has configured its computer systems so they will be able to immediately handle a new Greek currency.
No one knows just how broad the shock waves from a Greek exit would be, but big U.S. banks and consulting firms have also been doing a brisk business advising their corporate clients on how to prepare for a splintering of the eurozone. That is a striking contrast to the assurances from European politicians that the crisis is manageable and that the currency union can be held together. On Thursday, the European Central Bank will consider measures that would ease pressure on Europe’s cash-starved countries.
September 2, 2012 Leave a comment
There is talk of a plank in the Republican Party’s platform calling for a gold commission. The commission will study the possibility of re-establishing a gold standard.
The likelihood of a positive recommendation coming out of such a commission is as likely as a positive report of another commission to study the feasibility of restoring the Articles of Confederation.
I did a Google search on these terms: “gold commission,” Republican, platform. I got 20,000 hits.
That’s not too bad. I always like to see public interest in the restoration of gold as the backing for the U.S. dollar.
But there is a lot of deja vu about this. We have been down this yellow brick road before. It is nothing but gold-painted bricks all the way to the Emerald City: Greenback heaven.
In 1980 Senator Jesse Helms persuaded a Democrat- controlled Congress and Jimmy Carter to sign into law a call for a gold commission. Under those circumstances, you can imagine how seriously the President took the bill. But Carter was trounced by Reagan later that year. This offered hope to the more naive gold bugs within the camp of the faithful.
Under Reagan’s Secretary of the Treasury, Donald Regan, plans went forward. In March 1982, the Gold Commission began meeting. The Secretary of the Treasury filled the commission with anti-gold Keynesians and monetarists – followers of Milton Friedman – who also favored the Federal Reserve. There were only two pro-gold standard members: Ron Paul and Lewis Lehrman. Out of the Gold Commission came a majority report, which opposed the gold standard, a minority report by Paul and Lerhman, and a detailed history of the legal foundations of the U.S. dollar by Austrian school legal scholar, Edwin Vieira. You can download all three documents here.
The Spanish Government allocates another 41,000 million of public money to help banks [elconfidencial]
August 28, 2012 Leave a comment
Translation by Google
Ministers De Guindos and Montoro, in an image file. (EFE)
July 6, 2012 Leave a comment
As Americans spent July 4 celebrating the anniversary of the United States’ independence from Britain, German-born Kim Dotcom was reveling in a re-birth. According to the founder of Megaupload, his file storage site will rise again.
In a tweet to his followers this week, the man behind the world’s most famous file-locker site — and one of the FBI’s biggest foes — hinted that Megaupload will be brought back to life.
“SOPA is dead. PIPA is dead. ACTA is dead. MEGA will return. Bigger. Better. Faster. Free of charge & shielded from attacks. Evolution!” reads a tweet from the official @KimDotcom Twitter account. Dotcom— born Kim Schmitz — is currently being targeted by international authorities over his role with the website, which American official say was the centerpiece in a vast online piracy conspiracy.
By masterminding the operations of Megaupload, the Federal Bureau of Investigations insists that Dotcom caused the American entertainment industry to lose $500 million in revenue. Law enforcement agents raided his home this past January in a highly publicized sting that has since been condemned by not just Dotcom and his supporters but even justices in New Zealand.