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December 13, 2011

DOOM: He took a face from the ancient gallery


His Majesty the King Barack Hussein Obama is an economic illiterate. This in itself is bad enough in any public servant who has such an impact on public policy, but Obama takes it a step further by being ignorant of his own ignorance. His disdain for the opinions of his own advisers (as in the Bowles-Simpson plan) points to a man deep in the throes of intellectual arrogance. The 2012 election will either bring Nemesis to bear (if he loses), or will simply justify his belief in himself (if he wins).

I've often said it: the moment that Japan has to go to foreign markets to roll their debt, they are screwed. I think that the big story of the 2020's is going to be the collapse of Japan as an industrial power -- their demographics are lousy (they have one of the oldest populations in the world, and one of the lowest birthrates), their debt is sky-high, and they've been mired in political stasis for most of two decades now.

San Franciscoís minimum wage tops $10/hr. And Iíll bet you that most of the good liberal denizens of that burg still insist that this has no effect on employment at the low end.

Blinded by the 'animal spirits' myth.

Ludwig von Mises and the death of sound money. I'm a goldbug for a reason, folks.

Why unemployment is worse than you think.

The large demographic shift that has taken place over the last few decadesódriven by the maturing of the baby boom generationónow places considerable downward pressure on the unemployment rate, which makes the current malaise look a bit better than it really is.
It's as I've said before: given the flawed way we calculate unemployment, it would be possible to have 0% 'unemployment' even if 100% of the population was out of a job. As a larger proportion of our population ages out of the workforce and into retirement, and younger people put off looking for work longer and longer, this skews the calculated numbers.

When you donít start working until your mid-20ís and retire in your late 50ís, youíre basically taking two-thirds of your life as a vacation. This is not, needless to say, a sustainable model. And Iím not even just talking about the colossal burden the public-sector pensions and other benefits put on the public treasury; itís also a huge productivity hit in a country that is rapidly aging and entering a period of slow economic growth.

Escape the Euro prison!

Sarkozy preps the French voters for the now-likely-inevitable credit downgrade. Zut alors!

Germanyís battle with morality. I think this is more a case of the rest of Europe wanting Germany to do the convenient thing rather than the right thing.

This is just modern China in a nutshell for me: a deserted fake Disneyland. All the pathologies are here: the malinvestment, the corruption, the disdain for IP rights (Iím pretty sure the Chinese didnít get Disneyís okay before starting work), the unconcern for the average citizen who stands in the way of ďprogressĒ.

Gold and silver failing as safe havens? Well, I know which way Iím betting. Thatís why I consider this kind of thing less as a disaster than a buying opportunity. Look at the price of gold over the last 10 years, and then tell me what other asset class has performed nearly as well. And thatís not even considering precious metals as a hedge -- thatís as a pure investment vehicle. It may be that weíre simply implemented a de facto rather than a de jure gold standard. Banks are selling gold and buying cash, but in a real way, this simply means that cash and gold become directly convertible again. In other words: gold is money.

While gold could previously generate an income from being loaned out ó the result of gold producersís hedging needs in an environment where gold demand was uncertain ó it no longer can. Gold is now reflecting a negative lease rate, otherwise known as a repo rate. It means there is more demand for using the asset to obtain credit, than there is demand for asset, using credit. Or, for that matter, demand for hedging the asset.

Signposts on the way to DOOM: tuba thefts on the rise. There are markets in everything, even stolen tubas. (How in the hell would you fence a stolen tuba, anyhow? Is there some shady ďMusic ManĒ grifter somewhere in South L.A. who will fence hot band instruments to the school district? Is there some shadowy cartel of marching-band leaders who run the whole show?)

Barack Obama as Richard Nixon? The more enmeshed in his own lies Bammer gets, the more he tries to manufacture a history that is so plainly at odds with how things actually happened, the more our current President reminds me of Richard M. Nixon: embattled, encapsulated, paranoid, isolated.

ďThe presidentís policy platform is intellectually incoherent.Ē But it sounds coherent to the rubes, which is the whole point of populism, and why itís proven so successful historically. Barack Obama himself is intellectually incoherent, as is the ideology he espouses. Modern liberalism has never been all that big on introspection or philosophical consistency anyhow -- in fact the whole edifice of postmodernist theory was erected mainly to turn this defect into a virtue.

P. J. O'Rourke on the zero sum fallacy. The comments to this piece are hilarious, by the way. Liberals are always at pains to assure everyone that they understand basic economic theory, only to go on to demonstrate that they really donít understand it at all.

The Zero Sum Fallacy is just that, a fallacy. Economic history since the Industrial Revolution proves -- be the rich however stinking rich -- we ordinary people can make more of the good things in life. But we have to make them ourselves, with our knowledge, skills and hard work. Government can't give us good things. Government doesn't make things, it just redistributes them. This brings us back to fighting with each other.

Next in line to get on the DOOM train: South Korea.

The Occutards' attempt to close the ports would hurt the 99% they claim to represent, but one of the hallmarks of the "Occupy" movement is its complete incoherence.

London's banking sector isn't exactly devastated by Europe's anger at them over the EU veto. I think that most Brits think the whole EU is more trouble than it's worth at this point.

digg this
posted by Monty at 09:02 AM

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