In this RSA Animate, renowned academic David Harvey asks if it is time to look beyond capitalism towards a new social order that would allow us to live within a system that really could be responsible, just, and humane?
RSA Animate - Crises of Capitalism
Saturday, October 30, 2010
Friday, October 29, 2010
Gold Will Outlive Dollar Once Slaughter Comes
The world’s monetary system is in the process of melting down. We have entered the endgame for the dollar as the dominant reserve currency, but most investors and policy makers are unaware of the implications.
The only questions are how long the denouement of the dollar reserve system will last, and how much more damage will be inflicted by new rounds of quantitative easing or more radical monetary measures to prop up the system.
Whether prolonged or sudden, the transition to a stable monetary system will become possible only when the shortcomings of the status quo become unbearable. Such a transition is, by definition, nonlinear. So central-bank soothsaying based on the extrapolation of historical data and the repetition of conventional wisdom offers no guidance on what lies ahead.
It’s amazing that there is no intelligent discourse among policy leaders on the subject of monetary rot and its implications for the future economic and political landscape. Until there is fundamental monetary reform on an international scale, most economic forecasts aren’t worth the paper on which they are written.
Telltale signs of future trouble aren’t hard to spot. Only a few months ago, Federal Reserve Chairman Ben Bernanke and a chorus of other high-ranking Fed officials were talking about exit strategies from the U.S. central bank’s bloated balance sheet and the financial system’s unprecedented excess liquidity. Now, those same officials are talking about pumping more money into the system to stimulate growth.
The prospects for an orderly unwinding of the extreme posture of global monetary policy are zero. Bernanke, Jean- Claude Trichet and Mervyn King, his counterparts in Europe and the U.K. respectively, are huddling en masse upon the most precarious perch in the history of monetary affairs. These alleged guardians of monetary stability, in their attempts to shore up the system, have simply created the incinerator for paper money. We are past the point of no return. Quantitative easing may well become a way of life.
Financial markets and institutions sense trouble, as reflected in the flight to supposedly safe assets such as Treasuries and corporate-debt instruments with paltry yields, as well as the reluctance to lend by commercial banks. We are stuck in an epic liquidity trap. The irony is, if global central banks succeed in creating inflation, the value of these safe assets will be destroyed. It is a slaughter waiting to happen.
In the pedantic mentality of central bankers, their playbook creates just the right amount of inflation. As inflation accelerates, consumers will spend to get rid of their dollars of diminishing value and spur the economy. Once consumers start spending, it will be time to raise interest rates because a solid foundation for prosperity will have been established, they say.
But whatever the playbook promises, the capacity of financial markets to overshoot can’t be overestimated. The belief among policy makers and financial markets in the possibility of this sort of fine-tuning is preposterous, but it is the slender thread on which remaining investment and business confidence rests.
The breakdown of the monetary system will be chaotic. When inflation commences, it will be highly disruptive. The damage to fixed-income assets will seem instantaneous. Foreign-exchange markets will become dysfunctional. The economy will become even more fragile and unpredictable.
Naysayers point to gold’s price and see a bubble, without understanding that the only acceleration that is taking place is in the rate of decline of paper currency. The Fed is organizing an attack on the dollar’s value, believing that this is the most expedient way to defuse deflationary market forces. The man in the street is unaware, a perfect setup. Inflation can only be successful when the public doesn’t see it coming.
The sudden torrent of commentary on gold isn’t the sign of a bubble. Anti-gold pundits provide a great service to those who grasp this historical moment: They facilitate the advantageous positioning of the one asset most likely to be left standing when the dust settles.
Continue reading - Bloomberg - Gold Will Outlive Dollar Once Slaughter Comes
The only questions are how long the denouement of the dollar reserve system will last, and how much more damage will be inflicted by new rounds of quantitative easing or more radical monetary measures to prop up the system.
Whether prolonged or sudden, the transition to a stable monetary system will become possible only when the shortcomings of the status quo become unbearable. Such a transition is, by definition, nonlinear. So central-bank soothsaying based on the extrapolation of historical data and the repetition of conventional wisdom offers no guidance on what lies ahead.
It’s amazing that there is no intelligent discourse among policy leaders on the subject of monetary rot and its implications for the future economic and political landscape. Until there is fundamental monetary reform on an international scale, most economic forecasts aren’t worth the paper on which they are written.
Telltale signs of future trouble aren’t hard to spot. Only a few months ago, Federal Reserve Chairman Ben Bernanke and a chorus of other high-ranking Fed officials were talking about exit strategies from the U.S. central bank’s bloated balance sheet and the financial system’s unprecedented excess liquidity. Now, those same officials are talking about pumping more money into the system to stimulate growth.
The prospects for an orderly unwinding of the extreme posture of global monetary policy are zero. Bernanke, Jean- Claude Trichet and Mervyn King, his counterparts in Europe and the U.K. respectively, are huddling en masse upon the most precarious perch in the history of monetary affairs. These alleged guardians of monetary stability, in their attempts to shore up the system, have simply created the incinerator for paper money. We are past the point of no return. Quantitative easing may well become a way of life.
Financial markets and institutions sense trouble, as reflected in the flight to supposedly safe assets such as Treasuries and corporate-debt instruments with paltry yields, as well as the reluctance to lend by commercial banks. We are stuck in an epic liquidity trap. The irony is, if global central banks succeed in creating inflation, the value of these safe assets will be destroyed. It is a slaughter waiting to happen.
In the pedantic mentality of central bankers, their playbook creates just the right amount of inflation. As inflation accelerates, consumers will spend to get rid of their dollars of diminishing value and spur the economy. Once consumers start spending, it will be time to raise interest rates because a solid foundation for prosperity will have been established, they say.
But whatever the playbook promises, the capacity of financial markets to overshoot can’t be overestimated. The belief among policy makers and financial markets in the possibility of this sort of fine-tuning is preposterous, but it is the slender thread on which remaining investment and business confidence rests.
The breakdown of the monetary system will be chaotic. When inflation commences, it will be highly disruptive. The damage to fixed-income assets will seem instantaneous. Foreign-exchange markets will become dysfunctional. The economy will become even more fragile and unpredictable.
Naysayers point to gold’s price and see a bubble, without understanding that the only acceleration that is taking place is in the rate of decline of paper currency. The Fed is organizing an attack on the dollar’s value, believing that this is the most expedient way to defuse deflationary market forces. The man in the street is unaware, a perfect setup. Inflation can only be successful when the public doesn’t see it coming.
The sudden torrent of commentary on gold isn’t the sign of a bubble. Anti-gold pundits provide a great service to those who grasp this historical moment: They facilitate the advantageous positioning of the one asset most likely to be left standing when the dust settles.
Continue reading - Bloomberg - Gold Will Outlive Dollar Once Slaughter Comes
Wednesday, October 27, 2010
BREAKING! Wikileaks Iraq's Secret War Files - Dispatches
Dispatches, Channel 4's flagship current affairs strand, exposes the full and unreported horror of the Iraqi conflict and its aftermath, revealing the true scale of civilian casualties; and allegations that after the scandal of Abu Ghraib, American soldiers continued to abuse prisoners; and that US forces did not systematically intervene in the torture and murder of detainees by the Iraqi security services. The programme also features previously unreported material of insurgents being killed while trying to surrender.
Channel 4 is the only UK broadcaster to have been given access to nearly 400,000 secret military significant activities reports (SIGACTS) logged by the US military in Iraq between 2004 and 2009. These reports tell the story of the war and occupation which the US military did not want the world to know.
With descriptions and scenes of killings, torture and bloodshed which may disturb some viewers
See also - Iraq War Logs
Iraq's Secret War Files - Dispatches Wikileaks Special
Dispatches: Iraq's Secret War Files (part 1/5)
Dispatches: Iraq's Secret War Files (part 2/5)
Dispatches: Iraq's Secret War Files (part 3/5)
Dispatches: Iraq's Secret War Files (part 4/5)
Dispatches: Iraq's Secret War Files (part 5/5)
Channel 4 is the only UK broadcaster to have been given access to nearly 400,000 secret military significant activities reports (SIGACTS) logged by the US military in Iraq between 2004 and 2009. These reports tell the story of the war and occupation which the US military did not want the world to know.
With descriptions and scenes of killings, torture and bloodshed which may disturb some viewers
See also - Iraq War Logs
Iraq's Secret War Files - Dispatches Wikileaks Special
Dispatches: Iraq's Secret War Files (part 1/5)
Dispatches: Iraq's Secret War Files (part 2/5)
Dispatches: Iraq's Secret War Files (part 3/5)
Dispatches: Iraq's Secret War Files (part 4/5)
Dispatches: Iraq's Secret War Files (part 5/5)
Friday, October 22, 2010
The Worst Is Yet To Come!
The UK is bracing itself to hear about public spending cuts worth tens of billions of pounds. The coalition government will reveal the comprehensive spending review on Wednesday. It aims to dramatically cut the budget deficit and put the country on the road to financial recovery. But some economists says the worst is yet to come.
Doomsday Denial: Collapse 2.0 looms as UK calm before storm
Doomsday Denial: Collapse 2.0 looms as UK calm before storm
Wednesday, October 20, 2010
Ron Paul at TSU: Let's Bring About REAL Change!
On Tuesday, October 12, 2010, Congressman Ron Paul addressed the Texas Southern University Thurgood Marshall School of Law Government Law Society on returning to the Constitution, restraining government at home and abroad, and the need to embrace liberty to create a free society and bring about real change.
Ron Paul at TSU: Let's Bring About REAL Change!
Ron Paul at TSU: Let's Bring About REAL Change!
Monday, October 18, 2010
The Mirage of Inflation
This chapter is an extract from Henry Hazlitts famous book "Economics in One Lesson(1946)", which may be the best short introduction to economic thought.
Before we consider what the consequences of inflation are in specific cases, we should consider what its consequences are in general. Even prior to that, it seems desirable to ask why inflation has been constantly resorted to, why it has had an immemorial popular appeal, and why its siren music has tempted one nation after another down the path to economic disaster.
The most obvious and yet the oldest and most stubborn error on which the appeal of inflation rests is that of con- fusing "money" with wealth. "That wealth consists in money, or in gold and silver," wrote Adam Smith nearly two centuries ago, "is a popular notion which naturally arises from the double function of money, as the instrument of commerce, and as the measure of value. . . . grow rich is to get money; and wealth and money, in short, are, in common language, considered as in every respect synonymous."
Real wealth, of course, consists in what is produced and consumed: the food we eat, the clothes we wear, the houses we live in. It is railways and roads and motor cars; ships and planes and factories; schools and churches and theaters; pianos, paintings and hooks. Yet so powerful is the verbal ambiguity that confuses money with wealth, that even those who at times recognize the confusion will slide back into it in the course of their reasoning. Each man sees that if he personally had more money he could buy more things from others. If he had twice as much money he could buy twice as many things; if he had three times as much money he would he "worth" three times as much. And to many the conclusion seems obvious that if the government merely issued more money and distributed it to everybody, we should all he that much richer.
These are the most naive inflationist. There is a second group, less naive, who see that if the whole thing were as easy as that the government could solve all our problems merely by printing money. They sense that there must he a catch somewhere; so they would limit in some way the amount of additional money they would have the government issue. They would have it print just enough to make up some alleged "deficiency" or "gap."
So inflation turns out to he merely one more example of our central lesson. It may indeed bring benefits for a short time to favored groups, but only at the expense of others. And in the long run it brings disastrous consequences to the whole community. Even a relatively mild inflation distorts the structure of production. It leads to the over-expansion of some industries at the expense o others. This involves a misapplication and waste of capital. When the inflation collapses, or is brought to a halt, the misdirected capital investment-whether in the form of machines, factories or office buildings-cannot yield an adequate return and loses the greater part of its value.
Nor is it possible to bring inflation to a smooth and gentle stop, and so avert a subsequent depression. I t is , not even possible to halt an inflation, once embarked upon, at some preconceived point, or when prices have achieved a previously-agreed-upon level; for both political and economic forces, will have got out of hand. You cannot make an argument for a 25 per cent advance in prices by inflation without someone's contending that the, argument is twice as good for an advance of 50 per cent, and someone else's adding that it is four times as good for an advance of 100 per cent. The political pressure groups that have benefited from the inflation will insist upon its continuance.
It is impossible, moreover, to control the value of money under inflation. For, as we have seen, the causation is never a merely mechanical one. You cannot, for example, say in advance that a 100 per cent increase in the quantity of money will mean a 50 per cent fall in the value of the monetary unit. The value of money, as we have seen, depends upon the subjective valuations of the people who hold it. And those valuations do not depend solely on the quantity of it that each person holds. They depend also on the quality of the money. In wartime the value of a nation's monetary unit, not on the gold standard, will rise on the foreign exchanges with victory and fall with defeat, regardless of changes in its quantity. The present valuation will often depend upon what people expect the future quantity of money to be. And, as with commodities on the speculative exchanges, each person's valuation of money is affected not only by what he thinks its value is hut by what he thinks is going to be everybody else's valuation of money.
All this explains why, when super-inflation has once set in, the value of the monetary unit drops at a far faster rate than the quantity of money either is or can he increased. When this stage is reached, the disaster is nearly complete; and the scheme is bankrupt.
Yet, the ardor for inflation never dies. It would almost seem as if no country is’ capable of profiting from the experience of another and no generation of learning from the sufferings of its forbears. Each generation and country follows the same mirage. Each grasps for the same Dead Sea fruit that turns to dust and ashes in its mouth. For it is the nature of inflation to give birth to a thousand illusions.
Full chapter here - The Mirage of Inflation by Henry Hazlitt
Before we consider what the consequences of inflation are in specific cases, we should consider what its consequences are in general. Even prior to that, it seems desirable to ask why inflation has been constantly resorted to, why it has had an immemorial popular appeal, and why its siren music has tempted one nation after another down the path to economic disaster.
The most obvious and yet the oldest and most stubborn error on which the appeal of inflation rests is that of con- fusing "money" with wealth. "That wealth consists in money, or in gold and silver," wrote Adam Smith nearly two centuries ago, "is a popular notion which naturally arises from the double function of money, as the instrument of commerce, and as the measure of value. . . . grow rich is to get money; and wealth and money, in short, are, in common language, considered as in every respect synonymous."
Real wealth, of course, consists in what is produced and consumed: the food we eat, the clothes we wear, the houses we live in. It is railways and roads and motor cars; ships and planes and factories; schools and churches and theaters; pianos, paintings and hooks. Yet so powerful is the verbal ambiguity that confuses money with wealth, that even those who at times recognize the confusion will slide back into it in the course of their reasoning. Each man sees that if he personally had more money he could buy more things from others. If he had twice as much money he could buy twice as many things; if he had three times as much money he would he "worth" three times as much. And to many the conclusion seems obvious that if the government merely issued more money and distributed it to everybody, we should all he that much richer.
These are the most naive inflationist. There is a second group, less naive, who see that if the whole thing were as easy as that the government could solve all our problems merely by printing money. They sense that there must he a catch somewhere; so they would limit in some way the amount of additional money they would have the government issue. They would have it print just enough to make up some alleged "deficiency" or "gap."
So inflation turns out to he merely one more example of our central lesson. It may indeed bring benefits for a short time to favored groups, but only at the expense of others. And in the long run it brings disastrous consequences to the whole community. Even a relatively mild inflation distorts the structure of production. It leads to the over-expansion of some industries at the expense o others. This involves a misapplication and waste of capital. When the inflation collapses, or is brought to a halt, the misdirected capital investment-whether in the form of machines, factories or office buildings-cannot yield an adequate return and loses the greater part of its value.
Nor is it possible to bring inflation to a smooth and gentle stop, and so avert a subsequent depression. I t is , not even possible to halt an inflation, once embarked upon, at some preconceived point, or when prices have achieved a previously-agreed-upon level; for both political and economic forces, will have got out of hand. You cannot make an argument for a 25 per cent advance in prices by inflation without someone's contending that the, argument is twice as good for an advance of 50 per cent, and someone else's adding that it is four times as good for an advance of 100 per cent. The political pressure groups that have benefited from the inflation will insist upon its continuance.
It is impossible, moreover, to control the value of money under inflation. For, as we have seen, the causation is never a merely mechanical one. You cannot, for example, say in advance that a 100 per cent increase in the quantity of money will mean a 50 per cent fall in the value of the monetary unit. The value of money, as we have seen, depends upon the subjective valuations of the people who hold it. And those valuations do not depend solely on the quantity of it that each person holds. They depend also on the quality of the money. In wartime the value of a nation's monetary unit, not on the gold standard, will rise on the foreign exchanges with victory and fall with defeat, regardless of changes in its quantity. The present valuation will often depend upon what people expect the future quantity of money to be. And, as with commodities on the speculative exchanges, each person's valuation of money is affected not only by what he thinks its value is hut by what he thinks is going to be everybody else's valuation of money.
All this explains why, when super-inflation has once set in, the value of the monetary unit drops at a far faster rate than the quantity of money either is or can he increased. When this stage is reached, the disaster is nearly complete; and the scheme is bankrupt.
Yet, the ardor for inflation never dies. It would almost seem as if no country is’ capable of profiting from the experience of another and no generation of learning from the sufferings of its forbears. Each generation and country follows the same mirage. Each grasps for the same Dead Sea fruit that turns to dust and ashes in its mouth. For it is the nature of inflation to give birth to a thousand illusions.
Full chapter here - The Mirage of Inflation by Henry Hazlitt
Wednesday, October 13, 2010
French Strikes Biggest So Far
PARIS — In the latest expression of discontent over government austerity moves across Europe, French transport and energy workers, teachers and civil servants took to the streets on Tuesday to protest plans to reform the country’s pension system — the third such strike here in just over a month.
The strikes in France follow waves of social unrest across the region in recent months, with protesters in Spain, Belgium, Greece and Ireland voicing their anger as governments seek to rein in exploding deficits that threaten to undermine their sovereign credit ratings, exacerbating national budget woes.
Union officials claimed a nationwide turnout of more than 3.5 million people, an increase of 20 percent from the previous strike on Sept. 23, while the French interior ministry put the figure closer to 1.23 million, up from just under a million in the last strike. In Paris, the police counted 89,000 protesters, up from 75,000 previously.
“The protest is not weakening, but we can’t be sure it will grow,” Éric Woerth, the labor minister who has spearheaded the new measures, told France 3 television. “The government’s determination is total.”
Several labor groups — including those representing the national rail and Paris public transport workers — voted Tuesday to extend their walkouts through Wednesday, and unions have also called for another day of demonstrations on Saturday, so the ultimate effects of the strikes remain unclear.
“Everyone admits that things can’t continue like this,” said François Vergne, a labor lawyer in the Paris office of the law firm Morgan, Lewis & Bockius. “Other countries have adapted their laws and there is a resigned consensus that retirement at 60 is no longer sustainable.”
Late Monday, the upper house of the legislature voted to raise the age of retirement with a full pension to 67 from 65, having already agreed to increase the minimum legal retirement age to 62 from 60. Senators from the opposition Socialist Party still hope to slow full adoption of the package through amendments.
Last month the lower house voted to raise the minimum pension age to 62.
“The power relationship is being modified,” Mr. Vergne said. “We are in a period of transition.”
Continue reading - NYTimes - French Strikes Disrupt Air and Rail Travel
BBC NEWS - French strikes biggest so far, say unions and police
Video: http://www.youtube.com/watch?v=lQ-T6D4PBdE
Tuesday, October 12, 2010
Ron Paul speech to Tea Party uncensored
Rep. Ron Paul brought a crowd at the Virginia Tea Party Patriots Convention to its feet October 9th, delivering a fiery speech about an "intellectual revolution." He said the economy is going "to get a lot worse before it gets better" and advocated getting rid of the IRS and the income tax.
Ron Paul speech to Tea Party uncensored
Ron Paul speech to Tea Party uncensored
Monday, October 11, 2010
Ron Paul: U.S. Heading for Soviet-Style Economic Collapse
David Asman of America's Nightly Scoreboard on Fox Business hosts Congressman Ron Paul and Judge Andrew Napolitano in a discussion about the Federal Reserve, government spending, and Keynesian economic policies.
Ron Paul and Judge Napolitano on the Federal Reserve 10/06/10
Ron Paul and Judge Napolitano on the Federal Reserve 10/06/10
Thursday, October 7, 2010
Tim Jackson's economic reality check
As the world faces recession, climate change, inequity and more, Tim Jackson delivers a piercing challenge to established economic principles, explaining how we might stop feeding the crises and start investing in our future.
Tim Jackson's economic reality check
Tim Jackson's economic reality check
Saturday, October 2, 2010
China Labour Strikes
Labour union movements seeking better wages and working conditions have stepped up strikes and protests across China at an unprecedented rate. It has been described as nothing short of a revolution.
So far in this year, there had been at least 73 major co-ordinated strikes throughout the country. But the rights groups operate in secret to avoid police who often crush strikes through arrests and brutality.
The government says its main concern is that if it gives workers the right to form assemblies, they may turn against authorities.
Al Jazeera was given rare access to a network of workers on strike in the southern Chinese city of Guangzhou.
China labour strikes gain momentum
So far in this year, there had been at least 73 major co-ordinated strikes throughout the country. But the rights groups operate in secret to avoid police who often crush strikes through arrests and brutality.
The government says its main concern is that if it gives workers the right to form assemblies, they may turn against authorities.
Al Jazeera was given rare access to a network of workers on strike in the southern Chinese city of Guangzhou.
China labour strikes gain momentum
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