Archive for June, 2010

It is the past that changes

Sunday, June 27th, 2010

The future is certain, it is the past that changes.

Moveon had a web page demonizing General Petraeus as General Betray Us

Obama appoints General Petraeus in charge of Afghanistan, whereupon the page not only instantly disappears from Moveon.org, but also instantly disappears from Google’s cache. When the past changes, Google’s spiders are quicker of the mark than they are for normal updates, suggesting human intervention to correct the past lickety-spit.

General Petraeus is infinitesimally to the right of the fired General McChrystal.

The policy that should be followed in Afghanistan is not that of General Petraeus, General McChrystal, President Obama, or President Bush, all of which are following infinitesimally different variations of the same lunatic extreme left policy:  COIN.

The correct policy would be that of Lord Cromer, who brought peace, prosperity, and freedom to Egypt with only five thousand men. Unfortunately that policy was already politically incorrect in 1907.

China continues moving to the free market

Sunday, June 20th, 2010

The greatest limitation on the economic liberty of Chinese was capital controls.  Recently the party took a big step away from capital controls by allowing ordinary Chinese to buy and sell gold as an investment.  As Europe and the US moves towards capital controls, the party continues to move away from capital controls.

The Central Bank of China has announced:

Starting from July 21, 2005, China has moved into a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies.

It still “managed” but in the west, everything financial is managed. We have not had anything remotely resembling a free financial market since Basel.

Doomsday postponed for a short time

Tuesday, June 15th, 2010

As I write this, Spain just ran out of money.  Presumably the European central bank is going to print up a whole lot of fresh money and bail them out, if it has not done so already.  If they are not swiftly bailed out, there will be a run on the Spanish banks, and the Spanish deficit will be instafixed as the government loses the ability to pay most people.

The underlying crisis is, of course, that the welfare state is broke.  Greece is more broke than Spain, Spain more broke than Germany, Germany more broke than the US, but all the major governments are in a very similar hole.

So can we print our way out the crisis?  So far, printing more money has been highly successful, but printing fresh money in such huge amounts is giving everyone an uneasy feeling.  Will it work forever?  Can it work forever?

Printing more money will eventually lead to inflation, other things being equal, but of course, other things are not equal.  We are seeing deflation, not inflation.

The value of fiat money is speculative.  It is valuable because people think it is valuable.  Properly managed, fiat money is bubble that never bursts.  Improperly managed, it bursts, and people start using gold, whiskey, ammo, and dried beans.  With more and more fiat money being issued, and the value remaining high, we are seeing bubble behavior.

Hyperinflations start off in series of abrupt bursts.  People notice that not only are prices rising, but that goods are getting short.  There is a mad rush to unload money and load up on goods.  For a little while, money becomes unspendable.  After a while, normality returns, but with goods at much higher prices.  Prices remain fairly stable for while, the government continues to issue lots of money, and then there is another burst.  After this happens several times, inflation starts to become continuous and extremely rapid, and people stop using the fiat money.

So the first hyperinflationary burst, if it happens, which I rather think it will, will rather sudden and shocking.  The warning will not be high inflation, but high inflation with shelves emptying.  If the governments then start balancing their budgets by laying off civil servants, and cutting civil servant pensions, then we will return to stability – at a substantially higher price level.  If, on the other hand, deficits continue, another burst will come soon after the first.

If Jews bleed, it does not lead

Thursday, June 10th, 2010

The biggest story of the last few days has been Israel’s interception of peace activist ship to Gaza, in which they killed nine peace activists.

Here is a picture of some peace activists holding down a soldier at knifepoint, with what appears to be a pool of blood on the bulkheads.
knife and pool of blood
When the the picture gets carried at all in the mainstream media, the knife and the blood gets cropped.  Even Fox news has not shown the picture at all.

The Muslim press, however, are showing these photos as they are – which is not the first time the Muslim press in totalitarian terror states has shown itself to be more free than in the west  – I guess Muslims get more slack than Dhimmi.

The coming collapse

Tuesday, June 8th, 2010

Doc Zero explains the perverse incentives that make collapse inevitable.

Americans are already bailing out Greece, so will be bailing out California.  Add the unfunded state liabilities to the unfunded federal liability, there is no way the Federal government can make good on its debts.  We are not just up for the federal deficit.  We are up for the Greek and Californian deficit.

Minority mortgage meldown and diversity recession

Monday, June 7th, 2010

People are starting to realize wonder where all the money was pissed away to.  The answer, of course, is that most of it was pissed away on affirmative action loans to members of protected minorities.  Whose fault is this?

Steve Sailer blames primarily Karl Rove and George Bush

There is much truth in this, but I would primarily blame Basel.

Under Basel, what matters to a financial institution is not whether its assets are safely invested, but whether they are officially declared to be safely invested.  The people in charge of deciding what is officially safe have no incentive to make their estimates accurate, but powerful incentives to make their estimates politically correct.

[an earlier version of this post incorrectly said Basel II, for which I was called out in the comments. Most of the problems started with Basel I]

Freedom flotilla vs Israeli Defence Forces.

Tuesday, June 1st, 2010

Don’t take a knife to a gunfight.

Israel is blockading Gaza.  Activists attempted to force the blockade with pathetically inadequate weapons.  Perhaps the intent was to suffer some pathetic casualties, that they could then whine about, or perhaps they were just stupid.

If you are going to engage soldiers and marines, you should either take no weapons at all other than moral force, which may not be all that effective, but will not get you killed, or else weapons capable of doing some good.  Hamas tried weapons that should have been capable of doing some good, but the Israeli Defense Forces proved otherwise.  This leaves moral force only.  If you take a knife to a gunfight, as these activists did, the appropriate response is to laugh at them and piss on their graves.