The Cost of Socialism

Source: Safehaven.com

July 30, 2008

THe Cost of Socialism

by John Browne

'Over the past few decades, the United States has steadily evolved from a nation of 'producers' to one of 'consumers'. The change has been celebrated by politicians and economists as proof of America's arrival at the top of the global economic food chain. In reality, the development has depleted the nation of its hard-earned wealth, and has led us to the brink of ruin.

But rather than encouraging a return of America's productive energy, our government is responding to the growing economic crisis by simply trying to boost consumerism at all costs. Their strategy involves socializing losses among all citizens so that the depletion can't be easily discerned.

Now that the nation has chosen socialism as its economic salvation, it is worthwhile to examine some historic precedents. They are not encouraging. Europe, the former Soviet block and much of Africa and Asia, show vividly that socialism curbs individual freedom and enterprise, and leads inevitably toward economic decline.

America was blessed both with abundant natural resources and individual freedom, the backbone of enterprise. The combination rendered American productivity the envy of the world. Based on the strength of our industry and productivity, the American Treasury became the world's largest.

Why would America swap a history of successful capitalism for a murky future of socialism? The Answer is politics...'

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Why all roads lead to inflation

 Source: msn money
A combination of global expansion and money printing to avoid today's economic pain has set us up for tomorrow's spiraling prices.

By Bill Fleckenstein

'Inflation is a topic that does not receive enough attention. I'll try to address that deficiency in this week's column.

Regular readers know my motto (which is on the masthead of my Web site): "In a social democracy with a fiat currency, all roads lead to inflation." Over the past couple of decades, through all the occasional chatter about deflation, I have resolutely maintained that deflation would not be the outcome we would see because the Fed would do what the Fed has done.

One major force helped hold inflation at bay during the 1990s: globalization. As Jim Grant points out in a brilliant essay titled "The Close of the Era of Peace and Quiet" in the current Grant's Interest Rate Observer (subscription required):"Between the early 1980s and the late 1990s, an estimated 2 billion new pairs of hands had joined the global labor force. Employers never had it so good, especially so in countries like the United States, where relocation to low-cost meccas of the East was no idle threat, but an actionable business plan."

Cheap labor, when combined with the technological advances of the late 1990s -- which were powerful, though no more potent than those we'd seen in the 1920s and 1960s, for instance -- helped offset the Federal Reserve's money printing.

However, in the wake of the stock bubble, that money printing set off the U.S. housing boom and began to cause different consequences...'

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Are central banks really to blame for the housing bubble?

Source: Money Week

'One of the few positive developments from the US housing bubble is that many mainstream economists have recognized the pernicious role played by the Federal Reserve. Indeed, some analysts on CNBC have discussed the outright abolition of the Fed.

The case against the Fed is straightforward: In an attempt to jumpstart the economy out of recession, Greenspan slashed the federal funds target from 6.5% in January 2001 down to a ridiculous 1% by June 2003. After holding rates at 1% for a year, the Fed then steadily ratcheted them back up to 5.25% by June 2006.

The connection between these moves by the central bank, versus the pumping up and popping of the housing bubble, seemed to be more than just a coincidence. On the contrary, it looked like a classic example of the Misesian theory of the business cycle, in which artificially low interest rates lead to malinvestments, which then require a recession to correct.

Ironically, just as many mainstream analysts are seeing the wisdom of the Austrian view, two prominent libertarian economists, Jeffrey Rogers Hummel and David Henderson, have claimed the opposite. Hummel and Henderson (H&H) argue that despite its bad press as of late, the Fed really isn't to blame for the housing mess.

Coming from other writers, one might suspect political motives for such views. Yet H&H are certainly no tools of the powers that be. We have here a purely academic disagreement, but even so I hope to show that H&H's position falls apart under scrutiny...'

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Pétrole : gagnants et perdants

Pétrole : gagnants et perdants
Video sent by Ptite_Mule

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The Most Powerful People in America

Source: World News Trust

'(World News Trust) -- They are not the rich and superrich, nor the politically powerful running the two-party plutocracy, nor the greedy heads of banking and finance companies, and certainly not the media moguls and bloviating pundits. The most powerful people are U.S. American consumers who account for more than 70 percent of the economy.  It is exactly now, when the economy is in the toilet, that consumers hold the maximum power.  So why are we the people still deluding ourselves that the path to a better future rests on electing a new president?

 

We are suckers, conditioned by decades of clever marketing and advertising to believe the lies of politicians, and worst of all to believe that elections and our votes provide us with power.  Wrong.  Our real power can only be manifest through our spending dollars...'

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Global systemic crisis: Four big trends over the 2008-2013 period

Source: LEAP - Europe 2020

'...Global financial crisis – Savers and investors trapped into USD 10,000-billion worth of « ghost-assets »

If your banker managed to convince you to invest in the USD 10,000-billion worth of ghost-assets currently haunting the financial planet, then you have most probably lost everything even if you do not know it yet [2].

And neither G7-finance ministers nor IMF governors (who met last April 11, 12 and 13) can do anything about it. All of them are totally helpless in the face of the ongoing crisis. With staff cuts and gold sales in order to fill its deficit, the IMF today embodies the sinking of all the institutions created after WWII to regulate the world economy. The outcome of the mid-April meeting clearly reveals how incapable of working together are the various players gathered within the IMF and its various branches: on the one hand, public institutions longing for greater supervision over banking activities in order to prevent further financial catastrophes; on the other hand, banks quite satisfied with pledges of better behaviour. The only tangible result is near-to-mid-term inaction: the current crisis will continue to worsen while debates will go on at the IMF. As a matter of fact, the very concept upon which the IMF is based is outdated.

In any event, according to our experts, the estimated USD 1,000-billion worth of assets lost in the current crisis is largely underestimated [3]. It is probably closer to 10,000-billion of USD [4] that are about to be lost over the coming two years [5]. In other words, several large international banks will be swallowed up in the maelstrom, and along with them many companies, too fragile or depending too much on the US consumer [6]..."

"Most of these « ghost-assets » are made of US mortgage loans, US dollars, and more generally US dollar-denominated assets, as well as British Pound Sterling-denominated assets [10]. They were created from nothing in the financial euphoria of the past decade by the “sorcerers’ apprentice” of Wall Street, the City and the other major financial places of the world [11]. Remember! Those were the times when every one raved about the “miracle” of this new finance which permitted to create a “financial economy” 1,000 times worth the real economy [12]. Well, for some months now, the happy beneficiaries of these infinite virtual riches have been striving to find them some tangible incarnation [13]...'

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«Ο,τι θέλουν οι εφοπλιστές του Λονδίνου»

Πηγή: Ελευθεροτυπία

'Αποφασισμένη να προχωρήσει σε μεγάλες παροχές-παραχωρήσεις προς τους 150 Ελληνες εφοπλιστές του Λονδίνου, για να μετεγκατασταθούν από το City στην Ακτή Μιαούλη, είναι η κυβέρνηση, ακόμη και αν δεν εγγράψουν τα πλοία τους στο εθνικό νηολόγιο, δεδομένης της στήριξης της πολιτικής της από την Ενωση Ελλήνων Εφοπλιστών και το Committee.

Στα κυβερνητικά «δώρα», που πιθανότατα θα γνωστοποιηθούν μετά το Πάσχα, συμπεριλαμβάνεται, σύμφωνα με έγκυρες πληροφορίες, η περαιτέρω μείωση των οργανικών συνθέσεων των πληρωμάτων και της φορολόγησης πλοίων και εφοπλιστών, ενώ δεν αποκλείεται να επιδοτηθούν και οι ασφαλιστικές εισφορές των ναυτολογημένων Ελλήνων στα υπό ελληνική σημαία ποντοπόρα εμπορικά, όπως ισχύει στα κρουαζιερόπλοια...'

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