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Inflation vs Deflation IX

Nate posts his first post-Cyprus response:

It is with no small amount of sadness that I must now face the fact that I am not going to get out of this debate without having to explain mal-investment.  It appears in order to counter Vox’s deflation via credit reduction claim… it is absolutely necessary.

Ok so M1… TSM2… Z1…  what is it?

As I stated before…  you’ve already answered that question for yourself.  Vox can write poetic and convincing lines about the esoteric nature of credit money… and he can explain how the paper just represents a claim on this or that…  and none of it will change the fact that when you hear about what’s going on in Cyprus… you have a primal urge to run to the bank and get all of your cash out.  You want the cash.

That’s because the cash you want is money.  For now.

The debit card is very convenient.  No question.  But by now you are probably looking at it with much more cynical eye than you were a month or so ago.  Good.

Read the rest of it there.

The Wardog’s Coin

I am pleased to announce that Hinterlands has released THE WARDOG’S COIN, an 85-page ebook that consists of the title novella and a novelette, both of which are set in Selenoth, the world of A THRONE OF BONES.  It is available on Amazon for $1.99.

The title story is about a human mercenary company which finds itself in
the employ of an elf king. Outnumbered and under attack from an army of
orcs and goblins, the Company discovers it is no longer fighting for
pay, but for survival in an alien land. The second story, Qalabi Dawn, features a young
tribal chieftain, Shabaka No-Tail, who seeks to find a way to unite the
fractious tribes of The People before the implacable legions of the Dead
God invade the desert to carry out their crusade of total
extermination. In both stories, the borders of the world of Selenoth as it is known to the reader are expanded to some small extent.

Thanks to Jartstar, who did an excellent job on the cover.  Look very closely at the coin; the level of detail there is remarkable. Thanks also to the four proofreaders; this ebook should be considerably cleaner from the get-go than its predecessors.  Also, to celebrate the new publication, Hinterlands is giving away A Magic Broken for free on Amazon today.

Eight Steps of the Expected

Zerohedge looks back to history to predict what is coming down the road. 

To anyone paying attention, reality is now painfully obvious. These bankrupt, insolvent governments have just about run out of fingers to plug the dikes. And history shows that, once this happens, governments fall back on a very limited playbook:

Direct confiscation: As Cyprus showed us, bankrupt governments are quite happy to plunder people’s bank accounts, especially if it’s a wealthy minority. Aside from bank levies, though, this also includes things like seizing retirement accounts (Argentina), increases in civil asset forfeiture (United States), and gold criminalization.

Taxes:  Just another form of confiscation, taxation plunders the hard work and talent of the citizenry. But thanks to decades of brainwashing, it’s more socially acceptable. We’ve come to regard taxes as a ‘necessary evil,’ not realizing that the country existed for decades, even centuries, without an income tax.  Yet when bankrupt governments get desperate enough, they begin imposing new taxes… primarily WEALTH taxes (Argentina) or windfall profits taxes (United States in the 1970s).

Inflation:  This is indirect confiscation– the slow, gradual plundering of people’s savings. Again, governments have been quite successful at inculcating a belief that inflation is also a necessary evil. They’re also adept at fooling people with phony inflation statistics.

Capital Controls: Governments can, do, and will restrict the free-flow of capital across borders. They’ll prevent you from moving your own money to a safer jurisdiction, forcing you to keep your hard earned savings at home where it can be plundered and devalued. We’re seeing this everywhere in the developed world… from withdrawal limits in Europe to cash-sniffing dogs at border checkpoints. And it certainly doesn’t help when everyone from the IMF to Nobel laureate Paul Krugman argue in favor of Capital Controls.

The thought strikes me that we truly live in a perverse world where “free trade” demands the free movement of  labor and bars the free movement of capital. I don’t recall David Ricardo ever working through the implications of that arrangement.  As for the inflation prediction, we’ll see about that.  I have no doubt, of course, that the various governments will be doing their best to inflate, the question is whether they can actually manage to cut the link to credit or not.

How to learn Austrian Economics

Clearly I am debating the wrong person concerning the $56 trillion question.  I shouldn’t be engaging Nate in dialectical discourse with regards to the global economy, but rather a genuine expert on global business and economics.

Kristin is a Global Business and Econ major.  I want to make sure everyone understands that. After someone else brings up Austrian Economics…  Kristin blows them away.. with this amazingly awesome retort…
 
“And what does Austrian economics have to do with anything? But yes, in fact I do know some considering I was just there last year. I know a lot of the basics of the economies within the EU.“

And there you have it.

Kristin the Global Business and Econ major knows all about Austrian Economics… because she was in Europe just last year.

See friends?   Put down that Milton Friedman.  You don’t need to read all that.  You just need to do some sight seeing in Chicago.

Oh Sweet Mises… I’d find it hard to believe, were it not for the fact that I once met an economics major from a large public university who had never heard of John Maynard Keynes.

Persecution in America

It’s fascinating, is it not, how those who deny Jesus Christ, from Roman emperors to petty academic professors, are observably obsessed with forcing others to symbolically reject the name of Man’s Lord and Savior:

A professor at Florida Atlantic University (FAU) Davie campus named
Deandre Poole teaches an “Intercultural Communication” class from a
textbook by the same name.  The textbook calls for an exercise where
students write the name of Jesus in large letters on a piece of paper
and then stomp on it.

Enter Ryan Rotela, a student in the class who happens to be a devout
Mormon. Rotela refused to stomp and complained to Professor Poole,
telling him, “Never do the assignment again because it’s offensive.” 
Rotela also told the professor that he was going to complain to the
university.  Then, according to Rotela, FAU responded by suspending him
from Poole’s class.

It gets worse; the university is now going after the student, not the professor.  That’s obviously questionable.  But as the PJ Tatler rightly puts it, the more important question is this: “Why was there only one student in the class who found stomping on Jesus objectionable?”

Never forget, this is the sort of “tolerance” that the atheists and pagans grant to the Christians after successfully demanding respect and tolerance from Western Christian culture.  It is becoming increasingly obvious that the genuine tolerance that was given to them may have been a serious mistake of cataclysmic proportions for everyone, including the atheists and pagans who have been granted free reign and are foolishly using their freedom to bring down a civilization more than a millennium in the making.

Cyprus: curiouser and curiouser

First, one of the EU’s finance ministers suggested that the bank raids are not going to end with Cyprus.

Savers in the eurozone could see their bank accounts raided in the struggle to shore up the single currency, a senior EU official warned last night. The Cyprus rescue package – under which bank customers will have a chunk of their cash seized to bail out troubled lenders – could become a template for dealing with other creaking banking systems, Jeroen Dijsselbloem suggested. The remarks from the head of the eurozone’s finance ministers contradicted days of assurances that the Cyprus bank deposit raid was a ‘one off’.

Second, it appears that the news of the big 40% cash grab from uninsured depositors, (those with over EUR 100k in the bank), may be more than a little misleading, which may account for the strange silence from Russia over the last few days.  Zerohedge notes a Reuters report and postulates that the hot money which is supposedly the focus of the heist may already be well off the island.

As it turns out, these same oligrachs may have used the one week hiatus period of total chaos in the banking system to transfer the bulk of the cash they had deposited with one of the two main Cypriot banks, in the process making the whole punitive point of collapsing the Cyprus financial system entirely moot.

From Reuters: “While ordinary Cypriots queued at ATM machines to withdraw a few hundred euros as credit card transactions stopped, other depositors used an array of techniques to access their money.”

No one knows exactly how much money has left Cyprus’ banks, or where it has gone. The two banks at the centre of the crisis – Cyprus Popular Bank, also known as Laiki, and Bank of Cyprus – have units in London which remained open throughout the week and placed no limits on withdrawals. Bank of Cyprus also owns 80 percent of Russia’s Uniastrum Bank, which put no restrictions on withdrawals in Russia. Russians were among Cypriot banks’ largest depositors.

So while one could not withdraw from Bank of Cyprus or Laiki, one could withdraw without limitations from subsidiary and OpCo banks, and other affiliates?

In other words, the idea that the situation has somehow been successfully resolved is not only ludicrous from a structural perspective- at most it would amount to one more round of successful can-kicking – but may not even be the case with regards to postponing the inevitable crisis and crackup.

It was always bound to happen

In a move that will surprise absolutely no one, Amynda Marcotte finally comes out of the closet:

What’s an ambitious woman to do? Obviously, the price tag put on your
employment is just another version of the pay gap, and for some reason,
the elegant solution of professional women refusing to have children
until someone fixes this situation has been taken off the table. It’s a
major conundrum. So why not look to men for answers? Men have managed
the sticky situation of both having a job and having a home life for
decades now. Their solution is possibly even more elegant in its
simplicity than the “don’t have children” one: Marry a woman. 

I think it became fairly obvious that she wasn’t cut out for a life of heteronormative happiness when she invented the concept of “near rape”, a term that customarily translates from the femmesprache as “first date”.

Education and the pretense of excellence

This is an example of why the much-ballyhooed predominance of women in education is not translating to meaningful real world success and why the disappearance of men from higher education is not tantamount to either their replacement by women or an inevitable decline into technological stagnation:

My best students were guys who weren’t really paying attention in class, they were doing the stuff on their own, and called me only for help. They were ahead of the program. I was ok with putting zero grades (F-) to the ones who didn’t care about learning the stuff. My take: if you can’t do this stuff, you ain’t gonna be making money with it on the real world, so why do you want a grade on it? Go do something else.

Nonetheless I got the “best teacher award” from the students four times in a row.

So. A couple of women protested and wanted to pass my course, on the basis that they had been attending to class and had done most of the assignments. Were they able to do the stuff? No. But they wanted recognition for their efforts. I got pushed by the directive board so I gave an A+ to everyone.

That’s some quality black-knighting there. It’s based on agreeing and amplifying. If pushed to delink genuine achievement and grades, then delink it entirely, don’t permit the retention of a convincing appearance of a nonexistent link. Education that recognizes efforts rather than results is not education, it is selling paper.

Remember, fraud is always based on deceit. Exposing the deceit to all and sundry is very nearly as effective as preventing the fraud from taking place.  And it is important to expose it, because allowing false excellence to be substituted for the real thing can have significant consequences, as the UK is discovering to its detriment.

The country’s top woman civil servant is clinging to her £180,000-a-year job after being accused by MPs of a ‘catastrophic failure of leadership’ on securing Britain’s borders. Lin Homer’s disastrous tenure in charge of the UK Border Agency lead to a huge backlog of hundreds of thousands of immigration cases. But astonishingly she emerged unscathed and was rewarded with promotion through the civil service and is now in charge of HM Revenue and Customs. The powerful home affairs committee today said they were ‘astounded’ she was considered suitable for the job of collecting the nation’s taxes.

It is hardly astonishing that the UK’s top woman civil servant wasn’t held accountable for her catastrophic failure, given the Prime Minister’s mandate to promote women at all costs.  As was the case in the class that Yohami mentioned, Lin Homer was rewarded with bonuses and promoted for her effort rather than her results… and now she is in charge of the nation’s tax revenues.

Cyprus: bank heist round 2

This time, sans the Cypriot parliament as EU plays its usual card of asserting “if you jokers can’t vote the way we tell you, we’ll just declare that voting is unnecessary“:

So having learned that Parliament would not approve a deposit levy in the name of a “tax”, and that the government was deeply opposed to forcing citizens and other depositors in its banks to bear losses without the bondholders being wiped out first as one would expect in the capital structure, Germany, the ECB and rest of the EuroThieves did something innovative.

They simply ignored Parliament and came up with a scheme that didn’t require a vote. We’ll see how this works out for them.

This, incidentally, is exactly what happened here with GM.  It was blatantly unlawful to protect the UAW’s pension fund, which had no senior standing while trashing senior bondholders.  The government did not care and did it anyway — and the courts permitted it.

This has been the repeated means by which you are stolen from.  When you enter into an investment, whether you make a deposit in a bank or buy a bond or something else, you are buying into a capital structure in a given place with a given and declared level of both risk and potential reward.  You price that risk and your willingness to enter into the transaction with the full understanding of where you are in that capital structure.

When that is unilaterally changed retroactively you are being stolen from. 

Period.

One can’t help but notice this is an even worse deal for the Russians than the one that had them announcing their new permanent Mediterranean fleet, and it doesn’t have the support of either the Cypriot people or their parliament. I wouldn’t get too excited and start going long the euro; contra the financial spin this situation is far from resolved.

It is awesome

I don’t think the socionomic implications of this song becoming a hit really need to be spelled out to anyone here.