Tag: media

Alt Investors interview

Rahul interviewed Vox Day on December 14, 2011

Rahul: The first thing I wanted to get into is the argument of inflation vs deflation. I believe that we agree on many issues, but I know for sure we disagree on this topic. Why do you believe we’re going to face a deflationary depression.

VD: Because I believe the amount of credit created money, which is stored up in notional derivatives, and loans and that sort of thing, are going to decline faster than the central banks of the world are able to create money through the banks and push them out of the system.

Rahul: So what about the U.S. dollar then. We have Peter Schiff saying that the dollar is garbage. Since we artificially have low interest rates, a huge debt, and a trade account deficit, that will cause a run on the dollar.

VD: Because Peter Schiff has an amateurish understanding of the technical economic aspects of inflation as they relate to a debt-based currency. I was on his show; I like Peter and have a lot of respect for him. When it comes to the detailed aspects of economics, he doesn’t know what he’s talking about. He’s an investor and a good one. Everyone says look they’re printing money, and look at M2. They’re right, and M2 has increased. However, that’s only part of the equation. The unsophisticated way to look at the inflation/deflation question is to erroneously assume that money is paper. The central bank can print paper, and sophisticated people would say it’s all electronics (Fed would just flip a switch). What money really is, you can find this in Mises, is that money is the combo of paper money and bank credit. When you buy something, do you have to pay in paper?

Rahul: No.

VD: Off course not. How are you paying for it. You’re paying for it in credit. That’s an invented currency. It trades completely fungible. It’s completely fungible with paper currency and the electronic bank money. If you look at the data for the past 3.5 years, the total credit debt outstanding is flat at 53 trillion. M2 has increased a bit, but that’s 9 trillion. The amount of M2 has dwarfed by the outstanding bank credit. That amount, if it increased at its 50 year historical rate of 8.8%……known as Z1, we would have 72 trillion. We don’t. It’s still stuck at 53 trillion. That means it’s an active form of deflation. The only reason that this isn’t visible to everyone is that most of the deflation is hidden off the books in the financial institutions.

Rahul: Ok then. So what do you think about gold then? We have all these libertarians saying that gold will go to 10K /oz because we’re going to go back on some sort of gold standard. What’s your take on that?

VD: My take is that gold is much better as a wealth protector than it is than an investment. People think gold is good in inflation and bad in deflation. We had inflation throughout the 1980s at the same time that we had plunging gold prices. Now we’ve been seeing deflation…..even the inflationistas admit that there was deflation in 07-08. And yet gold prices went up. Gold, in some ways……for those who consider gold true money, then they should view it as anything that makes gold valuable is deflation. I think gold is a good safeguard of wealth even if you believe in inflation or deflation. Gold will still hold its value. The currency can disappear in either inflation, because it becomes worthless, or in deflation, where the financial system collapses because the debts can’t be paid off.

Rahul: Ok. Switching topics. Let’s look at Europe. Do you believe that the Euro countries will go back to their original currencies, like the Greeks going back the Drachma, or do you see a EuroTarp situation?

VD: Well I think they’re going to try a EuroTarp and it will fail. The Euro will break apart. I’ve been saying this for 10 years. I’m not surprised by the problems of the Euro. The only thing that surprises me that it’s 1.30 against the USD. 2.5 years ago, it was 1.15. It should be below .88 against the dollar.

Rahul: Why do you think it’s that high?

VD: I believe that the Fed is sending a lot money to Europe to prop up their currency.

Rahul: Allright. One last question. How will the U.S. get out of the depression? Krugman always talks about WWII getting us of the last depression. Will we have WWIII to bail us out or a Reagan style candidate to get us of this mess.

VD: Well, first of all, Krugman has no freaking clue what he’s talking about. He’s an absolute ignoramus on this matter. Before I got into economics, I was into military history. My grandfather fought in the south pacific. What got the U.S. out of the depression was that the rest of the industrialized world was blown to pieces. The US was the only country to have a functional industrial infrastructure. Therefore, we had 10 years to sell them consumer and capital goods to rebuild their infrastructure. It’s not even worth discussing. WWIII won’t get us out because WWII didn’t.

Rahul: So what will get us out of this mess?

VD: Collapse. What most likely going to happen is the financial system will collapse. The societal system will hopefully hold up. Currencies usually have a life of 70 years. It’s not the end of the world if the Euro dies. This isn’t the first attempt of a European monetary union. There have been at least five. This will collapse. The dollar will eventually collapse. This always happens. They will end up putting this back together.

Rahul: Will the SDR be the world’s reserve currency?

VD: It’s hard to say. I wouldn’t think so. What else is there? The central banks are allergic to a gold standard for the obvious reason that they can’t run their credit boom game very easily on a gold standard. They can do it, but they can’t do it to the same extent. Gold isn’t a magical cure all. We had a depression on a gold standard and we had problems with it. That doesn’t mean I’m against it. It’s much better and I’m for it. It isn’t a magical panacea that is going to usher us into unending prosperity. We still have to make stuff people want and sell it. That’s where wealth comes from. The whole idea that we can play games with money and that sort of thing, and somehow live off of that, is absurd. It’s a hangover from 40 years of a large credit boom. Since we’ve had a large credit boom, the bust will be magnified.

Introverted and Extroverted blogs

I hadn’t previously read Jonathan Rauch’s popular article on introversion in The Atlantic. It’s simple, but pretty good, although I shudder to think that many people actually regarded this as containing much in the way of new information.

Introverts are not necessarily shy. Shy people are anxious or frightened or self-excoriating in social settings; introverts generally are not. Introverts are also not misanthropic, though some of us do go along with Sartre as far as to say “Hell is other people at breakfast.” Rather, introverts are people who find other people tiring.

Extroverts are energized by people, and wilt or fade when alone. They often seem bored by themselves, in both senses of the expression. Leave an extrovert alone for two minutes and he will reach for his cell phone. In contrast, after an hour or two of being socially “on,” we introverts need to turn off and recharge. My own formula is roughly two hours alone for every hour of socializing. This isn’t antisocial. It isn’t a sign of depression. It does not call for medication. For introverts, to be alone with our thoughts is as restorative as sleeping, as nourishing as eating. Our motto: “I’m okay, you’re okay—in small doses.”

One thing I’ve noticed is that this blog appears to be a stronghold of introversion, which may help explain why it has such a hard core, but relatively small readership. For example, I actively dissuade what could be considered extrovert-style commenting – generally described in these parts as comment diarrhea – in which the commenter leaves many multiple one-line comments as they occur to him. And I’ve also noted that many of the blogs with bigger traffic tend to have more and shorter posts.

It has never bothered me that more people might prefer other blogs to this one, nor did I ever wish to imitate them, but I did find it puzzling that so many people like to regularly read blogs that essentially say nothing, and say nothing so succinctly. I’m not talking about aggregators like Drudge and Instapundit, you understand, but the sort of blogs where the commentary on the Republican debate is four lines or the contents of their meals is a frequent topic of conversation. I’ve tried reading several very popular blogs on occasion, and to be honest, I not only could not read them regularly, I couldn’t even figure out why anyone was reading them. Ever.

It couldn’t be described as an intelligence thing either. Some of these bloggers were quite smart and very successful, others perhaps not quite so much, but the one thing they had in common is that a) their average post length is very short, both in terms of the selections from the links provided and their own writing, and b) their readers’ average time on site is measured in single-digit seconds. That latter fact has always puzzled me too. Who reads anything except Twitter or market prices in less than 10 seconds? How is that even possible? I understand that those who are checking back to see if there is a new post or not will tend to drive down the average, but why would there be so many multiples of post-checking in comparison with incidence of readers actually reading the posts?

If it is true that extroversion and introversion have fundamentally different styles of communication, then these differences should translate to blog writing, blog commenting, and even blog readerships as well. This may also explain why most of the early big bloggers completely failed as book authors… authors tend to be introverts, for obvious reasons, whereas the more visible bloggers who attracted mainstream media attention are more likely to be extroverts and extroverts are seldom able to focus long enough to complete a coherent thoughtcomplete book. SFWA President-For-Life John Scalzi of Whatever is an interesting case; is he an extroverted geek who is able to focus himself long enough to complete his books or an introvert who enjoys performing in public on occasion? Since I find tend to find his approach to both his blog and his books rather scattershot, I suspect the former, but I wouldn’t bet much on it. The Prince of Wängst strikes me as extremely introverted, as does Roissy. Ann Althouse’s blog, on the other hand, appears to be of the extroverted variety.

To what extent the blog matches the blogger, or the readership, for that matter, I don’t know. It’s more of an impression than an observation and I’d be interested in hearing your opinions about what blogs fit which category. As should be obvious, like most of the readership, I am rather strongly introverted myself, which is why I always find it both bizarre and amusing when I am accused of writing things solely in order to attract attention. That is the classic extrovert’s projection at work; they simply cannot imagine that anyone would not want to be on stage or appear on TV.

As for Rauch’s article, the best part of it is where he describes the concept of social fatigue. At every social gathering, there is the inevitable moment when the mundane chatter surrounding me like an aural miasma appears to crescendo, grow ever more incoherent and frenetic, until it finally all fades away into the blessed silence inside my mind.

Occasionally someone will notice that I am paying absolutely no attention to the conversation and ask me what I am thinking. This is a mistake. But because I am sufficiently civilized, I never answer truthfully. There is no benefit to sharing the dark thoughts inspired by an overdose of social exposure, and anyway, it’s nothing that a little time alone won’t cure.

On the radio

I’m going to be on WNJC 1360 AM from 3:10-4:00 PM Eastern today, a Philadelphia radio station. The two hosts have visited the Occupy Wall Street protests and they have invited me on the show to discuss it with them. You can listen live if you happen to be interested.

On the radio

In case you’re interested, I’m being interviewed on the Preparedness Radio Network at noon EST for an hour. They appear to have a listen live link here.

An interesting post-interview note from the host: “We’re all about the downloads here after the live shows. Already they have downloaded this broadcast nearly 1,000 times—that has never happened immediately after a show before.”

Mailvox: scientists wanted

A documentary filmmaker is looking for scientists and mathematicians willing to go on camera to discuss TE(p)NSBMGDaGF:

I am a filmmaker currently working on an untitled documentary project with the purpose of revealing the ideological motives of those who act as the gatekeepers for Darwinism. While on the surface this may sound a bit like the 2008 documentary “Expelled”, my proposed film is not about Intelligent Design whatsoever, it is simply an examination of the science of TE(p)NSBMGDaGF, as you so affectionally refer to it, and the ideology of those determined to protect it from criticism and attempt to strong arm others who practice any genuine scientific inquiry to challenge it.

I recently discovered your blog during my research, and though I am an agnostic, I have found your material on this subject very compelling. My funding is in place, and most of my preliminary research has been completed, but I am running into a brick wall when it comes to getting those in the scientific community (outside of ID proponents) to point me in the right direction on the challenges to Darwinism from evo-devo, genetics, and mathematics, and to agree to be interviewed for the project. Though I have simply presented my film as an “evidentiary exploration of Darwinian evolution”, most biologists seem to have learned that it is not wise to provide potential ammunition for a documentary film. Either out of fear of retribution or a sense of their authority being challenged, I have found few who are willing to assist me in my research, or to go on record.

This is why I am contacting you. From the comments on your posts, I have noticed that quite a few scientists and engineers read and comment on your blog, and I was hoping perhaps they might give me some assistance regarding fundamental objections to Darwinian theory from other schools of scientific inquiry, and suggestions on those in the scientific community I should be looking to engage with. I appreciate any assistance you and your “ilk” would be willing to give me on this topic.

I have the impression this guy is looking for credentials, so if you happen to be a sufficiently credentialed scientist or mathematician who is interested in being interviewed about what is happening in the field of evolutionary biology, shoot me an email with your credentials and I will pass them along to the filmmaker.

And before anyone leaps to the wrong assumption, no, I’m not involved in this, and no, I won’t be appearing in it. But it is interesting to see that scientists are either afraid to speak publicly concerning their doubts about TENS or are unwilling to defend the orthodox dogma. No wonder the Darwinists are losing the media war. They’re afraid to even show up for the fight and have resorted to ideological thuggery inside their increasingly irrelevant secular monasteries. Thomas Huxley must be rolling over in his grave at the sight of Darwin’s Yellow-bellied Chickens.

Mustache vs Mustache

It’s like Spy vs Spy, only hairier. Joseph Farah beats up on Michael Medved:

Medved explains in the broadcast that his disgust with WND, which he refers to as “WorldNutDaily,” began during a period in which he toiled for the site as a weekly columnist – a position from which he was terminated for lack of interest by the public.

Medved is a remarkably clueless talker, prone to moral preening and fake outrage, and Farah is correct about the lack of interest in Medved’s columns. I had access to the servers back then and I remember my column had around 4x the readership of Medved’s when he was still on WND.

And let’s not forget that Equus Pallidus reduced Medved to a sputtering puddle of self-contradictions on his own show when he was having his little fainting fit over my perfectly factual, completely uncontroversial statement that if National Socialist Germany could identify, transport, and kill 6 million Jews in three years, it is apparent that it is entirely possible for the USA to identify and transport 12 million illegal immigrants in less than eight years.

In this epic battle of mustaches, it’s clear that the edge is with 70’s Porn Stache over the Gay Mustachio.

Overprepared

If I sounded a little less than fluid in the interview with CTV yesterday, the reason is, ironically enough, that the two Canadian producers prepared me extraordinarily well for it. I was very impressed with their thoroughness and the quality of their questions; I’ve been on a number of national news shows before and I’ve never seen anything like it. After a 30-minute pre-interview going over the debt ceiling debate and how it related to some of the concepts in RGD with one of the producers the day before, I produced two charts that we both thought would be useful as well as nicely visual, after which I was sent me the six questions I was to anticipate.

However, there was just a bit of a curve ball in the interview itself. Not only did they use a different picture than the one I provided, (understandably, since they must have wanted color), and they didn’t make use of the charts I made, (which was fine, I used them in today’s column), but some of the questions asked by the anchor were somewhat different than the ones I’d been provided. Her questions weren’t bad ones, by any means, but they were just far enough afield so I didn’t have the statistics on things like “historical tax revenue as a percentage of GDP” immediately to hand.

Note that I’m not complaining here, merely observing how the process was very different than my experience with American TV and radio.

Anyhow, I found that I was thinking “wait, what?” the entire time I was trying to answer the anchor’s questions. “Did I mishear that? Am I even answering the right question?” Anyhow, since I thought the producer’s questions were pretty good ones and I prepared for them, I thought I might as well post my notes for the interview here.

You recently wrote in an article that the issue is not so much the debt ceiling, but the debt itself. Can you explain exactly why?

The U.S. federal government has spent three years keeping the economy artificially propped up by substituting $4.1 trillion in new government debt for $3.6 trillion in household and financial sector debt-deleveraging.  Washington cannot keep playing ostrich without raising the debt ceiling.  The reason you’ve seen the number $2.4 trillion bandied about is because that buys them another six quarters at the current rate of $365 billion in new debt per quarter, enough to get them past the 2012 elections. But all this accomplishes is to delay the day of reckoning and increase the eventual cost.  Since the housing market and employment numbers have actually gotten worse during this period of extend-and-pretend, it should be clear that raising the debt ceiling isn’t even a potential fix for the problem.
 
In your book you look at the patterns that led to the Great Depression, and the Heisei boom In Japan that led to it’s famous ‘lost decade”- and you believe it will happen again, only this time it will be worse. What leads you to believe this?

First, the debt-to-GDP ratio is worse than it was in the Great Depression or Japan in 1999.  It was 2.6 in 1933, it peaked at 3.7 in 2008 and it is 3.5 now.  Second, in the 1930s, it was only the USA that attempted to fight the post-1929 economic contraction with Keynesian stimulus policies and only the USA suffered a Great Depression.  In England, the contraction stopped in 1932, France never saw double-digit unemployment, and the Japanese economy was actually enjoying significant growth.(1)  This time, Europe, China, and Japan all followed the US lead and applied their own stimulus plans in 2009, which we are already seeing is now in the process of backfiring on everyone.
 
In a chapter of your book entitled “No one knows anything” you explain that many of the governments calculations for GDP are misleading that they contain wide margins for error and cannot be trusted- why is that?
 
Because they’re verifiably wrong.  Look at the recent first quarter.  All three reports, from Advance to Final, had U.S. GDP growth at 1.8 to 1.9%.  Then, in the second quarter report, there is an inexplicable revision from 1.9% to 0.4%.  That’s a $225 billion mistake, which is almost five times more than the $60 billion growth now being reported.  These revisions are so out of control that if you bother to look back at the 2001 numbers, you’ll see that the 2001 recession has been revised out of existence.  It’s complete fiction.  On the employment side, the game is to not count people who don’t have jobs as unemployed.  That’s why they claim the unemployment rate is only 9.2% when it’s really closer to 20%.

You say that a boom fuelled by easy credit must be followed by a bust of equal size and duration. Instead, it has been FED policy to re-inflate bubbles and they collapse, which only creates bigger bubbles- You say we are currently in the biggest bubble yet- what could pop it?
 
What will pop it is a reduction in the rate of growth of government spending, an increase in interest rates, or a major sovereign investor’s refusal to continue buying Treasury bonds.  Any of the three will suffice to put the USA into a debt-deleveraging spiral.  The problem with depending upon debt-based economic growth is that eventually, you run out of people who are willing and able to borrow money. And that’s when the contraction starts.

There is a large backlog of home foreclosures in the United States- what would happen if that backlog were to suddenly be cleared? Are there other potential triggers out there?
 
Clearing the backlog would put the economy into the equivalent of heart failure because it would instantly kill a lot of banks.  The $600 billion decline in household sector debt is deceptively small because over 7.5% of all mortgages have been delinquent for more than 90 days.  The banks aren’t writing those bad loans off yet because to do so would bankrupt them.  Based on the FDIC statistics, I estimate that about $3 trillion of the $7.5 trillion in assets presently claimed by the big four, Bank of America, Citi, Wells Fargo, and JP Morgan Chase, are worthless.
 
What are the options for the global economy- what are the best and worst case scenarios?
 
Pay a high price now, or pay a higher price later.  Deflation, default, and economic contraction aren’t fun, but they are perfectly survivable.  The best case scenario is we go through the global equivalent of the Great Depression, what I’ve called Great Depression 2.0.  It will be very difficult for a lot of people, but the basic governmental structures will survive and there won’t be cannibalism in the streets or anything like that.  The worst case is that the politicians keep kicking the can down the road until the entire global financial system finally collapses overnight.  In that case, we’re probably going to see wars, civil wars, and fundamental change of the sort most of us find impossible to imagine.

(1)thanks to the invasion of Manchuria, of course, but the GDP statistics are what they are.

Libertarian #25

DBKP Reports has released its ratings of the top 50 most popular Libertarian websites on the Internet. Ratings are based on the sites’ 3-month average of Alexa worldwide traffic as ranked on July 13-14, 2011. The Libertarian list has expanded from the Top 40 to the Top 50 sites this rating.

The Libertarian 50′s top five most popular sites is led by Lew Rockwell, followed by Reason and Ludwig Von Mises Institute. The top five is rounded out by The Daily Paul and the Big Picture.

25 24 Vox Popoli 155294

The inevitable drift left

On a scale of one to ten, how surprised are you that David Frum has had a sudden change of heart with regards to homogamy now that New York has legalized it? I’d say minus four. About the only thing less surprising will be Obama’s new position on the topic once he doesn’t have to run for office anymore.

I was a strong opponent of same-sex marriage. Fourteen years ago, Andrew Sullivan and I forcefully debated the issue at length online (at a time when online debate was a brand new thing). Yet I find myself strangely untroubled by New York state’s vote to authorize same-sex marriage — a vote that probably signals that most of “blue” states will follow within the next 10 years.

I don’t think I’m alone in my reaction either. Most conservatives have reacted with calm — if not outright approval — to New York’s dramatic decision.

Frum illustrates what today’s “conservative” opinion “leaders” do. They do their best to march in front of the mainstream media parade in an attempt to appear they’re leading it. What will be amusing is Frum’s desperate attempt to have another change of heart once he realizes that the buying off of a few Republican senators is not the political sea change that he is reading.

Since all politics ebb and flow over time, it can be amusing to watch how the pragmatists’ positions float along with them.

On podcasting

I get a lot of requests to do more podcasts on a regular basis, and while I’m amenable with regards to the necessary talking, interviewing, and so forth, I’ve finally concluded that I’m simply not at all interested in doing the necessary editing and studio tinkering. So, if there is anyone who is interested in that side of it, let me know. I don’t have any grand ideas about going full media, but given how most of the world seems to be astonished that the global economy is headed back tostill experiencing economic contraction, I figure that there may be a need for more of the sort of thing I started with the Voxonomics podcasts.

Basically, I’d like to be able to record an MP3, upload it to a server, and have a reasonably edited podcast magically appear within a day or two. If that’s not possible because no one is interested, it’s completely fine, but I thought I should at least throw this out there for any audiophiles with some time on their hands.