Paris Hilton: an observation

Speaking of Paris Hilton, there's something odd about her: smooth, featureless, un-angular; as if she were, I don't know, inflated and unstable. One feels it would only take a little prick to make her explode.

Posh tarts and Pop Tarts

How much social disruption is caused by posh people's boredom?

The Grumbler today whines about schoolgirls aping whores to get attention - a survival strategy in today's feckless-male world, I'd have thought - and a Dr Ringrose of London's Institute of Education (they never ask actual schoolteachers, do they) opines that teaching about the history of feminism is "needed to overcome the negative influences of celebrities such as Paris Hilton, Britney Spears and Christina Aguilera".

Paris Hilton is a world-famous millionaire socialite am-porn star and now part-time political commentatrix. Britney Spears is a world-famous millionaire entertainer, and her disastrous private life is a moneymaker for her and a raft of reporters and photographers; besides, her misdeeds and misfortunes are no worse than those of the underclass whose offspring I teach, nor much different from the self-indulgence of many rich and aristocratic women in the first half of the twentieth century. Christina Aguilera ditto - and currently a Google search for her yields nearly 29 million pages.

Emmeline Pankhurst was a rich businessman's daughter, married a barrister, joined the Independent Labour Party, toured North America lecturing on VD and joined the Conservative Party when she returned. Her daughter Adela went to Australia, joined the Communists and then the Fascists. Another daughter, Sylvia, got knocked-up out of wedlock and she and her mother fell out and never met again. The third, Christabel, enthusiastically promoted the First World War and internment of enemy aliens, visited Russia after the Revolution to urge its continuation in the conflict with Germany, became a Christian evangelist in the USA, returned to Britain, was made a Dame Commander of the British Empire in 1936, and fled the country when war broke out again.

Yep, I can just see all that on the syllabus.

The need for civil rights

Professor James Duane explains in shocking detail why, in the USA, everybody should remember to exercise their right under the Fifth Amendment to remain silent. (htp: Obnoxio The Clown, referring to Philip Thomas' post)

"The following is the common Miranda warning used by most law enforcement agencies in the United States today:

You have the right to remain silent. Anything you say can and will be used against you in a court of law. You have the right to speak to an attorney and to have an attorney present during any questioning. If you cannot afford a lawyer, one will be provided for you at government expense."

How about here in Britain?

"You have the right to remain silent. But it may harm your defence if you fail to mention anything that you later rely on in court. Anything you do say may be given in evidence."

"Free legal advice is worth what you pay for it." Having said that, here is a site purporting to give advice to activists being questioned by police in the UK.

How many laws are on the Statute Books in the United Kingdom? Is there anybody in the country of legal age who could not be accused of having broken one of them? Do we not have too much law?

UK worse than USA?

If it's the USA (aka The Great Santa) that's in dire trouble, how come the pound sterling has dropped 5 cents against the dollar, since July 17?

Bill Gates: charity begins at home

The Bill & Melinda Gates Foundation is set up to give away $38 billion (plus another $30 billion pledged by Warren Buffett).

While I'm in the mood for mad ideas, how about sparing some fraction of that (oh, a billion?) to go back to Bill's crazy source code and finally straighten out all the problems with Microsoft's core products, then send out a one-use-only disk to all previous purchasers, to reload everybody's programs with reliable updated versions?

Or should I stick with dreaming up more realistic schemes, like the deposit-free banking idea?

Fractional reserve banking - why bother?

Karl Denninger comments on the unfolding crisis of non-subprime mortgages, where he thinks losses will be even worse.

A question: why bother with any kind of reserve?

Once you've determined that banks can lend a high multiple of deposits, you may as well make deposits entirely irrelevant. In fact, it would save quite a bit on operating costs if you could have banks that specifically didn't take deposits from anybody - no cash in or out, so no tellers, no branches. Let the Federal Reserve or the Bank of England give a handful of providers a total lending limit, and then stand back and watch them pump away.

Insolvency? Loan-to-value not good enough? Raise the limits again, pump harder. Get a punter to overpay for one house and you increase the value of all the others in the street, so making their mortgages safer. And if the bank doesn't have to pay interest to depositors, it can charge as little as it likes for its loans.

I can't see the flaw here, any more than I can see the difference between a banker and a swindler.

I don't know why I didn't think of it before.

House prices underpinned by shortages, boosted by inflation?

The Centre for Economics and Business Research reckons house prices will steady next year and shoot up for three years after that, thanks to housing shortages and building project cancellations - reports The Grumbler.

"Real estate could become a very good investment and inflation hedge once the government starts seriously printing money," commented Jim from San Marcos (who still has a realtor's licence) after his July 27th post.

I hate computers

Currently I use Windows, like most people, and my experience of this is certainly like the picture on the left. No wonder there are so many Bill Gates jokes, e.g. "The president of Lotus walks into an elevator with a gun in his hand. In the elevator are: Saddam Hussein, Timothy McVeigh, and Bill Gates, but there are only two bullets in the gun! Who does he shoot? A: Gates, twice, to be sure."

I also have an ASUS laptop that has a nervous breakdown when I ask it to connect to the Internet and my printer at the same time. In fact, it's now objecting to my mouse as well. I half-suspect the power management system is compromised by some ASUS virus that informs Peking of my every keystroke; put that down to paranoia if you like, but we'll see what the history books say one day.

But is the Mac really as simple and reliable as the middle picture suggests? And is Linux really so powerful and jazzy? Before I throw this computer from some carefully-selected high place, I'd appreciate guidance on its replacement.

By the way, here's Daniel Bozet's original cartoon; I thought the one above looked unbalanced.

And here's some techno comment on BoingBoing, that obviously I don't quite understand.

If telephones were like this, I'd be using liveried runners.

Check memes with Snopes.com

My American brother and his wife put me on to Snopes.com, a service that sources and corrects rumours that spread through the Internet. One example is a very sharp, funny diatribe on the Middle East, allegedly by Dennis Miller, but actually adapted from this 2002 article by Larry Miller.

What have I learned?

• Meme alterations tend to add spite - compare the original with its viral successor
• I should include Snopes and Larry Miller in my blogroll

In the piece concerned, I particularly liked the imagined reversal of position between Jews and Arabs. I'm always grateful for a mental flip that lends me a new perspective.

USA $800 billion subsidy to Asian investors

Read Karl Denninger on how the Fed has been forced to prop up shares of Fannie Mae and Freddie Mac, to please foreign equity holders such as China.

Further comment from Mish.

The taxpayer pays all - and presumably we're looking to do something similar here, to keep the banking show on the road.

This may be the time when those predictions about the Dow hitting 9,000 and gold breaking through $1,200 start to come true.

Gold

Gold now below $900, heading perhaps for the $875 forecast by "Jesse" a couple of weeks ago. Will the second part of the prediction be proved correct, also?

Logical consistency

Also in today's Guardian's G2 section is an article titled "I became a Zen Buddhist nun," at the end of which is the invitation: "Do you have a story to tell about your life? Email it (no attachments, please)..."

Reading the Guardian

It's been years since I tried to read the Guardian. My favourite memory of it is Posy Simmonds' "Silent Three" cartoon strip, which I admire for the artist's control of her line, more than for its social comment.

This morning, on the paper run while the kettle was boiling, I caught sight of its trailer on the front page: "How the wealthy lost touch with the rest of us/Polly Toynbee" (actually, it's also by David Walker, though it doesn't say so there).

I thought, I'll grit my teeth and have a go. There must be some reason why teachers like me read this stuff. Here (in the G2 section) it is.

Fisk it yourself. Note the sly references to (ugh!) the Daily Mail and (ahhh!) how hard teachers work. Then note what isn't said, for example about Toynbee's own high income and wealth, foreign property etc.

And look at the unexamined implicit assumptions in statements like "...others deserve a share of that, too." Unless you are religious (and I include in that category anyone who talks about Man with a capital M), why should anyone care about anybody who's not a blood relation (and the ever-logical Mao didn't even do that)?

So I guess my gripe is that here we have a coldly commercial product pretending to morality; which perhaps I should admire for the artist's control of her line, more than for its social comment.

David Cameron: a flaw?

There was a moment - a minor incident - and I can't track it down. It was either Matthew Parris or Quentin Letts, watching Tony Blair perform in Parliament some years ago. The PM reacted scornfully to something he appeared to have heard from the Opposition benches, yet when the journalist asked his colleagues in the Press Gallery, nobody had heard that something. It seemed that Blair was simply indulging in brazen invention. A tiny incident, but revealing a character trait that has cost the country dearly.

In this week's Spectator, Charles Moore publishes an SMS text from a businesswoman friend, giving her immediate impressions of meeting David Cameron, and although she is clearly struck by the man's looks and personality, one little sentence jumped out at me: "Doesn't really listen." I think I know what she means, because it gels with how I read his body language every time I see him on the news: he is tightly focused on maintaining his grip on the Protean figure of Success, and will not be distracted. That has its dangers.

Breaking radio silence

How much debt does the USA have, compared to its income? According to Ned Davis Research, the previous all-time high was in the Depression of the 30s (265%); NDR's latest estimate is 350%, The Mogambo Guru reports.

So, inflation or deflation? The Mogambo Guru rants that only inflation (which he hates) can save us now. But in the first link above, Louis P. Stanasolovich comments:

High debt levels also have another side effect: disinflation. Because consumers and businesses have limited spending, they must retrench once they reach their saturation points. When the demand for goods and services diminishes due to the over-extension of credit, the result is disinflation.

In other words, we will have to live poorer - no matter what the currency does. We see in Zimbabwe that you can have billions and it won't buy you a square meal. What inflation can do, is disguise the problems for a while (as it did post-2000) - until the system breaks down completely. Who has the public spirit and grit to stop the charade now?

By the way (since The Mogambo Guru loves gold)... Krugerrand = going out to get more champagne.

Inflation, deflation, the world economy and freedom

This article by Matthew Beller on the Mises website tries to show how the US government can't "print its way out" of the present crisis.

The Federal Reserve controls the "monetary base" of physical currency and bank deposits, which represent only 15% of the money supply; the rest is bank lending. Currently, the banks are in a fright, so they are reducing credit, on which the economy depends. But if the Federal Reserve increases the monetary base, the banks' ability to multiply their deposits could lead to hyperinflation and the destruction of the dollar altogether. Hence the attempts to maintain confidence in the banking system instead, even if that means expensive financial support.

This isn't enough for the monetarists. They say the lending in the recent boom went on consumer spending, which encouraged producers to make too much of the wrong stuff and so the economy developed in the wrong way. The econo-Puritans say we should accept deflation because, although temporarily painful, it will rebalance the economy for a more sustainable long-term future.

However, nobody likes nasty medicine, so a political question is whether democracies will allow politicians to take timely corrective action. Past history suggests that we'll only vote for the treatment when we're half-dead, and even then, we'll curse the doctor afterwards.

My feeling is that this tendency to delay means that underneath the business cycle is a fatal linear trend, moving wealth and power to less democratic countries. When the world economy recovers, it may be on very different terms: for although (e.g.) China may suffer a setback as the Western consumer reduces spending, Chinese industrial capacity has been growing over recent years - not only the factories and tools, but equally importantly the skills base. At the upturn, the East will be well-placed to cater for reviving demand, while the West struggles to supply appropriately-skilled labour, and tries to buy back some of the industrial materials it had previously exported. And as the East industrialises, it will generate locally a greater proportion of world demand.

I cannot see how we can avoid becoming poorer, on average, than we have been in past decades, even if an elite in our society grows richer and more powerful (a phenomenon associated with more impoverished economies). We cannot rely on high-end production: China will address its quality issues, as Japan did in the 1950s. Nor can we be complacent about intellectual property rights, in a world where might makes right.

But China itself has deep problems - an growing and ageing population; an increasingly unbalanced demographic structure, thanks to attempts to limit family size; pollution; water shortgages; declining quality of farm land. The Chinese leadership faces a long-term challenge in dealing with unsatisfiable domestic expectations, which will tend to make it intransigent in its relations with foreign powers. The East-West contest may become characterized by desperation on both sides.

And so democracy in the West will come under pressure. In difficult times, people are thrown back on a network of social relationships and mutual expectations, but sudden, unreal access of wealth has tempted us to put our faith in the amassing of cash, and/or government intervention, to the detriment of agreed internal social control and support systems. When the system enters its failure phase, which Fischer ("The Great Wave") thinks may be starting, the social threads begin to snap: inflation, crime, family breakdown, war. The reification of the ties that bind us together tempts our government to maintain the social order through externalised means of surveillance and enforcement. Ultimately, the mismanagement of national budgets is a freedom issue.

Banks: the legal recriminations begin.

I wondered a while ago where bankers would flee when the reckoning came. Looks like the lawsuits are starting already.

For the gold bugs

"Jesse" does a chart suggesting the gold price could drop to $875 before taking off for $1,200 and upwards.

China shakes the steel world

Shen Wenrong, the billionaire who bought Dortmund's Phoenix steel plant and moved it to the Pearl River, is increasing his hold on the privately-owned sector of the Chinese steel industry, as reported in SteelGuru here.

Readers of James Kynge's "China Shakes the World" will recall that Wenrong acquired Phoenix in 2004 partly in order to get into production fast, but also because, having bought it at scrap valuation during the last steel recession, he would not be encumbered with the debts that would wipe out his rivals in the next one.

Which means that he's looking beyond the next recession. And when the recovery comes, where will the West's capacity be found? Those who say that the East's fortunes are bound up with those of the West, had better get new spectacles to correct their short-sightedness.

GSE losses "only $25 billion"

Bloomberg reports on the bailout plan. Only $25 billion? Phew - a couple of Senators were thinking maybe $1 trillion, as The Motley Fool's TMFSinchiruna points out.

Could I please have "only" 1% of the lower figure for my modest needs? You won't miss it - after all, look at what you haven't missed so far. I'd even write you a specially nice letter of thanks.