Friday, February 06, 2009
Go drugs!
Gary Becker thinks we should legalize and tax drugs. Look at how this approach has decimated alcohol and tobacco usage, for example.
And the joys to be had from drugs! As the Moroccan saying goes,"A pipe of khif before breakfast is worth a hundred camels in the courtyard." Though I think the Devils' Dictionary needs updating: we need slogans like, "A six-pack of wife-beater in the morning is worth a hundred business calls", "Sixty a day is worth death before sixty", "Dropping a tab is worth the risk of grinning at the backs of your hands for the rest of your life."
So what's it to be, Falstaff or the pain-in-the-mule Puritans?
I think it's to do with work. In the old days, the ordinary person couldn't afford (financially or otherwise) to be almost constantly intoxicated; now, most of us are richer than Roman Emperors: central heating, carpets, hot water, ice cream, multimedia entertainment 24/7, no starvation if you don't work. Once, the Tree of Idleness was for the few surviving old men, who were past it; now, while we still have The Energy of Slaves (ie. machines and fossil fuels) to do the hard stuff for us, we don't know what to do with ourselves.
Freedom makes you fall apart.
And the joys to be had from drugs! As the Moroccan saying goes,"A pipe of khif before breakfast is worth a hundred camels in the courtyard." Though I think the Devils' Dictionary needs updating: we need slogans like, "A six-pack of wife-beater in the morning is worth a hundred business calls", "Sixty a day is worth death before sixty", "Dropping a tab is worth the risk of grinning at the backs of your hands for the rest of your life."
So what's it to be, Falstaff or the pain-in-the-mule Puritans?
I think it's to do with work. In the old days, the ordinary person couldn't afford (financially or otherwise) to be almost constantly intoxicated; now, most of us are richer than Roman Emperors: central heating, carpets, hot water, ice cream, multimedia entertainment 24/7, no starvation if you don't work. Once, the Tree of Idleness was for the few surviving old men, who were past it; now, while we still have The Energy of Slaves (ie. machines and fossil fuels) to do the hard stuff for us, we don't know what to do with ourselves.
Freedom makes you fall apart.
What goes up
Todd Harrison of Minyanville is predicting a big stockmarket rally soon (htp: Kirk Report). Others (Elliott Wave followers, for example) have suggested this will happen, but as part of a longer pattern of overall decline. In other words, a "bear market rally".My feeling? This is (a) a market for bold day traders, and (b) an opportunity for some less adventurous types to cash-out at a less dismal price than they've been offered recently. In fact, I think this situational psychology is part of the process that will help limit the rise and confirm the downward trend.
Restoration, not revolt
"What is a cynic? A man who knows the price of everything and the value of nothing," says Lord Darlington in Wilde's Lady Windermere's Fan. That perfectly describes the man who doesn't understand inflation.
Inflation is The Mogambo Guru's bete noire, and he gives us another comedy riff on that today. His principal cure for it is gold, the stock in trade of another ranter, Jim Willie, who sees the price of the yellow metal breaking out in various currencies (it's soared in sterling, for example).
Both men habitually connect gold, the US Constitution and the decayed professional morals of the politico-judicial elite, and try to stimulate the people to restore the old, good order. In short, they are prophets, and there's plenty more out there at this time.
For it is a sign of societal stress that ranters, dreamers and revolutionaries begin to drag out their soap boxes and declaim to passers-by. We had it in the Old Testament, the English Civil War, the American Revolutionary War and most other times that the world was turned upside down.
If buttercups buzzed after the bee
If boats were on land, churches on sea
If ponies rode men and grass ate the cows
And cats should be chased to holes by the mouse
If the mammas sold their babies to the gypsies for half a crown
Summer were spring and the t’other way round
Then all the world would be upside down
There is a difference between civil war, and the revolt of colonies from their distant parent. Having said that, the crisis is now cracking the cement between the States and the Federal Government, as we see in New Hampshire and elsewhere. America, remember history and avoid secessionary talk.
The results of revolution are rarely pretty. Norman Cohn's famous book , about the horrifying aftermath of prophet episodes in the Middle Ages, shows that once the mix is brought to the boil, it becomes very volatile. The outcome is often not what the prophet expected; and always, the people suffer. Rather than overthrow our rulers, it would be far better (if possible) to make them see the danger to us all of continuing their course, and have them turn back.
But can they see it? Do they know the difference between price and value? Will they permit the theft of real wealth by inflation? Or is it, worse still, their intention?
The best we can hope for, is that our leaders are not cynics, and so do not need correction from dangerous idealists.
Inflation is The Mogambo Guru's bete noire, and he gives us another comedy riff on that today. His principal cure for it is gold, the stock in trade of another ranter, Jim Willie, who sees the price of the yellow metal breaking out in various currencies (it's soared in sterling, for example).
Both men habitually connect gold, the US Constitution and the decayed professional morals of the politico-judicial elite, and try to stimulate the people to restore the old, good order. In short, they are prophets, and there's plenty more out there at this time.
For it is a sign of societal stress that ranters, dreamers and revolutionaries begin to drag out their soap boxes and declaim to passers-by. We had it in the Old Testament, the English Civil War, the American Revolutionary War and most other times that the world was turned upside down.
If buttercups buzzed after the bee
If boats were on land, churches on sea
If ponies rode men and grass ate the cows
And cats should be chased to holes by the mouse
If the mammas sold their babies to the gypsies for half a crown
Summer were spring and the t’other way round
Then all the world would be upside down
There is a difference between civil war, and the revolt of colonies from their distant parent. Having said that, the crisis is now cracking the cement between the States and the Federal Government, as we see in New Hampshire and elsewhere. America, remember history and avoid secessionary talk.
The results of revolution are rarely pretty. Norman Cohn's famous book , about the horrifying aftermath of prophet episodes in the Middle Ages, shows that once the mix is brought to the boil, it becomes very volatile. The outcome is often not what the prophet expected; and always, the people suffer. Rather than overthrow our rulers, it would be far better (if possible) to make them see the danger to us all of continuing their course, and have them turn back.
But can they see it? Do they know the difference between price and value? Will they permit the theft of real wealth by inflation? Or is it, worse still, their intention?
The best we can hope for, is that our leaders are not cynics, and so do not need correction from dangerous idealists.
Thursday, February 05, 2009
Stock market could halve again - more evidence
I've been following this alarming idea recently. Now Russell Napier chips in, citing Tobin's Q as a measure to predict a further 55% stockmarket decline within the next five years (htp: Financial Sense).
I had a look at Tobin's Q last April. Are we coming to some gloomy consensus - except for Karl Denninger, who fears it could be worse?
I had a look at Tobin's Q last April. Are we coming to some gloomy consensus - except for Karl Denninger, who fears it could be worse?
Learned fools
Forbes suggests that college education can be financially ruinous. The association of education with wealth only works when both are in limited supply, otherwise the Hedge Schools would have made Irish peasants rich. A silk hat does not make you a Bradford millionaire.
A doctor friend often used to quote some factoid that if the average doctor had left school at 16 and become employed in some capacity suited to his abilities, his hard-studying medical counterpart would never catch up in terms of total lifetime income earned.
I've heard it said that after the Revolution, the French trained thousands more lawyers, in order to devalue the profession.
Man to the plough;
Wife to the cow;
Girl to the yarn;
Boy to the barn;
And your rent will be netted.
Man tally-ho;
Miss piano;
Wife silk and satin;
Boy Greek and Latin;
And you'll all be Gazetted.
A doctor friend often used to quote some factoid that if the average doctor had left school at 16 and become employed in some capacity suited to his abilities, his hard-studying medical counterpart would never catch up in terms of total lifetime income earned.
I've heard it said that after the Revolution, the French trained thousands more lawyers, in order to devalue the profession.
Man to the plough;
Wife to the cow;
Girl to the yarn;
Boy to the barn;
And your rent will be netted.
Man tally-ho;
Miss piano;
Wife silk and satin;
Boy Greek and Latin;
And you'll all be Gazetted.
Global monetary inflation and the threat to peace
Last week, I suggested that we could be entering an era of competitive currency devaluation. Now, Mish sees it happening in Russia, Mexico, Indonesia - and hints of intervention in Japan. The Canadian National Post predicts a drop in the US dollar, too (htp: Jesse).
Can the Euro -already strained by member countries moving in different directions - take this pressure? A friend told me recently of an old restaurant incident involving people he knew, where first one "did a runner", then another, so that the last man left at the table was stuck with the whole bill. This is a game that punishes the virtuous.
Gold is supposed to be a haven in such conditions, but is already above its long-term post-1971 trend, as I show here. So the bold investor might buy in now, knowing it's high but hoping it'll go higher (or fearing that other things will go lower still). Others say silver, or oil, or agricultural land. "The best lack all conviction, while the worst / Are full of passionate intensity."
These are tricky times. As in revolutions generally, it's hard to see which faction will be victorious, but loss, injustice and confusion are certain: "we are here as on a darkling plain / Swept with confused alarms of struggle and flight / Where ignorant armies clash by night."
This may seem over-dramatic; but when money ceases to be dependable and deadly dull, everything else becomes much too exciting. If the middle classes suddenly find their savings wiped out by inflation, their assets generally devalued and their businesses and employment under threat, watch out.
Can the Euro -already strained by member countries moving in different directions - take this pressure? A friend told me recently of an old restaurant incident involving people he knew, where first one "did a runner", then another, so that the last man left at the table was stuck with the whole bill. This is a game that punishes the virtuous.
Gold is supposed to be a haven in such conditions, but is already above its long-term post-1971 trend, as I show here. So the bold investor might buy in now, knowing it's high but hoping it'll go higher (or fearing that other things will go lower still). Others say silver, or oil, or agricultural land. "The best lack all conviction, while the worst / Are full of passionate intensity."
These are tricky times. As in revolutions generally, it's hard to see which faction will be victorious, but loss, injustice and confusion are certain: "we are here as on a darkling plain / Swept with confused alarms of struggle and flight / Where ignorant armies clash by night."
This may seem over-dramatic; but when money ceases to be dependable and deadly dull, everything else becomes much too exciting. If the middle classes suddenly find their savings wiped out by inflation, their assets generally devalued and their businesses and employment under threat, watch out.
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