Candidate's exam response, reported in a Monmouthshire village magazine:
Q. What is artificial insemination?
A. When the farmer does it to the bull instead of the cow.
Sunday, October 10, 2010
Saturday, October 09, 2010
Gold is merely the thermometer of inflation?
The vitally important inflation / deflation debate continues. In my last post, I relayed one view, which is that the very rich and powerful will not permit runaway inflation, because it erodes the value of money and the rich have most of the money.
As a corrective, I give below the latest video from the National Inflation Association (NIA), a US group that has warned about credit growth and inflation for a long time. Their motivation appears to be patriotic - a return to sound money as part of what makes individual prosperity and freedom possible.
The NIA argues that the rise in the price of gold is not because of mass speculation, for although a lot of gold has been bought recently, a lot has also been sold. What may be happening now is a transfer of privately-held gold from relatively poor people who need to raise money, to investors who are looking ahead to a time when cash will rapidly depreciate. Think of all those gold-buying outlets (or inlets) you now see on your High Street. As someone said a while ago, the mania will be when those shops start selling you gold instead of buying it from you.
As many have now said, trading nations around the world are devaluing their currencies to keep pace with one another, for fear that their exports will be hit if they don't. So the soaring value of precious metals can be seen as a better indication of inflation than currency exchange rates.
You may think that if currencies are depreciating, then surely prices of goods and services in general must also increase rapidly, and we don't see this yet. But we are in a recession and the threat of unemployment is keeping down wage demands; the self-employed are willing to lower their rates, perhaps especially if paid in cash; and traders in items such as cars and computers are offering discounts to clear stock and keep paying their overheads.
However, the NIA and others say there will come a time when the system begins to crack. Governments are buying their own debt, or lending money to banks to do it for them, to maintain the appearance of normality and control; this can't go on forever. The prediction is that we will get either default or hyperinflation. So the gold bugs say buy gold, silver, maybe oil and agricultural commodities etc - anything tangible that can't be multiplied at will.
I don't think (feel) that the turning point is imminent, because of recession and the attempts by some governments (such as the UK) to retrench. But I fear that these last-ditch attempts are untimately doomed to partial or complete failure. In that case, the gold bugs will probably be vindicated.
The other thing I'd say, as I've said before, is that if the system really does come under severe strain, the price of gold may not be the most important of your concerns. If you accept the inflationists' thesis, you will be quietly making preparations to cope with emergencies of different kinds.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
As a corrective, I give below the latest video from the National Inflation Association (NIA), a US group that has warned about credit growth and inflation for a long time. Their motivation appears to be patriotic - a return to sound money as part of what makes individual prosperity and freedom possible.
The NIA argues that the rise in the price of gold is not because of mass speculation, for although a lot of gold has been bought recently, a lot has also been sold. What may be happening now is a transfer of privately-held gold from relatively poor people who need to raise money, to investors who are looking ahead to a time when cash will rapidly depreciate. Think of all those gold-buying outlets (or inlets) you now see on your High Street. As someone said a while ago, the mania will be when those shops start selling you gold instead of buying it from you.
As many have now said, trading nations around the world are devaluing their currencies to keep pace with one another, for fear that their exports will be hit if they don't. So the soaring value of precious metals can be seen as a better indication of inflation than currency exchange rates.
You may think that if currencies are depreciating, then surely prices of goods and services in general must also increase rapidly, and we don't see this yet. But we are in a recession and the threat of unemployment is keeping down wage demands; the self-employed are willing to lower their rates, perhaps especially if paid in cash; and traders in items such as cars and computers are offering discounts to clear stock and keep paying their overheads.
However, the NIA and others say there will come a time when the system begins to crack. Governments are buying their own debt, or lending money to banks to do it for them, to maintain the appearance of normality and control; this can't go on forever. The prediction is that we will get either default or hyperinflation. So the gold bugs say buy gold, silver, maybe oil and agricultural commodities etc - anything tangible that can't be multiplied at will.
I don't think (feel) that the turning point is imminent, because of recession and the attempts by some governments (such as the UK) to retrench. But I fear that these last-ditch attempts are untimately doomed to partial or complete failure. In that case, the gold bugs will probably be vindicated.
The other thing I'd say, as I've said before, is that if the system really does come under severe strain, the price of gold may not be the most important of your concerns. If you accept the inflationists' thesis, you will be quietly making preparations to cope with emergencies of different kinds.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
Wednesday, October 06, 2010
Down with the Bolligarchs!
"Governing is quite simple, really," remarked Kameronski. "It's merely a matter of knouting the krestyan and taxing the burzhuaznyĭ. Some," and he looked about him meaningfully as a dread silence enveloped the room, "fail to understand the necessity of firmness."The figure on the right in the last image is that of the hapless Osbornski, purged with other moderates and revisionists in the ensuing Party reorganisation. His wilier successor Clarkov, known as "old Stone-Liver", survived until the latter half of the decade.
Saturday, September 25, 2010
The Thin Geek Line
I have just finished reading "The Ultimate Utility of Nonutility", by Lisa Colletta (Academe magazine, September-October 2010).
In it, she writes the following:
"A liberal mind is one which is independent and disinterested, aware of the history of thought, action, and reaction, and understanding of ambiguity. The liberal arts are not valuable because they are useful politically or vocationally. They are valuable because they are what constitutes real knowledge.
...I would claim that real knowledge of the real world is emphatically not the domain of the professional fields. The professions teach students skills, skills that may indeed be useful, but are too often uniformed by knowledge or thoughtfulness."
She is not alone in her dismissive attitude towards the sciences and engineering. I have seen similar opinions expressed by David Brooks of The Washington Post, Simon Jenkins of the UK's The Guardian, several other political commentators, and all too many university professors.
They remind me of the ancient Greek philosophers, debating the virtues of democracy, while surrounded by slaves and servants who do the actual work.
Apparently, her 'real' knowledge and grasp of the ephemeral nature of human constructs have failed to make her aware of the frailty of our whole civilization.
Were it not for the excess food and other resources provided by the Agricultural, Scientific and Industrial Revolutions, our comfortable lives would not be possible, the lofty ideals of the Enlightenment would be so much empty rhetoric, and democracy as we know it would not exist. In fact, without the relatively small number of technical experts, the best estimates are that 95% of humanity would starve to death within a few months.
Let her ponder that the next time she pontificates to her students.
In it, she writes the following:
"A liberal mind is one which is independent and disinterested, aware of the history of thought, action, and reaction, and understanding of ambiguity. The liberal arts are not valuable because they are useful politically or vocationally. They are valuable because they are what constitutes real knowledge.
...I would claim that real knowledge of the real world is emphatically not the domain of the professional fields. The professions teach students skills, skills that may indeed be useful, but are too often uniformed by knowledge or thoughtfulness."
She is not alone in her dismissive attitude towards the sciences and engineering. I have seen similar opinions expressed by David Brooks of The Washington Post, Simon Jenkins of the UK's The Guardian, several other political commentators, and all too many university professors.
They remind me of the ancient Greek philosophers, debating the virtues of democracy, while surrounded by slaves and servants who do the actual work.
Apparently, her 'real' knowledge and grasp of the ephemeral nature of human constructs have failed to make her aware of the frailty of our whole civilization.
Were it not for the excess food and other resources provided by the Agricultural, Scientific and Industrial Revolutions, our comfortable lives would not be possible, the lofty ideals of the Enlightenment would be so much empty rhetoric, and democracy as we know it would not exist. In fact, without the relatively small number of technical experts, the best estimates are that 95% of humanity would starve to death within a few months.
Let her ponder that the next time she pontificates to her students.
Tuesday, September 21, 2010
Excellent article by Charles Hugh Smith
Charles Hugh Smith explains the current mess in terms of class warfare and entrenched self-interest. In a nutshell:
US citizens have to pay US tax on their earnings anywhere in the world, but if they renounce citzizenship and have over $2 million in net assets (including income-producing assets such as pensions), there is still a one-off ransom tax to pay before they leave.
If they have less than $2 million, they may not have enough to live the idler's dream abroad.
The result is that fewer than 750 Americans chose the escape route in the last year.
But Smith's article is very useful for seeing how the parts of the machine work, and why it resists reconstruction.
- The wealthiest top 1% have influenced the tax system so that their investment income is barely touched, especially when there are loopholes and shelters they can use. They and their wealth can stay in the US.
- The bottom 60% depend partly or wholly on what they receive in benefits from the system. They have to stay in the US.
- This puts the burden on the middle-to-upper income-earners. But if the burden gets too heavy, the top half of those earners may choose to flee the country. If so, the system breaks down.
US citizens have to pay US tax on their earnings anywhere in the world, but if they renounce citzizenship and have over $2 million in net assets (including income-producing assets such as pensions), there is still a one-off ransom tax to pay before they leave.
If they have less than $2 million, they may not have enough to live the idler's dream abroad.
The result is that fewer than 750 Americans chose the escape route in the last year.
But Smith's article is very useful for seeing how the parts of the machine work, and why it resists reconstruction.
Tuesday, September 14, 2010
What inflation? "Them" won't let it happen
Inflation in food and soon, it is reported, in clothing, is owing to factors such as bad harvests, rising energy costs and government export restrictions.
But if you agree with the monetarists that inflation is caused by the expansion of money and credit, then until people and governments have paid-down (or defaulted) enough debt to feel confident about spending again, we are in a deflationary environment and whoever holds money is going to do well.
That said, there is a subset of monetarists who think that somehow, governments will force-feed money into the system to create inflation, or hyperinflation.
While this is technically possible, people like Mike Shedlock counter that the ruling elite will not allow this to happen, since it would destroy their wealth.
It's a rigged game, not Russian roulette. So barring some catastrophic default, we've got to sweat it out through a new Depression era.
Save money.
"Commercial real estate lags residential and residential real estate has not yet bottomed, and indeed may not bottom for years." - Mike Shedlock
"The most important indicator is “credit growth” or lack thereof. Everything else follows... There is no credit growth, and therefore, according to my long-standing theory, there can be no sustainable economic growth unless and until miraculously credit starts growing. However, given current policies in Washington, that seems unlikely at this time." - Bert Dohmen (htp: Karl Denninger)
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
But if you agree with the monetarists that inflation is caused by the expansion of money and credit, then until people and governments have paid-down (or defaulted) enough debt to feel confident about spending again, we are in a deflationary environment and whoever holds money is going to do well.
That said, there is a subset of monetarists who think that somehow, governments will force-feed money into the system to create inflation, or hyperinflation.
While this is technically possible, people like Mike Shedlock counter that the ruling elite will not allow this to happen, since it would destroy their wealth.
It's a rigged game, not Russian roulette. So barring some catastrophic default, we've got to sweat it out through a new Depression era.
Save money.
"Commercial real estate lags residential and residential real estate has not yet bottomed, and indeed may not bottom for years." - Mike Shedlock
"The most important indicator is “credit growth” or lack thereof. Everything else follows... There is no credit growth, and therefore, according to my long-standing theory, there can be no sustainable economic growth unless and until miraculously credit starts growing. However, given current policies in Washington, that seems unlikely at this time." - Bert Dohmen (htp: Karl Denninger)
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
Sunday, September 12, 2010
Future issues
White collar work in the West is threatened by lightspeed worldwide communication with countries where wage rates are dramatically lower; and by increasingly powerful computers and programs.
When all but manual and menial work simply and permanently isn't there anymore for very large numbers of people, the moral connexion between work and income is weakened. The issue then will be distribution of wealth: who gets given what, and with what justification?
The embers of socialism are still hot.
When all but manual and menial work simply and permanently isn't there anymore for very large numbers of people, the moral connexion between work and income is weakened. The issue then will be distribution of wealth: who gets given what, and with what justification?
The embers of socialism are still hot.
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