QE and inequality

"Pension Pulse" blog author and corporate pensions expert Michael Kolivakis includes in his latest post this Bloomberg interview with Marc Faber, the no-nonsense guru of the bears:



Guru-ji remains firmly convinced that the longstanding policy of monetary inflation will ultimately end in systemic collapse.

Faber lives in northern Thailand, which appears to be socially stable and with a good agricultural base and arable land-to-population ratio, so even if this catastrophe arrives during his lifetime he and his family may stand a chance. Besides, he is also close to several international borders and I wonder whether that was also a factor in his choice of domicile.

Unfortunately, I live in Britain, a hugely overcrowded country whose rulers have allowed scarcely-restricted immigration, unrealistic levels of social benefits and the rapid concreting-over of some of the world's finest farmland. Most survivalist strategies here (other than a bit of hoarding to cover short-term disruption) are simply fantasies.

But what Faber says here about the interim social effects of "money-printing" is put very clearly and starkly. The cash wave reaches institutions first and then the pockets of the well-to-do. Instead of using it to set up businesses and create employment, they look around for existing businesses to grab and merge, thus creating more job losses and depressing workers' wages. Similarly, the property bubble burst and led to the dispossession of the poorer sort, who now do not have access to credit and cannot buy back into the housing market at today's lower prices; so the better-off snap up the houses and rent them out to people who were evicted - and rents are going up.

According to minority economists like Steve Keen, classical economic theorists simply don't understand debt and monetary inflation. Their models assume that if more money comes into an economy, prices go up but so do wages, so no big deal. If they were geographers, they would look at the ocean as if it were a lake on a windless summer's day, and have no knowledge of tides, freak waves and tsunamis.

Traders know different, and if ever we can prove bankers do too, then maybe we will finally get the criminal trials needed to clean up the system. Because this system has become a machine for oppressing the poor and pushing down the middle earners. I tried to show the effects of so-called "free trade" in a graphic a while ago, and before I get trollfarts about socialism I'd like to point out that real free-marketers like Max Keiser attack it from the opposite angle.

Easy Riders

Why have these two never been seen together?

As the LA Times says of one of them, he "... is both a charmer and a cliche. Passionate about truth [...] and a mendacious hypocrite in real life."

The other is a world-class performer.

Europe is paralyzed by personal debt

Inspect data here.

INVESTMENT DISCLOSURE: Mostly in cash (and index-linked National Savings Certificates), but now planning to build up some reserves of physical gold via regular saving.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content.

Europe is paralyzed by personal debt

Inspect data here.

I burned my mother-in-law's teeth

We were in Ireland, up in the Galtee Mountains near Clonmel, where my wife's mother grew up. The holiday cottage had its own water supply, whose peat stain got through the filter on our water jug, and in the old fireplace we burned peat brickettes bought from the local garage. I love an open fire, and my motto for anything finished with is "it'll burn".

Peace, sunshine, fresh air. We should have bought a place there before the market went crazy.

I say fresh air, but the farmowner's dog (we called him Fogarty) could be detected going past a high window, by his crusted-cowshit smell. A genial animal, he would roll over when he saw us, displaying the impressive collection of scars on his belly and genitalia earned by jumping over barbed wire fences. Only the threat of sprayed hosewater would send him off on his way.

Morning. Breakfast over, the peat log dying to embers, my wife and her mother getting ready for the car ride into town to get their hair done. I tidied up and grabbed a crumpled paper tissue off the table and flung it on the fire. There's a delicious pause before paper darkens, then blooms into flame.

Only this time it was a blue flame. Wrapped in the tissue was a dental plate for the two false teeth my mother-in-law put on for show, though they weren't very good for the business of eating, which is why she had them out more often than in.

The flame brightened and elongated. It was far too late to save them.

She told the hairdresser, who collapsed, barking with laughter, then staggered across the passageway to the next shop: "Hey Jim, here's a feller burned the Mammy's teeth!"

I felt... accepted.

She passed away some years ago, but my wife says she's forgiven me by now.

George Orwell and sham security

UPDATE (15 September 2012): the camera has now been removed - I don't know why, or for how long.

"In general you could not assume that you were much safer in the country than in London. There were no telescreens, of course, but there was always the danger of concealed microphones by which your voice might be picked up and recognized..."

 

George Orwell, Nineteen Eighty-Four.

 

Left: suburban Birmingham (UK), 9 September 2012

 

This camera was installed recently - and quietly - near to where I live.

 

Like so many things these days, it has its own little slogan: Making Birmingham Safer.

 

Not true. Last Sunday afternoon, the burglar alarm went off on a house across the road. I called the police, who told me they wouldn't come out unless I saw something suspicious; it could, after all, explained the policewoman on the other end of the line, have been triggered by a cat jumping onto a windowsill or something.

 

The response was much as I had expected, but I'd made the call to placate a couple of little girls who'd noticed the noise while trampolining in their garden next door.

 

When there's a real burglary, all you get is a crime number so you can claim on your insurance. And maybe a crime prevention pack from Victim Support officers who want to come in and eat your biscuits (I told them what I wanted was the burglars' heads cut off with a blunt knife, but their reaction suggested that my wish was inappropriate).

 

On the Monday, I returned from work to find a note through the door. It was from the police, asking for witnesses to an attempted robbery on our street on Sunday evening (c. 10:30).

 

No connection? Or would B not have happened if Birmingham's finest troubled themselves to deal in person with A, and show a regular physical presence in our area?

 

What use are cameras? Until burglars and muggers go around with numbers on their chests there'll be no flash-flash-you're-caught, like speeding motorists.

 

I suppose the police could upgrade to automatic face recognition software - but with all its Big Brother potential, that's a cure worse than the disease. Besides, criminals would find ways round: Andy McNab's novels explain how you go into a charity shop, buy a change of gear and put a peaked cap on your head and hey presto, cyber-following is foiled.

 

So what is all this? False reassurance, or an excuse to tighten the snooper's noose round the citizenry in general?

 

Or is it simply easier and safer for the cops to shuffle papers and handle calls from ninny householders who imagine we're still in an age when collars were felt, naughty kids' ears clipped and the bobby would tell you the time? Clock on, clock off and roll on retirement?

Ripped off by pump prices

Americans complain about the high cost of fuel, but compared to us Brits they're sitting pretty. Below (left) is a snapshot of a widget found on Max Keiser's site, where you can check regularly and grind your teeth.

To convert from (US dollars per US gallon) to the current British equivalent (i.e. French Revolutionary decimal pence per French Revolutionary litre), simply divide by 6.

Or 6.058595, if you want to be more exact. Here's a sample based on the latest prices and exchange rates - Brits are paying almost exactly double:













INVESTMENT DISCLOSURE: Mostly in cash (and index-linked National Savings Certificates), but now planning to build up some reserves of physical gold via regular saving.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content.