COLLECTIVE MADNESS


“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Monday, June 04, 2012

Maybe it’s time for Desert Rat’s Platinum Trillion Dollar Coins


Global slump alert as world money contracts

Growth of the world money supply has dropped to the lowest level since the financial crisis of 2008-2009, heralding a severe economic slowdown later this year unless authorites rapidly take action.

In this photo illustration a one Euro coin stands on a map of Brussels on December 9, 2011 in Berlin, Germany
Real M1 for the G7 economies and leading E7 emerging powers peaked at 5.1pc in November and has since plunged to 1.6pc in Apri Photo: Getty Images
The latest data show that the real M1 money supply – cash and overnight deposits – for China, the eurozone, Britain and the US has been contracting since the early Spring. Any further falls risk a full-blown global recession.
Clear signs of trouble are emerging in the US, until now the last bastion of strength. The New York Institute of Supply Management said its ISM business index – a proxy for business demand – flashed a "screeching halt" in May, crashing to 49.9 from 61.2 in April, where anything below 50 denotes contraction. Unemployment is rising again after grim jobs data for April and May, indicating that the economy may have fallen below stall speed.
Central bank governors and finance ministers from the G7 bloc are to hold an emergency teleconference call on Tuesday to grapple with Europe's escalating crisis. There is mounting anger in North America and Asia over the failure of the Europeans to use their vast resources to contain the brushfire in Spain.
The world money data collected by Simon Ward at Henderson Global Investors show that real M1 for the G7 economies and leading E7 emerging powers peaked at 5.1pc in November and has since plunged to 1.6pc in April. The data explain why commodity prices are falling hard, with Brent crude down to a 16-month low of under $97 a barrel.
China's money data are falling at the fastest pace since records began. The gauge – six-month real M1 – gives advance warning of economic output half a year ahead. "Europe needs to start quantitative easing [QE] immediately and China must ease policy," said Mr Ward.
The Americans may act first. Goldman Sachs expects Federal Reserve chair Ben Bernanke to open the door for QE in testimony on Thursday.
Stock markets rallied in Madrid and Milan led by bank shares on rumours of an EU plan to recapitalise banks directly with funds from the EU bail-out machinery.
Olli Rehn, the EU economics chief, said use of the European Stability Mechanism to bail out lenders was a "serious possibility", adding that it was imperative to "break the link between banks and sovereigns".
However, there is no sign yet that Germany will be willing to drop its veto on such action, viewed by Berlin as the start of debt mutualisation. Chancellor Angela Merkel crushed talk of an instant "banking union" after meeting commission president Jose Barroso, saying their could be no quick fix. She called instead for EU banking supervision as a "mid-term goal".
Her spokesman said any options that "resemble eurobonds" are for the distant future. "It's up to national governments to decide whether they want to avail themselves of aid. That also applies to Spain," he said.
Use of the ESM for bank bail-outs would meet fierce resistance in the German, Dutch and Finnish parliaments. A senior EU official said even Germany's Social Democrats are cooling on eurobonds. "They looked at the polling data and shivered. The German people are not willing to send money into a bottomless pit," he said.

44 comments:

  1. With interest rates as low as they have ever been, falling demand, rising unemployment and genuine gaps in the infrastructure, why not pursue toll or fee paying projects? If the annual return on any project is greater than 2%, you get the project for free and a huge boost to the economy. What am I missing?

    On hardwood reforestation projects, you can expect an annual rate of return of 9%. Fund them on federal land at 1% and have the surplus fund social security by using federal land. Reforest the river banks of the Mississippi and save untold billions in flood damage.

    ReplyDelete
  2. Here is another infrastructure program that will cost nothing to taxpayers and create jobs and wealth

    One year after adopting an ambitious 10-year capital program, the (NJT)Authority gets to work on two important widening programs.

    This was the year when the shovels met the ground at last on two programs critically important to the future of New Jersey’s toll roads – the widenings of the New Jersey Turnpike and the Garden State Parkway. After years of planning, engineering and environmental permitting, construction began and formal groundbreaking ceremonies were held for both programs early in the summer.

    The widening programs were among 35 projects included in the 10-year capital plan the Turnpike Authority adopted in October of 2008. The Authority raised $1.75 billion through bond sales in 2009 to start construction on the widenings and other projects in the capital plan. The 2009 bond sales were the first in a series of sales expected to take place over the next several years to fund the $7 billion capital plan.

    The Turnpike widening will be the largest expansion of Turnpike capacity since the toll road opened in 1951. One-hundred and seventy lane miles will be added over a 35-mile stretch that runs through 11 municipalities in Burlington, Mercer and Middlesex counties.

    When the program is completed, three lanes will have been added in each direction between Interchange 6 and Interchange 8A and one lane in each direction between Interchange 8A and Interchange 9. The dual/dual configuration familiar to those who travel on the northern parts of the Turnpike will be extended south to Interchange 6.

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  3. I am not talking food stamps, teacher salaries or free dinners in the schools. What we need is about $3 Trillion in bond financed fee for use projects. The income generated would increase federal revenues by $750 Billion in ordinary income and at current interest rates cost the taxpayers nothing. The bonds would be retired out of revenue. This is far preferable to paying people to sit on their more than ample behinds doing nothing.

    Again, I am not talking about Obama style transfer payments but real projects including domestic energy that will pay rent or collect tolls or fees. A new national interstate highway for trucks only would be a great start.

    ReplyDelete
  4. ($750 Billion in ordinary income taxes) 25% of $3 Trillion.

    ReplyDelete
  5. Our recent audience:

    Romania Iasi
    22
    United States Rochester, Michigan
    23
    Poland Warsaw, Warszawa
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    Canada Toronto, Ontario
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    United States Byram, Mississippi
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    Unknown
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    Denmark Thisted, Viborg
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    Germany
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    United States Ostrander, Ohio
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    United States
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    Australia Gatton, Queensland
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    United Kingdom Loughborough, Leicestershire
    33
    United States Sunnyvale, California
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    United States Honolulu, Hawaii
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    United States
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    Unknown
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    United States Rochester, Michigan
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    Unknown
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    Hungary Budapest

    ReplyDelete
  6. Looks like about 40% non US visitors. And by the way fareed signed on from Israel.

    ReplyDelete
    Replies
    1. .

      From the JP,

      A new poll by the Netanya Academic College shows 52% of Israeli opposing an Israeli strike on Iran, while 48% support it.

      No Consensus Among Israelis

      .

      Delete
  7. Think this thing through in the context of "peak oil," and it starts to make sense.

    ReplyDelete
  8. The only interesting question, now, is "who's next?" Is it us, or is it China?

    I think it might be China.

    ReplyDelete
  9. Or, it might just be Europe, Brazil, India, and Russia, leaving the U.S., Canada, Australia, and China standing for awhile.

    ReplyDelete
  10. Replies
    1. Japan is toast.

      Powered out.

      Brown lights.

      Toast.

      b

      Delete
  11. There is an interesting thought. An interstate highway system and structure set up for natural gas or ethanol fuel only vehicles. Synergy.

    ReplyDelete
    Replies
    1. Dr. Bill has been pushing that idea for years.

      All the fault of 'big oil' and the Republicans.

      Bastards.

      Whole transportation system is toast.

      Because of them.

      We need Ike back. He built the interstate system. He could fix it.

      b

      Delete
    2. .

      Was that Dr. Bill or Mr. Bill?


      .

      Delete
  12. You sound like that English officer in Hemingway, we're buggered, they're buggered, everybody's buggered. And they were too, all buggered.

    Obama is toast.

    Iran will be toast.

    We have a major storm warning. We will be hailed out toast here in half hour.

    Only the squirrels will be ok.

    b

    ReplyDelete
  13. I'm not big on more highways. The cars will, of necessity, get smaller, and more of the freight will go by rail.

    We do need the ethanol, though.

    A refinery in every county would be a good start.

    ReplyDelete
  14. Look out Nintendo Co., Microsoft Corp. is preparing its response to the Japanese company's next-generation console, a technology it calls "SmartGlass."

    ...

    SmartGlass, Microsoft says, will allow a tablet or smartphone to stream media to a big screen controlled by the Xbox console. It also can augment videogames with additional information such as team formations in a sports game.

    ReplyDelete
  15. Now here's an article that makes a day--

    Pisser explodes, soaks Press Corp -

    http://www.nationaljournal.com/congress/erupting-urinal-soaks-house-press-gallery-20120604

    heh :)

    b

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  16. Not so, however, early on June 4, 1942, when the loss of Midway seemed likely, the loss of Hawaii seemed probable, and attacks on the West Coast of the United States or the Panama Canal seemed all too possible.

    One can read the accounts and conclude that the fortunes of war (read: luck) went the Americans’ way. Or one can read more closely and see that while the Americans may have gotten some breaks, they made the most of them.

    What John Keegan has called “the most stunning and decisive blow in the history of naval warfare” was, above all, a victory of spirit.


    Victory At Sea

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  17. While most Britons will be dragging their weary bodies back into work tomorrow morning, Mandy Bailey will be excitedly rising from her bed hours before dawn like a child at Christmas to haul a telescope up a hill.

    ...

    In past centuries the transit of Venus provided an invaluable opportunity to estimate the Earth's distance from the Sun. This was done by comparing variances in how long the transit lasted when viewed from different places on the Earth's surface.

    ...

    "It's like if you put your finger out in front of you and you close one eye and then close the other one, what you see behind it is slightly different – the parallax effect," she added.

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  18. Nope. But I have probably stayed at every Motel 6 along I-5 between San Diego and Sacramento.

    ReplyDelete
  19. "The main goal [of Hemp History Week] is to try to bring back hemp farming in the United States again," explains Eric Streenstra, President of the nonprofit advocacy group Vote Hemp.

    Once hailed as a "New Billion Dollar Crop" by Poplar Mechanics, hemp farming was effectively shut down in the United States over confusion with its genetic cousin, marijuana. Though hemp carries no psychoactive properties, the 1937 Marihuana Tax Act defined hemp a a narcotic and that wording was subsequently adopted into the Controlled Substances Act of 1970.

    ReplyDelete
  20. On this day in 1984, Bruce Springsteen released the album "Born in the USA." It was his seventh studio album.

    ReplyDelete
  21. We're lucky that we have Bernanke at the Fed at this moment in time. Now we just have to find him a really, really big helicopter.

    ReplyDelete
    Replies
    1. .

      Monetary policy can't do it on it's own, IMO. When you are giving out money for free, it's hard to give it out any cheaper. And credit is great, as long as you have someone recieving it that is going to do something productive with it to create growth.

      .

      Delete
    2. Capital investment with almost free capital and financed by fees or rent, amortized over a thirty year period with the capital returned out of profits just seems smart to me. Such a scheme could be a great job and wealth creator to the workers and employees of the companies hired for the projects. it creates income based on investment rather than consumption. It would be good for the investors and stock holders of the companies doing the work. Good paying jobs could get back to paying health benefits.

      Delete
    3. it creates income based on investment rather than consumption.

      What is The Next Big Thing in a post-consumption economy? This guy makes the 'bring back the manufacturing base' argument:

      We can't. It's no accident that China and Japan, for example, have been both producer-driven economies and nations of savers. We have to slowly shift back to being a producer-driven economy. It will be difficult and painful, but we have to spend less and produce more goods and services that other economies around the world want to buy. We also need to replace these other economies as investors in our own economy.

      This probably means that the U.S. government needs to identify some key industries that it will nurture as the potential big exporters of the future. There used to be many objections to this sort of "industrial policy," but perhaps now that much of our financial system has been nationalized, such interventions will seem relatively mild. We're already investing in the automobile industry, for example, although I'm not sure that's our best bet for future exports. Tom Friedman is probably correct in saying (in Hot, Flat, and Crowded) that environmental technologies would be one of the best possible industrial policy investments for the U.S.

      The article is light-weight but the author uses the latest four-letter word in Washington: "industrial policy." The progressive/Democrats and conservative/Republicans could not be more differentiated on this subject (witness Solyndra being gob smacked like a dead pigeon with no context or bigger picture.)

      This guy suggests "monetizing" the social networking phenomena.

      As for "what am I missing?" I would guess two things: the 30-yr time frame is too long for the current investment mentality, and second, any post-consumption economy will require (I think) some form of government intervention. I don't think I need to extrapolate that thought any further.

      Delete
    4. What role the government?


      As President Obama said in his Inaugural Address, the time has come to put away childish things. It is also time to discard childish ideas. It is not true, as we were urged to believe in recent years, that an invisible hand driven by greed serves up the greatest good for all. Even the gaudiest array of private-consumption goods, by itself, cannot sustain a flourishing society. We need a well-nourished public sphere as well. Nor can our government continue to spend hundreds of billions of dollars more each year than it takes in. Continued prosperity will require large, ongoing public investments in our long-neglected public sphere -- investments that will have to be paid for with additional tax revenue.

      Although big sums are involved here, the task is manageable. ... Nor is there any controversy about the policy instruments needed to bring about this change.

      Pollution taxes have proven their effectiveness in the environmental domain. In addition to generating a lot of revenue, they provide powerful incentives for the private sector to undertake much of the required investment for successful transition to sustainable energy sources. And as the European experience has shown, people are able to adapt to these taxes in ways that leave their standard of living essentially undiminished.

      Progressive consumption taxation has a similar pedigree. It has long been proposed, for example, by distinguished economists on both sides of the aisle. In a 1943 article published in the American Economic Review, Milton Friedman, the patron saint of free-market conservatism, proposed such a tax as by far the best way to pay for the war effort. In 1995, a progressive consumption tax was proposed in the Senate under the bipartisan sponsorship of Republican Pete Domenici and Democrat Sam Nunn. This tax is not a fringe idea. On the contrary, it is a veritable poster child for the kind of bipartisan policy wisdom the president has been actively seeking.

      LINK

      Delete
  22. Vietnam becoming our ally now.

    http://www.theatlantic.com/magazine/archive/2012/05/the-vietnam-solution/8969/?single_page=true

    Balance the Chinese.

    I'm not going to say I told you so.

    b

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  23. Suspected oil in the S. China Sea. S. Vietnam, The Philippines, China, Malasia, Brunei all trying to stake their claims.

    We're waving the carrot of "support" in front of the players in return for them signing on to the Asia/Pacific Trade Pact.

    ReplyDelete
    Replies
    1. Sure. But also, there are a lot of Chinese, and the Vietnamese remember- they were in our country before....

      b

      Delete
  24. Recent U.S. intelligence reports show the number of attacks have risen this year to 25 per month, compared with an average of 19 for each month last year, according to a person familiar with them.

    ...

    James Jeffrey, who served as U.S. ambassador to Iraq until last week, said the figures being cited were misleading.

    "Significant attacks are continuing to drop and, most importantly, casualties are way down," Ambassador Jeffrey said in an interview before his Iraq rotation ended. "Everything I know points to an organization—al Qaeda in Iraq—under extraordinary stress."

    ReplyDelete
  25. High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/2/fdd43f52-a8b5-11e1-be59-00144feabdc0.html#ixzz1wszNsTuW

    Defeat at Khalkin Gol influenced Japan’s decision not to pursue war in northern Asia against the Soviet Union but, instead, to attack the European colonies of south-east Asia as well as US naval power in the Pacific. This brought the US into the war, more or less guaranteeing an Allied victory, and meant that, when Hitler attacked the Soviet Union, he could not count on the Japanese tying up Soviet forces on a second front in the Far East.


    http://www.ft.com/intl/cms/s/2/fdd43f52-a8b5-11e1-be59-00144feabdc0.html#axzz1whIQdVDq

    "The Second World War" Anthony Beevor

    Good article about what sounds to be a good book.

    b

    ReplyDelete
    Replies
    1. Maybe you should take this down for me. Did not see the first paragraph there.

      oops

      I do not know how to delete.

      b

      Delete
    2. fuck em they can’t take a joke. I’d sooner go through the houses tearing off “do not remove” signs on mattresses.

      Delete
    3. The Allied triumph was inconceivable without the vast expansion of US war [materiel] output...

      As Marc Reisner described in "Cadillac Desert," the rapid escalation in industrial output was only possible using the hydro power produced from the large dams constructed by USBR and Army COE on the great rivers of western USA. A fascinating hinge point in history.

      Delete
  26. Steve Hayes reported Saturday on President Obama's refusal to get his hands dirty—or even to get Air Force One's wheels dirty—by landing on the soil of the great state of Wisconsin prior to Tuesday's recall election between Scott Walker and Tom Barrett.

    ...

    Meanwhile, for the next 24 hours, every conservative reformer, everyone who admires Scott Walker and hopes his example will inspire other politicians across the nation, is alternately holding his breath in anticipation of the results, and humming "On Wisconsin" as he goes about his tasks.

    ReplyDelete
  27. China's most important newspaper, the People's Daily, warned yesterday any Western-backed military intervention would create even bloodier chaos and abandoning the Annan plan could push Syria into the "abyss".

    The Syrian government, meanwhile, continues to limit the access of foreign journalists by rationing visas, which has led to the rebel groups largely controlling the flow of information about events on the ground in Syria.

    The London-based Syrian Observatory for Human Rights, an anti-government organisation, says it has confirmed the names of 80 dead soldiers with local doctors alleging they were killed when four to six checkpoints were overrun by rebels near Idlib.

    ReplyDelete
  28. on the Avenue of Eternal Peace, just a minute away from the Gate of Heavenly Peace, which leads into the Forbidden City

    "lighting up the world in an instant"

    Tank man of Tiananmen Square--

    I remember seeing this I believe as it happened, then, again, and again, and again....

    It was a thrilling moment.


    http://www.time.com/time/magazine/article/0,9171,988169-1,00.html

    b

    ReplyDelete
  29. You’re never too dumb to become a general officer


    American General in South Korea Replaced After Spy Report
    By CHOE SANG-HUN
    Published: June 5, 2012


    SEOUL, South Korea — The Pentagon has replaced the commander of United States Special Forces in South Korea after a media report quoted him as saying American and South Korean troops have been parachuting into North Korea on spy missions, a statement denied by Washington and Seoul.
    Brig. Gen. Neil H. Tolley’s departure as commanding general of the Special Operations Command Korea, a job he held since October 2010, was part of “routine” rotations of jobs and had “nothing to do with” the media report, said a spokesman of the American military in Seoul, speaking Tuesday on customary condition of anonymity.

    ReplyDelete