Economic History

     

 

 

Tyranny of the Living

 

Tradition… is the democracy of the dead.

K. Chesterton

 

[ed note: this article is from Bill Bonner’s archives, originally published June 20, 2003]

 

Yesterday’s news brought word from Deputy Defense Secretary Wolfowitz that U.S. troops would be in Iraq for the next 10 years. Also came an estimate of the cost: An extra $3 billion would have to be added to the defense budget for Iraq… and an extra $1.5 billion for Afghanistan.

“Avoid foreign entanglements,” cautioned the father of the country. But corpses have no voice and no vote, neither in markets nor in politics. They might as well be dead.

 

My WolfieWolfie, back when still protected

Cartoon by Steve Bell

 

Read the rest of this entry »

     

 

 

Crack Up!

BALTIMORE – The Dow rose on Wednesday morning… after Janet Yellen made soothing remarks about a “gradual” return to normal interest rates. Then investors must have realized that returning to normal is not on the Fed’s agenda. The Dow finished the day down 99 points.

We haven’t seen normal central bank policy since the Nixon years. Normal is a currency backed by gold, not by PhD economists. Only briefly and episodically, over the last 2000 years, has the world flirted with pure paper or “fiat” money. Every time, the affair was over in a short time… and regretted for a long time.

 

1-Fate_of_CurrenciesThe result of the usurpation of money by government

 

Read the rest of this entry »

     

 

 

“On this side of the law

On that side of the law

Who is weak? Who is wrong?

Who is for and who’s against… the law”

Johnny Cash

 

Were We Unfair to the Oregon Protesters?

We return our attention to the freedom fighters holed up on the high plains… and their standoff with the law in a federal bird sanctuary in Oregon.

 

nancy-steve-ross-sepia-effect-of-cowboys-riding-seneca-oregon-usaOn the plains of Oregon…

Photo credit: Nancy & Steve Ross

 

Read the rest of this entry »

     

 

 

A Dangerous Spot

SANTORINI, Greece – “Gods were gods. Men were men,” explained our tour guide, Spiros.

“The ancient Greeks thought there was a difference. Men had to realize they weren’t gods. They couldn’t do the things gods could do. If they tried, it provoked a disaster. The gods got jealous and punished them.”

What has changed? There are still things humans can and can’t do. When men get too big for their britches, the gods still punish them. The disaster we were looking at had nothing to do with the hubris of mankind. The problem was geological.

 

santoriniSantorini – world improvers from Hollywood have apparently found housing there.

Photo via kiklamino.com

 

Read the rest of this entry »

     

 

 

Chockablock with History

ON THE WINE DARK IONIAN SEA – We drove from Palermo to Agrigento, thence to Syracuse and finally Catania. This was a quick visit to Sicily, not enough to learn very much.

Sicily is complex. It deserves time. If we had more, we would rent an apartment and get to know it better. But now we are on a ship, headed to the Greek island of Santorini.

 

mediterranean

 

mediterranean 2Mediterranean views…

Photo credit: fmh

 

Read the rest of this entry »

     

 

 

Looking at the Big Picture

Step back. Look at the big picture. Stocks are near record highs. Investor sentiment has never been more bullish. The VIX, which shows the options market’s expectation of 30-day volatility in stocks, is near record lows.

But the US stock market – broadly measured by the S&P 500 – is “above the line” of our Simplified Trading System (STS). It’s trading above 20 times reported earnings. The index could go much higher. But our simple approach tells us that the safe gains are behind us. It is better to be out than in.

 

small-dollar

Read the rest of this entry »

     

 

 

Or:  Who Knew The F***ing Lions Could Swim?

I found myself in a Northern one-horse town some 20 miles west of Aquilea  with no apparent means of getting back to Rome. No, let me amend that, from my personal perspective, it might as well have been a no-horse town. Romans and their money! With every new emperor the denarius becomes worth less than before. And so the ten denarii I still called my own (which of course were all new denarii) wouldn't even buy me a horse. Thanks much, emperor!  Actually, when I left Aquilea – rather in a mad rush on the spur of the moment – I had a lot more money with me than ten denarii. Little did I know that pillaging gangs of Marcomanni had already invaded the empire. I learned about this the hard way, as I encountered a troupe of these bandits three leagues to the West of Aquilea. I can thank Glycon – all hail Glycon!-  and probably several of the other gods profusely that I actually survived the encounter. After all, it is well-known what these Germanic brutes are capable of when they are putting their mind to it. Unfortunately this inadvertent crossing of paths with the barbarian hordes cost me my horse and most of my money. Not to mention my coat and my boots. The only reason why I was left these 10 denarii was that they didn't find my spare purse, which I wear affixed in a place that robbers don't check most of the time, unless they're really hard up. In a way it is an example of poetic justice, or injustice, depending on one's viewpoint. I probably should accept my fate without demur though, since I had to agree with Alexander that to remain in Aquilea was simply no longer an option.

That cheeky little git Commodus – what is he, 10 years old? 11? – even made up a limerick about some unnamed 'Greek fraud and his Roman butt-boy' that he kept reciting all day long and it was pretty clear to everyone whom he meant. I swear that rascal has a glint of Caligula in his eye, it's probably no coincidence that he shares his birthday. Of course the auguries all pronounced a glorious future for the git when he was born, regardless of that unmistakable  hint the date of his birth provided them with. I actually doubt that he is the emperor's son, he's much too healthy for that.  Faustina must have cuckolded Marcus, the gods know she had plenty of opportunity. To think that this naughty and cruel child could one day become emperor makes me shudder. Anyway, that very same day, when we had retired after dinner, Alexander called for me, inviting me to a night-cap. We inevitably turned to discussing recent events with a good helping of trepidation and Alexander pointed out that it was probably rather significant that no-one had attempted to discipline the boy. His tutors made as though they hadn't heard anything, a number of people were giggling as if he had told the joke of the year and the emperor himself reacted mainly by occasionally fixing us with that rather cold glare he sometimes affects.

 

Read the rest of this entry »

     

 

 

The ANC, Communism and Umkontho we Sizwe

A veritable flood of articles has been published in the mainstream media in recent days on occasiom of South Africa's first black president, Nelson Mandela passing on recently. We want to take a look at a few aspects of Mandela's and South Africa's history that have not received as much attention as they probably deserve. Most of the world is understandably (and rightly) fawning over Mandela and his achievements, but the US state department had him designated as a terrorist until 1990 and for several decades regarded him as a communist sympathizer. Of course every feted revolutionary leader who has managed to vanquish the oppressors of his people was a 'terrorist' at some point in the past. Anyone who leads an armed revolt against a government is designated a terrorist by those he fights.

 

Read the rest of this entry »

     

 

 

1600 Years Ago, in the Year 412 AD, or 1156 Ab Urbe Condita (since the founding of Rome) …

In 412, the Western Roman Emperor Honorius (full name Flavius Honorius Augustus), the son of Theodosius I.,  teamed up with the Visigoth king Ataulf (also: Atawulf, the 'father of wolves') against the usurper Jovinus.

Jovinus had unilaterally proclaimed himself Augustus and made his brother Sebastianus his co-emperor, taking control of Northern Gaul with the help of the Gallic nobility as well as King Gundahar of the Burgundians and King Goar of the Alans. The Burgundians used the opportunity to establish themselves on the Roman side of the Rhine, founding a new kingdom there with Worms as the capital.

Ataulf marched from Italy to Gaul, with ex-emperor Priscus Attalus and Honorius' half-sister Galla Placidia in tow as hostages, ostensibly to join Jovinus.  While on the way, Ataulf crossed paths with another Visigoth chieftain named Sarus, who was supposed to help Jovinus militarily. Ataulf evidently wanted to be the only Visigoth of importance in Gaul and without further ado decided to attack and kill Sarus.

 

Read the rest of this entry »

     

 

 

How to Deal with Economic History

In a recent article at the NYT entitled 'Incredible Credibility', Paul Krugman once again takes aim at those who believe it may not be a good idea to let the government's debt rise without limit. In order to understand the backdrop to this, Krugman is a Keynesian who thinks that recessions should be fought by increasing the government deficit spending and printing gobs of money. Moreover, he is a past master at presenting whatever evidence appears to support his case, while ignoring or disparaging evidence that seems to contradict his beliefs.

Among the evidence he ignores we find e.g. the 'stagflation' of the 1970's, or the inability of Japan to revive its economy in spite of having embarked on the biggest government deficit spending spree ever in a modern industrialized economy. Evidence he likes to frequently disparage is the evident success of austerity policies in the Baltic nations (evident to all but Krugman, one might say).

 

Read the rest of this entry »

     

 


 

Something Is Cooking

 

By now it has made the rounds that both Super Mario and Thomas Jordan, chairman of the 'Zimbabwe of the Alps' (h/t Jim Grant) suddenly have found out they are either too busy with urgent work or have prior engagements that keep them from appearing at Jackson Hole.

This is potentially quite significant, as whenever these guys postpone long awaited public appearances at important meetings, they are hatching out something big, which they then spring on us mere mortals at the earliest opportunity. The Jackson Hole pow-wow certainly qualifies as an important meeting, as all the CB bigwigs tend to go there, accompanied by a gaggle of academic apologists for central monetary planning who give them new ideas. Everybody gets to hold a speech or present a paper, and we can be fairly sure that the informal gatherings are inter alia used to talk about policy coordination.

 

Read the rest of this entry »

     

 

 

… or Why Trying to Prove a Point about Economics with 'Just Two Charts' is a Really Bad Idea

 

The Gold Standard Debate Revisited

The discussion over the GOP's gold standard proposals continues in spite of the fact that everybody surely knows the idea is not even taken seriously by its proponents – as we noted yesterday, there is every reason to believe it is mainly designed to angle for the votes of disaffected Ron Paul and Tea Party supporters, many of whom happen to believe in sound money. As we also pointed out, there has been a remarkable outpouring of opinion denouncing the gold standard. Unfortunately many people are misinformed about both economic history and economic theory and simply regurgitate the propaganda they have been exposed to all of their lives. Consider this our attempt to present countervailing evidence. 

Read the rest of this entry »

Most read in the last 20 days:

  • US Financial Markets – Alarm Bells are Ringing
      A Shift in Expectations When discussing the outlook for so-called “risk assets”, i.e., mainly stocks and corporate bonds (particularly low-grade bonds) and their counterparts on the “safe haven” end of the spectrum (such as gold and government bonds with strong ratings), one has to consider different time frames and the indicators applicable to these time frames. Since Donald Trump's election victory, there have been sizable moves in stocks, gold and treasury bonds, as the election...
  • The Great El Monte Public Pension Swindle
      Nowhere City California There are places in Southern California where, although the sun always shines, they haven’t seen a ray of light for over 50-years.  There’s a no man’s land of urban blight along Interstate 10, from East Los Angeles through the San Gabriel Valley, where cities you’ve never heard of and would never go to, are jumbled together like shipping containers on Terminal Island.  El Monte, California, is one of those places.   Advice dispensed on Interstate...
  • A Trade Deal Trump Cannot Improve
      Worst in Class BALTIMORE – People can believe whatever they want. But sooner or later, real life intervenes. We just like to see the looks on their faces when it does. By that measure, 2017 may be our best year ever. Rarely have so many people believed so many impossible things.   Alice laughed. "There's no use trying," she said: "one can't believe impossible things." "I daresay you haven't had much practice," said the Queen. "When I was your age, I always did it for...
  • Where’s the Outrage?
      Blind to Crony Socialism Whenever a failed CEO is fired with a cushy payoff, the outrage is swift and voluminous.  The liberal press usually misrepresents this as a hypocritical “jobs for the boys” program within the capitalist class.  In reality, the payoffs are almost always contractual obligations, often for deferred compensation, that the companies vigorously try to avoid.  Believe me.  I’ve been on both sides of this kind of dispute (except, of course, for the “failed”...
  • Trump’s Trade Catastrophe?
      “Trade Cheaters” It is worse than “voodoo economics,” says former Treasury Secretary Larry Summers. It is the “economic equivalent of creationism.” Wait a minute -  Larry Summers is wrong about almost everything. Could he be right about this?   Larry Summers, the man who is usually wrong about almost everything. As we have always argued, the economy is much safer when he sleeps, so his tendency to fall asleep on all sorts of occasions should definitely be welcomed....
  • Pope Francis Now International Monetary Guru
      Neo-Marxist Pope Francis Argues for Global Central Bank As the new year dawns, it seems the current occupant of St. Peter’s Chair will take on a new function which is outside the purview of the office that the Divine Founder of his institution had clearly mandated.   Neo-Papist transmogrification. We highly recommend the economic thought of one of Francis' storied predecessors, John Paul II, which we have written about on previous occasions. In “A Tale of Two Popes” and...
  • Side Notes, January 14 - Red Flags Over Goldman Sachs
      Red Flags Over Goldman Sachs Just to prove that I am an even-handed insulter, here is a rant about my former employer, Goldman Sachs. The scandal at 1MDB, the Malaysian sovereign wealth fund from which it appears that billions were stolen by politicians all the way up to the Prime Minister, continues to unfold.   The main players in the 1MDB scandal. Irony alert: apparently money siphoned off from 1MDB was used to inter alia finance Martin Scorcese's movie “The Wolf of...
  • Trump’s Plan to Close the Trade Deficit with China
      Rags to Riches Jack Ma is an amiable fellow.  Back in 1994, while visiting the United States he decided to give that newfangled internet thing a whirl.  At a moment of peak inspiration, he executed his first search engine request by typing in the word beer.   Jack Ma, founder and CEO of Alibaba, China's largest e-commerce firm. Once he was a school teacher, but it turned out that he had enormous entrepreneurial talent and that the world of wheelers, dealers, movers and...
  • Money Creation and the Boom-Bust Cycle
      A Difference of Opinions In his various writings, Murray Rothbard argued that in a free market economy that operates on a gold standard, the creation of credit that is not fully backed up by gold (fractional-reserve banking) sets in motion the menace of the boom-bust cycle. In his The Case for 100 Percent Gold Dollar Rothbard wrote:   I therefore advocate as the soundest monetary system and the only one fully compatible with the free market and with the absence of force or fraud...
  • Silver’s Got Fundamentals - Precious Metals Supply-Demand Report
      Supply-Demand Fundamentals Improve Noticeably Last week was another short week, due to the New Year holiday. We look forward to getting back to our regularly scheduled market action.   Photo via thedailycoin.org   The prices of both metals moved up again this week. Something very noticeable is occurring in the supply and demand fundamentals. We will give an update on that, but first, here’s the graph of the metals’ prices.   Prices of gold and silver...
  • Regime Change: The Effect of Trump's Victory on Stock Prices
      A Soaring Market On January 20 2017 Donald Trump will be sworn in as the new president of the United States. On the stock market his victory has triggered a lot of advance cheer already: the Dow Jones Industrial Average rose by a sizable 7.80 percent between the election and the turn of the year.   Two big winners: the DJIA and Donald Trump - click to enlarge.   Many investors are now wondering what effect the change in government will have on stock prices in the new...
  • Donald and the Dollar
      No Country Can be Made Great by Devaluation John Connally, President Nixon’s Secretary of the Treasury, once remarked to the consternation of Europe’s financial elites over America’s inflationary monetary policy, that the dollar “is our currency, but your problem.”  Times have certainly changed and it now appears that the dollar has become an American problem.   Richard Nixon and his treasury secretary John Connally. The latter is today mainly remembered for his...

Austrian Theory and Investment

Support Acting Man

Own physical gold and silver outside a bank

Archive

j9TJzzN

350x200

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com