The headline said it all: "Confusion and Staff Troubles Rife at I.R.S. Office in Ohio." No mention of mendacity, of evil, of meanness, of vice. Nada.
For liberals, their own pals are never morally amiss. They may make mistakes, be confused and have troubles. But guilty of malpractice never! Only Republicans and others who do not share their own attitudes can possibly be morally, ethically defective. When a Republican votes for reducing increases in welfare budgets or subsidies or other support for what liberals consider right and proper, the problem lies with their moral fiber, their lack of decency and good will. Not so with anything that liberals mismanage − that can only be due to some kind of technical malfeasance − confusion and "staff troubles."
How do these folks manage, intellectually, to dodge the moral and ethical ire they are so eager to dish out at their opponents?
BIS and IMF attacks on quantitative easing deeply misguided warn monetarists ... Monetarists across the world have warned that the International Monetary Fund and the Bank for International Settlements are making an historic error by calling for a withdrawal of emergency stimulus before the global economy has fully recovered. The BIS warned against "ever more monetary policy activism" to keep the global economy afloat. It called on the US, Britain, Japan, and the eurozone, to restore interest rates to normal levels "sooner rather than later." – UK Telegraph
Dominant Social Theme: We know what we're doing but we're just having a little argument.
Free-Market Analysis: Is this more evidence that monetary policy is merely made up as it goes along? Now we have the spectacle of three of the largest central banks in the world expanding money printing while two of the largest monetary-policy institutions attack those same programs.
What can we make of this? What is stranger is that the BIS is the policy arm of the central banking community and certainly has some oversight. The IMF, too, may be seen as a coordinating body with considerable monetary power. The bosses, in other words, are jawboning their employees.
George Soros switches from physical gold to gold stocks and that is very bullish for gold prices ... Ever the investor who loves to confuse markets – remember how his description of gold as the 'ultimate bubble' confused some folk as he bought the metal himself – George Soros has done it again with his gold ETF sales. Today the global financial press is awash with reports that Mr. Soros has sold gold again. True. But he has reinvested that money in a far more risky investment in gold miners whose performance is leveraged against the gold price. They go up faster than the gold price and they fall further when it comes down too. – GoldSeek
Dominant Social Theme: Gold, the barbaric metal.
Free-Market Analysis: We learn in this short article that billionaire investor George Soros is betting on mining stocks. "Very bullish," for gold, the article tells us. Here's more:
The Soros Investment Fund's 13F filing does indeed show the sale of 12 per cent of his total investment in GLD. But it also reveals that he then used $40 million of that cash to buy shares of the Market Vectors Gold Miner Major ETF (GDX).
China to the rescue of Argentina with a 10 billion dollars equivalent swap ... Argentina is negotiating with China a new 10 billon dollars equivalent swap of international reserves support based on the experience of 2009 when the global financial crisis. The new accord should theoretically help Argentina strengthen its international position vis-à-vis the run on the dollar (or the flight from the Peso) and which has cost the Central bank 4 billion dollars so far this year. – MercoPress
Dominant Social Theme: The Chinese are undermining the dollar and are very clever people. It's West versus East, as it has been eternally.
Free-Market Analysis: We have a lot of trouble taking this at face value but first we should provide the background. Argentina's President Cristina Fernandez is in discussions with Chinese Vice-president Li to accept Argentine pesos within the context of yuan-peso swap. Here's more:
The swap does not actually mean an increase in international reserves unless there is a critical situation when a trigger goes off but it is a clear support for Argentina ...
Euro – Quo Vadis? How much more punishment will Europeans take to defend the misconceived Euro currency? ... The Eurozone is in crisis, and only bold reforms can tackle the root causes. In the following article, Wolfgang Kasper explains why we should be tuning the clock back to before the Maasstricht Treaty, and proposes that an understanding of institutional economics is crucial in order to comprehend the current politico- economic predicament. – Elgar Blog
Dominant Social Theme: Europe is doing fine and Brussels wouldn't have it any other way.
Free-Market Analysis: Another economist who was an early commentator on the euro-treaty has abandoned the idea of a currency union. The article is written by Wolfgang Kasper, and here is a short bio:
Wolfgang Kasper is emeritus Professor of Economics, University of New South Wales, Sydney, Australia. In the late 1960s and early 1970s, he worked for the German Council of Economic Advisors and published analytical work on early proposals by the European Commission to impose a unitary currency on nations of the (then) European Economic Community. He was the lead author of W. Kasper, M.E. Streit, P.J. Boettke, Institutional Economics – Property, Competition, Policies.
There are no scandals in Washington. There is simply a turnover. We are preparing for an escalation of the global financial war. The old team is simply being told to step aside. Make way for the killers.
When G-7 concluded their emergency meeting in London last weekend, they announced that they were going to target tax havens. What does this mean? After months of G-7 central banks buying mortgage bonds and equities, the hunt for capital is on. Of course, we knew the tax havens were in the crosshairs already – only intelligence agencies can dump out the kind of leaks we have been seeing over the last month leading up to the G-7 meeting.
However, the seriousness of the capital moves underway were underscored by the swiftness with which a "scandal" was trumped up and ready to go at the IRS, with headlines on Monday morning, the leadership was out on Wednesday and a new acting from OMB in at the IRS on Thursday. Wonder who the new commissioner will be? That is being sorted out now. It will be someone masterful at legal warfare – "lawfare."
Over the past month there has been a statistically improbable concurrence of events that can only be explained as a conspiracy to protect the dollar from the Federal Reserve's policy of Quantitative Easing (QE).
Quantitative Easing is the term given to the Federal Reserve's policy of printing 1,000 billion new dollars annually in order to finance the US budget deficit by purchasing US Treasury bonds and to keep the prices high of debt-related derivatives on the "banks too big to fail" (BTBF) balance sheets by purchasing mortgage-backed derivatives. Without QE, interest rates would be much higher, and values on the banks' balance sheets would be much lower.
Quantitative Easing has been underway since December 2008. During these 54 months, the Federal Reserve has created several trillion new dollars with which the Fed has monetized the same amount of debt.
One result of this policy is that most real US interest rates are negative. Another result is that the supply of dollars has outstripped the world's demand for dollars.
Creative destruction: our economic crisis was wholly predictable: Keynes, Hobson, Marx - and the crisis of capitalism. Is it to the wrong ideas of economists or to the interests of the power-holders that we should turn to explain the "Great Contraction" of 2008-2009? John Maynard Keynes believed that the Great Depression of 1929-32 was caused by the wrong theory of how the economy worked in the minds of policymakers – the remedy for which was to equip them with the right theory. But this ignored one thing: that the reigning ideas are, more often than not, the product of the dominant power structures. – New Statesman
Dominant Social Theme: Keynes got it right for the right reasons.
Free-Market Analysis: This article gives us a concise insight into the theories of three great minds regarding the much discussed and maligned business cycle. Of course, these minds are "great" in a historical context. We don't consider any of them great within the context of free-market thinking.
Let's look at J.A. Hobson and Karl Marx first. Hobson was a Fabian socialist and Marx, of course, was a communist theorist. Both believed in international government activism to relieve the perceived problems inherent in the operation of the Invisible Hand.
Reuters: 'An Increasingly Polarized Washington Is Devouring Its Own' ... Unprecedented Justice Department searches of journalists' phone records. IRS targeting of conservative political groups. Spiraling sexual assault rates in the military. And the downplaying of the first killing of an American ambassador in 30 years. But Obama's failings are only part of the problem. An increasingly polarized Washington is devouring its own. Ceaseless, take-no-prisoners political warfare, not nefarious White House plots, ravages government. – Reuters
Dominant Social Theme: Government needs to work better to avoid crises and scandals.
Free-Market Analysis: On Saturday, we published an editorial with a title very similar to the one in this current Reuters editorial: "Scandal: And They Shall Eat Their Own ... "
The difference between the Daily Bell editorial and the Reuters editorial is instructive. In our editorial, we posited that a reason for the scandals might have to do with the ubiquitous nature of the modern Internet. This was not the only possibility but it was one Anthony Wile found feasible.
Beijing has long maintained control in part by tacitly promising that over time everyone will benefit from the country's new wealth. Rampant corruption and the garish displays of affluence by senior officials and their families strike at the heart of Beijing's promise that it is working to make life better for all. Ordinary Chinese, often through microblogs and other social media, have increasingly lashed out at what they see as a privileged class of political elites. – LA Times
Dominant Social Theme: When it comes to Leviathan, nothing will change because nothing can change.
Free-Market Analysis: This article tells of changes in China based in part on Internet exposure. It has become ubiquitous in the alternative media community to explain that the Internet is merely buttressing authoritarianism and making governments more efficient when it comes to repression. This article provides us with a stated antidote.
Two-speed Britain as London soars away from the rest ... In London, there are more cranes on the skyline than in the rest of the country put together. Evidence is growing that a recovery is under way, but there are now fears that only the south-east is benefiting, leaving the nation more divided. – The Guardian
Dominant Social Theme: This is an unpredictable element of the recovery.
Free-Market Analysis: Since it has been speculated that Britain is headed back into a recession, this article raises questions for us. At the same time, it is quite predictable. Let's look at why.
First of all, we don't think that Britain is anywhere near a "recovery," nor are we certain what a recovery would look like at this point in Britain, in the US or throughout Europe.
The problems are similar throughout the West. Higher taxes and price inflation, coupled with increased regulation and bureaucratic authoritarianism, provide a kind of job-sapping austerity that produces low growth or no growth.
"What do you expect when you target the President?" This is what an Internal Revenue Service (IRS) agent allegedly said to the head of a conservative organization that was being audited after calling for the impeachment of then-President Clinton. Recent revelations that IRS agents gave "special scrutiny" to organizations opposed to the current administration's policies suggest that many in the IRS still believe harassing the president's opponents is part of their job.
As troubling as these recent reports are, it would be a grave mistake to think that IRS harassment of opponents of the incumbent president is a modern, or a partisan, phenomenon. As scholar Burton Folsom pointed out in his book New Deal or Raw Deal, IRS agents in the 1930s were essentially "hit squads" against opponents of the New Deal. It is well-known that the administrations of John F. Kennedy and Lyndon Johnson used the IRS to silence their critics. One of the articles of impeachment drawn up against Richard Nixon dealt with his use of the IRS to harass his political enemies. Allegations of IRS abuses were common during the Clinton administration, and just this week some of the current administration's defenders recalled that antiwar and progressive groups alleged harassment by the IRS during the Bush presidency.
Listening to the White House on the Benghazi attack, the IRS scandal on targeting conservative groups and the Justice Department's snooping into AP reporters' emails, we can reasonably ask of another President of the United States: What did he not know, and when did he not know it?
Or worse, maybe he did not know it, which would suggest gross incompetence on the part of the president and his senior staff.
But either way, what may have motivated those farther down the bureaucratic chain to undertake and initiate the particular acts they are now accused of, especially in the case of the IRS agents in Washington and at least three IRS offices around the country?
The good (and career-successful) government servant often attempts to anticipate the wishes of his superior and to start trying to achieve the goal before actually instructed to do so.
In Nazi Germany, this was called "working towards the Fuhrer." In 1934, a senior Nazi government official told his subordinates, "It is the duty of every single person to attempt, in the spirit of the Fuhrer, to work towards him." And, "the one who works correctly towards the Fuhrer along his lines and toward his aim will in future as previously have the finest reward . . . "
The Daily Bell is pleased to present this exclusive interview with Doug Casey.
Introduction: Doug Casey has appeared on hundreds of radio and TV shows and has been the subject of articles in People, US, Time, Forbes, The Washington Post and numerous other publications. His books include The International Man, Crisis Investing (17 weeks at #1 on the New York Times Bestseller list), Strategic Investing (seven weeks on the NYT list) and, most recently Totally Incorrect. He's the Chairman of Casey Research (caseyresearch.com), which publishes about two dozen newsletters and numerous special reports. Doug Casey, who's travelled to over 175 countries, and his team have been correctly predicting major budding trends in the overall economy and commodity markets for over three decades.
Daily Bell: Nice to speak with you again. Let's jump right in. What's going on with gold? Why are mining stocks down?
Doug Casey: I'm not concerned about gold being down because markets fluctuate. And considering that gold's been in a bull market for a dozen years, I'm very unconcerned about the fact that it's come off. All the fundamentals that underlie the bull market are still in place.
As far as gold stocks are concerned, they've always been a highly leveraged play on gold so when gold catches cold the gold stocks have always caught pneumonia, and that's the case now. Of course, that's amplified by the fact that costs in the mining sector have skyrocketed and it costs on the average $1,000 to $1,200 to get an ounce of gold out of the ground at this point. The world has been pretty thoroughly explored, and it's not easy to find economic deposits. If you do find one, it will only be because you've spent many millions in high tech exploration. You'll then discover that regulation is brutal, and you'll spend more for lawyers and lobbyists than on geologists and engineers. NGO's will plague you with lawsuits, and incite the natives. Governments will extract huge amounts in taxes and royalties. Capital costs are gigantic, usually now in the hundreds of millions, or billions. After all that it takes close to a decade to get the thing in production. There's much more I can say, but mining is a crappy business.
The good news is that now is a superb time to speculate in these stocks. Their prices reflect all the negatives.
And I will cause them to eat the flesh of their sons and the flesh of their daughters, and they shall eat every one the flesh of his friend in the siege and straitness ... – King James Bible (Cambridge Ed.)
Commentator Peggy Noonan has written a Wall Street Journal editorial entitled, "This Is No Ordinary Scandal: Political abuse of the IRS threatens the basic integrity of our government."
Noonan is often, or at least occasionally, insightful, and in this case, I was pleased to see her sentiment conforms to an editorial I wrote last Saturday:
This is a big deal. Unlike other IRS problems throughout the years, this one features not just individual "enemies" but also a broad cross section of US citizens that are concerned about the growing unconstitutional actions of their government.
But Noonan neglects to make an important point that I will mention toward the end of this article.
Let's look at the broader picture first. The US is supposedly engaged in something like 75 wars and skirmishes abroad and the invasions of privacy taking place on the home front are equally startling.