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Sunday, October 30, 2011

Texan freed by DNA test after 25 years exonerated

By WILL WEISSERT

AUSTIN, Texas (AP) ? A Texas appeals court on Wednesday formally exonerated a man who spent nearly 25 years in prison for his wife's 1986 fatal beating, reaffirming a judge's decision to set him free last week after DNA tests linked the killing to another man.

The Texas Court of Criminal Appeals declared Michael Morton innocent of killing his wife, Christine, and made him eligible to receive $80,000 from the state for each year of confinement, or about $2 million total.

Morton, 57, was convicted on the basis of circumstantial evidence and sentenced to life in prison. He maintained over the years that his wife and their 3-year-old son were fine when he left for work at an Austin grocery store on the day she was killed, and that an intruder must have attacked her.

[...]The Innocence Project has accused the prosecutor who originally handled the case, Ken Anderson, of deliberately concealing non-DNA evidence that likely would have helped Morton avoid being convicted in the first place. Anderson, who is now a district judge in Williamson County, has not responded to repeated requests for comment made through his court administrator.

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"Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing ever happened..." - Winston Churchill


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Saturday, October 29, 2011

US refused to hand over information on alleged plot, Iran says


TEHRAN ? Iran said on Saturday that the US government rebuffed its request to hand over information on an alleged Iranian plot to kill the Saudi ambassador to Washington.

"This person has had no link to Islamic Republic of Iran entities," the foreign ministry said in a statement received by AFP, referring to a suspect named by the United States.

"Based on legal norms, if there is any claim against any other government, the US government should submit the accused person's information to the other country and request cooperation," it said.

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This site contains copyrighted material the use of which in some cases has not been specifically authorized by the copyright owner. Such material is made available for the purposes of news reporting, education, research, comment, and criticism, which constitutes a 'fair use' of such copyrighted material in accordance with Title 17 U.S.C. Section 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. It is our policy to respond to notices of alleged infringement that comply with the Digital Millennium Copyright Act (found at the U.S. Copyright Office) and other applicable intellectual property laws. It is our policy to remove material from public view that we believe in good faith to be copyrighted material that has been illegally copied and distributed by any of our members or users.
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"Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing ever happened..." - Winston Churchill


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Record-High 50% of Americans Favor Legalizing Marijuana Use

Liberals and those 18 to 29 most in favor; Americans 65 and older most opposed
by Frank Newport



PRINCETON, NJ -- A record-high 50% of Americans now say the use of marijuana should be made legal, up from 46% last year. Forty-six percent say marijuana use should remain illegal.

When Gallup first asked about legalizing marijuana, in 1969, 12% of Americans favored it, while 84% were opposed. Support remained in the mid-20s in Gallup measures from the late 1970s to the mid-1990s, but has crept up since, passing 30% in 2000 and 40% in 2009 before reaching the 50% level in this year's Oct. 6-9 annual Crime survey.

[...]Support for legalizing marijuana is directly and inversely proportional to age, ranging from 62% approval among those 18 to 29 down to 31% among those 65 and older. Liberals are twice as likely as conservatives to favor legalizing marijuana. And Democrats and independents are more likely to be in favor than are Republicans.

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"Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing ever happened..." - Winston Churchill


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There Is An Evil 1%, But Everyone Is Getting Its Identity Wrong

by Llewellyn H. Rockwell, Jr.

The "occupy" protest movement is thriving off the claim that the 99% are being exploited by the 1%, and there is truth in what they say. But they have the identities of the groups wrong. They imagine that it is the 1% of highest wealth holders who are the problem. In fact, that 1% includes some of the smartest, most innovative people in the country ? the people who invent, market, and distribute material blessings to the whole population. They also own the capital that sustains productivity and growth.

But there is another 1% out there, those who do live parasitically off the population and exploit the 99%. Moreover, there is a long intellectual tradition, dating back to the late middle ages that draws attention to the strange reality that a tiny minority lives off the productive labor of the overwhelming majority.

I?m speaking of the State, which even today is made up of a tiny sliver of the population, but is the direct cause of all the impoverishing wars, inflation, taxes, regimentation, and social conflict. This 1% is the direct cause of the violence, the censorship, the unemployment, and vast amounts of poverty, too.

Look at the numbers, rounding from latest data. The U.S. population is 307 million. There are about 20 million government employees at all levels, which makes 6.5%. But 6.2 million of these people are public school teachers, whom I think we can say are not really the ruling elite. That takes us down to 4.4%.

We can knock of another half million who work for the post office, and probably the same who work for various service department bureaus. Probably another million do not work in any enforcement arm of the State, and there?s also the amazing labor-pool fluff that comes with any government work. Local governments do not cause nation-wide problems (usually), and the same might be said of the 50 states. The real problem is at the federal level (8.5 million), from which we can subtract fluff, drones, and service workers.

In the end, we end up with about 3 million people who constitute what is commonly called the State. For short, we can just call these people the 1%.

The 1% do not generate any wealth of their own. Everything they have they get by taking from others under the cover of law. They live at our expense. Without us, the State as an institution would die.

Here we come to the core of the issue. What is the State and what does it do? There is vast confusion about this issue, insofar as it is talked about at all. For hundreds of years, people have imagined that the State might be an organic institution that develops naturally out of some social contract. Or perhaps the State is our benefactor because it provides services we could not otherwise provide for ourselves.

In classrooms and in political discussions, there is very little if any honest talk about what the State is and what it does. But in the libertarian tradition, matters are much clearer. From Bastiat to Rothbard, the answer has been before our eyes. The State is the only institution in society that is permitted by law to use aggressive force against person and property.

Let?s understand through a simple example. Let?s say you go into a restaurant and hate the wallpaper. You can complain and try to persuade the owner to change it. If he doesn?t change it, you can decide not to go back. But if you break in, take money out of the cash register, buy paint, and cover the wallpaper yourself, you will be charged with criminal wrongdoing and perhaps go to jail. Everyone in society agrees that you did the wrong thing.

But the State is different. If it doesn?t like the wallpaper, it can pass a law (or maybe even not that) and send a memo. It can mandate a change. It doesn?t have to do the repainting. The State can make you repaint the place. If you refuse, you are guilty of criminal wrongdoing.

Same goals, different means, two very different sets of criminals. The State is the institution that essentially redefines criminal wrongdoing to make itself exempt from the law that governs everyone else.

It is the same with every tax, every regulation, every mandate, and every single word of the federal code. It all represents coercion. Even in the area of money and banking, it is the State that created and sustains the Fed and the dollar because it forcibly limits competition in money and banking, preventing people from making gold or silver money, or innovating in other ways. And in some ways, this is the most dreadful intervention of all, because it allows the State to destroy our money on a whim.

The State is everybody?s enemy. Why don?t the protesters get this? Because they are victims of propaganda by the State, doled out in public school, that attempts to blame all human suffering on private parties and free enterprise. They do not comprehend that the real enemy is the institution that brainwashes them to think they way they do.

They are right that society is rife with conflicts, and that the contest is wildly lopsided. It is indeed the 99% vs. the 1%. They?re just wrong about the identity of the enemy.
__
Llewellyn H. Rockwell, Jr. [send him mail], former editorial assistant to Ludwig von Mises and congressional chief of staff to Ron Paul, is founder and chairman of the Mises Institute, executor for the estate of Murray N. Rothbard, and editor of LewRockwell.com. See his books.


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rapest,robbers,murderers,and thieves come from all walks of life and they will never change.most crime is made up by the powers that be,the rest the lack of personal responsibility. i started reading but it was the template sort of thing an accountant would say, wealth creator argument and all that.

there is technology, there could be employment for a minority. to model life on a monetary system or based on employment would be denying reality of the time. in reality and the reality of such systems is that pretty much all jobs are destructive.

You got it wrong Mr. Rockwell. A six grader has a better understanding of the world surrounding him than the one reflected in your article. FAIL! This posits that the "1%" named by Rockwell are independent: yet the richest 1% spends hundreds of millions annually on lobbying that ensures Rockwell's 1% do their bidding. The OWS have the right target. It is obvious if Rockwell's 1% ever stopped complying with the richest 1%'s wishes, they'd be shown the door via the elimination of their campaign backing and replaced by more biddable (n.p.i.) servants.

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"Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing ever happened..." - Winston Churchill


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Obama: Iran 'Will Pay a Price' for Assassination Plot

By LEE FERRAN | ABC News ? 16 hrs ago

President Barack Obama said today that Iran will "pay a price" through sanctions and international pressure for its recent hostile behavior including the alleged Iran-directed plot to assassinate the Saudi Arabian ambassador to the U.S. in Washington, D.C.

Echoing previous statements by top U.S. officials, Obama said that when dealing with Iran, "We don't take any options off the table," but did not make any mention of possible military action in favor of pushing harsh economic sanctions and corralling international condemnation of Iran's alleged action.

"We're going to continue... to mobilize the international community to make sure that Iran is further and further isolated and pays a price for this kind of behavior," Obama said.

Obama declined to comment on whether he believed the highest levels of the Iranian government were aware or involved in the alleged plot, but said even if the Iranian president or supreme leader did not have "detailed operational knowledge, there has to be accountability with respect to anybody in the Iranian government engaging in this kind of activity."

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"Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing ever happened..." - Winston Churchill


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Iranian Terror "Mastermind" Described as Drunk, Pothead, Hooker Frequenting "Joke"

Scatterbrained used car salesman selected as patsy by Feds
Steve Watson


The already dubious ?Iranian? terror plot to assassinate a Saudi ambassador and blow up the Saudi and Israeli embassies in Washington, continues to unravel into farce with the revelation that the so called ?mastermind? behind the plot is a failed used car salesman described by those who know him as a ?joke?.

While The Justice Department is hyping the notion that 56-year-old Iranian-born U.S. citizen Manssor Arbabsiar was participating in a dastardly Iranian plot to kill Saudi Arabia?s U.S. ambassador, details have emerged that make the already farcical case look like a badly scripted comedy.

Local media in Austin and San Antonio spoke to several of Arbabsiar?s acquaintances in Round Rock and Corpus Christi, who described him in most unflattering terms, saying that they doubt Arbabsiar could have had any meaningful involvement in the supposed international ploy.

?He used to drink, smoke pot, go with the prostitutes,? Tom Hosseini, an Iranian who has known Arbabsiar since college, told reporters, adding ?His first wife left him because he would lose his keys every other day. This guy is not a mastermind.?

Hosseini also told reporters that in college Arbabsiar earned the nickname ??Jack? for his affinity for whisky, confirming that he wasn?t in any way religious and that ?he couldn?t even pray, doesn?t know how to fast.?

Describing Arbabsiar as rude, offensive and unfriendly, others noted that he was a ?floundering? businessman who at various points had tried his hand in running a restaurant, a convenience store and a used car lot.

?He was pretty disorganised, always losing things like keys, titles, probably a thousand cell phones,? David Tomscha, who ran the small used-car yard with him, said. ?He wasn?t meticulous with taking care of things.?

?He never spoke ill of the United States,? Mr Tomscha added. ?I always thought he liked it here, because he could make money. He loved to make money.?

Arbabsiar, who has a history of run ins with the law and minor criminal offences, was described in other accounts as having a preoccupation with traveling to Iran in order to procure the services of cheap Persian prostitutes.

Another local acquaintance, Mitch Hamueen, scoffed at the DOJ suggestion that ?Chevrolet? was a code word for the alleged terror operation.

?He probably wasn?t talking in code, he was probably talking about an actual Chevrolet,? he said.

?He?s the fall guy,? Hamueen said. ?They?re looking for a fall guy.?

Reporters also spoke with Arbabsiar?s apparently estranged wife who told them ?I know that his innocence is going to come out.?

The Obama administration contends that Arbabsiar tried to hire assassins from a Mexican drug gang to carry out the murder of ambassador Adel al-Jubeir during a visit to the United States.

However, the head of the drug gang turned out to be a DEA agent posing as a Mexican Los Zetas gangster. The story has all the hallmarks of classic FBI entrapment tactics that have characterized almost every major terror bust in recent times.

Nevertheless, Everyone from Hillary Clinton to John Kerry has pounced on the allegations, suggesting there is a wider conspiracy, that sanctions should be placed on Iran, and that even further action should not be ruled out.

It remains thoroughly unclear why members of the Iranian elite Quds Force would select a bumbling scatterbrained halfwit to communicate with hardcore Mexican drug gangs and carry out an assassination inside the U.S.
__
Steve Watson is the London based writer and editor for Alex Jones? Infowars.net, and Prisonplanet.com. He has a Masters Degree in International Relations from the School of Politics at The University of Nottingham in England.


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What Radicalism? OWS's Slogan Should Really Be "Up With The Man!"

by Jeffrey A. Tucker

The protesters of the "occupy" movement imagine themselves to be in the spirit of history's great radicals ? speaking truth to power and all that. As many have said, the movement seems blind to the real source of power in society, else they would be protesting government bureaucracies and the Federal Reserve.

Actually, however, it is even worse than that. The protest movement is not just blind to the actual driving force behind impoverishment and injustice. The main ethos of the movement is actively supportive of government and the powerful interests that back the status quo, so much so that this movement doesn't even deserve the name radical.

My exhibit is an opinion piece on the far-left site Alternet.org, a venue that often runs excellent critiques of American foreign policy. But when it comes to economic issues, it offers up the predictable goofiness that has afflicted the leftist mind for at least a century.

In "5 Conservative Economic Myths Occupy Wall Street Is Helping to Bust," author Dave Johnson gives us a peek into the economic worldview at the heart of this movement. Far from fighting power, it is supporting power. Instead of dissing the suits, it is tailoring them. The slogan on the streets should really be "Up with the Man!"

The supposed myths Johnson lists are:

Business does everything better than government. Rich people are "job creators."Government and taxes take money out of the economy.Regulations kill jobs.Protectionism hurts the economy.
Yes, these are the supposed myths. I might have phrased some differently but the bottom line is that every one of them is absolutely true. So of course it is enormously amusing to watch the author explain to us what is so obviously false about all these points. In the course of his explanation, he begins to sound like a public-service ad put out by a government bureaucracy.

So we learn from him that

the taxes that government collects are invested in the "public structures" that create the prosperity and lifestyle we enjoy ? or at least did before taxes were cut. Tax revenue builds the infrastructure of transportation, courts, schools, universities, research facilities and other institutions that enable our businesses to grow and prosper and the consumer protection, safety inspection, water and sewer, health, parks and arts that help us live and enjoy our lives.
So says the commissar! Up with the mandarins! Those courts and regulations are so wonderful, aren't they? And yet, isn't it rather strange that this little litany doesn't include anything about the police that are being unleashed on the protesters? The police are making all the rest of these supposed "services" possible. The larger and more expansive the state, the more police it needs to enforce its edicts. By praising all of this and urging its expansion, the protesters are urging an expansion of the police state ? and yet they seem completely oblivious to this reality.

Now, what about free enterprise? Here is how the writer characterizes the market economy that took humankind from caves to condominiums, from smoke signals to cell phones, from chasing wild animals to ordering from a fast-food window:

[Under competition] businesses are forced to cut every corner, cheapen every product, cut out every service, lay people off, cut people's wages while adding hours, gut benefits ? and probably go under anyway because when every business does the same 99 percent of us can't afford to buy or do things anymore.
Leave aside the ridiculous claim that only 1 percent of the public can afford to buy things. Has he never been to Walmart (oh I'm sure he is against that too)? It is indeed true that business cuts jobs and benefits when profit margins are squeezed. Not so when businesses are succeeding. So does this writer favor higher and higher profits so that businesses don't cut back? Of course not. That would be regarded as evil too. So how about bailouts when companies are failing so that they don't have to cut employees and hours? Nope: bailouts are precisely what the protesters are against. Or how about a policy that permits businesses to waste vast resources doing whatever they want? No, that would be contrary to the environmentalist ethic of doing without. There's just no pleasing these people.

What about the idea that production follows investment and this is rooted in savings? The writer completely rejects this:

Anyone with a real business will tell you that people coming in the door and buying things is what creates jobs. In a real economy, people wanting to buy things ? demand ? is what causes businesses to form and people to be hired.
It hasn't occurred to this guy that there is no shortage of want in the world. The demand for stuff is infinite. The struggle inherent in the economic way of doing things comes with supplying what is demanded. The writer might respond that people need money to buy stuff. So we are back again to the old canard that printing infinite paper tickets is the path to salvation. We already have that system and it is called the Federal Reserve. Once again, this line of thinking ends up on the side of powerful elites.

Here he is on free trade, in which the whole human race cooperates toward mutual benefit while ignoring the nation-state (sweet liberty!):

What has happened is countries sell to us but do not buy equally from us, causing huge trade deficits that have drained our economy and our jobs and our wages.
This is precisely the claim made by every corporate mercantilist from the late Middle Ages to the present day. They want government protection against foreign goods so that they can charge more to consumers at home. They care nothing for the well-being of anyone else but themselves. They use nationalist rhetoric ("us"?) to whip up a frenzy to back their own corporate private privileges.

And so the "radical Left" says the exact same thing? This is not a challenge to the system; it is the system.

As for government regulations, check out this mind bender:

A business wants to make a profit, and will only care how regulations affect that goal. It makes sense for government to set up regulations because the rest of us are concerned about the larger world of the rest of us, and therefore understand more clearly how the actions of a business will affect the rest of us.
The implied assumptions: government acts on our behalf; government is all knowing about what is needed and what is not; businesses never favor regulations as a means of outcompeting upstarts; in a market, businesses can profit even without serving the public.

None of this is true. Government acts on behalf of itself and the interest groups it represents. Government is not omniscient and is, actually, the dumbest institution in society because it does nothing but take by force and reward its friends.

As for controlling business, there is probably no regulation on the books that wasn't pushed by some fat cat somewhere as a means of clobbering the competition through legal channels. In contrast, in a market economy, there is only one path to profitability: service to others.

These are all truths that libertarians know. For example, the historical documentation is legion on the relationship between more regulation and the lobbying by top players in the corporate pecking order. What's striking is how completely oblivious this writer is to certain basic facts about reality. It's like a kind of insanity where up is down, right is left, and white is black.

However, when it comes to war and foreign policy, suddenly sanity arrives again:

Spending on wars, the "Defense" department (military), intelligence, nuclear weapons, veterans, and related budget items (including interest on money borrowed for past military spending) is a significant portion of the budget, and people instinctively feel that the country is not getting back services that match what they are putting in.
It's all true, but note the nature of his regret. He opposes the warfare state because he thinks that he discredits the government's system of extract-and-spend. He fears that all this squandering money on bombs is making it more difficult to realize the domestic agenda of all-around government planning, spending, and socialism.

Whether backing more spending, more inflation, more regulation, or more protection, it is precisely as Anthony Gregory says: "the true members of the ruling class have nothing to fear from these protests, which on balance strengthen the power elite."

These people are radicals only in the sense that the youth of the Red Guard in Mao's China and the Nazi youth movement in Vienna in the early 1930s were radical: they are only urging the regime to be truer to itself and stop compromising with its enemies. In this sense, these street protests are not benign; they might be a foreshadowing of dark times ahead.

What is desperately needed is a movement of true radicals who do actually speak truth to power, not one that serves as echo chamber for the myths that the powerful have been trying to sell us for hundreds of years.
__
Jeffrey Tucker is the editor of Mises.org and author of It's a Jetsons World: Private Miracles and Public Crimes and Bourbon for Breakfast: Living Outside the Statist Quo. Send him mail. See Jeffrey A. Tucker's article archives.


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Awe. Jeffery doesn't like liberals. This piece is simply an outburst against anything "left." The accusations about the OWS not being radical or being pro-government (or at least pro-status quo) isn't supported by a single fact. Drivel.

This site contains copyrighted material the use of which in some cases has not been specifically authorized by the copyright owner. Such material is made available for the purposes of news reporting, education, research, comment, and criticism, which constitutes a 'fair use' of such copyrighted material in accordance with Title 17 U.S.C. Section 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. It is our policy to respond to notices of alleged infringement that comply with the Digital Millennium Copyright Act (found at the U.S. Copyright Office) and other applicable intellectual property laws. It is our policy to remove material from public view that we believe in good faith to be copyrighted material that has been illegally copied and distributed by any of our members or users.
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"Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing ever happened..." - Winston Churchill


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Rethinking the Gold Bubble

by James E. Miller

There has been a lot of speculation recently on whether or not gold is in a bubble. With Federal Reserve chairman Ben Bernanke announcing "Operation Twist" last month, gold and other commodity prices have fluctuated erratically. Immediately following the "Twist" announcement, prices of both plummeted. Gold then stabilized a few days later. To make sense of these phenomena, one must utilize Ludwig von Mises's lesson that history must be interpreted with logic and rational deduction rather than empirical evidence alone.

As the Austrian business-cycle theory teaches, artificially cheap credit, not backed by real savings, creates intertemporal discoordination in production involving scarce resources that ultimately results in malivestment. As Roger Garrison explains,

An artificial boom is an instance in which the change in the interest-rate signal and the change in resource availabilities are at odds with one another. If the central bank pads the supply of loanable funds with newly created money, the interest rate is lowered just as it is with an increase in saving. But in the absence of an actual change in time preferences, no additional resources for sustaining the policy-induced boom are freed up. In fact, facing a lower interest rate, people will save less and spend more on current consumables. The central bank's credit expansion, then, results in an incompatible mix of market forces.

Increased investment in longer-term projects is consistent with the underlying economic realities in a genuine saving-induced boom but not in a policy-induced artificial boom. The artificial boom is characterized by "malinvestment and overconsumption."

The type of boom-and-bust cycle caused by cheap credit and overinvestment was reflected in the recent housing bubble as well as the dot-com bubble just over a decade ago. As former Fed chairman Alan Greenspan cut interest rates (to deal with his previous bubbles) he provided the credit and incentive to invest in such ventures as housing and Internet start-ups. Once these investments were not as profitable as they were originally, well, you know the outcome.

So what is gold's role in all this? In light of credit and monetary expansion by governments, gold has historically kept its value over time. Investors looking for a safe asset that maintains its value can always look to gold. In a recent article in the Telegraph, Emma Simon elaborates on this historical case:

Recent research from the World Gold Council shows how gold has held its value over the long term when compared with other commodities. The relative price of gold and oil has remained almost constant over the past 50 years. So although the price of both (in either pounds or dollars) has risen during this period, if you were buying a barrel of oil with bullion you would hand over roughly the same weight of gold as you would have done in 1950.

More startling is that gold has retained this purchasing power over even longer periods. It is thought that an ounce of gold bought 350 loaves in the time of Nebuchadnezzar, the king of Babylon who died in 562BC. An ounce of gold still buys roughly 350 ordinary sliced loaves today, showing that over 2,500 years gold has proved a very effective hedge against inflation, at least when it comes to everyday essentials.

So if gold holds its value in the face of inflation, what does this tell us about the latest drop in its price following Bernanke's "Twist" announcement?

At the onset of "Quantitative Easing 2," Bernanke's last big monetary-base expansion, it was speculated that the Fed may be creating a commodities bubble. Indeed, commodities enjoyed a bull run while Bernanke added $600 billion to the Fed's balance sheet:


Source: SeekingAlpha.com

Once QE2 ended, commodities at the consumer level continued to increase in price until the "Operation Twist" announcement. There are a few conclusions to draw from this. First, we are experiencing the bursting of a commodity bubble caused by interest rates being kept artificially low by central banks around the world. These low interest rates entice large investors such as university endowments and pension funds to seek higher returns elsewhere. For example, the University of Texas endowment took the unprecedented move of purchasing $1 billion in gold bullion last April. Bernanke even boasted at the onset of QE2 last November that stock prices were up as more investors were willing to risk their money for better returns. Like commodities, stock-market gains have been heavily correlated to increases in the Fed's balance sheet. As Henry Hazlitt acknowledged, "no actual inflation happens by a simultaneous or proportional increase in everybody's money supply or money income." New money hits the economy in stages and flows into different sectors. The effect isn't felt all at once. This is just one of the consequences of artificially low interest rates.

Second, the market was expecting Bernanke and the other leaders at the Federal Reserve to do a lot more at the recent Federal Open Market Committee meeting than replicate a failed monetary trick from the 1960s. Even Goldman Sachs was surprised by the market effects of the "Twist." Judging by the plunge commodity prices took following the Fed's announcement, the market has become accustomed to expecting further monetary "easing" ? especially given Bernanke's record of meeting any economic slowdown with more money printing. It should also be pointed out that China's recent attempt at slowing down its inflation-driven economy has also lowered demand for commodities; yet another case of fiat boom and subsequent bust.

While gold may be down in price now, there is great reason to assume it will continue to rise in the long term. As investor Brandon Smith explains,

In reality, there is no QE1, QE2, TARP, etc. These are not separate stimulus efforts that actually started and concluded independent of one another. They are all a part of one long fiat injection into our economy that never ended.

The Fed is ALWAYS creating fiat. Some of it is reported, most of it is not. Ask yourself this: Are interest rates still at near zero? If the answer is yes, then the fiat still flows.

Indeed, in order to keep interest rates low, the Fed must suppress by continued "easing." There is no reason to believe that central banks around the world will suddenly have a change of heart and stop injecting money into their economies to avoid a much needed correction. This is especially so in the United States; as Doug Casey points out, "interest accounts for roughly 2% of $15 trillion official national debt, or $300 billion per year. As interest rates inevitably rise, that interest amount will grow."

The Fed will, if it ever plans to, have to raise interest rates slowly if the US government doesn't plan on continuing its spending spree of buying votes. Considering both central banks of Sweden and Japan started devaluing their perspective currencies last August and what becomes of the eurozone will most likely be the massive printing of either the drachma, escudo, lira, deutschemark, or even the euro itself, gold doesn't appear to be in a bubble in the long run as governments around the world continue to spend like drunken sailors to prop up commercial banks and provide entitlements. Having your cake and eating it too is a good strategy when the money is cheap (basically free in the case of the printing press), but the party won't last forever.

We have just witnessed another boom and bust caused by the Federal Reserve's keeping interest rates too low. The erratic volatility of gold and other commodities is the direct result of further intervention into the market through central banking. A former boss and mentor of mine once conveyed to me his worry that the actions of just a few people are having a profound effect on the world's financial system.

My response was that we haven't seen anything yet.
__
James E. Miller holds a BS in public administration with a minor in business from Shippensburg University, PA. He is a former staff columnist to the Shippensburg Slate and current contributor to his hometown newspaper, the Middletown Press and Journal. See his blog. Send him mail. See James E. Miller's article archives.


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Friday, October 28, 2011

Occupy Time Square: 1 Marine vs. 30 Cops (Marine Wins)

United States Marine Corps. Sgt. Shamar Thomas from Roosevelt, NY went toe to toe with the New York Police Department. An activist in the Occupy Wall Street movement, Thomas voiced his opinions of the NYPD police brutality that had and has been plaguing the #OWS movement.

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There is nothing to be proud about, and no honour in engaging in illegal immoral wars of aggression, based on lies, that have so far killed hundreds of thousands of innocent men women and children. american people needed no protection from iraq or afghanistan. soldiers and police are two sides of the same despicable coin.
Yes, I don't disagree. In this instance however, this is one troop who is actually standing up for freedom. A lot of these soldiers don't know why they are fighting, they are living in a lie sold by their tube's and policians. At the time it seemed patriotic as most people weren't awake back then.

Anyway....next time he should ask why they are not arresting corrupts banksters and politicians.

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What If A Court Gave An Important Ruling, But We Were Not Allowed To Know What It Was?

by Mike Masnick, Techdirt

That Anonymous Coward alerts us to the news that DC federal appeals court has issued a ruling (pdf) in the case of Gitmo detainee Adnan Farhan Abd Al Latif, but the entire ruling is classified, so the public has no idea what it says.

A ruling last year at the district court had ordered the administration to release Latif for lack of evidence that he had anything to do with Al Qaeda. And now... we have no idea what the government is ordered to do or not do. So what do we do in a time when the federal government gets to come up with secret interpretations of law and then can have court rulings on related issues entirely hidden from the public?


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Iran: U.S. plot allegations resemble Iraq WMD claims

By Robin Pomeroy

TEHRAN (Reuters) - President Mahmoud Ahmadinejad said on Monday U.S. allegations of an Iranian assassination plot resembled its claims of weapons of mass destruction that formed the basis for the 2003 invasion of Iraq, and would prove to be equally untrue.

Ahmadinejad said Washington had fabricated the plot of an Iranian seeking to kill Saudi Arabia's ambassador to Washington in order to cause a rift between Tehran and Saudi Arabia and dominate the oil-rich Gulf.

"In the past the U.S. administration claimed there were weapons of mass destruction in Iraq. They said it so strongly, they offered and presented documentations and everyone said 'yes, we believe in you, we buy it'," Ahmadinejad said in a live interview on Al Jazeera television.

"Now is everyone asking them, were those claims true? Did they find any weapon of mass destruction in Iraq? They fabricated a bunch of papers. Is that a difficult thing to do?

"The truth will be revealed ultimately and there will be no problem for us at that time," Ahmadinejad said.

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The LA Times notices the "double standard" on Iran

By Glenn Greenwald

Today we have a pleasant and exceedingly rare surprise: a major media outlet noting that the very behavior which the U.S. Government and all Serious People are now righteously condemning is behavior in which the U.S. itself routinely engages. From The Los Angeles Times?Editorial Page,?entitled ?Iran?s plot ? and a U.S. double standard??:

But wait a minute. Two weeks ago, the United States assassinated one of?its?enemies in Yemen, on Yemeni soil. If the U.S. believes it has the right to assassinate enemies like Anwar Awlaki anywhere in the world in the name of a ?war on terror? that has no geographical limitation, how can it then argue that other nations don?t have a similar right to track down their enemies and kill them wherever they?re found?

It?s true that the assassination of Awlaki was carried out with the cooperation of the government of Yemen. That makes a difference. But would the U.S. have hesitated to kill him if Yemen had not approved? Remember: There was no cooperation from the Pakistani government when Osama bin Laden was killed in May.

It?s also true that there?s a big difference between an Al Qaeda operative who, according to U.S. officials, had been deeply involved in planning terrorist activities, and a duly credited ambassador of a sovereign country. Still, the fact remains that all nations ought to think long and hard before gunning down their enemies in other countries.

As the United States continues down the path of state-sponsored assassination far from the battlefields of Iraq and Afghanistan, all sorts of tricky moral questions are likely to arise. But this much is clear: The world is unlikely to accept that the United States has a right to behave as it wishes without accountability all around the globe and that other nations do not.

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Nobody to do the Picking

by Douglas French

President Obama says Americans want to go to work. Unemployed Americans don't want a handout he says, each time he proposes extending unemployment benefits. Republican Senate leaders, he said, ?are advancing a misguided notion that emergency relief somehow discourages people from looking for a job should talk to these folks.?

?That attitude, I think, reflects a lack of faith in the American people,? says Mr. Obama. ?Because the Americans I hear from, in letters and town hall meetings, Americans like Leslie and Jim and Denise ? they?re not looking for a handout. They desperately want to work. It?s just, right now, they can?t find a job.?

Out-of-work aesthetician Leslie Macko, former body-parts manager Jim Chukalas, and unemployed maintenance supervisor Denise Gibson joined the president as props for a photo op and speech fodder last summer. ?These are honest, decent, hardworking folks who have fallen on hard times through no fault of their own and who have nowhere else to turn except unemployment benefits and who need emergency relief to help them weather this economic storm,? said the President.

Depending upon which government unemployment figure you follow, nearly one in five Americans is unemployed. Yet at harvest time farmers are finding that the only willing labor has to come from a nearby penitentiary.

In Idaho, farm labor is so scarce, convicts from the minimum-security St. Anthony Work Camp are picking, sorting and packing spuds for $7.50 an hour and happy to have work outside the prison walls. ?The best part is you have the influence of the real world, which eventually we?re all going back to,? said Thomas Alworth, a 36-year-old convicted of grand theft by possession.

Convict labor in Arizona is up 30 percent this year, with Arizona's tough immigration law a primary reason. ?The crackdown on immigrants just makes it so hard? to find workers, said Richard Selapack, vice president for labor contracts at the Arizona Department of Corrections.

Frank van Straalen, COO of Eurofresh Farms in Wilcox, Arizona, says very few native-born Americans apply for jobs in his greenhouses and those that do typically quit.

Jerry Spencer had the same experience at his tomato farm north of Birmingham. After his Hispanic workers left with the passage of Alabama's new immigration law, he thought he'd recruit unemployed U.S. citizens to pick the tomatoes. However, "jobless resident Americans lack the physical stamina and the mental toughness to see the job through," Spencer told the Associated Press.

Tomato farmer Helen Jenkins says, ?It?s just not working,? referring to the new law. ?You can?t get the (American) workers out here to do the work that the Hispanics were doing. They?re just not capable.?

Lana Boatwright, another tomato farmer, told the AP that many of the people she has tried to hire were concerned about losing their government disability payments if they went to work for her.

Mr. van Straalem, a third of whose workers are prisoners, told the Wall Street Journal, "We're fortunate, we're near a prison here."

Restaurateurs and farmers in Georgia are having trouble finding help since the passage of HB 87 in April. The labor shortage left crops rotting fields this spring and summer at a cost of $74.9 million to Georgia farmers. The farmers said they lacked 40 percent of the total work force they needed.

Today, the Bureau of Labor Statistics released producer price index (PPI) data for September. In the release's Stage-of-Processing Analysis section was this,

Finished foods: Prices for finished consumer foods climbed 0.6 percent in September, the fourth consecutive monthly increase. Accounting for over eighty percent of the September advance, prices for fresh and dry vegetables increased 10.0 percent.

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$7.50 an hour .. Are you shitting me ?
Stop being a cheap Uncle Scrooge and pay people a decent wage ..
Only an idiot would work the fields for 7.50 an hour .

IN other words :
The Market is trying to tell these cheap farmers something and what do they do ? They fucking whine !!

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Italy cracks down on anarchists after riot


ROME (AP) -- Italian police conducted raids Monday throughout the country against suspected anarchists and their sympathizers following riots in Rome that marred a march against Wall Street greed, a top security official said.

Interior Ministry Undersecretary Alfredo Mantovano told Sky TG24 TV that the crackdown targeted far-left suspects. He gave no details because the operation, which included house searches, was still being carried out.

Italian news reports said police raided homes and youth centers where extremists are known to hang out in cities including Florence, Palermo and Ancona. Six people were detained, along with the seizure of gas masks, ski masks and other gear used by rioters as protection from tear gas and to hide their faces, the ANSA news agency reported.

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Thursday, October 27, 2011

Keynesian Economics In Under 1 Minute

Keynesian Economics In Under 1 Minute - informationliberationinformationliberation
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Keynesian Economics In Under 1 Minute


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The Federal Reserve and Bank of America Initiate a Coup to Dump Hundreds of Billions of Dollars of Losses on the American Taxpayer

Penn Jillette gets it.


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Yea, well, if the rich were doing it without guns pointed at them, there wouldn't be any need for the guns. He's totally right! Compassion is only compassion when you do it yourself--plus a heck of a whole lot more fulfilling.

Perhaps you three "Anonymous" should try it.

Way to be part of the 1%, Penn. We're taking this shit back so you may as well learn to like it or maybe try out Russia. I hear they don't take care of their people over there. You should fit right in. The poor can't afford to help the poor, you rich bastard. lol you all are idiots who miss the point, It's real cute but kind of disappointing. You're dithering bags of idiot, walking around in a rage you yourselves will forever be confused about. When is it going to be his turn to shut up and Teller's to speak? If he wants a true Libertarian paradise he should live in Haiti. He's just another person who can't handle the gray areas of life. Third world countries have very weak non-centralized government, the majority are disenfranchised with no public schooling, no support systems to help them get out of poverty, terrible infrastructure, poor health standards, and no strong businesses. There you go, Libertarians, now please try to think your ideas all the way through before you go trying to change the world (which used to be a Libertarian's wet dream, but ask yourself why we worked so hard to get away from it). Im poor but i still give to the homeless. i politically believe in taxation because i know Haliburton wont give a dime. what an idiot, no body is pointing a gun at any one to get them to help, the only gun pointing is us pointing the guns at other countries to get them to do what we want them to , fucking ass hole. We want cops, teachers , military, good roads and bridges, these things cost money, revenue comes from taxes, pretty fucking simple.
The rich got their tax break and they still sent the jobs over seas where people work for $.32 an hour. Enough is never enough for them. They worry about what kind of fucking caviar to eat while some people wonder where their next meal will come from. It is sad really. I don't make that much, but I do not complain when 20% of my check disappears every week. But they will bitch if they have to pay 30% even though what they have left over is what I make all year. Wish I had their fucking problems. Oh Penn! You know I love you man! You are a genius! But you don't get it on this one. People need to be fed, medicated, educated, clothed and sheltered. Using our government to ensure everyone's basic needs are met is not compassion. It is self interest. I do not want to live surrounded by starving, sick, stupid, naked homeless people. I support an Economic Bill of Rights as proposed by FDR. We might not be able to get there today; but, we can do better and should!

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Top Income in U.S. Is...Gasp!...Wash. D.C. Area

By Frank Bass and Timothy R. Homan

Federal employees whose compensation averages more than $126,000 and the nation?s greatest concentration of lawyers helped Washington edge out San Jose as the wealthiest U.S. metropolitan area, government data show.

The U.S. capital has swapped top spots with Silicon Valley, according to recent Census Bureau figures, with the typical household in the Washington metro area earning $84,523 last year. The national median income for 2010 was $50,046.

The figures demonstrate how the nation?s political and financial classes are prospering as the economy struggles with unemployment above 9 percent and thousands of Americans protest in the streets against income disparity, said Kevin Zeese, director of Prosperity Agenda, a Baltimore-based advocacy group trying to narrow the divide between rich and poor.

?There?s a gap that?s isolating Washington from the reality of the rest of the country,? Zeese said. ?They just get more and more out of touch.?

Total compensation for federal workers, including health care and other benefits, last year averaged $126,369, compared with $122,697 in 2009, according to Bloomberg News calculations of Commerce Department data. There were 170,467 federal employees in the District of Columbia as of June. The Washington area includes the District of Columbia, parts of Northern Virginia, eastern Maryland and eastern West Virginia.

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Miami Commission Approves $500,000 Settlement to Cop Rapist's Victim

City of Miami Commissioners approve a $500,000 settlement for woman raped by police officer
By Brian Hamacher



The Miami City Commission unanimously approved a $550,000 settlement Thursday for a woman who filed a lawsuit after she was kidnapped and sexually assaulted by a police officer.

The woman was attacked on March 19, 2007 by Officer Michael Ragusa, who was sentenced in 2008 to 10 years behind bars for sexual attacks on three women.

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The Austerity Myth: Federal Spending Up 5% This Year

By JOHN MERLINE, INVESTOR'S BUSINESS DAILY

When Republicans took control of the House in January, they pledged to make deep cuts in federal spending, and in April they succeeded in passing a bill advertised as cutting $38 billion from fiscal 2011's budget. Then in August, they pushed for a deal to cut an additional $2.4 trillion over the next decade.

Some analysts have blamed these spending cuts for this year's economic slowdown.

But data released by the Treasury Department on Friday show that, so far, there haven't been any spending cuts at all.

Higher Spending, Deficits

In fact, in the first nine months of this year, federal spending was $120 billion higher than in the same period in 2010, the data show. That's an increase of almost 5%. And deficits during this time were $23.5 billion higher.

These spending hikes haven't stopped many analysts from claiming that the country is in an age of budget austerity, one that's hurting economic growth.

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Wednesday, October 26, 2011

Video: Man beaten as East St. Louis police watch

By Carolyn P. Smith - News-Democrat

A video posted on YouTube shows two East St. Louis Police officers standing by as another man punches a handcuffed man lying in the street.

The video is the subject of an internal investigation, the top commander of the police department said.

[...]]The video shows the two East St. Louis police officers present near Club Capacity, which is the former Jo Joe?s and before that was Club Phoenix. The unnamed victim is lying on the ground in handcuffs. A police commander is standing by as an unknown individual, who is not with the police, beats the victim. An officer Maces the victim and the man beating the victim Maces the victim, too.

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Prison-Yard America

by Wendy McElroy

Since September, a public-school district in Florida has been taking fingerprint scans at the entrance to schools as a way to monitor attendance. The scans are compared against a database of students to detect truants. As in most highly intrusive school policies, parents are thrown a bone of control by allowing them to request an ?opt out? for their children. An opted-out student needs to pursue a teacher and go through a special sign-in every day. In terms of time, convenience, and avoidance of stigma, students have a strong incentive to comply quietly.

But the current scanner setup is not efficient enough; the location makes it ?difficult to keep track of every student.? And so the district is experimenting with supplementary scanners on the school buses that almost every student uses.

The schools' superintendent, Sandra Cook, acknowledges that the transition has not been easy. Why not? Have parents complained about the Orwellian violation of children's privacy? Are they outraged by the state's assumption that children's fingerprints are state property unless objections are raised?

TV station WJHG explains, ?One of the biggest challenges they've faced is where to put the devices on the buses. State safety codes require the aisles to be kept completely clear, so one of the ideas they've discussed is to put a laptop on one side of the steering wheel and the finger scan system on the other.? The discussion revolves, not around rights, but around technical issues.

The institutions and interactions of society are slowly coming to resemble a prison yard.A key and defining feature of America's prison system is that the people being processed through it have no rights whatsoever that the authorities feel required to consider. Prisoners are caged like animals, removed from familial and other free exchanges, strip-searched at a guard's whim, beaten with no legal recourse, and forced into a de facto ?slave? labor.

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Why the State Demands Control of Money

by Hans-Hermann Hoppe

Imagine you are in command of the state, defined as an institution that possesses a territorial monopoly of ultimate decision making in every case of conflict, including conflicts involving the state and its agents itself, and, by implication, the right to tax, i.e., to unilaterally determine the price that your subjects must pay you to perform the task of ultimate decision making.

To act under these constraints ? or rather, lack of constraints ? is what constitutes politics and political action, and it should be clear from the outset that politics, then, by its very nature, always means mischief. Not from your point of view, of course, but mischief from the point of view of those subject to your rule as ultimate judge. Predictably, you will use your position to enrich yourself at other people's expense.

More specifically, we can predict in particular what your attitude and policy vis-?-vis money and banking will be.

Assume that you rule over a territory that has developed beyond the stage of a primitive barter economy and where a common medium of exchange, i.e., a money, is in use. First off, it is easy to see why you would be particularly interested in money and monetary affairs. As state ruler, you can in principle confiscate whatever you want and provide yourself with an unearned income. But rather than confiscating various producer or consumer goods, you will naturally prefer to confiscate money. Because money, as the most easily and widely saleable and acceptable good of all, allows you the greatest freedom to spend your income as you like, on the greatest variety of goods. First and foremost, then, the taxes you impose on society will be money taxes, whether on property or income. You will want to maximize your money-tax revenues.

In this attempt, however, you will quickly encounter some rather intractable difficulties. Eventually, your attempts to further increase your tax income will encounter resistance in that higher tax rates will not lead to higher but to lower tax revenue. Your income ? your spending money ? declines, because producers, burdened with increasingly higher tax rates, simply produce less.

In this situation, you only have one other option to further increase or at least maintain your current level of spending: by borrowing such funds. And for that you must go to banks ? and hence your special interest also in banks and the banking industry. If you borrow money from banks, these banks will automatically take an active interest in your future well-being. They will want you to stay in business, i.e., they want the state to go on in its exploitation business. And since banks tend to be major players in society, such support is certainly beneficial to you. On the other hand, as a negative, if you borrow money from banks you are not only expected to pay your loan back, but to pay interest on top.

The question, then, that arises for you as the ruler is, How can I free myself of these two constraints, i.e., of tax-resistance in the form of falling tax revenue and of the need to borrow from and pay interest to banks?

It is not too difficult to see what the ultimate solution to your problem is.

You can reach the desired independence of taxpayers and tax payments and of banks, if only you establish yourself first as a territorial monopolist of the production of money. On your territory, only you are permitted to produce money. But that is not sufficient. Because as long as money is a regular good that must be expensively produced, there is nothing in it for you except expenses. More importantly, then, you must use your monopoly position in order to lower the production cost and the quality of money as close as possible to zero. Instead of costly quality money such as gold or silver, you must see to it that worthless pieces of paper that can be produced at practically zero cost will become money. (Normally, no one would accept worthless pieces of paper as payment for anything. Pieces of paper are acceptable as payment only insofar as they are titles to something else, i.e., property titles. In other words then, you must replace pieces of paper that were titles to money with pieces of paper that are titles to nothing.)

Under competitive conditions, i.e., if everyone were free to produce money, a money that can be produced at almost zero cost would be produced up to a quantity where marginal revenue equals marginal cost, and because marginal cost is zero the marginal revenue, i.e., the purchasing power of this money, would be zero as well. Hence, the necessity to monopolize the production of paper money, so as to restrict its supply, in order to avoid hyperinflationary conditions and the disappearance of money from the market altogether (and a flight into "real values") ? and the more so the cheaper the money commodity.

In a way, you have thus accomplished what all alchemists and their sponsors wanted to achieve: you have produced something valuable (money with purchasing power) out of something practically worthless. What an achievement. It costs you practically nothing and you can turn around and buy yourself something really valuable, such as a house or a Mercedes; and you can achieve these wonders not just for yourself but also for your friends and acquaintances, of which you discover that you have all of a sudden far more than you used to have (including many economists, who explain why your monopoly is really good for everyone).

What are the effects? First and foremost, more paper money does not in the slightest affect the quantity or quality of all other, nonmonetary goods. There exist just as many other goods around as before. This immediately refutes the notion ? apparently held by most if not all mainstream economists ? that "more" money can somehow increase "social wealth." To believe this, as everyone proposing a so-called easy-money policy as an efficient and "socially responsible" way out of economic troubles apparently does, is to believe in magic: that stones ? or rather paper ? can be turned into bread.

Rather, what the additional money you printed will affect is twofold. On the one hand, money prices will be higher than they would otherwise be, and the purchasing power per unit of money will be lower. In a word, the result will be inflation. More importantly, however, all the while the greater amount of money does not increase (or decrease) the total amount of presently existing social wealth (the total quantity of all goods in society), it redistributes the existing wealth in favor of you and your friends and acquaintances, i.e., those who get your money first. You and your friends are relatively enriched (own a larger part of the total social wealth) at the expense of impoverishing others (who as a result own less).

The problem, for you and your friends, with this institutional setup is not that it doesn't work. It works perfectly, always to your own (and your friends') advantage and always at the expense of others. All you have to do is to avoid hyperinflation. For in that case people would avoid using money and flee into real values, thus robbing you of your magic wand. The problem with your paper-money monopoly, if there is one at all, is only that this fact will be immediately noticed also by others and recognized as the big, criminal rip-off that it indeed is.

But this problem can be overcome, too, if, in addition to monopolizing the production of money, you also set yourself up as a banker and enter the banking business with the establishment of a central bank.

Because you can create paper money out of thin air, you can also create credit out of thin air. In fact, because you can create credit out of nothing (without any savings on your part), you can offer loans at cheaper rates than anyone else, even at an interest rate as low as zero (or even at a negative rate). With this ability, not only is your former dependency on banks and the banking industry eliminated; you can, moreover, make banks dependent on you, and you can forge a permanent alliance and complicity between banks and state. You don't even have to become involved in the business of investing the credit yourself. That task, and the risk involved in it, you can safely leave to commercial banks. What you, your central bank, need to do is only this: You create credit out of thin air and then loan this money, at below-market interest rates, to commercial banks. Instead of you paying interest to banks, banks now pay interest to you. And the banks in turn loan out your newly created easy credit to their business friends at somewhat higher but still submarket interest rates (to earn from the interest differential). In addition, to make the banks especially keen on working with you, you may permit the banks to create a certain amount of their own new credit (of checkbook money) in addition and on top of the credit that you have created (fractional-reserve banking).

What are the consequences of this monetary policy? To a large extent they are the same as with an easy money policy: First, an easy credit policy is also inflationary. More money is brought into circulation and prices will be higher, and the purchasing power of money lower, than would have been the case otherwise. Second, the credit expansion too has no effect on the quantity or quality of all goods currently in existence. It neither increases nor decreases their amount. More money is just this: more paper. It does not and cannot increase social wealth by one iota. Third, easy credit also engenders a systematic redistribution of social wealth in favor of you, the central bank, and the commercial banks within your cartel. You receive an interest return on money that you have created at practically zero cost out of thin air (instead of on money costly saved out of an existing income), and so do the banks, who earn additional interest on your costless money loans. Both you and your banker friends thereby appropriate an "unearned income." You and the banks are enriched at the expense of all "real" money savers (who receive a lower interest return than they otherwise would, i.e., without the injection of your and the banks' cheap credit into the credit market).

On the other hand, there also exists a fundamental difference between an easy, print-and-spend money policy and an easy, print-and-loan credit policy.

First off, an easy credit policy alters the production structure ? what is produced and by whom ? in a highly significant way.

You, the chief of the central bank, can create credit out of thin air. You do not have to first save money out of your money income, i.e., cut your own expenses, and thus abstain from buying certain nonmoney goods (as every normal person must, if he extends credit to someone). You only have to turn on the printing press and can thus undercut any interest rate demanded of borrowers by savers elsewhere in the market. Granting credit does not involve any sacrifice on your part (which is why this institution is so "nice"). If things then go well, you will be paid a positive-interest return on your paper investment, and if they don't go well ? well, as the monopoly producer of money, you can always make up losses more easily than anyone else: by covering your losses with even more printed paper.

Without costs and no genuine, personal risk of losses, then, you can grant credit essentially indiscriminately, to everyone and for any purpose, without concern for the creditworthiness of the debtor or the soundness of his business plan. Because of your "easy" credit, certain people (in particular investment bankers) who otherwise would not be deemed sufficiently creditworthy, and certain projects (in particular of banks and their main clients) that would not be considered profitable but wasteful or too risky instead do get credit and do get funded.

Essentially, the same applies to the commercial banks within your banking cartel. Because of their special relationship to you, as the first recipients of your costless low-interest paper-money credit, the banks, too, can offer loans to prospective lenders at interest rates below market interest rates ? and if things go well for them they go well; and if they don't, they can rely on you, as the monopolistic producer of money, to bail them out in the same way as you bail yourself out of any financial trouble: by more paper money. Accordingly, the banks too will be less discriminating in the selection of their clients and their business plans and more prone to funding the "wrong" people and the "wrong" projects.

And there is a second significant difference between a print-and-spend and a print-and-loan policy and this difference explains why the income and wealth redistribution in your and your banker friends' favor that is set in motion by easy credit takes the specific form of a temporal ? boom-bust ? cycle, i.e., of an initial phase of seeming general prosperity (of expected increases in future incomes and wealth) followed by a phase of widespread impoverishment (when the prosperity of the boom period is revealed as a widespread illusion).

This boom-bust feature is the logical ? and physically necessary ? consequence of credit created out of thin air, of credit unbacked by savings, of fiduciary credit (or however else you may call it) and of the fact that every investment takes time and only shows later on, at some time in the future, whether it is successful or not.

The reason for the business cycle is as elementary as it is fundamental. Robinson Crusoe can give a loan of fish (which he has not consumed) to Friday. Friday can convert these savings into a fishing net (he can eat the fish while constructing the net), and with the help of the net, then, Friday, in principle, is capable of repaying his loan to Robinson, plus interest, and still earn a profit of additional fish for himself. But this is physically impossible if Robinson's loan is only a paper note, denominated in fish, but unbacked by real-fish savings, i.e., if Robinson has no fish because he has consumed them all.

Then, and necessarily so, Friday must fail in his investment endeavor. In a simple barter economy, of course, this becomes immediately apparent. Friday will not accept Robinson's paper credit in the first place (but only real, commodity credit), and because of this, the boom-bust cycle will not get started. But in a complex monetary economy, the fact that credit was created out of thin air is not noticeable: every credit note looks like any other, and because of this the notes are accepted by the takers of credit.

This does not change the fundamental fact of reality that nothing can be produced out of nothing and that investment projects undertaken without any real funding whatsoever (by savings) must fail, but it explains why a boom ? an increased level of investment accompanied by the expectation of higher future income and wealth ? can get started (Friday does accept the note instead of immediately refusing it). And it explains why it then takes a while until the physical reality reasserts itself and reveals such expectations as illusory.

But what's a little crisis to you? Even if your path to riches is through repeated crises, brought about by your paper-money regime and central-bank policies, from your point of view ? from the viewpoint as the head of state and chief of the central bank ? this form of print-and-loan wealth redistribution in your own and your banker friends' favor, while less immediate than that achieved with a simple print-and-spend policy, is still much preferable, because it is far more difficult to see through and recognize for what it is. Rather than coming across as a plain fraud and parasite, in pursuing an easy-credit policy you can even pretend that you are engaged in the selfless task of "investing in the future" (rather than spending on present frivolities) and "healing" economic crises (rather than causing them).

What a world we live in!
__
Hans-Hermann Hoppe, an Austrian School economist and anarchocapitalist philosopher, is professor emeritus of economics at UNLV, a distinguished fellow with the Ludwig von Mises Institute, and founder and president of The Property and Freedom Society. Send him mail. See Hans-Hermann Hoppe's article archives.


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