Misdirection or New Direction?

In an earlier post entitled "Austerity, Repudiation or Inflation?" I predicted that austerity measures to reduce the national debt or an outright default on the debt were both unlikely outcomes.

I therefore concluded that the UK government would continue to expand its sovereign debt and that the Bank of England would continue to run the printing press in order to purchase all the unsold treasury bonds.

However, a recent statement issued by Federal Reserve Chairman Ben Bernanke gives us more information to go on, since where the US central bank leads, the ECB and BoE are likely to follow.

So what do we make of Chairman Bernanke's statement?

It could be a simple case of misdirection. When Helicopter Ben says "we are not going to monetize any more US debt" he could mean "we are going to monetize US debt like crazy".

If that is the case, then the scenario I originally predicted will still come true.

Or he could be "getting tough" with the politicians. Ron Paul's HR 1207 has sent shivers down the spines of central bankers around the world.

A genuine refusal from the central bank to monetize any more sovereign debt will definitely provoke a response from government.

But what response?

Either the political class will bow down and beg his forgiveness - but why should they if the money tap is turned off? - or the resolve to End The Fed will increase and come, not just from free marketeers like Ron Paul, but also from big spending socialists like Dennis Kucinich.

If the US Treasury issued new fiat money instead of interest-bearing debt, the inflationary effects would be sudden and transparent instead of slow and opaque.

I don't know if it is possible to avert global monetary disaster at this point. Maybe pigs will sprout wings and politicians will spend less. Eventually, they may have no choice.

Four Errors of Marxism.

There are (at least) four major errors in the political, economic and historical doctrine of Marxism.

The first error is identified by Ludwig Von Mises in Chapter Three of Human Action.

Ad Hominem is essential to Marxism. Don't believe in the triumph of socialism?

Well, then you must be a bourgeois ;-)

The second error concerns the analysis of classes.

Society stubbornly refuses to resolve itself neatly into bourgeoisie and proletariat.

Marx himself wrote this in a letter to Karl Kautsky dated September 12th 1882:

"You ask me what the English workers think about colonial policy. Well, exactly the same as they think about politics in general: the same as the bourgeoisie think. There is no workers' party here, you see, there are only Conservatives and Liberal-Radicals, and the workers gaily share the feast of England's monopoly of the world market and the colonies."

The third error is a failure to distinguish between cost and value. Adam Smith and Ricardo also slipped up on this question and advocated the Labour Theory of Value.

The fourth error is Marx's theory of the economic cycle. According to Marxists, the private appropriation of profit impoverishes consumers to such an extent that a "Crisis of Overproduction" results. This article in "Proletarian" outlines the orthodox marxist position on the business cycle.

The real cause of malinvestment is outlined by the Austrian School of Economics.

Who are the REAL "spin doctors" here?

Mainstream TV, newspaper and radio pundits make very heavy weather of "political spin".

Since Labour's 1997 election victory there has been endless discussion of "shadowy figures" such as Alistair Campbell.

However, there is a "elephant in the room" that the mainstream media will never mention. That elephant is their very own spin on who is a "serious candidate".

Here is an example from the USA.

As the LPUK gains popularity we can expect similar shenanigins from the media in Britain.

Central Banking: create the problem you claim to solve!

I'd like to open this post with a hilarious wiki article that appears to have been written by a dummy, rather than "for dummies".

Of course, not all of us are that naive.

Many authors are aware that there is something decidedly fishy about central banking and yet many of them completely mis-identify what makes the Federal Reserve, ECB and BoE smell of kippers.

One such author is Stephen Zarlenga, whose solution to government control of the money supply is...even more government control of the money supply.

This article by Kaj Grussner of the Mises Institute neatly illustrates where statist money cranks such as Paul Grignon, Ellen Brown and Stephen Zarlenga got it completely wrong.

Personally, I'm getting a little tired of people claiming that they "don't understand" the "complex issues" around the government monopoly on money.

What's "complicated" about the fact that money predates government?

Google Merchant bans Alex Jones.

Google loves to censor.

When they are not acting as lackeys for the the Chinese Communist Party, they like to oppose westerners who tell the truth about global corporatism.

The most notable example is filmaker and talk radio host Alex Jones.

I've often said that if an article is published by a news agency like Reuters or Associated Press then no-one will bat an eyelid until Alex Jones reads it out verbatim at which point people will call him a "conspiracy nut".

He's an aggregator who selects information that is critical of Big Government.

Keep up the good work Alex. You're having an effect!

Merseyside Police's £40k Fail.

A flying CCTV police drone...that violates Air Traffic regulations.

Ironic isn't it?

Its like...

Still Statist, but no longer Racist?

The BNP rank-and-file have just voted to let anyone join.

So now, if you phone them up and say: "Hello, I'm a black gay jew who wants to join the BNP" they can't knock you back!

While you're at it, phone up the Labour, Conservative and Lib Dem parties and ask them how their brand of Keynesian statism differs from the ex-nazis of the BNP.

Poll: Is it acceptable to torture Richard Littlejohn?

60% of Daily Mail readers think its perfectly acceptable to torture you if they suspect that you're a terrorist.

Personally, I think that torture is great and I suspect that the "journalist" Richard Littlejohn (Sun, Daily Mail) is an amoral thug who just needs a bit of pressure applied to him in order to confess to his crimes.

If you ask me, he probably started the Reichstag Fire in 1930s Germany. Just a hunch. Personally, I don't have any truck with namby-pamby liberal concepts like "evidence".

My sophisticated interrogation methods will reveal the truth:

Me: "Did you start the Reichstag Fire?"
Littlejohn: "No."

SLAP!

Me: "Let's start again with my finger in your eye socket shall we?"

Former Minnesota governor Jesse Ventura once remarked that if he was allowed to waterboard Dick Cheney, that the vice president would confess to the Sharon Tate murders.

I think he has a point.

The ignorant, amoral thugs who voted "yes" in that Daily Mail poll have apparently never heard of the Spanish Inquisition. It has also never occured to them that white British people might get tortured on home soil.

Tony Blair attacks "Conspiracy Theories"

This article in the Daily Mail gave me a good chuckle.

I'm always accused of being a "conspiracy theorist" myself. I look for motive and opportunity in the world of human beings. According to popular culture, that means I'm a paranoid loony who wears a tin-foil hat.

You might not define yourself in those terms, but its very likely that the government does put you in the "conspiracy theorist" box every time that you disagree with them.

Of course, the real nub of the issue here is the truth. Blair did not complain about "wrongness" or "inaccuracy". He criticised a way of thinking.

I might say that he just wants to avoid any scrutiny of the facts, but that would make me a "conspiracy theorist" wouldn't it?

Pssst...Did you know that the Reichstag Fire was an inside job?

Only in America? Think on...

Britain is often regarded by American libertarians as the "beta test" area for tyranny.

They note our mushrooming CCTV cameras, draconian victim disarmament laws and NHS death panels.

They take it as a warning: "...if it can happen over there...it can happen over here".

Still, I'm not convinced that Britain always leads the way in terms of repeated boot applications to the human face.

Would any British government department publish a document like the Domestic Extremism Lexicon on the internet?

I think its a case of "horses-for-courses". American fascists like things out-in-the-open. No messing.

Maybe British fascists are just more modest and diffident?

Austerity, Repudiation or Inflation?

I'm talking about the national debt folks.

Whoever wins the next election, what are the chance that our sovereign debt will be actually be paid down during the next parliament?

Pretty slim if you ask me.

Political expediency demands that our MPs must continue to spend like crazy in three areas: welfare for the poor, government jobs for the middle class and corporate welfare for the largest companies still nominally in the "private sector".

Making major cuts in any of those three areas would draw tremendous political flack.

Austerity is not on the cards.

Is the next government likely to default on its obligations?

That might sound like a trouble-free way out of the hole, especially if Labour wins again. It would bolster the party's "left" credentials with the grass-roots, wouldn't it?

Lenin did it in 1917...

While credit rating agencies such Moodys do not discount the possibility of default, the backlash would be fierce.

As well as royally shafting the current holders of UK debt (including commercial banks, foreign central banks, the BoE, pension funds and small investors), a default would make Britain a financial pariah.

Future British governments would be forced to live within their means.

Repudiation is not on the cards.

That leaves us with the last remaining possibility. That the UK national debt will continue to grow at breakneck speed and the principal market for this debt will be our very own central bank.

In order to monetize this debt, the BoE would credit the Treasury's account with astronomical figures and take on equally vast sums of worthless UK debt.

It is absolutely no co-incidence that so many other western nations are struggling in the same way that Britain is at the moment.

The post-war Bretton Woods agreement tied the world's paper currencies to the US Federal Reserve Note and the dollar itself to Gold at the rate of $35 per troy oz.

Richard Nixon's administration shut the "gold window" in 1971 and gave us the modern era of total fiat money.

Tax revenues and debt became the new "backing" for central bank paper as inflation ran rampant. The soul singer Marvin Gaye described these political developments in his song "Inner City Blues".

Inflation is definitely on the cards.

British Army To Patrol Streets

This article in from the Independent outlines plans to deploy British troops in order to deal with the fabled terrorist bogeyman.

"Anti-Terror" legislation has already been used by local councils to spy on people who over-filled their wheelie bins or sent their kids to selective schools outside their appointed catchment area.

So, I'm wondering who the real threat is this time.

I'm guessing that the real threat to our political class is the general public once the sovereign debt crisis explodes over our heads.

£420,000 - Small Change to the Labour Party!

The Manchester Evening News reports that Manchester City Council has overpaid more than £420,000 to the organisation Marketing Manchester (which describes itself as “the agency charged with promoting Manchester on a national and international stage). This was over a six year period. Manchester City Council is supposed to contribute 35 per cent of Marketing Manchester's budget, with the other nine Greater Manchester councils splitting the remaining 65 per cent of the bill between them. Instead, the ratio was reversed – and it took the council six years to notice. That doesn't say much for their accounting methods for a start. To make things worse, a decision has been made not to reclaim the money, but to write it off instead – to write off nearly half a million pounds of taxpayers' money.

It seems that the Council's Deputy Leader, Jim Battle (Labour) reckons it's not worth the effort of reclaiming the money owed. According to Battle:

“There was a misunderstanding and it has now been corrected, end of story. It would be bureaucratic nonsense to chase a few thousand pounds. It will cost more to administer and correct.”

End of story? Leaving to one side the fact that they tend to take a firmer line when the hard-pressed working poor of this city fall behind with their Council Tax payments (they send the bailiffs in), this seems a bit of a cavalier attitude to taxpayers' money – and it is the taxpayers' money, not the council's. Ordinary people work hard to support themselves and then get over-taxed by this kleptomaniac Labour council – the least they can do is spend the money raised through Council Tax wisely. How is it that the council thinks they can afford to use our money to subsidise this glorified PR agency, and yet they couldn't afford to salt the roads properly this winter?

Or maybe the real question that should be asked is this: Should Marketing Manchester even exist? Why does Manchester need promoting? We're one of the major cities in the UK, who doesn't know we're here? Giving money to Marketing Manchester is a pointless extravagance at a time when the council should be focusing on providing core services as efficiently as possible.

O.K. who are you and what have you done with Gordon Brown?

That is the question I found myself asking after reading this article in yahoo news.

New voting system?

I'm all ears...

A written constitution? Like in America?

I smell blood...

Of course, its possible that we will never get a new voting system or a written constitution. Its also very likely that the first "new constitution" will be awful.

However, the very fact that a governing political party is talking about constitutional change shows that our political class is desperate to restore some credibility and justify their existence.

What worries them is not so much that we'll vote for the wrong party, but that we won't vote at all, won't join political parties, won't contribute to their campaigns but instead will act on the popular sentiment that "it doesn't matter who you vote for cos they're all the same".

Monarchs don't pretend to have a popular mandate. They own everything in the kingdom. They are the master. You are the serf. There are no illusions.

Democratic politicians have to pretend that they work for you. Not for themselves, the banking cartel, the military industrial complex or any other special interest.

That pretence is wearing pretty thin.

Half of all UK jobs created by the state.

Most socialists in this country want that figure raised to 100%.

Its a slippery slope. Intervention begets a crisis, which provokes more intervention, which begets another crisis, which leads to more intervention until no more tinkering is possible and the system collapses.