No need for national conflict over Arctic resources

Arctic leaders talk in Russia about tapping riches without ruining environment

http://rt.com/news/arctic-forum-russia-putin-315/

The nations of the world are right to discuss opening the Arctic to economic development without threats of national conflict. Austrian economic theory points the way. Previously untapped resources become the sole property of the first to bring them to market. In his Second Treatise on Government John Locke explained that man has the right to property ownership in any previously untapped resource via "mixing one's labor" with it. Austrian economists call this the homesteading principle. Therefore, the Arctic should become a free economic zone, and property rights should accrue to whichever individual, company, or country homesteads it. The benefits that will accrue to the citizens of the world are the same regardless of who brings the product to market. It is important that the new owners obtain complete ownership of the resource so that they will capitalize it for the long term rather than simply exploit it for temporary gain. Any homesteader may, of course, transfer his ownership rights to anyone else at any time. Plus, any owner loses his right to the property if he abandons it; then the property becomes available to the next homesteader. The homesteader may rightfully claim ownership only to the property that he can work. He may not claim the entire Arctic or even a large part of it without working it.

IMF calls for a socialist EU

Eurozone governments must give up more power to avoid another crisis, say IMF economists

http://www.telegraph.co.uk/finance/financialcrisis/10333439/Eurozone-governments-must-give-up-more-power-to-avoid-another-crisis-say-IMF-economists.html

The IMF--whose mandate for existence ceased when the US went off the gold standard in 1971...yet, like Dracula, it still walks the earth, sucking the lifeblood of more victimes--has recommended that the EU become one, big socialist union in order to fight the scourge of deflation. God forbid that deficit countries "suffer" deflation, whereby their costs of production fall and the nation becomes more competitive. Fighting deflation has become one of the world's greatest fallacies. Deflation is GOOD. Lower prices are GOOD. This is how an individual and an entire nation recovers. In his seminal book America's Great Depression Murray N. Rothbard explained how Presidents Hoover and FDR insisted on propping up prices during the Great Depression, which only prolonged the misery. Jorg Guido Hulsmann explains the economic theory involved in this short book Deflation and Liberty.

Failing to address the core problem

Draghi wants permanent eurozone bailout fund

ECB president Mario Draghi wants a 500 billion euro bank bailout fund, as if a one time bailout is all that is needed. However, the core problem has not been addressed. Fractional reserve banking means that the banks can pyramid multiple amounts of new lending (creating new money in the process) out of a small increase in reserves. This "something for nothing" credit expansion causes an unsustainable bubble, and that which cannot be sustained will not be sustained. The malinvestment must be liquidated, and Draghi assumes that his bailout fund is sufficient to save the banks...just this one time. But Draghi's proposed one time bailout will be repeated again and again until we realize that lending must be funded from real savings and not newly printed fiat money, created by the banks' privilege of fractional reserve lending. The template for an honest and noninflational banking system can be found in Murray N. Rothbard's The Mystery of Banking.

Lowering the bar

From Open Europe news summary of September 20, 2013:

European Commission finance officials have tentatively reached an agreement to adjust the way the ‘structural deficit’ of eurozone countries is calculated. This could allow for an easing of austerity since more of the deficit could be seen as ‘cyclical’.WSJ

This would be hilarious if it were not so serious. Since the deficit countries lack the courage to balance their budgets and, furthermore, have no reason to do so in a union without real enforcement, the euro elite have decided to redefine success by lowering the bar! When will the rest of Europe wake up and realize that the EU and the EMU suffer from structural faults that cannot be avoided? The EU is a socialist organization, whereby success is punished and failure is rewarded. There is no way to avoid the inevitable consequences of such a structure. Europe's capital base and its world competitiveness is being undermined by its attempt to place entire countries on welfare.

Once again, I'm Shocked! Shocked! (Not really)

From today's Open Europe news summary:

The ECB's Money Market Contact Group, a panel of industry members who advise the ECB, have called for the central bank to renew its three year long term refinancing operation (LTRO) next year due to fears over funding pressures as the current loans expire.
WSJ  

Once again, I'm (not really) Shocked!  Shocked! that politicians are prevailing upon a central bank to keep printing money.

Here is a short explanation of the LTRO.  It means that the European Central Bank can print money and funnel it to European banks so that THEY, and not the ECB itself, can monetize their own governments' debt.  This is just one of the many backdoor methods by which the ECB violates the Maastricht treaty, which specifically precludes it from buying sovereign debt.

No surprise that the Fed will continue Quantitative Easing

A friend asked me if I were surprised by Bernanke's statement that the Fed would not end or even slow down it $85 billion per month bond purchases.  Here is my reply:

Not at all.  Bernanke knows that he has a Hobson's Choice or, as Hayek said, a tiger by the tail.  If he keeps printing money, we risk hyperinflation. But if he slows down printing money, we get a recession.  The Fed will always choose to risk hyperinflation, because hyperinflation is not apparent until it is too late.  Thus, we get the inane statements that there is no sign of inflation.  Plus, there are no honorable central bankers anymore.  Paul Volcker was the last of a dying breed.

Here's my dictum: "If you can print money, you will print money."  The politicians will not appoint a central bank chairman that might do otherwise.  The political pressure to print money in order to buy the bonds of governments running massive deficits and keep the bubble economy inflated will always outweigh the political pressure to take our medicine and allow the recession to cleanse the economy of malinvestment.

My advice, prepare as best you can for hyperinflation.

I'm Shocked! Shocked!

Greece not meeting Troika's agreement to cut civil service jobs

I'm shocked! Shocked! (Not really) that the Greeks are not living up to their promises to cut civil service jobs in order to get the latest round of bailout money. Wake up, Europe! There is no enforcement mechanism! The only real enforcement mechanism is to end the madness of the European Monetary Union. It is nothing more than a socialist construct that depletes the capital of responsible people without their consent.