Plundering the Nation's Heritage

From today's Open Europe news summary:

Le Monde reports that the Spanish government is planning on putting “one quarter of the national heritage” up for sale in order to tackle their budget deficit.
Euractiv Le Monde

The Spanish people have plundered their nation's heritage over a few decades' of socialism.  It Is no different than if thieves broke into the Prado, stole all the El Greco's, and sold them in order to live a life of leisure for a few years.  Now the money is gone and everyone must go back to work...or steal something else.

Another economic fallacy revealed

From today's Open Europe news summary:

The FT reports that motorways in Portugal are deserted due to the recession, the introduction of tolls and the overinvestment in roads funded by the EU, which has left Portugal with four times more motorway per inhabitant than the UK.
FT Open Europe research: Structural funds

So much for the idea that infrastructure investment by government spurs economic growth.  I saw the same phenomenon last summer in Spain; i.e., brand new but empty motorways.  Infrastructure investment MUST follow economic growth, because no one can predict where growth will arise or in what form.  In the nineteenth century Bethlehem Steel built its own railroads to transport its products to market.  Oil pipelines and other infrastructure must be built where the oil is discovered.  I think it is safe to say that most of the new motorways in Europe would never have been built, if private capital funded them.  This is not an indictment of the shortsightedness of private capital, but an indictment of the irresponsibility of government.  Does anyone really doubt that government contracts and union labor jobs were not influential in all this useless infrastructure investment?  How long will it be before these now beautiful roads fall into disrepair due to lack of adequate toll receipts?

Here's what it means to default on sovereign debt

Re:  Argentina Loses Debt Appeal

I have read many otherwise reputable economists state that defaulting on one's sovereign debt is not such a bad thing, often citing Argentina as an example.  Well, read what sovereign debt default really means.  Your assets, even your military assets, are seized.  Your president doesn't fly in a private jet, for fear that it will be seized.  And...you wind up paying anyway!

Another Greek Bailout? Sure...we'll simply print the money

UK may have to help third Greek bail-out  COMMENT: Godfrey Bloom, UKIP MEP

http://www.express.co.uk/news/uk/423861/UK-may-have-to-help-third-Greek-bail-out

Central bankers and politicians speak of never-ending bailouts only because they can print money in unlimited amounts.  The Greeks know it; the Spaniards know it; the Irish know it; the Portuguese know it; every profligate politician buying votes with funny money knows it.  No country will ever get its finances in order as long as this fact remains.  Return to sound money and all nations MUST get their finances in order; they will have no choice.  They will be forced to behave like we great unwashed, spending only what we earn or what borrowings the credit markets deem we can repay.

Burn the Japanese debt? Think again, Ambrose!

Re: Just set fire to Japan's quadrillion debt, by Ambrose Evans-Pritchard

Well, Ambrose, I am one of those who has "Austro-outrage" over your inane proposal to just burn or bury in a locked drawer Japan's mounting debt.  Your unconcern over the consequences of confiscating the accumulated wealth of an entire generation is breathtaking.  That debt represents the sacrifice of real people to sustain them in their old age.  Furthermore, it is the only source of future Japanese prosperity, the capital accumulation that results from such savings sacrifice.  Now you want Japanese politicians, some of the most ignorant people on the face of the earth, to force the Japanese people to eat their seed corn, because you want these politicians to confiscate the entire crop.  Get real!  Get real economics, Austrian economics, that is not blinded by the smoke and mirrors of fiat money manipulation by gangsters in high office!

 

Think of it this way...rather than authorize the government of Japan to issue debt that is purchased by the Bank of Japan, let ME sign debt obligations that are purchased by the Bank of Japan.  Put MY debt instruments in a locked drawer or, better yet, burn them!  I'm sure that I can spend the money just as fast as the Japanese government, and isn't it the spending part that you believe is all important?  So, why does it matter who spends the money?  Now then, where do I sign?

My interview re: Declare Detroit a Free City

Below are links to audio files of my recent half hour interview on "The Exceptional Conservative Show", originating in Washington, DC.  I discuss my recent essay "Declare Detroit a Free City".

Media files

the-exceptional-conservative-show.mp3 (MPEG Layer 3 Audio, 20.6 MB)

the-exceptional-conservative-show.wma (Windows Media Audio file, 20.6 MB)

EU "backdoor" support of Portugal

From today's Open Europe news summary:

ECB lending to banks in Portugal reached €50.2bn in July, its highest level for seven months.Bloomberg WSJ Reuters Irish Independent

As explained by Professor Philip Bagus in this essay, the European Central Bank supports profligate countries via its START2 program, whereby deficit banks never really do settle accounts.  Whereas EU treaties prohibit the ECB from buying sovereign debt, the ECB bypasses this restriction by "lending" euros to still extant national central banks, taking sovereign debt as collateral.   Thus, treaties mean nothing...put your faith in gold.