D4L Update for 10/31/2013
by Chuck Donovan
“The fact that the market is not doing what we wish it would do is no reason to automatically assume that the government would do better.” – Thomas Sowell
I discussed some of the information below on today’s Butler on Business show.
HEADLINES THAT CAUGHT MY ATTENTION
Finally!?! This squadron, VMFAT-501, was started up on 2 April, 2010. The flight on 28 October, 2013 was a training mission in a training squadron. Three-and-a-half years after opening the squadron it flies the first mission profile the “new” airplane was designed to fly. Can’t the military industrial complex do better than that? How long before Marines on the front lines actually have the support taxpayers are funding for them through this clearly mismanaged program?
[STOVL stands for Short Take-Off and Vertical Landing. The STOVL capabilities of the F-35B are a big leap ahead of the Harrier “jump jet” the Marines have been flying operationally since the 1970’s.]
Lagos private wooden bridge owners make millions of naira everyday – Investigation – OCTOBER 26, 2013 BY GBENRO ADEOYE
If you didn’t already guess, the investigation isn’t into the inefficient actions of a government that has utterly failed to keep roads and bridges in serviceable condition. The investigation is to see if the bridge builders and operators are acting “unfairly” to those who want to use the bridges.
Keep in mind, independent people, acting through freedom-of-choice, have taken a risk with their time and money to provide a service to people who otherwise would have to either wade across rivers, travel a longer distance to cross another bridge, or not get across at all. Don’t these entrepeneureal risk takers deserve compensation of some sort? Don’t the people using the bridge have a choice to find work or business in another location?
Nobody is holding a gun to anybody’s head forcing them to build these bridges or to use them, yet people not used to seeing freedom in action see a problem.
I don’t think these bridge owner/operators should be investigated or vilified. In fact they should be held up as the heroes they are.
As usual, the problem is people who are afraid of letting freedom win.
DR. ANTAL FEKETE IS NOT AFRAID OF LETTING FREEDOM WIN
The following is extracted from an interview published at The Daily Bell (www.thedailybell.com)the full article is available at: http://www.thedailybell.com/exclusive-interviews/34698/Anthony-Wile-Dr-Antal-Fekete-on-Real-Bills-Quantity-of-Money-Theory-and-the-New-Austrian-Economic-Manifesto/#sthash.H73tVMFk.dpuf
With Anthony Wile – October 27, 2013
“Professor Antal E. Fekete is an author, mathematician, monetary scientist and educator. Born in Budapest, Hungary in 1932
Daily Bell: The price of gold is still declining. Bring us up to date on the price action since we last spoke, please.
Antal Fekete: I take strong exception to your using the language of ‘rising and falling gold price.’ It puts things standing on their head. It paints a will-o’-the-wisp picture of reality. The rising of the gold price in reality is the irreversible long-term decline in the value of the dollar; the falling of the gold price in reality is a temporary strengthening of the dollar for whatever, mostly irrelevant, reasons. There is absolutely no symmetry between the two events. Moreover, this is as it ought to be, since the dollar is nothing but a dishonored promise to pay gold. When did you last see the dishonored promise of a banker permanently going to a premium? Whatever decline in the gold price you are talking about, it has not made a dent in the towering fact that the dollar has lost 99 percent of its gold value as well as its purchasing power since it was dishonored 42 years ago in 1971. The language of ‘declining gold price’ serves the interest of those who do everything in their power to blindfold the public in order to keep them in blissful ignorance about the terminal agony of the moribund dollar. It is disingenuous to suggest that the gold price is declining. A better way of expressing it is to say that a stay of execution for the dollar is in force.
Daily Bell: Do you still believe there’s no way out of this cycle but “extinction” and then barter?
Antal Fekete: I believe that the way out of the present disaster, brought upon us by the incompetence and ineptitude of our Keynesian and Friedmanite money doctors, leads to permanent gold backwardation (read: headlong rush of gold into hiding) that will in the fullness of time convert our incomparable multilateral trading system into miserable barter, and our highly productive world economy into a subsistence economy.
Daily Bell: What would you do if you were head of the Fed?
Antal Fekete: When Mises was asked what he would do if he were the President of the United States he said he would resign forthwith. I answer your question by saying that I would also resign and issue a strongly-worded statement that I don’t want my name to be associated with a wrong-headed, utterly corrupt and unconstitutional experiment with irredeemable currency, foisting it upon the rest of the world. It is immoral. It marks the darkest hour in the history of this nation.
Daily Bell: What is Janet Yellen going to do when she becomes Fed head? Will there inevitably be another crash and a depression?
Antal Fekete: She is well-heeled to kick the can further down the road. This road leads to a series of crashes, the blowing and pricking of bubbles. We are already in a depression, masked by unlimited money creation which is pouring oil on the fire of deflation. Bond purchases by the Fed lead to halving interest rates and halving them again and again. This is tantamount to the destruction of capital, as we have discussed a moment ago. Lower interest rates mean higher bond prices, which measure the increase in the burden of debt, the proverbial straw that breaks the back of the camel.
Daily Bell: Are the central bankers managing to restimulate? We believe that they will cause another stock market boom and bust. Your thoughts?
Antal Fekete: Central banks stimulate prosperity and the economy into oblivion. Capital destroyed by the falling interest rate structure cannot be resurrected by an exercise in exit strategies. Besides, easy money (quantitative or otherwise) is addictive. Once being hooked on it, the economy cannot be weaned off the drug. There is a threshold of abuse beyond which the economy is doomed.
Daily Bell: The current “recovery” will not be extensive no matter how high the market runs because a money-led expansion cannot affect the underlying distortions of the economy. Only a full-fledged purging can do that, letting bankrupt firms fold up, etc. Comment?
Antal Fekete: You have put it beautifully.
Daily Bell: Let’s return to your previous interview with some follow-up questions. Why does gold’s marginal utility decline at a rate lower than that of any other commodity, as you observed last time?
Antal Fekete: It is the result of a long historical process that had started even before writing was invented. As Menger described it in his Origin of Money, people came to be using the most marketable good for exchange purposes, to avoid losses. Like it or hate it, the most marketable good was (and is) gold….”