Camp of the Saints

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August 20, 2013admin 23 Comments »
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23 Responses to this entry

  • Doug Says:

    Ugghh, Zerohedge…

    I’m constantly shocked why that site is so popular among so many people that I respect and esteem as thinkers. Its staggering how many things it gets wrong about even basic financial facts. For example here’s an actually good financial blogger brutal take down on Zerohedge’s insane conspiracy theories about Comex gold inventories. http://kiddynamitesworld.com/precious-metals-charlatans-freaks-of-the-industry/. I can also say from personal experience working in HFT, that Zerohedge constantly sprouts endless bullshit about the subject that has no grounding in reality. It’s one thing to be ignorant or even speculative, but it’s quite another to be so arrogantly wrong about subjects that one’s ignorantly speculating about.

    This has nothing to do with this particular story, of course. But Moldbug said something along the lines that reactionaries need to be accurate and grounded in fact to a much greater degree than progressives. The latter have the full backing of the Cathedral to gently interpret any factual missteps. The latter will be mercilessly torn apart for any small lapses by them or their associates. Which isn’t to say that it’s never worth reading ZH, even noisy signals can contain mutual information. But reactionaries need to keep lunatics like them at arms length.

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    admin Reply:

    ZH is an anarchic information source, so it’s dirty signal, but massive amounts of reality gets through. The broad message is quite reliable — for instance, whatever the details of the PM ‘conspiracy’ if we see increasing gold contract backwardation it’s a sure sign that ‘they’ are on to something. Training in informational distrust has to be a good thing, doesn’t it?

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    vimothy Reply:

    Although I agree that ZH’s crank quotient is extraordinarily high, Modlbug’s comments about “Orange Line Libertarians” like Cato vs the Mises Institute are pertinent here, viz. being able to say whatever one damn well pleases without the need to self-censor for Cathedral recognition.

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    Alrenous Reply:

    I disclaim that I don’t read Zero Hedge either, because it gives me the same vibe it does to you.

    Reactionaries are often brutally attacked on small points of factual inaccuracy. But, should they be? Or should they be forgiven? When a Cathedral cleric missteps, it is whitewashed. Should it be?

    In the case of Zero Hedge, they may be crazy but they don’t have an agenda of controlling you by lying to you. Therefore, their mistakes are forgivable. The only question the balance of cost and benefit.

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    Posted on August 20th, 2013 at 3:31 am Reply | Quote
  • spandrell Says:

    ZH analysis sucks but the links are legit.

    An Algerian prisoner adds, “I’ve been in detention camps in France and in Italy, but this one here is the worst.”

    What’s this guy doing? Detention camp tourism? Either that’s or he’s the most unlucky migrants in recent European history. He must be the only one who could never get in.

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    admin Reply:

    The fact that he’s not only failed to get in, but actually ratcheted downwards through increasingly degraded detention camps, suggests that his potential contribution to Europe’s mean IQ is unlikely to be missed.

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    Posted on August 20th, 2013 at 10:40 am Reply | Quote
  • VXXC Says:

    Actually ZeroHedge proves you DON’T have to be scrupulously accurate. .

    Why? Are the Progs? ZH proves you need grit, persistance, staying power, ruthlessness.

    Is it a quest for truth, or POWER?

    ZH understands who/whom.

    When you build the mulitverse wiki’s web traffic to parity with ZH, come back and say Lo! we were right. Until then no one cares whether the grape is skinned with fingers clockwise or counterclockwise.

    ZH on financial matters is more right than wrong. .

    The great middle educated masses understand they are being robbed blind, this is essentially correct. They understand America has been looted for tens of trillions, is being deliberately flooded with immigrants, that our elites are criminals. ZH readers of course must be a couple of sigmas above the lumpenproletariat, who wouldn’t have interest and couldn’t have comprehension. As to ZH getting the exact details of the great crimes against America by her elites, this may be put down to the ,i> Dark Con of Crime. .

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    Posted on August 20th, 2013 at 11:48 am Reply | Quote
  • Solex Says:

    Sounds like you’ve never had problems travelling? You’re the lucky exception, then – or maybe you really are happy living at home?

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    Posted on August 20th, 2013 at 12:47 pm Reply | Quote
  • Kgaard Says:

    Zerohedge’s links are fun, but on the financial stuff (which is their raison d’etre) they are spectacularly wrong much of the time. Reading that stuff is like watching Cramer. It will cost you IQ points and money at the same time. Zerohedge MISSED the gigantic decline in gold prices earlier this year. Anyone who was in junior miners was obliterated. There are people who saw that coming … who had the right model for what drives gold. (Scott Grannis of Calafiia Beach Pundit, for one.)

    The core problem with Zerohedge, really, is that their monetary worldview is wrong. Quantitative easing has been a fantastic positive for the American (and world) economy. We were headed down the EXACT same road as 1929-32 — and it was Bernanke stepping in that saved us. Without QE, we would be exactly where Spain and Greece are today.

    The time to have fixed the moral problems within the financial system was 10-15 years ago. You don’t get religion after the monetary horse has left the barn (to mix about three metaphors). Even Rothbard would tell you that!

    I get my reactionary links straight from the reactosphere and skip Zerohedge altogether now …

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    admin Reply:

    If you think Bernanke “saved us” you’ve broken with Austrianism far more radically than I have. (Endorse Financial Central Planning, and you’re basically saying the Left is right. Everything we know about catallaxy suggests that’s the wrong road to take.) In general worldview, ZH will be vindicated eventually. Nemesis is frustratingly patient, but once she gets going, it’s a mess.

    I agree with Vxxc on this question — it’s only superficially an intellectual controversy about economics. More basically, it’s a war that’s just getting started. Keynesians aren’t debating partners, they’re the enemy.

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    Kgaard Reply:

    Well … I got into this same argument somewhere else and was beaten on by 10 dudes so I’m hesitant to take this up again. But I’m actually a supply-side economist — even worked for the guy coined the term. The thing is … even Murray Rothbard would say you can’t fix an inflation with a deflation — which is exactly what the root-canal “cleansing crash” proponents want. It just doesn’t work. You end up with a vortex in the banking system, which is what we had in 1931. The devastation is spectacular.

    The time to have fixed the banking system’s moral hazard problems was not after the crash but BEFORE the crash. As Rothbard says, inflation occurs when the excess liquidity is created (i.e. 2001-2008). Once the bubble pops the game is over. You’re best bet is actually to print the money needed to maintain the pre-crash price level. Otherwise you have rolling bankruptcies. This may have worked to “cleanse” the system of excesses back in the 1830s. But the world is different today. There are too many fixed contracts (for utilities, labor, debt service etc etc). What happens in a crash is that a business’s nominal revenue stream collapses. If it’s nominal COST stream remains the same, the business is doomed. Everyone is doomed, by extension, in a chain reaction. The only way to offset this is to avoid the collapse in nominal GDP in the first place. That’s what Bernanke did. And he was right. Again … the only other option we had was to become Greece, Spain or Portugal. Those places are very, very bad right now. They are not having some sort of magical cleansing. I was in Lisbon six months ago meeting with companies and the common theme was that all the young people were emigrating. Portugal is a dying society. They are a sacrifice at the alter of the euro.

    A great guy to follow on this is Scott Sumner, whose blog is the Money Illusion. He is a professor at Bentley. Makes more sense than 20 Austrians right now.

    The thing to do is work to avoid the NEXT crash by boosting capital requirements at banks. Countries such as Turkey did not have the kind of banking collapse we did because their bank capital ratios are around 15-17%. They’ve seen this movie many times and thus run their banks with lower leverage …

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    admin Reply:

    There’s endless thrashing out ahead on this. Among the commentators here, there’s a mix of positions being intelligently advanced, with Sumner-style NGDP targeting among them. I’d defend a more market-oriented position, in which free money controls these variables, without central bank interference, so when ZH insists that the Titanic is going down, it strikes me as a good thing — radical liquidationism and all. Still, we’re not going to see the Fed abolished anytime (very) soon.

    Ultimately it’s a political argument about the legitimacy of State economic — and especially financial — management, with the sub-theme of bureaucratic competence functioning as a subordinate element. If bureaucrats can run a money system, then at least its imaginable that they should be socially permitted to do so. The more disastrously they fail, the better, therefore, from the perspective of economic liberty.

    Posted on August 20th, 2013 at 5:30 pm Reply | Quote
  • Kgaard Says:

    Yeah, I guess you are right that failure on the part of monetary authorities could lead to greater economic liberty down the road. But of course … the authorities are HIGHLY incentivized not to fail. And they are getting better at what they do. The reason this recession is not a repeat of the 30s for the US is precisely that Bernanke has the playbook from the 30s. Actually, even the 30s might not have been so bad had the Fed chairman, Benjamin Strong, not died in 1928. He was replace by a benchwarmer who didn’t know what to do when the banking system started to vortex.

    One thing the ZH’ers seem to constantly miss in their zeal to see the end of the monetary world right around the corner is that US inflation is running near to all-time lows. The system is nowhere near collapse. Not even on the same planet as collapse. So … that’s something to factor into one’s thinking …

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    admin Reply:

    Before the fiat era, inflation was on average zero, so even at present levels the US is nowhere close to “all-time lows”. Inflation is a profound moral sickness that should appall everybody, but that seems — weirdly — to be a minority opinion. If asset prices are included, or even a bare minimum of honesty applied to consumer price levels, the official inflation rate can be seen for the propaganda exercise that it is. Furthermore, inflation is far from the only relevant indicator — how about total (US) public obligations, coming in at a cool $222,000,000,000,000 and thus clearly representing unacknowledged bankruptcy. Sure, it’s very possible to go chicken little about this stuff, but that doesn’t mean that Leviathan’s lies about its only invincibility have to be accepted without suspicion.

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    Posted on August 21st, 2013 at 3:56 am Reply | Quote
  • Kgaard Says:

    Yes, you are right. When we were on a gold standard inflation was non-existent. But of course … up until 1920 more than half the population (the economically weaker half) couldn’t vote. There’s a pretty direct correlation between universal voter participation and inflation. The Romans had the same problem. The only way to lick inflation permanently is to jettison democracy. That being said, within the context of democratic, post-gold-standard societies, central bankers are getting a lot better at dealing with the mechanisms that keep inflation from going bananas. Look at the success of the Southeast Asian and South American countries in this regard (excluding Argentina, which is run by retards). They’ve basically figured out how to do it. In this sense, I think the gradually rising average effective IQ of Third World peoples is helping. Plus, populations are getting older, and older people are more apt to demand stable money rather than jobs …

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    vimothy Reply:

    Inflation might have been very low in US pre-Fed history on average, but that doesn’t mean that inflation was generally zero. In fact it bounced around all over the place. And what we see with the move into the present CB regime is that average inflation goes to its target rate and the variance of inflation falls to a very low level. I would argue that this constitutes “licking inflation” for at least one reasonable definition: inflation is moderate and predictable.

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    admin Reply:

    Zero average inflation represents money performing its dynamic cybernetic function — oscillating as required to adjust production — whilst low (but positive) continuous inflation is a symptom of predation by a central monetary authority.

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    vimothy Reply:

    Predation in what sense — that it’s a tax?

    Alrenous Reply:

    It’s important to distinguish between inflation as decreased demand for money versus inflation as increased supply of money, as they mean the economy is doing different things.

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    admin Reply:

    “The only way to lick inflation permanently is to jettison democracy.” — Indeed so.

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    Posted on August 21st, 2013 at 2:40 pm Reply | Quote
  • admin Says:

    “… a tax?”
    — the most sinister and corrosive type of tax.

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    Posted on August 22nd, 2013 at 9:29 am Reply | Quote
  • vimothy Says:

    the most sinister and corrosive type of tax.

    How so? As taxes go, it seems very mild: a low, flat tax on the holders of base money (principally, one would guess, foreign drug dealers and high street banks), which produces a trivial stream of revenue.

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    admin Reply:

    It’s also essentially dishonest, and generates revenue only by degrading the integrity of the money system.

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    Posted on August 22nd, 2013 at 9:59 am Reply | Quote

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