Posts Tagged ‘Money’

Sentences (#100)

Cathedral money:

the reason why inflation measurement and reporting has become so controversial is that it is “less a measure of purchasing power (and therefore a financial tool), and increasingly a process of affecting macro-economic policies (and therefore a policy lever).”

(The whole post is crucial, still more so the report.)

May 10, 2017admin 17 Comments »
FILED UNDER :Political economy

Quote note (#314)

Political economy as it ought to be done:

When business in the United States underwent a mild contraction in 1927, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage. More disastrous, however, was the Federal Reserve’s attempt to assist Great Britain who had been losing gold to us because the Bank of England refused to allow interest rates to rise when market forces dictated (it was politically unpalatable). The reasoning of the authorities involved was as follows: if the Federal Reserve pumped excessive paper reserves into American banks, interest rates in the United States would fall to a level comparable with those in Great Britain; this would act to stop Britain’s gold loss and avoid the political embarrassment of having to raise interest rates. The “Fed” succeeded; it stopped the gold loss, but it nearly destroyed the economies of the world, in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market, triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed. Great Britain fared even worse, and rather than absorb the full consequences of her previous folly, she abandoned the gold standard completely in 1931, tearing asunder what remained of the fabric of confidence and inducing a world-wide series of bank failures. The world economies plunged into the Great Depression of the 1930’s.

With a logic reminiscent of a generation earlier, statists argued that the gold standard was largely to blame for the credit debacle which led to the Great Depression. If the gold standard had not existed, they argued, Britain’s abandonment of gold payments in 1931 would not have caused the failure of banks all over the world. (The irony was that since 1913, we had been, not on a gold standard, but on what may be termed “a mixed gold standard”; yet it is gold that took the blame.) But the opposition to the gold standard in any form — from a growing number of welfare-state advocates — was prompted by a much subtler insight: the realization that the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale.

The Great Depression myth is among the most disastrous ideological catastrophes in history.

The article (all good) is by a young Alan Greenspan, which is a cautionary lesson in personal degeneration.

December 8, 2016admin 39 Comments »
FILED UNDER :Political economy
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Quote note (#309)


On Monday, Trump will meet with John Allison, the former CEO of the bank BB&T and of the libertarian think tank the Cato Institute. […] There have been reports that Allison is being considered for Treasury secretary. […] Trump’s has on the campaign trail questioned the future of the Federal Reserve’s political independence, but Allison takes that rhetoric a step further. While running the the Cato Institute, Allison wrote a paper in support of abolishing the Fed. […] “I would get rid of the Federal Reserve because the volatility in the economy is primarily caused by the Fed,” Allison wrote in 2014 for the Cato Journal, a publication of the institute. […] Allison said that simply allowing the market to regulate itself would be preferable to the Fed harming the stability of the financial system. […] “When the Fed is radically changing the money supply, distorting interest rates, and over-regulating the financial sector, it makes rational economic calculation difficult,” Allison wrote. “Markets do form bubbles, but the Fed makes them worse.”

November 29, 2016admin 15 Comments »
FILED UNDER :Political economy

Wealth Space

From Szabo’s critically-important exploration of collectibles:


At the extreme upper left-hand corner is modern money – used purely as a medium of exchange and obligation satisfaction, and with high velocity, typically several transactions per month. The predominant such media in a culture also usually becomes its of account. At the opposite (southeast) extreme are pure stores of value – seldom if ever alienated, they usually change ownership only at death. At the northeast extreme are pure collectibles – a low-velocity (a few to a few dozen transfers per human lifetime) medium of obligation satisfaction and exchange, but also a store and display of wealth. At the southwest extremely are immediate consumables, such as food obtained from foraging in cultures that do not preserve or store their food.

September 3, 2016admin 33 Comments »
FILED UNDER :Political economy

Twitter cuts (#46)

This might understandably seem like a gratuitous wind-up, given recent discussions — therefore but it’s irresistible:

January 27, 2016admin 7 Comments »
FILED UNDER :Political economy

Chaos Patch (#97)

(Open thread + links)

ACIDS. Hyperborean NRx. Limits of fascism, and nationalism. In defense of deontology. Journalism today. The weekly round.

Sell everything. The China bubble (related Marxist take). How low can oil go? Epocalypse (also). Western Spring (related). A fable for our times. The fury. Cthulhu dreaming. Thoughts on the deep state. Democracy in question. Charlie don’t surf.

The Sunni/Shia line up. Jihad in Istanbul, Jakarta, and Ouagadougou.

Who needs cash? How to make money better. Bitcoin and security. Event horizon.

More to come. The liberal agony (1, 2), and the other thing (1, 2, 3, 4, 5). Tightrope walking. Taharrush. Feminism in crisis (plus, and related). The Swedish angle (1, 2, 3, 4, 5, 6). Lie back and think of multiculturalism. Comedy hour.

An epic (loose) trilogy from Feser on Islam and Western religion (1, 2, 3). Other Catholic responses (1, 2).

Trumpenführer panic report (1, 2, 3, 4, 5). Bonus Cruz popcorn. Nuclear popcorn.

SJW target of the week. Milo was warned (plus anecdotal fluff). Twitter and free speech. The Enlightenment in ruins. Adolf is back.

Why IQ matters. Hamiltonian bees. A colorful character. A CRISPR walk-through. Genes and brains ((cautious) Steve Hsu video interview). Tesla crime-think. The welfare trait. Liberated infidelity. The liberal war on science (remember). Smoking and schizophrenia.

Galactic dark ages. Space (and 2016 stuff). Colonizing the galaxy will be hard. Difficult numbers.

How England was undone.

Time to short Penn.

Tech acceleration made simple. Split futures. The year to come in quantum computing.

Wikipedia, an appreciation. Lessons of The Illiad. On Stephenson’s Anathem, and Gibson’s ‘Agrippa’. Closing of the childhood frontier.

“A common bias among the smart is to overestimate how smart everyone else is.”

January 17, 2016admin 37 Comments »
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Satoshi Nakamoto Night

On October 31, 2008, this happened.

(The first XS Bitcoin horror story.)

October 31, 2015admin 2 Comments »

Chaos Patch (#78)

(Open thread + links)

Hard history. The new man (and also). Odd comparisons. The medium is the message. Pan-nationalism (and ideological genetics). The Norman hypothesis. Restoring virtue ethics. Why I am not a propertarianist (related). Against horrorism. Democracy in question. Meanings of immorality. Is updating imaginable? The weekly round.

The Fed-media disconnect. More cultural libertarians and stuff. Totalitolerance. Culture war escalation. Politeness works.

“Austrian-like perspectives on China are looking pretty good these days.” Plus, a China-slide primer. ZH on the yuan (1, 2). Stockman on local government debt. Some Chinese counter-spin. Investing in failure.

Nervous about the Norks. Italy’s 15-year flatline. Twitchy Pakistan. Silent in Bangkok. Grimness in Gaza.

Germany rolls over. European comedy hour. Image analysis. International fencing champions. Opportunities. Better still. The Australian way. What people are reading.

Trump fear and loathing watch (1, 2, 3, 4, 5, 6, 7).

Implications of contingency. “If you like your religion, you can keep your religion.”

Computers can’t solve communism. Closer to fusion gain? Exploding batteries. Dehumanized (and retro-chronic) Singularity. Complicated dark matter.
Dead ends. Genes from junk (see also), and synthetic bug bits. Smarter people (or not). Cellular skepticism. HBD blogging season.

Scales of conflict. Solitude or death. Trustless biology. Demand crunch. Talking tools.

What‘s your poison?

September 6, 2015admin 14 Comments »
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Huge News (if true)

China is bailing out of US Treasury paper (ZH reports).

August 27, 2015admin 22 Comments »

Exit Options

Everyone will notice them when they’ve gone.

All recent policy decisions by the reigning political-economic structure are intelligible as a mandatory bubble. If you didn’t think quietly ‘sitting it out’ was already the exercise of an exit option, the necessary lesson will be increasingly hard to ignore. Refusing to invest everything into this lunacy is ceasing to be a permissible social posture. We’ve already reached the stage where merely seeking to preserve a pot of retirement savings has been officially recoded as something close to right-wing guerrilla warfare.

Anybody with anything at all is now in the position where they are faced with an aggressive binary dilemma. Either unreserved collaboration with the final phase gamble of the existing order — amounting ultimately to the all-in bet that politics has no ontological limits, so that any dysfunction is soluble in a sufficient exertion of will — or a dissident skepticism about this dominant assertion, practically instantiated by ever more desperate attempts at withdrawal (persecuted with ever greater fanaticism as acts of sabotage).

There will be massive confusion among the destitution. Explaining why capital preservation is being persecuted as dissent would provide the scaffolding for a counter-narrative that will certainly, eventually, be needed.

ADDED: The basic point is this, if it is conceded to Keynes that refusing to invest in industrial production is anti-social, then, as a matter of realistic political necessity, any insane evil that the powers-that-be come up with gets defined as ‘industrial production’. Let go of gold — the archaic economic exit option — as we did, and anything at all that we’re told to sink all we have into is green-lighted. The stream was crossed without enough people noticing. Now the fascism we chose reaps its consequences. It isn’t going to be pretty.

June 6, 2015admin 23 Comments »
FILED UNDER :Political economy