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James Delingpole: The consensus on printing money reminds me of the case for global warming ^ | March 9, 2012 | James Delingpole

Posted on 03/26/2012 9:47:31 AM PDT by Ernest_at_the_Beach

We all have a pretty good idea of why the Soviet Union collapsed: it’s because its state-run planned economy wasn’t as efficient as its rivals in the free-market West. The lesson we’ve learned from this is that capitalism won the political argument. But it’s a false lesson, because capitalism didn’t. The problems that made the Soviet Union such a failure are now endemic in the West. To give one tiny example, in my Sunday paper last weekend was a story about how the Culture Secretary, Jeremy Hunt, is launching ‘a drive to encourage Britons to holiday in their own country… with discounts worth a fifth on breaks booked during the Olympic year’.

Who is paying for this scheme? You are, of course. The government has no money of its own. It finances its expenditure in one of three main ways: through taxation; through borrowing; through money-printing. So whether through confiscation from the present generation (tax) or future generations (borrowing, money printing), the government has decided on your and your children’s behalf that rather than allowing you to keep your money to spend on trivia like food, healthcare, education etc it would be better deployed on a whizzo scheme to discourage British people from taking their holidays abroad.

Put like that it sounds stupid, doesn’t it? But that’s how we ought to put it, every time. Until we can educate ourselves that, as Frederic Bastiat put it, ‘Government is the great fiction through which everybody endeavours to live at the expense of everybody else’, we will never get out of the ginormous heap of economic and sociopolitical ordure in which we find ourselves buried up to the neck.

It is in the nature of politicians to imagine that doing something will always make things better than if they had done nothing. The Soviets tested this notion to destruction. Despite being as richly endowed in natural resources as any people on earth, they lived in penury because of the way the resources were allocated: not by the market but by bureaucratic planners. This led to squandering, hoarding and inefficiency on an epic scale.

In his superb Basic Economics, Thomas Sowell quotes two Russian economists on the Soviet Union’s failures: ‘To make one ton of copper we use about 1,000 kilowatt hours of electrical energy, as against 300 in West Germany. To produce one ton of cement we use twice the amount of energy that Japan does.’

Again, the idiocy of this seems obvious. So why do so many of us fail to apply the same lofty scorn, say, to our coalition’s plans to divert precious scarce resources to wind-farm building? Or its brilliant scheme to enrich Siemens, despoil the Chilterns, and further indebt the economy by enabling rich commuters to shave 20 minutes off their travel time from Birmingham to London?

One answer is that we are a nation of economic illiterates. I’m not claiming to be the world’s greatest expert in this regard. But I have, of late, been doing my best to educate myself because I’m becoming increasingly worried that our political class is conducting a dangerous experiment which is steering us towards an economic catastrophe of perhaps unprecedented magnitude.

I’m thinking particularly of money-printing: ‘quantitative easing’, as it’s euphemistically known. Vince Cable described it the other day as an ‘unorthodox’ experiment whose impacts were ‘very imperfectly understood’: probably the first time he’s talked a glimmer of sense. Cable went on to say that the alternative to QE was ‘probably a disaster’ — which is where we diverge. Sure, almost every economic commentator you read appears to agree that QE is the necessary evil that saved our economy from armageddon. But a decade ago, pretty much every expert you read was in full agreement that ‘decarbonisation’ was the only solution to the deadly threat of anthropogenic global warming. I recognise just the same bastard alliance of junk science, appeals to authority, vested interests and half-baked chattering class received ideas working to promote the ‘QE: our only hope’ meme.

A key plank in the argument for QE is the Keynesian concept of ‘aggregate demand’. In times of recession, we’re assured by the experts, the government needs to do what the private sector won’t: spend money like there’s no tomorrow, thus stimulating the economy back into health. It’s a superficially persuasive theory: even if you’re just paying workers to dig holes in the ground and then fill them up again (a much more useful project than HS2), at least you’ll have people with money in their pockets to go out and spend on beer, fags, lottery tickets and so on, thus providing income to publicans, newsagents etc.

What the theory ignores is the basic truth outlined at the beginning. Governments — be they Joe Stalin’s, Barack Obama’s or Dave Cameron’s — are crap at allocating scarce resources. Whichever method they use to finance their meddling, and money printing is probably the most dangerous of the lot, they’re stealing from the (relatively) lean, productive and efficient private sector and squandering it on boondoggles like Solyndra or the Edinburgh tram disaster.

For me, QE — and the need for a return to sound money — is the most urgent story of our time. It’s why recently I’ve become involved with and, both of which discuss these issues from the perspective of those Austrian school economists (Von Mises, Hayek, etc) who saw the current crisis coming a mile off — and probably offer the only real escape route. Hope for the best, prepare for the worst, that’s what I say. If, as I fear, there’s a shitstorm around the corner then Bogpaper could be just what you need….

,This article was originally published at The Spectator

TOPICS: Business/Economy; Conspiracy
KEYWORDS: economy; globaleconomy; globalwarminghoax
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To: Ernest_at_the_Beach
Some time it becomes a bit difficult to differentiate between idiots in the government who in the reality don't want to see American slide down the drain, but feel their programs, actions will in some way help a part of the whole, and those within the establishment (ex: International Bankers and the Federal Reserve Banks, to name just two parts of the larger set), who really are only interested in making money off the USA through legal means as well as continued gain in power within their one world dominated control goals.

21 posted on 03/26/2012 6:35:35 PM PDT by Marine_Uncle
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To: blam

Frustrating isn’t it? It is like being on ship on the 4th of July and the morons are celebrating by blowing holes in the side of the ship and you can’t do a single thing about it but watch as the ship slowly begins to fill with water. You know we are going to capsize and go down, but you can’t get these idiots to stop shooting holes in the bottom of the ship. They don’t see that they are causing it to sink. They are just partying for the moment, not a care in the world. Meanwhile, I’m wrapped in wool and wearing two life-vests and thinking, “how does this stop the sharks from feasting on my thigh meat?”

22 posted on 03/26/2012 7:00:22 PM PDT by Freedom_Is_Not_Free (REPEAL OBAMACARE. Nothing else matters.)
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To: Freedom_Is_Not_Free
Freedom_Is_Not_Free said: "I have a real grudging respect for the ability of the government to delay the day of reckoning."

Financial musical chairs. When the music stops, somebody will be holding a bag full of dollars or U.S. debt.

The Federal Reserve is already holding a bunch of U.S. debt because buyers are not available at the rate that the U.S. is willing to pay.

I would imagine that one very telling development is when a good deal of commerce consists of bartering. A loaf of bread is worth several pounds of sugar at the supermarket. That will continue to be true even after the dollar has been made worthless or worth less.

If you are a government worker, the state will continue to pay you the same wage as always, denominated in dollars, but the purchasing power will be in continuous decline.

Government workers will have job security, so they will stay on the government payroll rather than seek work elsewhere.

The general public will find that prices for the products created by their employers will rise, due to inflation of the currency, but sales will decline. Many will be laid off and others will have their hours and their pay reduced.

Farmers will find that there is less demand for their products and that the dollars offered for them has increased, but the purchasing power of those dollars has declined. The farmers, in order to maintain production, will withhold some of their crops, assuming that the government allows it, in order to barter for scarce commodities.

Farmers will hire guards for their fields, paid in produce, to prevent theft. Farmers will be working harder in order to continue operating.

There will be no shortage of money. But there will be an extreme shortage of wealth. Government agents will accept bribes in order to process permits of various kinds. Such agents will be hesitant to be caught outside of guarded areas, for they will be recognized as parasites.

Police will be employed to collect property taxes in the form of a share of homegrown produce. Those tending the gardens will resent the imposition of taxes with no public services in return. Police will travel in groups driving armored vehicles and will be barely distinguishable from uniformed gangsters selling protection.

23 posted on 03/26/2012 9:41:35 PM PDT by William Tell
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To: blam; All
Working link to the FR thread:


Not sure how I messed up the other link.

24 posted on 03/27/2012 9:17:13 AM PDT by Ernest_at_the_Beach (The Global Warming HOAX is about Global Governance)
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To: Ernest_at_the_Beach

"Keep preparing for rough times ahead. Stock your pantry in preparation for lean days, even as the regime attempts to make such things illegal. Focus your mind on liberty, that it should never die."

"I cannot tell you exactly what is coming but I know, as do you, that something unprecedented in American history, perhaps even all human history, is coming soon."

Most of my friends are saying this or something similar...these days.

25 posted on 03/27/2012 12:16:03 PM PDT by blam
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