Saturday, 9 October 2010

“Abassi” – Shona Lyon


Abassi, bronze by Shona Lyon
68cm (Height) x 24cm (Width) x 24cm (Depth)

Another brilliant figurative piece by Mt Eden sculptress Shona Lyon.  [Check out the “Aphrodite” posted here the other day.]  In Central African mythology, Abassi was the creator … a jealous god who put the first men on earth, created in his own image naturally, and then became worried they might match him.


Labels: , ,

Friday, 8 October 2010

FRIDAY MORNING RAMBLE: The “don’t mention the war” edition

There will be no mention here of the war over a certain Breakfast TV host. With that curt introduction out of the way, on with this week’s guided tour around the net.

"To say that we can solve the problem of too much borrowing
and spending with more borrowing and spending, is like
saying that Tiger Woods can solve his problems
by getting another girlfriend."

- Jim Rogers

“As a method of economic analysis econometrics is a
childish play with figures that does not contribute
anything to the elucidation of the problems of
economic reality."

                                      - Ludwig Von Mises The Ultimate Foundation of Economic Science

                      BUY YOUR'S HERE

There is a real possibility that in our lifetime we will
live through a depression worse than the 1930s and...the
world as we know it ending
. I think that is a real
possibility. And the the financial cause of that, unless
something is done
        --Yaron Brook,
Director of the Ayn Rand Institute
(Ford Hall Forum - May 20, 2010)

  • Yes, Virginia. America is on the brink of financial disaster.  Even Ben Bernanke gets that much.
    Bernanke Tells the Truth: The United States is on the Brink of Financial Disaster – ECONOMIC POLICY JOURNAL
  • Yes, Virginia. America really is on the brink of financial disaster.  Doug Casey explains why.
    Thoughts on the Greater Depression – Doug Casey, interviewed by the DAILY RECKONING
  • Oh yeah, it’s not just America.  Not that you’d know from NZ’s official stats. “Reality is beginning to show through the cracks in our current way of life. Standard statistical economic information is becoming more akin to propaganda.
        Unemployment figures do not include two sets of ‘jobless’ categories. The CPI figures are worked out on a continually shifting base which produces lower answers. This CPI is called ‘inflation,’ but the REAL inflation is in the money supply which has been expanding at 8% compounded for 20 years. Now it is declining at a rate of around 3.8% and we are starting to experience deflation even while the economists are still forecasting 2% or 3% growth. We are now pursuing GDP growth like it was REAL Wealth.
        We are lost in a sea of misinformation.”
    Thought for the Day  - NZ FOUNDATION FOR ECONOMIC GROWTH [check out their latest newsletter. It’s a goody!]

  • “Don’t be confused by the claim that ‘the Kiwi dollar has increased in value, because it hasn’t. What has happened is that New Zealand’s currency is losing (or winning, depending on how you look at it) in the global race towards currency debasement.”
    Stop talking about the desirability for a weak Kiwi dollar. I am sick of hearing it.  - THE HUMAN ELEMENT

  • Read and compare…  [hat tip Scott Powell]
    Inflation and the Fall of the Roman Empire – Joseph Peden, MISES DAILY

  • Another timely blast from the past.
    The Twofold Roots of the Great Depression: Inflationism and Intervention – Lionel Robbins, MISES DAILY

  • David Gergen and Niall Ferguson discuss 'The Financial Crisis: Will It Lead to America's Decline?' [hat tip Scott Powell]

  • Just heard the news that Ian Morris, founder member of Th’ Dudes,  has just died.  They did have one good song, you know. Pretty good for a B-side.
  • Here’s Jimmy Lunceford. Rhythm is his business.
  • Beautiful music in Dresden’s gloriously Baroque Frauenkirche. [Shamelessly stolen from Olivia]
  • And finally … Sex on Breakfast television. What would the Governor General say!

Thanks for reading,
and have a great weekend!



Here’s yet another great event to put in your calendar, a guest lecturer from Canada speaking at the Auckland Uni Economics Group


    This week we take a slight detour to look at another branch from our family tree of economics.  That branch is the school of Public Choice and we are thrilled to have leading the discussion Peter Holle, founding President of the Canadian think tank Frontier Centre for Public Policy.
    Peter will talk about the theory underlying Public Choice and highlight the implications for public policymakers of this influential school of economics.  Public Choice is a branch of economics that studies the decision-making behaviour of voters, politicians and government officials from the perspective of economic theory.  It can be considered as a bridge between economics and political science.
    Peter has worked extensively with public sector reform and has provided advisory services to various governments across Canada and the United States.  His publications have appeared in various newspapers and journals including dozens of newspapers, the National Post and the Wall Street Journal. He has a Masters of Business Administration from the University of Wisconsin at Madison.  We are delighted that Peter is able to speak to us during his short visit to New Zealand and we look forward to seeing you next Tuesday evening at 6:30pm.

    Date: Tuesday 12 October
    Time: 6:30pm
    Room: University of Auckland Business School, Owen G Glenn Building, Room 317 (Level 3)

All welcome!
Fraser, Julian and Peter

Check us out on the web at


Thursday, 7 October 2010

Japonisme print



I love dramatic illustrations.

I love graphic prints.

I really like this highly stylised piece.

But all I can tell you about it is it appeared in a recent post at the Japonisme blog, without any attribution.

And that it’s pretty damn neat.


Not another Paul Henry post! [updated]

I’m astonished that people are still--still!—talking about Paul Henry. About a breakfast host most of them don’t even watch (and why would you when there’s much better things to do over breakfast), but whose bad-taste quips they’ve gone out of their way to be offended by.

But at least people are now talking about free speech. Albeit wrongly.

The principle of free speech require that speakers be free from government censorship. It does not require that the taxpayer provide anyone with a microphone.

It’s a guarantee that you can say what you want on your own dime or your employer’s dime (if they’ll back you up). It’s not a guarantee of freedom from criticism or consequences.

You should be as free to air your views as I am to ignore them.  If I don’t like it, I can always turn it off.

You should be as free to air your views as your advertisers are to withdraw from them. If they don’t like it, they’re free to try to turn you off.

There is a right to free speech.  There is no right not to be offended.

People say stupid things.  They say things that are wrong. But parading around wearing an "I'm offended" sign is not an argument. It's just a whine.

Music reviewer Simon Sweetman reminded his readers the other day that lots of people in his field said stupid things. Sometimes people cared. Sometimes people didn’t.

Elvis Costello told fellow musicians Ray Charles was a "blind, dumb nigger."

John Lennon told Americans the Beatles were bigger than Jesus.

Bryan Ferry told German journalists he was a fan of the work-ethic, architecture and artistic flair of the Nazi.

Eric Clapton told his audiences he supported hardnut anti-immigration Tory Enoch Powell, called England “overcrowded,” that it was becoming “a black colony and suggested England “get the foreigners out, get the wogs out, get the coons out.” All at the time he was enjoying fame and fortune for covering a Bob Marley song.

Donna Summer told journalists that Aids was punishment from God for homosexuality.

And South Park made fun of Catholics and showed Mary menstruating on screen.

Some of them took a hit to their careers. Some of them didn’t. For some of them it was a calculated career move.  For some of them, it wasn’t. But win or lose, the issue was between their fans and themselves--an issue only for those who bought and produced their records and shows to decide, not for anyone else.

Because speech is speech, it’s not violent destruction.

Ridicule is better than bans.

Moral persuasion is better than force.

Laughter is better than “multi-cultural legislation” to stop people saying things other people don’t like.

When tyranny occurs, it can be challenged from a thousand presses -- but not if speech has been silenced and the presses have been closed down for being “offensive.”

Free speech has always been more valued in the abstract than in reality. "Freedom but..." is not freedom. “Freedom to … ” is.

Forcing ideas underground does not eradicate them, it incubates them. Bad ideas are anaerobic -- the oxygen of free inquiry kills them.

Bad ideas can only be fought with better ones.

So if you don't like Paul Henry, turn him off.  Maybe you could find something better to do over breakfast.  Like, maybe, talk to your family about why free speech is important.

RELATED POST: Some propositions on free speech


“Capitalism Without Guilt” in Sydney

Thanks to a kind reader, I’m heading over to Sydney this weekend to see Yaron Brook from the Ayn Rand Institute speak on Monday night about Capitalism Without Guilt.  Why don’t you join me?

This is the sort of hard-hitting commentary you might expect. Here he is on Pajamas TV discussing what rising gold prices tell us about the global economy.  [Click the pic to go to the video.]

Click to go to the Video And here he is at the Q&A of a recent talk, answering the common question about welfare, entitlements, and what does capitalism do for the poor.  [See the whole talk linked here.]

So join me in Sydney. It’s going to be a great event!


GUEST POST: More on the Myth that Patents are Monopolies

Guest post by patent specialist Dale Halling

David Kline, author of Rembrandts in the Attic, has added the following insights from history on the idea that patents are monopolies.

_Quote The condemnation of monopolies ought not to extend to patents, by which the originator of a new process is permitted to enjoy, for a limited period, the exclusive privilege of using his own improvement. This is not making the commodity dearer for his benefit, but merely postponing a part of the increased cheapness (or excellence) which the public owe to the inventor, in order to compensate and reward him for his service.
     - John Stuart Mill, Principles of Political Economy, 1848

_QuoteThe dawn of the right of inventors has been actually [contemporaneous] with the destruction of monopolies odious to the common justice of men; and the common sense of mankind has marked a distinction between such monopolies and the exclusive rights conceded to inventors. Their rights, under patents, are called ‘monopolies’ only from the poverty of language, which has failed to express in words a distinction which no less clearly exists.
Louis Wolowski, Chair of Industrial Economics, Conservatoire des Arts et Métiers, 1864

_QuoteHow can the exclusive right of an invention be compared with a monopoly in trade? How can the exclusive privilege to sell salt in Elizabeth’s time, which added not one bushel to the production, but which enriched the monopolist and robbed the community, and the exclusive right of Whitney to his cotton gin, which has added hundreds of millions to the products and exports of the country, be both branded, with equal justice, with the odious name of monopoly?
- George H. Knight, 1891 :

A patent is a property right, it is not a monopoly.  For more information see  my post The Myth That Patents are Monopoly.

* * * * *

Dale Halling is an American patent attorney and entrepreneur, and the author of the book The Decline and Fall of the American Entrepreneur: How Little Known Laws are Killing Innovation.
Read his regular thoughts at his
State of Innovation blog.

Labels: , , , ,

“The law of common bloody sense” is the winner!

Drum roll please. 

A nationwide Australian survey (well, they asked 1003 people) has discovered that the film character who most represents Australians and the way they see themselves is … wait for it … Darryl Kerrigan from The Castle.

_Quote Over one third of people (37 per cent) believe The Castle - the 1997 film about a working class Melbourne family's fight to save their home - best represents the real Australia, according to a nationwide survey released on Wednesday.
    Darryl Kerrigan, the movie's working class patriarch played by Michael Caton, was the favourite Aussie film character for 23 per cent of the 1003 people surveyed.
    Crocodile Dundee, played by Paul Hogan, won 21 per cent of the vote while Muriel (Toni Collette) from Muriel's Wedding came third with 17 per cent.


For those who’ve never met Darryl or his film, Darryl is the little Aussie battler who takes on all comers when his family’s home at 3 Highview Crescent, Cooloroo is “compulsorily acquired” by the government to give to some pirates in neckties.

It’s a film full of life, humour and property rights. And Dennis Denuto.

Buy a copy now. And make sure it goes straight to your pool room.

Labels: ,

Honest, and a lawyer?

As legal aid lawyers in New Zealand are starting to be found out for their rorts—three down, eight-hundred to go—a story is just coming out of the States about a lawyer who sued a client for non-payment of fees — and ended up owing the client money. An amount in the six figures. [Hat tip Overlawyered]

Turned out the client he was suing was another lawyer, so he knew how lawyers’ bills get padded. Turned out that the bill included charges for working 31, 40, 39, and even 71 hour days.  And even in the working day of a hard-working lawyer, and I’m sure there must be some, there are only ever 24 hours.

Meanwhile, in response to the exposure of the first of Auckland’s lying sharks, the three of whom sucked around $2 million from the taxpayer in the last four years, the lawyers’ union has leapt into action. 

Its representative Jonathan Temm was on radio this morning calling for legal aid fees to increase.

Labels: ,

Bloggers drinks tonight

All bloggers and their readers are invited to join us tonight at Galbraith’s in Mt Eden Rd for the regular first-Thursday-of-the-month Bloggers Drinks.  Join us for a drink, a chat, and a chance to make plans to fix the problems of the world—or at least to buy your favourite blogger(s) a drink.

Come one, come all—and discover whether or not bloggers talk as much nonsense good sense in person as they do online.

What: Auckland Bloggers Drinks
Tonight, 7 October from 6.30pm
Galbraiths, 2 Mt Eden Road, Mt Eden, Auckland
Who for: Bloggers, blog readers, blog trolls.
What for: The talking of nonsense and telling of lies.

Matakana House – Organon Architecture


Here’s an interesting house just coming off the Organon drawing board.  A house for a quiet Matakana valley, overlooking a stream. Private. Open. Sunlit. A small spot of paradise, really.



Labels: ,

Wednesday, 6 October 2010

QUOTE OF THE DAY: On voting …

Social movements usually follow the line of least resistance. While the direct production of economic goods is often very hard, taking possession of those goods produced by others is very easy.  This facility has greatly increased from the moment when deprivation became possible through the law… 
To save, a man must have certain control over himself.  Tilling a field to produce grain is hard work.  Waiting in the corner of a wood to rob a passer-by is dangerous.  On the other hand, going to vote is much easier and if it means that all those who are unadaptable, incapable and idle will be able to obtain board and lodging by it, they will hurry to do so.

            - Vilfredo Pareto, Les Systèmes Socialistes

Labels: ,

DOWN TO THE DOCTOR’S: Free speech, free whales, free wombs … and Paul Henry

_richardmcgrath[5] Libertarianz leader Dr Richard McGrath ransacks the newspapers for stories and headlines on issues affecting our freedom.

This week: Free speech, free whales, free wombs … and Paul Henry

  • (NZ HERALD) Henry Apology RejectedTVNZ presenter Paul Henry apologises to the Queen’s representative for any offence caused to the latter by a question he asked John Key about the choice of the next Governor General. Race Commissar and eminent Marxist Joris de Bres says Paul Henry’s apology “should be aimed at all New Zealanders.”

My diagnosis: Not in my name Joris. If one takes the time to examine exactly what was said, Paul Henry did not suggest that the next Governor-General should look and sound like a New Zealander; he did not suggest that the current holder of that office did not look and sound like a New Zealander; he was merely asking John Key’s opinion on what could be one of many selection criteria.

Further, Joris de Brezhnev’s comments reflect a politically correct oversensitivity –- should Paul Henry really apologise to all New Zealanders: maybe a national tour in sackcloth and ashes to all corners of the country to make penance even to infants, toddlers, those with dementia, and others incapable of understanding what is essentially a non-issue? Of course not. Should he apologise to anyone at all? No. If you think you might be offended by something on television, for goodness sake turn it off and read a book instead. (And surely you could find something better to do at breakfast time than watch the box; something like, I don’t know, maybe talk to the family?)

If you are offended by something on state TV, then demand a refund on the taxes you are forced to pay to fund it. But no-one has a right to sail through life without being ‘offended’. Life would be so much duller, were that the case.

I find myself offended by Paul Henry’s apology. Perhaps I should stamp my foot and demand that he retract it and apologise afresh. 

  • (DOMPOST) Abortion Rally Outside CourtFifty people who support easier access to safe legal abortion on demand for NZ women protest outside the Court of Appeal in which the anti-abortion group that ironically calls itself Right to Life is battling the Abortion Supervisory Committee. 

My diagnosis: First, a small point – the Action for Abortion Rights protestors chanted “Hey Mister, keep your laws off my sister,” possibly unaware that there are at least two women judges sitting on the Court of Appeal.

Second, libertarians –- in stark distinction to conservatives -- support access to privately-provided abortion on demand for women. Abortion is a health service for which a free market would improve safety and quality. The service should be user-pays, so that Catholics, SPUCsters and others opposed to abortion are not forced to fund abortion clinics as they are under a state-run health system.

Third, the Abortion Supervisory Committee should be disbanded once an open competitive market in termination of pregnancies is up and running.

Action for Abortion Rights should know that the Libertarianz Party wholeheartedly supports the complete legalisation of abortion on demand in New Zealand, on the basis that a person has ownership over their body and all that’s in it (and, in fact, is their body). Those who oppose a woman’s right to control a blob of protoplasm in her uterus are advocating the subjugation of women, and of sex, in the same way that many religions do.

My diagnosis: Once again, as per the comments above on Paul Henry, no-one has the right to sail through life and never be offended. I personally would not have supported Valerie Morse’s immolation of the national flag on Anzac Day, but the issue should be: did her actions breach anyone else’s fundamental rights? Answer: no, unless they violated any implicit contract with the owners of the land on which she stood while doing so. In this case, it is reported that she was standing in the grounds of Victoria University’s law school. So, the question should be: what sayeth the university on this matter? If the Chancellor says she has the right to burn flags on law school property –- presumably harming no-one in the process, cleaning up afterward and leaving the area as she found it –- then she’s off scot free, with her fine refunded, court costs paid and compensation awarded. If, however, the Chancellor says she broke the rules by torching the Union Jack/Southern Cross, then she’s toast as far as I’m concerned.

  • (SUNDAY STAR TIMES) “Why Beached Whales Should Be Left To Die – Michael Laws argues that members of the Voluntary Whale Extinction Movement should be left to sun themselves on our beaches undisturbed.

My diagnosis: Initially, I tended to agree with Laws on this one. But then I thought the issue through.

In a sense, he’s right –- in a Darwinian sense these whales are big-time losers, repeatedly trying to traverse terra firma. They should learn not to run before they can walk. And not to walk before they grow legs.

But aren’t the whale-huggers doing just what capitalism encourages: merging their labour with unclaimed natural resources for profit? Perhaps the profit angle is missing at the moment, but if punters were willing to shell out Pacific pesos for an opportunity to help keep alive and refloat these kamikaze sea mammals, wouldn’t that warm the heart of every greenie? Those that died could be carved up, with the meat and bones sold off for meat and carvings. Those that didn’t could be tagged and kept around for whale tours. A win-win situation for all. Now, I just need to work out how to broadcast a recording of the pilot whale mating call from the nearest beach…

When the people fear the government, there is tyranny – when
the government fear the people, there is liberty.
- attributed to Thomas Jefferson


Name suppression: Protest works

Make no mistake, Simon Power-Lust’s decision to make it harder for those before the courts to get name suppression is a victory for  protest action.  We might now expect, even if justice is not done (these are the New Zealand courts we’re talking about), that at least we’ll know who it’s being done to.

Being famous or well-connected is not a reason to be granted name suppression, and let us hope the “weasel clauses” in the announced measures (when naming might “create extreme hardship”) don’t allow well-connected lawyers too many loopholes through which to slip their well-heeled clients.

Let us hope too that New Zealand’s media now act with the maturity we deserve—realising that those before the courts are innocent unless or until proven guilty, and are reported that way. Because, while justice in New Zealand has been made marginally more open, it still grinds exceedingly slowly—so, hope all we will, it’s still going to take months if not years for anyone before the courts to actually receive justice.

But did you notice the sting in Simon Power-Lust’s tail?  He didn’t want to do this, so he’s put some payback in the pot — breach name suppression now, and bloggers, newspapers, radio and TV will face six months jail!  And while newspapers, radio and TV will get access to a bureaucratically managed “national register” of names that must not be named to assist them in dispensing judicially-enforced silence, bloggers will instead have to scan court reports, comments and media stories to ensure they are not naming anyone that will see the doors of prison open before them.

If you think that’s not payback, you don’t know how politicians think.

Tuesday, 5 October 2010

“ Muscular” Tower for Downtown Los Angeles - Yang Wang and Stephen Silva

0179-2 (1)


0179-4 An interesting idea has produced a very interesting structure to help revitalise downtown L.A..

The idea is to have a “multi-zoned” tower that’s open all hours (just like all downtowns should be), and it’s been injected organically into a tower to produce a very promising looking structure.

Keep an eye on this.  It could be very interesting.




KRIS SAYCE: Overt and Covert Counterfeiting – A Lesson in Central Banking

_Kris_Sayce_headshot Guest post by Kris Sayce

More dark and dastardly goings-on by the world’s central bankers.

And I’m not just referring to the corrupt money-printing taking place at the Reserve Bank of Australia’s (RBA) money printing agency Securency.

You may have read the odd story or two about what Securency has been up to. Accusations have been made that it has bribed foreign officials in order to win contracts for its polymer bank note business – such as the plastic Australian notes you use each day.

Even RBA officials have been drawn into the fire with accusations that current RBA chief, Glenn Stevens, “helped lobby Indonesia’s central bank for a bank note printing contract”.

Mr. Stevens was deputy governor of the RBA at the time.

In today’s The Age, the paper runs with the headline, “RBA counterfeiting claim”. The paper says:
“The Reserve Bank of Australia’s currency firm, Securency, produced millions of partly made foreign banknotes without authorisation from overseas central banks, in a practice described by former staff as effective counterfeiting.”
We’ll make a point here. It’s not “effective counterfeiting”, it is counterfeiting.

Isn’t it a shame that the mainstream press still can’t make the connection between unauthorised printing of paper money and authorised printing of paper money.

Because if they put their ant-sized brains to the task they’d soon figure out that not only is unauthorised printing of paper money a counterfeit job, but even the authorised printing of money is fraudulent.

Furthermore, they’d figure out that a central bank doesn’t even need to print actual bank notes in order to counterfeit money. It can just add it to the bottom line with a click of a mouse.

And even better for the central bankers is that they can get the retail banks to do the dirty work for them, thanks to fractional reserve banking. That’s where banks entice people to deposit money and then then it lends out to other customers using the savers’ money as collateral.

It’s counterfeiting because even though the savers’ cash has supposedly been loaned out for to a borrower, the saver still has the ability to withdraw their deposit without any need for the borrower to repay the loan.

How’s that possible unless new money is created from thin air?

But given how Securency seems to operate its business, we’re surprised The Age didn’t print what it really thinks rather than skirting around the edges. To us it seems clear. Why else would a money printer print counterfeit foreign currency unless it planned to use that currency in it’s [ahem] business dealings…

In other words, backhanded payments, bribes or the new term that everyone likes to use, graft. It all means the same thing, political corruption.

I mean, after all, why bribe someone by exchanging Aussie dollars for the foreign currency when you can just print as much of the foreign currency as you like? It’s pretty easy when you control the printing presses…

But of course, counterfeiting currencies isn’t unique to Australia. The US Federal Reserve is all over it at the moment. Today’s Australian Financial Review reports that:
“One of the US Federal Reserve’s most influential officials has publicly thrown his weight behind another round of asset purchases, warning the current economic situation facing the US is ‘wholly unacceptable.’”
What is it that New York Fed president William Dudley – the successor to Treasury Secretary Timothy Geithner – finds so “wholly unacceptable”? He explains:
“I conclude further [monetary] action is likely to be warranted unless the economic outlook evolves in a way that makes me more confident that we will see better outcomes for both employment and inflation before too long.”
It won’t surprise you to learn that the better outcome for inflation is higher inflation.

In the world of central banking, inflation is good. You know that, we’ve told you a hundred times before that’s how the central bankers, retail bankers and the mainstream view inflation.

But Dudley isn’t the only one to complain about low inflation. Boston Fed president Eric Rosengren told The Forecasters Club of New York last week that:
“While it’s clear to everyone why a high unemployment rate is a problem, one of the reasons we worry about a too-low rate of inflation is that the closer to zero the inflation rate gets, the greater the risk it could fall into a harmful deflation.”
We won’t cover old ground by pointing out the fallacy about the fears of deflation. We’ve written about this several times over the past couple of years.

But the fact is, deflation is only bad if you’re hocked up to the eyeballs, or if you’re the one doing the lending.

And seeing as the Fed – and every other central bank – is supposed to be the lender of last resort, the last thing the Fed wants is for it to actually have to be the lender of last resort. Doing so would expose to the world that it doesn’t have the capital to meet that obligation.

Not without printing more money that is.

Hence why the Fed is so keen to induce inflation. That way the retail banks can counterfeit their way out of the debt bubble rather than facing the prospect of overtly going bankrupt.

The reverse side of this of course is that while it saves the bankers, it destroys everyone else – people are encouraged to keep spending 50% and 60% of their salaries to pay off a debt when they would have been better off defaulting.

And at the same time they don’t realise their wealth and wages are being eroded over time as inflation takes its dastardly toll. That means you have to work harder and longer in order to receive the same wage.

Yes friend, we’re sure a valid case can be made that it wasn’t the women’s lib movement that helped draw more women into the workforce, but rather it was the inflationary policies of central bankers that forced women to enter the workforce because families were finding it increasingly hard to live on just one income.

Who’d have thunk it? Men in pinstriped suits doing more for feminism than the Suffragettes! What d’ya think of that, sister?

Anyhoo, it’s worth noting a chart Mr. Rosengren used in his speech. It was this one:
Federal Funds Effective Rate: Actual and According to the Taylor Rule
The red line shows where the US Fed Funds rate would be if it wasn’t for what’s known as the zero bound.

The zero bound simply means that a central bank can’t have an official negative interest rate policy. Doing so would mean the bank would charge customers to deposit money.

Think about it this way. It would be the equivalent of Commonwealth Bank charging you, for instance, 5% per year for you to deposit your savings in an account with them.

Now, that’s not to say that it doesn’t cost you money to deposit money with a bank. Once you add on monthly fees we’re sure plenty of people do pay to store their money in a bank – we won’t get on to the subject of whether paying for storage is a good thing or not, that’s for another day.

But can you imagine seeing an ad from the CBA telling you it will only cost you 5% a year to deposit your cash? It would hardly have savers busting the doors down to give them their money.

That’s why the central bankers have to go about it in an underhanded and deceitful way.

What it ultimately means is that a negative interest rate is a tax on savers. It penalises savers for having money.
But it’s not a tax in that you’re only taxed on the income produced from the savings. A negative interest rate involves deducting from the principal. It means a saver depositing $100, but only getting $95 back a year later.

What this chart does is give away the game. It reveals to one and all what the Fed’s real policy position is.
The Fed knows it can’t overtly tax savers by giving them back less than they paid in. So that’s why the Fed – and other central banks – choose to go about it fraudulently, by not telling people what they’re really doing.
Because of this, as Mr. Rosengren notes:
“Constrained by the zero bound, the Federal Reserve utilized less conventional policies…”
He then showed another chart, showing the extent of the unconventional policies:
Federal Reserve System Assets: Selected Temporary Operations
This chart shows how the Fed had to pump liquidity into the economy by buying up a whole bunch of worthless assets.

You can see how the chart jumps from somewhere around USD$50 billion in early October 2008 to over USD$1 trillion just a month or so later.

The reality is that it didn’t really matter what the Fed was buying. That was just the beard, the cover, the disguise. All the Fed really wanted to do was push more new money into the economy to make sure most banks didn’t fail and so that its inability to fulfil its promise of being the lender of last resort wasn’t exposed.

The upshot is that by pumping the extra liquidity into the market, the Fed has achieved its negative interest rate goal. If negative interest rates involve charging savers on deposited money, then devaluing savers’ money by increasing the money supply does exactly the same thing.

Mr. Rosengren from the Boston Fed confirms this with his chart. He confirms that it’s central bank policy to devalue the currency in order to save the bankers.

And they’re doing it in cruel, dishonest and underhanded way.

Which, when you look at how the RBA and Securency have behaved, appears to be pretty much par for the course when it comes to the world’s central bankers.

Kris Sayce
For Money Morning Australia

Labels: , , , , ,

Why the 10:10 Video Is a Distraction

_jeffrey-perren Guest Post by Jeff Perren

You’ll have seen, or heard, about the 10:10 ads, complete with exploding children, intended by British warmists to “persuade” you to conform.  No pressure.

I invite you to head to Pajamas Media and read my new article on Why the 10:10 Video Is a Distraction.

In it, I argue that the real enemy is much more dangerous, because much more benign looking.

Here's how it begins...

_Quote A British group called recently released (then quickly pulled) a viro snuff film. In the video, teachers press a red button to explode schoolchildren reluctant to accept the Green dogma of AGW (anthropogenic global warming) and other environmentalist fairy tales.
There's no question that the film is revolting and its producers are vicious, no matter how much they try to claim it was intended as humor. Still, the pundits up in arms over it are making a tactical error.
Your comments are invited.

Read the rest here.



Art Nouveau – Brussels edition

The city of Brussels is now the home of the world’s biggest bureaucracy, but around the turn of century it played host to something more life-enhancing—with architects Victor Horta, Paul Cauchie, and Henry Van de Velde it was a pioneer is launching the organic style of Art Nouveau on the world, a style using the new materials of steel and glass to begin to liberate architecture from the past, and make the machine age more natural.

Here’s a trip around just a few of the many thousand beautiful Art Nouveau buildings built in Brussels around that time and since.

And here’s a few more stunning examples in this trip around European Art Nouveau.

Labels: , ,

Monday, 4 October 2010

Henry V

Here’s a few questions for all you literate types getting all your pants in a bunch about Paul Henry’s latest stupidity. (This must surely be about number five, at least?) So …

… you know what he’s like. So if you don’t like him, why do you watch?

… haven’t you got something better to do over breakfast than watch a grinning fool present braindead news?

… on a scale of one to very-frigging-offensive, surely a professionally-produced ad laughing at exploding children programmed to be played on all channels far outstrips a morning blowhard’s thoughts on a retiring Governor General?  So how come you’re all so quiet about that?

Just a few questions whose answers I wonder about.


Tomorrow the Auckland Uni Econ Group talks about money…

UoA Econ Group 5 Oct

The news today is full of concerns over the state of the world's economies; in fact these concerns have not subsided for the last three years. This has resulted in many central banks around the world having increased their printing of money, especially so in the United States which has printed hundreds of billions (if not trillions) of US currency.
But what theory is advanced for doing this?
Can printing bits of paper actually solve an economy's problems?
And what are the long-term consequences of such a policy?
To help answer these questions we need to examine the often misunderstood economic concepts of inflation and deflation.
In this week's seminar we set out to better understand these concepts. To do so we must first look at the origins of money and ask some more fundamental questions as to what money actually is. Did the market for money develop naturally or spontaneously or did it require a central authority to mandate its use?

Date: Tuesday 5th October
Time: 6:30pm
Room: University of Auckland Business School, Owen G Glenn Building, Room 317 (Level 3)

All welcome!

Look forward to seeing you,
Fraser, Julian & Peter

Labels: , , ,

CUE CARD ECONOMICS: Opportunity Cost

There are plenty of contemporary economic concepts that make no sense—or, worse, serve only to obscure legitimate concepts. “Externalities” is one, an illegitimate concept that serves only to delegitimize a necessary one, in this case: property rights. (Other  equally illegitimate cousins of this anti-concept include “stakeholder theory”—the idea that that a business owes its community, rather then the other way around, and whether anyone in the community has contributed to the business’s success or not—and the phony “free-rider problem” are other related examples of equally shoddy package deals.)

“Opportunity cost” is equally nonsensical.

One of the most common notions in economics, “opportunity cost” is [in Larry Sechrest’s formulation]

_Quote the idea that the cost one must bear when making choices is appropriately measured by the value to the actor of what he or she gives up. If A and B are ranked first and second, respectively, on one’s value scale, then the cost of choosing A is said to be B, the next best alternative.

But once one observes that this is a ‘B’ one hasn’t even got, one realises that this is a cost that hasn’t, and won’t, be paid—and we end up treating what is not even a potential loss as a real one. Which leads to the realisation that “opportunity costs” are an exercise in unreality.

To see how foolish this anti-concept is, just imagine I’m evaluating my year’s share trading. In January, let’s imagine I considered plunging heavily on two hypothetical stocks, one of which rose to $20 and one of which rose to $30. If I had bought the first and remained uninformed about “opportunity costs,” I would be under the “illusion” I had made a profit. Yet if I had read the latest textbooks, I would be made “aware” that instead I’d made a dreadful loss, and rather than uncorking champagne I should instead contemplate throwing myself off the nearest tall building!

The absurdity is real. The”loss” is not. Neither is the concept of “opportunity cost.” Says Reisman, those who insist that the doctrine of opportunity cost is valid

_Quoteconfuse the alternative opportunities whose competition in bidding gives rise to the money costs with the phenomenon of cost itself, and thereafter ignore the necessity of a money outlay actually being present. In other words, they....confuse the cause with the effect.

And the potential with the actual.

So stop worrying about a non-existent cost, or “you can wind up needlessly worrying about money that you never made.”


A map for Paul Henry

I don’t know how often Paul Henry leaves New Zealand, but when he does there are atlases and stuff to help him find his way around.

Here, for instance, is a map of Europe he might find convenient. [Hat tip Geek Press]



The Case for Legalizing Capitalism

Guest Post by Jeff Perren

Someone called Kel Kelly, has written a book with the title of the post.

I haven't read it - and given the current length of my reading list it will be 10 years before I can even crack its cover - but I have to salute one of the best book titles I've ever seen.

From the review on
_Quote He considers every important topic: banking, education, taxation, labor, environment, trade, war and peace, safety, medicine, drugs, and far more. He presents the reader with a basic explanation of how capitalism is supposed to work and how society functions when commerce is free. He then turns to all the areas of life that are distorted and destroyed by the great "helping hand" of government.
Hmmm... maybe I'll bump this up my reading list.

P.S. Based on a single comment on the review, it sounds as if Mr. Kelly has the usual screwed up views about war and foreign policy. But, then, it is on so that's what one would expect. Still, it sounds as if the book might be worthwhile otherwise, and you really can't beat that title.