Archive for November, 2009

Is housing a “higher order” good under ABCT?

November 30, 2009 2 comments

Austrian Business Cycle Theory applied to the housing bubble.


There’s real ambiguity here.  You could argue housing is “just” a consumption good.  But within the debt-based monetary system, it also possesses strong “capital good” value as a store of value for households looking for a refuge from relentless monetary debasement.

That “store of value” aspect to the asset makes it a possible target for “bubble-dynamics” from fractional reserve banking’s recursive lending ballooning the pricing structure.

Basically anything that can be used as security for a loan can now be subject to a bubble. 

Call it the new ABCT of the Ponzi-cycle.

Categories: Austrian School

Bankers told to do their jobs in Dubai

November 30, 2009 Leave a comment

Good Grief!  It appears that bankers will not be saved in Dubai!

That means they’ll actually have to do their jobs – assess risk, take losses where they’ve lent too much and negotiate with debtors when they default.

It’s been so long since they’ve actually had to do their jobs, rather than being bailed out 100 cents in the dollar by corrupt sycophantic governments, do they even remember how to talk to a debtor? 

How…  inconvenient.

The Brits a basketcase?

November 30, 2009 Leave a comment

As MISH has stated so well with his “watched pot” theory, the next bubble to burst is likely to happen where you least expect it.

Could the Brits be a basketcase?

Categories: Fiscal Armageddon

Dumbo flies!

November 30, 2009 Leave a comment

I stand corrected – Abbott wins over Turnbull, 42 to 41.  And Dumbo did fly in the end.

I feel much less suicidal today.  The ETS “Mark of the Beast” legislation is dead, with a wooden stake through its dead heart.

Wong will have a cry with her girlfriends in the Fabian Cabinet.

I’ll enjoy it while it lasts!

Categories: Environment

Wikipedia is surprisingly accurate

November 30, 2009 Leave a comment

Taken from the “criticism of fractional reserve banking” article:

Some monetary reformers see the prevalence of the debt-based monetary system ultimately resulting in a political crisis, between the vast majority of dispossessed who have had any accumulated net wealth periodically “stolen” during periods of “credit crunch” (and find themselves in permanent inter-generational debt, being forced to work involuntarily in the money-economy simply to house themselves and survive in the debt-based economy), and a tiny minority of inter-generational, super-rich elites connected close to the font of the money supply (being the private banking sector), who will strongly resist calls for redistributive economic policies by using all of their financial strength and lobbying power in an attempt to entrench and sustain their artificially privileged status. Given that the profession of this privileged minority is to produce nothing other than debt and inflation, and given that they face being rendered impotent if the power to print debt-free money was returned to government, it is to be expected that those associated and aligned with the private banking interests will use any means necessary to preserve their power, as they have no other skill besides the issuance and distribution of debt money.

Two wings of the same bird of prey

November 30, 2009 1 comment

So, after all the political “intrigue” over the Liberal split, it looks like the ETS legislation will pass tomorrow no matter whether the Goldman Sachs message boy or the Banker’s Husband is voted in as leader.  Abbott would vote down the legislation, but big ears is as likely to win as Dumbo is to fly.

Libertarians in the US often label the two political parties as “two wings of the same bird of prey,” a term coined by Butler Shaffer. To think the ETS legislation – giving unprecedented power over virtually all economic activity to Canberra – would be voted down by the central government is laughable.  Those “employed” in this game are there to dole out favours to their backers.  This increases that power.  Everyone in Canberra wins.  Only the “community” loses.  So it will pass.  Of course.

But step back and think of the irony, the lunacy of this legislation.  We don’t yet have definitive uncontested factual evidence establishing whether grass absorbs more carbon than trees, whether storing carbon in trees is better than cutting them down and letting them grow again, whether the mouths or the butts of cattle cause more emissions, whether sequestration will work…we don’t know ANYTHING definitive about these and many other questions.

But, in the name of an invisible gas that may or may not be causing climate change, we will be forced to cede unprecedented planning, financial, economic, business, farming power to the central govt.  Property rights will be rendered meaningless because a carbon tax could change the valuation of any asset at any time. 

Two wings of the same bird of prey, flapping away to enslave the working men and women of the world.  This is Mark of the Beast-style control over every transaction in the economy.  I am reminded of Murray Rothbard’s sad, forlorn efforts to hold back the tide of govt oppression in the US.  From the WP on this great man:

Building on the Austrian School’s concept of spontaneous order in markets, support for a free market in money production and condemnation of central planning, Rothbard sought to minimize coercive government control of the economy. He considered the monopoly force of government the greatest danger to liberty and the long-term wellbeing of the populace, labeling the State as nothing but a “gang of thieves writ large” – the locus of the most immoral, grasping and unscrupulous individuals in any society.

Rothbard concluded that virtually all services provided by monopoly governments could be provided more efficiently by the private sector. He viewed many regulations and laws ostensibly promulgated for the “public interest” as self-interested power grabs by scheming government bureaucrats engaging in dangerously unfettered self-aggrandizement, as they were not subject to market disciplines which would quickly eliminate such parasitic inefficiencies if they were to occur in the competitive private sector.

Rothbard was equally condemning of state corporatism. He criticized many instances where business elites co-opted government’s monopoly power so as to influence laws and regulatory policy in a manner benefiting them at the expense of their competitive rivals.

He argued that taxation represents coercive theft on a grand scale, and “a compulsory monopoly of force” prohibiting the more efficient voluntary procurement of defense and judicial services from competing suppliers. He also considered central banking and fractional reserve banking under a monopoly fiat money system a form of state-sponsored, legalized financial fraud, antithetical to libertarian principles and ethics. Rothbard opposed military, political, and economic interventionism in the affairs of other nations.

The locus of the most immoral, grasping and unscrupulous individuals in any society.


We are regressing back to tired ideas about govt being the saviour with this legislation.  Where are the lessons from Eastern Europe, from Chernobyl, from the Aral Sea?  This stealth centralisation of economic decision-making, away from the market-based decentralised approach that has worked in the West for centuries is a guaranteed recipe for disaster.  I stand as a witness to this madness.

What drives this fascist-socialist agenda?  Certainly not genuine policy debate about the environment. 

Madness drives it, the insane zealotry that has driven egotists and madmen for centuries.

And the paranoia of parasites.

Free market environmentalism

November 30, 2009 Leave a comment

The free market and concern for the environment are compatible – indeed symbiotic.  Farmers care about their land and are amongst those most concerned about mining causing problems in our food growing areas of QLD.  The govt is the farmer’s enemy here, possibly siding with the mining companies.

Property rights give families a reason to preserve the environment because they are preserving their livelihoods . That is the most effective incentive because it is the most intimate.

Having govt control environment issues disperses responsibility through many ignorant distant hands – through power-hungry bureaucrats who believe they need to shape the world, through politicians looking to curry favour with the mining industry, through those who have no direct interest in the land itself.

Invariably those with the best knowledge and the greatest interest in local environmental issues are those with the most direct stake – the private owners of land affected by the pollution! 

Tourism is concerned for the Great Barrier Reef.  The boating and fishing industries are concerned about the quality of our waterways. 

The govt and the mining companies are the very agents to be most feared, because they have the least direct stake in the long-term viability of the local ecosystem.  Note that even though mining companies are nominally “private” corporations, they are actually in a sense govt agents, taking temporary leasing rights from the govt to mine.  These concessions from the govt to mine are for a temporary period only and therefore it is more accurate to consider mining companies as quasi-govt authorities in many cases.

Libertarians have long been concerned for the environment.  Please take the time to read this excellent piece from Murray Rothbard.

Please think carefully next time you hear a govt mouthpiece talking about “saving the environment”.  What they are invariably saying is “Give me more power.”