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ECONOMICS AND ESOTERICA FOR A NEW PARADIGM

Posts Tagged ‘George Orwell

This would never happen where you live

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by Simon Black of Sovereign Man
Posted originally June 2, 2011

HERE’S A GREAT STORY. I left Santiago yesterday, quite happy that I had managed to lock up a major property deal at the 11th hour right before my international departure. I cut it so close, I literally had to run from my attorneys’ office back to my flat in El Golf within 90-seconds of signing the contract. I was in such a hurry to make my flight that, when going through security, I forgot to empty my pockets. I know, the cardinal sin, right?

I had a Blackberry, my wallet, a belt, and several Chilean coins jingling around in my pants, and the X-ray machine dinged like a winning slot machine.  Instinctively, I prepared myself for a verbal battle with some neanderthal who would try and put his hand down my pants. Except… it didn’t happen.

In my haste, I had almost forgotten that this was Chile, a civilized place that doesn’t go out of its way to demean citizens and residents at every available opportunity. No fondling, no fear and intimidation tactics, no surprise searches, no cash-sniffing dogs, no ‘secondary screening’, no stasi on the jet bridge. Instead, the solo security attendant simply asked if I had anything in my pockets. I pulled out my Blackberry and showed it to him, and he waved me through. I was on my plane 2-minutes later.

A few days ago, I was having a conversation with our Chief Investment Strategist Tim Staermose; he was telling me about a similar experience traveling recently to Macau via hydrofoil from Hong Kong. During his trip, he checked his luggage, got his boarding pass, went through immigration control… all the typical sort of international travel stuff, except for one thing: there were no X-ray machines or radiating body scanners at all, and there certainly weren’t any surly border guards to fondle passengers.

As I travel frequently and spend time in so many different countries, it’s becoming clear to me that there are essentially two categories in the world– police states that are running towards George Orwell’s view of the world in 1984, and countries where you can still feel like a free human being. Unfortunately, the police states are doing their best to corrupt the rest of the world. Homeland Security chief Janet Napolitano recently toured India and met with senior security officials there, undoubtedly trying to influence them to toughen security measures and join the Orwellian order.

Back in the US, the Department of Homeland Security recently announced its ever-expanding “If you see something, say something…” program, this time at the 2011 Indianapolis 500 race. If you’re not familiar, this is the program that encourages people across the country to become unpaid spies for the federal government and rat out friends and neighbors for anything ‘suspicious’. In eerie Big Brother fashion, Napolitano delivers this message from monitors perched throughout WalMart stores nationwide.

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Orwell targets Bernanke: An unteachable hole in the air

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by Frederick Sheehan
Posted originally October 21, 2010

On Friday, October 15, 2010, Federal Reserve Chairman Ben S. Bernanke delivered a dishonest speech: “Monetary Policy Tools and Objectives in a Low-Inflation Environment.” What follows is not a critique of the talk, since that would be redundant. Please see one of my recent articles “Exploiting Bernanke” (September 21, 2010), which discussed the anticipated speech of October 15, 2010. Also see, “Central Bankers are Paid to Lie – Buy Corn” (October 5, 2010), which showed how Federal Reserve Chairman Arthur Burns fibbed his way through the 1970s. Investors who either believed him or were not adept at translating signals from the real world suffered.

Bernanke’s mendacious speech confirmed my general investment advice in “Central Bankers are Paid to Lie”: “Courses of protection include buying farms (including machinery companies, grain commodity funds, water rights, and desalinization companies), as well as precious metals, mining and drilling companies, and freeze-dried food.” As a guess, Bernanke’s current intention (this will change, and change often) is to add a trillion dollars to the economy. Such a wild, mad experiment has never been attempted before, outside of Argentina, Zimbabwe, and such.

The reason last Friday’s speech could be analyzed three weeks before it was delivered is Bernanke’s predictability. He will do nothing that veers from the course he found convenient for personal advancement three decades ago. He has neither said nor would dare process a thought that deviates from his doctoral thesis.

Even the title of his latest speech is a lie or stupid, as you wish – broadcasting as he did our “Low-Inflation Environment.” Inflation is practically everywhere that counts: food, insurance premiums, utility bills, tuitions. (“Where it counts” does not include the deflation of what really counts: wages, net wealth, house prices. This is why the “inflation vs. deflation” question is false.) Commodity prices keep rising, partially because there is greater demand than supply; partially because we are used to seeing oil and corn quoted in dollars. Producer and consumer prices generally lag commodity prices. The length of the lag differs. Anywhere from three months to one year captures most instances, under normal conditions. (When further depreciation of the dollar against commodities is anticipated, the lag will be compressed.) The dollar has fallen against a basket of currencies by 13% over the past 18 weeks. It is prudent to at least hedge for a contraction of this lag.

Bernanke’s speech was characteristic. He turned logic on its head and ignored the most debilitating consequences of his past actions. The Fed chairman used official government numbers to claim inflation was too low. Homage to government inflation calculations should have, alone, been enough for the media to ignore anything else he said. Of course, he was dutifully quoted and taken at his word.

It was not that long ago when an economist who claimed inflation was too low would have lost credibility. Bernanke stated “that FOMC participants generally judge the mandate-consistent inflation rate to be about 2 percent or a bit below.” The FOMC is the Federal Open Market Committee – the body that has absolute authority to act upon such inverted thinking as 2% inflation being good for the country.

A step back, to 1957: This was a time when academic economists were learning that theories manipulated to satisfy politicians could put themselves in positions of power. Most from this guild never dreamt anyone outside a college classroom noticed their existence. They miscalculated, as is the rule for these humbugs.

Politicians want money and credit to fulfill their constituents’ every wish. A Harvard economist told Congress that the U.S. needed a 2% rate of inflation to defeat communism. Washington loved him.

On August 13, 1957, William McChesney Martin, the Federal Reserve chairman at the time (and not an economist – he had been a Latin scholar at Yale, so understood that shortcuts destroy empires), lectured the Senate Banking Committee on the specific topic of the Federal Reserve “targeting” (Bernanke’s word – not Martin’s) a 2% rate of inflation: “Consumers are encouraged to postpone saving and instead purchase goods which they do not immediately need, and the incentive to strive for efficiency no longer governs business decisions…and speculative influences impair reliance upon business judgment.” Of utmost importance, groups struggle to insulate themselves from the loss of purchasing power, then “fundamental faith in the fairness of our institutions and our government deteriorates.”

The Bernanke Fed has stated its current policy is to chase consumers out of savings and into speculative ventures. (See The 2004 Fed Transcripts: A Methodical, Diabolical Destruction of America’s “Wealth”.) That is exactly the recipe for the Fed to accelerate its impoverishment of the American people. Alan Greenspan, of course, was the master at jumbling a few words to distract attention from this long-running plan to prevent the Fed’s extinction. Bernanke also resorts to nonsense. From his October 15, 2010, speech: a 2% rate of inflation is to “attain… price stability” and to “bring the unemployment rate down significantly.” He is doing exactly the opposite of what he pretends.

George Orwell wrote about “[t]his lunatic world in which opposites are turned into one another.” That was not lunacy for lunacy’s sake, nor is it today.

In 1940, Orwell wrote of World War II: “After 1936, of course, the thing was obvious to anyone except an idiot.” He was not erasing his own past, as was common with many others and is universal among “experts” today. (See the first paragraph of Ben Bernanke’s October 15, 2010, speech.) In 1938, upon returning to England from continental Europe, Orwell had written about the “familiar streets, the posters telling of cricket matches and Royal weddings, the men in bowler hats, the pigeons in Trafalgar Square, the red busses the blue policemen – all sleeping the deep, deep sleep of England, from which I sometimes fear that we shall never wake till we are jerked out of it by the roar of bombs.” The bombs flattened London in 1940.

The British institutions in the 1930s were in the same condition that the Federal Reserve, other government manipulators, the so-called economics profession, and the revered think tanks are in today. Orwell wrote of Neville Chamberlain, British Prime Minister from 1937 to 1940: “He was merely a stupid old man doing his best according to his very dim lights. It is difficult otherwise to explain the contradictions of his policy, his failure to grasp any of the courses that were open to him. Like the mass of the people, he did not want to pay the price either of peace or of war. ” At another point: “Tossed to and fro between their incomes and their principles, it was impossible that men like Chamberlain should do anything but make the worst of both worlds.”

This is an apt summation of the desiccated American hierarchy today. It is withering into dust.

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Our Orwellian Economy

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by Charlie Husen
Originally posted July 07, 2010

OUR ECONOMY IS IN THE FINAL ACT OF AN ORWELLIAN DRAMA. Just as in Orwell’s fiction, the individual and the truth are usurped by the power of the state.

Our Ministry of Housing had a goal to make homes affordable for the lower classes. Now that these homeowners are desperately underwater, rich investors are buying up the lower end real estate. Many members of the lower class that were helped by the Ministry of Housing are destined to rent forever.

Our Ministry of Lending had a goal to make mortgages affordable for all. Now, the indebtedness of our total mortgage market is equal to the value of our mortgaged housing stock. So in the aggregate, anyone with a mortgage is just a high-priced renter.

Our Ministry of Jobs had a goal to increase employment. It has heavily subsidized the non-productive public and financial sector jobs market. To pay for these subsidies the productive private sector was heavily taxed. Now, many of these formerly productive middle class jobs are either being shipped overseas or are staffed by illegal aliens.

Our Ministry of Finance had a goal to spur investment. It has created two huge investment bubbles. Now our nation of terrified investors has created an even bigger bubble in the perceived safety of long term bonds.

The Ministry of Sound Investing had a goal to manage interest rates for the benefit of investors. It is now punishing savers with zero percent interest rates and using the windfall to bail out speculators.

Our Ministry of Sound Money had a goal of controlling prices. One dollar in 1950 is now worth 12 cents.

Our Ministry of Sound Government had a goal to reward citizens for voting appropriately. For the past 15 years our politicians have used ultra-long-term debt to purchase votes in the next election. Mathematically it has become impossible to pay back this liability with future income, so by definition it is a Ponzi scheme.

Our Ministry of Sound Accounting has created bookkeeping techniques to hide 
the Ministry of Sound Government’s Ponzi scheme.

• Presently our Ministry of Truth is saying we need to borrow large amounts of money from hostile foreign nations to increase our children’s standard of living and keep them safe in the future.

Debt and consumption are good. Saving is very, very bad. Our government and our financial sector are good. The corporate sector is evil. Up is down. And left is right. There are many allocation problems with our economy today caused by bad government policy. This is why I can’t fathom why our economists feel that more government power and more subsidies to the financial sector can produce more private sector jobs.

In the end we must listen to the Ministry of Fairness when they say, “all citizens are equal.”

And, as good citizens we must understand that, “the government and the financial sector are more equal than everyone else.”