Must Reads For The Week 3/19/16

Posted March 19, 2016 by austrianaddict
Categories: Must Reads For The Week
Tags: , , , , , , , , , , , , , , , , , ,

Tea Party Candidate Wins Primary For Boehner’s Old Seat, at thehill.com. Warren Davidson won the Republican primary election for John Boehner’s old seat. Davidson was endorsed by US congressman Jim Jordan. Jordan is a member of the freedom caucus which was the driving in getting Boehner to give up the speakership. Change happens inch by inch.

Fantastic Lies And Aversion To The Truth. The Duke Lacrosse Case 10 Years Later, at lewrockwell.com. I watched ESPN’s 30 for 30 titled Fantastic Lies last week. The world view of the media, Dukes administration and faculty, the political left, and an over zealous prosecutor was able to trump the truth. If you didn’t see ‘Fantastic Lies’ you probably should take the time to see it. The Duke Lacrosse case happened 10 years ago, and we haven’t learned any lessons from it, (read Rolling Stones UVA Rape Debacle).

Chaffetz Wants To Take Guns Away From ‘Rambo’ BLM. Forest Service Agents, at desertnews.com. What do you want to bet the anti-gun crowd is not in favor of taking guns away from the Bureau of Land Management?

7-Eleven Customer Shoots Dead Hatchet-Wielding Attacker, at tammybruce.com. I bet the anti-gun crowd wants this guys gun taken away. They probably want him arrested.

Loretta Lynch And The Governments War On Free Speech, at zerohedge.com. Attorney General Lynch said she asked the FBI to see if the federal government should take legal action against so-called climate change deniers. This is government trying to stifle the first amendment right to free speech. They don’t want anyone speaking out against what they believe to be the ultimate truth.

Caught On Tape: “Enormous Crowds” Of Unemployed Chinese Miners Take To The Streets, Clash With Riot Police, at zerohedge.com. When the Central bank electronically prints counterfeit money this is the result. On the one hand demand is pulled forward in time. The increased demand eventually fades as the printed money loses its stimulative effect. Production of these demanded goods has increased. When this false demand eventually fades, the jobs and capital that was used to fulfill this false demand will eventually be liquidated in order to match production with real demand. On the other hand, the process of production is distorted. Labor, resources, and capital are used to produce things for which there is no demand (Ghost cities and malls). When there is not enough demand to match this false production, the jobs, capital and resources will eventually be liquidated. Will the Chinese government be able to keep millions of its disgruntled citizens from rebelling?

Boris Johnson Accuses Obama Of Blatant Hypocrisy For Telling British Voters To Stay In EU, at dailymail.co.uk. When Obama’s presidency ends in less than a year, do you think he will ride off into the sunset, or will he keep sticking his nose where it doesn’t belong?

ECB To Stimulate Europe By Taking Peoples Money, by Patrick Barron, at mises.ca. A zero interest rate policy is just another way of taking peoples money. Countries are so far in debt they will continue to find creative ways to take what you produce.

A First-Hand Look At What’s Really Happening In Subprime Auto, at zerohedge.com. Does this sound like the housing bubble?

The We’ve Created Millions Of Jobs Myth, by Ryan McMaken, at mises.org. What is the truth behind the Obama administrations assertion that millions of jobs have been created. Look at the numbers.

GOP Official: We choose The Nominee, Not The Voters, at tammybruce.com. GOP rules committee member admits this on TV. The establishment of the Republican party doesn’t want to lose its power.

 

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Free Trade or Trade Restrictions: Which Leads To Prosperity?

Posted March 16, 2016 by austrianaddict
Categories: Econ. 101
Tags: , , , , , ,

Free Trade Is The Path To Prosperity, by Georgi Vuldzhev, at mises.org. – When people make voluntary exchanges,  both parties actions reveal that they value what they have received more than what they have given up. It is an increase of value for both parties. Without trade each of us would have to produce all the goods we wanted to consume. Would you have enough time or knowledge to pull this off? No chance! If you had to pull this off, would you be poorer? Absolutely! When government interferes with trade (voluntary exchange), society becomes less prosperous. Are you listening Mr. Trump, Mr. Sanders, and Mrs. Clinton? Politicians purchase votes, at a low cost, with protectionist rhetoric. Unfortunately the high cost of government trade restrictions, subsidies, and tariffs, is paid by consumers and workers who lose their jobs.

Donald Trump vs. Milton Friedman on Trade Policy. by Mark J. Perry, at carpediemblog. – In time of war countries blockade their enemies ports to prevent imports from coming in. Why? Because it harms them economically. Tariffs are the same as blockades. Blockades prevent trade, which causes economic harm. Henry George said: “What protection teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war.” Donald Trump has proposed a 45% tariff on Chinese goods. Just because you are successful in the business world doesn’t mean you know anything about economics.

Here is the video from LibertyPen

 

Related Article – Specialization And Trade Create Wealth, at austrianaddict.com.

Related Article – Walter E. Williams: Voluntary vs. Involuntary Exchange, or Seduction vs. Rape, at austrianaddict.com.

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People Want A President Who Will ‘Get Something Done’

Posted March 15, 2016 by austrianaddict
Categories: Government and Politics
Tags: , , , , , , , , , ,

I hear a recurring theme from people when asked who they want as their next President? The answer goes something like this; I want someone who will ‘get something done’, or I want someone who will ‘fix things’, or I want someone to ‘run the country’. What do people mean when they say these things? More importantly what is implied by these statements?

People who make these statements are implying that government is the place where problems get solved. They seem to think everything emanates from government. This is 180 degrees from the principles on which our country was founded where individuals solved their problems and government stayed out of their way.

GET SOMETHING DONE?

If ‘getting something done’ is the standard for rating the success of an administration, than every President has been a success. The Federal Government has been growing at an ever-increasing speed over the last century and especially over the last fifty years. This couldn’t have happened unless presidents and politicians were ‘getting something done’. So from the stand point of growing the size and power of  Government, politicians have been ‘getting something done’ for quite some time. Unfortunately this ‘something’ that has been ‘getting done’ is destructive to the principles and institutions on which our country was founded, such as individual liberty, the rule of law, property rights, and a free market economy.

Everybody has their own idea of what ‘getting something done’ means. For me ‘getting something done’ would be cutting government in half and probably more. Of course the only person who agrees with what I ‘want to get done’ is me, and I’m not running for President.

When we say we want someone who will ‘get something done’ we are implying that ‘solutions’ to perceived problems can only come from government central planners. Even so-called conservatives, who are supposed to be for smaller government and greater individual liberty, seem to think that ‘solutions’ to ‘problems’ can be found if the right people are put in power. The world is so big, people seem to think that the complex order that exists in society can only be brought about and operated by top down planning from politicians and bureaucrats. People have no understanding that complex order can happen spontaneously when individuals are allowed to voluntary cooperate in free markets. Government central planners, can’t bring the amount of knowledge to bear on any situation as the total amount of knowledge that individuals acting in a free markets can bring. Thomas Sowell has said, “People who are very aware that they have more knowledge then the average person are often very unaware that they do not have one tenth of the knowledge of all the average persons put together. In this situation, for the intelligentsia to impose their notions on ordinary people is essentially to impose ignorance on knowledge.” Does this sound like our present day political and bureaucratic class? Now add their thirst to rule over the masses, and you have a dangerous situation for individual liberty.

Politicians have been talking about change for decades. My goodness President Obama was elected on Hope and Change. Unfortunately when you run on something as ill-defined as change, each voter ascribes his idea of change to the candidate. By using the vague phrases like Obama’s ‘hope and change’ or Trump’s ‘America’s going to win again’, the politician holds up a mirror in front of himself, allowing the voter to see his perfect candidate, himself. It’s a verbal sleight of hand trick that fools many in the audience.

SOLUTIONS? TRADE OFFS? OR TOLERABLE BESTS?

What needs to be fixed? Is there a solution, a trade-off, or just a tolerable best?  Where does the best possible outcome lie; top down decision-making by central planners in government, or individual decision-making in a free market?

Top down decrees can’t solve problems for two very important reasons. 1) There are no solutions to most ‘problems’ there are only trade offs. and 2) Top down decision makers don’t have access to the amount of knowledge that millions of individuals bring to bear as they make decisions about the trade offs they face everyday.

If government intervention caused a problem in the first place, the problem can’t be fixed by implementing another government solution. Many of the original ‘problems’ that Government tried to solve are not problems at all, they are the inescapable realities of the imperfect world in which we live. When it comes to these ‘tragedies of the human condition’ there are no solutions or good answers, only bad or worse choices (a tolerable best).

What would constitute a solution? Is the solution an end result, or is the real solution the process for making trade offs between tolerable bests? Because of subjective value, scarcity, and the passage of time there can’t be end results. The solution lies in the process of allowing individuals to freely produce, consume, exchange, and save whatever they want.

THE ROAD TO SERFDOM

When thinking about the possibility of solutions, trade offs, and tolerable bests, ask yourself, who should have the power to make a particular decision, you, or a government central planner? In  The Road To Serfdom  F.A. Hayek said, “Few are ready to recognize that the rise of fascism and nazism was not a reaction against the socialist trends of the preceding period but a necessary outcome of those tendencies. This is a truth which most people were unwilling to see even when the similarities of many of the repellent features of the internal regimes in Communist Russia and National Socialist Germany were widely recognized. As a result, many who think themselves infinitely superior to the aberrations of the nazism, and sincerely hate all its manifestations, work at the same time for ideals whose realization would lead straight to the abhorred tyranny.”….. “Hitler did not have to destroy democracy; he merely took advantage of the decay of democracy and at the critical moment obtained the support of many to whom, though they detested Hitler, he yet seemed the only man strong enough to ‘get things done.”

The growing power of the executive branch over the last two administrations is what should give us pause. We probably don’t have to worry too much if a Republican is elected President in 2016, because the Democrats and the media will push back hard against everything he would try to get done. The only reason President Obama has gotten away with ‘getting something done’ is because the Republicans were too afraid of being called racist to push back, and the media was cheerleading the Presidents usurpations of power.

How far down the road to serfdom are we? How many exits remain before there is no turning back?

I know, I know: IT CAN’T HAPPEN HERE!

Related Article – Milton Friedman: Moving Toward Serfdom, at austrianaddict.com.

Related Article – Spontaneous Order Utilizes More Knowledge Than Central Planning Could Ever Hope To Utilize, at austrianaddict.com.

Related Article – Is America Still On F.A. Hayek’s “Road To Serfdom“, by Richard Ebeling, at fee.org.

 

 

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Must Reads For The Week 3/12/16

Posted March 12, 2016 by austrianaddict
Categories: Must Reads For The Week
Tags: , , , , , , , , , , , , , ,

Crack Dealer Freed Under Obama Plan Murders Woman, 2 Kids, at tammybruce.com. This reminds me of Kate Steinle being murdered in San Francisco by an illegal immigrant who had previously been deported. Obviously the perpetrator  bears the responsibility for his actions. But Do politicians bear some responsibility for the crimes committed by criminals who are let go because of some social justice crusade? I think they are playing God when they think they understand the mind of a criminal.

Any Moran Can Get A Good Score Now, at lewrockwell.com. The SAT test is going to be changed to become more in line with Common Core. This can’t be good?

State Department Warns Employees: ‘Microaggressions’ May Count As Harassment, at tammybruce.com. We have raised a generation of wimps. Sticks and stones as my mother used to say.

Sexual Assaults Soar At Swedish Swimming Pools After Refugee Influx, at zerohedge.com. No one would accept this kind of behaviour from anyone. Why would you allow Illegal immigrants to get away with this unless you are paralyzed by political correctness.

Libya: How Hillary Clinton Destroyed A Country, at lewrockwell.com. Once again a big government central planner knowing what is best for Libya.

Thanks Bush And Obama: 1 In 7 Americans Were On Food Stamps In 2015, by Ryan McMaken, at mises.org. Food Stamps have taken the place of people waiting in line at soup kitchens during the great depression. I get behind these people at the store every week. I guess food is an entitlement?

It’s Official: Kate Brown Signs Minimum Wage Bill For $14:75 In Portland, at oregonlive.com. Hey Governor Brown, I bet this bill will put minimum wage workers out of jobs. But don’t worry, you will be able to pat yourself on the back for “doing something”.

Former ECB Chief Economist Dissed Negative Interest Rates And Praises Deflation, by Joseph T. Salerno, at mises.org. Deflation is the correction that has to come about because of all of the printed money.

Former Fed President: We Injected Cocaine and Heroin Into The System To Create The Wealth Effect, at zerohedge.com. All the money printing was intended to create a wealth effect in housing and stocks. People would spend more if they thought they were wealthier because their home price went up as did their stock prices. This spending was supposed to stimulate economic growth. But we know spending doesn’t drive an economy, production does.

Feel The Bern Sanders Gets Epic Twitter Smackdown About Internet Access, at tammybruce.com. Bernie Tweeted: “Today, people living in Bucharest, Romania have access to much faster Internet than most of the US. that’s unacceptable and must change.”     Someone tweeted back; “In Romania we have faster internet b/c we killed our commie dictator on Christmas morning in 1989 then we opened up the markets.”  Romanian Communist Leader Nicolae Ceausescu was shot and hung from a lamp post.

Mr. T. Says goodbye To Nancy Reagan With Sweet Tweets, at thefederalist.com. Who knew Nancy Reagan and Mr. T. worked together to keep kids from trying drugs.

Amazing Northern Lights Across The Sky In The UK.

I’ve been fortunate to see the Northern Lights when I was on a fishing trip in northern Minnesota. They are spectacular to see.

 

 

 

 

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Bernie Identifies Problems: Doesn’t Understand Their Cause.

Posted March 10, 2016 by austrianaddict
Categories: Government and Politics
Tags: , , ,

Bernie Sanders has identified problems like increased costs of healthcare, rising student loan debt, and the financial crisis of 08. Unfortunately Bernie thinks the cure for these problems can only come from the very entity that caused the problems in the first place, and that is government and the Federal Reserve. He is like a doctor who finds his patient has lung cancer, and thinks the cure is to smoke more cigarettes. He doesn’t understand that cigarettes caused the cancer in the first place. Government intervention has caused the rising costs of healthcare and college education, and the Feds easy money policies caused the financial crisis. More Government intervention can’t fix these problems it can only make them worse. Individuals making decisions in free markets will improve these problems. I didn’t say free markets would lead to a perfect “solution”, because there can be no perfect solution when human beings are involved. Free markets allow individuals to make trade offs between competing values. In other words markets don’t proscribe one size fits all solutions, that’s what government does. The difference is when government “solutions” don’t work, government gets credit for trying to solve the problem and is given perpetual do overs, while markets are demonized for doing exactly what they are supposed to do (allow individuals to make decisions).

In this article, Bernie, It’s Government That “Rigs” The Economy, at mises.org, Tho Bishop explains that most  problems are blamed on the market economy when in fact it’s government intervening in the free market that causes these problems. Here are some excerpts from the article.

“Touching back on Sanders’s indictment of Wall Street regarding the financial crises, perhaps no entity is more responsible for “rigging” the economy than the Federal Reserve — which not only enabled much of Wall Street’s reckless borrowing in the lead up to the crisis, but actively sought to inflate the stock market (at the expense of risk-averse savers) following it. While, to his credit, Sanders has supported the full audit of the Federal Reserve long advocated for Ron Paul, he has fully advocated for the Fed to double down on these very same policies.”

“In fact, almost every example the left points to regarding a “rigged economy” can be directly linked to the State. Be it Pharma Bro and the broken pharmaceutical industry, or the cost of healthcare in America, or the burden of student loans being felt by Millennials across the country, the market is blamed for the sins of government. Capitalism is demonized for the evils of interventionism.”

As Ludwig von Mises wrote in Human Action:

“[Advocates of government intervention] blame the market economy for the consequences of the very anticapitalistic policies which they themselves advocate as necessary and beneficial reforms. They fix on the market economy the responsibility for the inevitable failure and frustration of interventionism.”

“Unfortunately this anti-capitalist mentality continues to dominate politics today. Until that changes, politicians like Sanders will continue to find success demonizing a rigged economy they bear personal responsibility for creating.”

Related Article – Free Market Fracking Trumps Government Solutions When It Comes To Producing Energy, at austrianaddict.com.

Related Article – Solutions To California’s Drought: Government Fines Or Market Prices, at austrianaddict.com.

Related Article – Economic Forces Eventually Win: Let’s Look At Oil, at austrianaddict.com.

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Thomas Sowell: Random Thoughts On The Passing Scene

Posted March 9, 2016 by austrianaddict
Categories: Miscellaneous
Tags: ,

Thomas Sowell

Here are some of Thomas Sowell’s most recent random thoughts (read the rest here).

-“Will a Supreme Court without a single Protestant justice rule that an “under-representation” of any group is evidence of discrimination?”

-“Here is a trick question: What percentage of American households have incomes in the top 10 percent? Answer: 51 percent of American households are in the top 10 percent in income at come point in the course of a lifetime – usually in their older years. Those who want us to envy and resent the top 10 percent are urging half of us to envy and resent ourselves.”

-“According to the Washington Post, record numbers of college students say that they plan to engage in protests. Our educational system may not teach students much math of science, but students learn from gutless academic administrators that mob rule is the way to get what you want – and to silence those who disagree with you.”

-“At last we have reached the point where we can say, “Next year this time, Obama will not be president.” But the disasters he leaves behind will plague us for years to come. And some of those disasters may strike even before he is gone.”

-“Historians of the future, when they look back on our times, may be completely baffled when trying to understand how Western civilization welcomed vast numbers of people hostile to the fundamental values of Western civilization, people who had been taught that they have a right to kill those who do not share their beliefs.”

–“The presidential election prospects for the democrats are so bad this year that only the Republicans can save them – as Republicans have saved them before.”

Related Article – Thomas Sowell” Random Thoughts, at austrianaddict.com.

Related Article – Thomas Sowell Compares FDR And President Obama, at austrianaddict.com.

Related Article – Thomas Sowell: Wealth, Poverty, and Politics, at austrianaddict.com.

 

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Must Reads For The Week 3/5/16

Posted March 4, 2016 by austrianaddict
Categories: Must Reads For The Week
Tags: , , , , , , , , , , , , ,

 Scientists Finally Admit Climate Models Are FAILING, by Michael Bastatasch, at thelibertarianrepublic.com. The scientific climate models are showing something different than what has actually been observed over the last 20 years. Climate scientist Ed Hawkins stated, “Reality has deviated from our expectations – it is perfectly normal to try and understand this difference...” I bet Ed Hawkins will try to make reality fit his climate model.

Government Subsidies Will Erode Freedom Of The Press, by Jaana Woiceshyn, at capitalismmagizine.com. Since newspaper subscription and advertising revenue is down, be ready for the newspapers to ask for a government bailout. As biased toward big government as the press is today, at least it is free to stumble onto the truth every once in a while. The press will never bite the hand that feeds them if they receive subsidies from the Federal government.

MSNBC Host Tries To Show Trump Is Racist, Segment Backfires, at tammybruce.com. Here is an example of journalism at its finest. The host fell into a pile of $#!+ and didn’t come out smelling like a rose.

The Two Party Illusion, at zerohedge.com. The republican party used to be the party that stood for free markets, while the democrat party stood for collectivism while trying to sell it as freedom. Now both parties stand for collectivism with the democrat party making no excuses that it is for socialism. What choice do people who believe in individual liberty and free markets have???????

Japan Sells 10Y bond At Negative Yield For First Time Ever, at zerohedge.com. What would you do if I offered to pay you $95 dollars in a year if you give me $100 dollars today? You would laugh at me, wouldn’t you? Japan is finding “investors” who will do this?

Bernie Sanders Criticizes The Fed For The Wrong Reasons, by C. Jay Engel, at mises.org. Criticizing the Fed doesn’t mean your not a socialist. People who are for free markets think interest rates should be set by individuals interacting in the market. Bernie likes the fact that the Fed has the power to over ride market interest rates. He is just upset that the Fed chose to raise them.

Tell A Joke, Don’t Pass Go, Pay $200,000, by Gavin McInnis, at thefederalist.com. Free Speech vs. Political Correctness. Comedian taken to court because someone was offended by is joke.

A User’s Guide To Free Expression And Bathroom Sanity, by Ryan Anderson, at thefederalist.com. More PC insanity  coming to a public bathroom near your.

How Sweet It Is Maple Syrup Cartel Crumbles, by Joseph T. Salerno, at mises.org. If a cartel raises prices too high or restricts supply, economic forces will eventually crush it. The maple syrup cartel has restricted supply which raised prices. The high prices brought in new producers who saw a chance to make a profit. OPEC is facing the same economic forces. Fracking is the new producer that is making OPEC sweat.

How Progress Occurs, at economicnoise.com. Government only gets in the way of progress. Individuals acting in free markets is where progress occurs. As George Gilder has said – “Socialist and totalitarian Governments are doomed to support the past, because creativity is unpredictable, it is also uncontrollable. If the politicians want to have central planning and command, they can not have dynamism and life. A managed economy is almost by definition a barren one.”

The Greatest Entitlement, by Jeff Deist, at mises.org. Excerpt from the article: “The 20th century was the progressive century, marked by the rise of war and socialism as entrenched features of American life. But perhaps the most lasting effects will be felt in the entitlement mindset woven into the American psyche, via decades of successful incrementalism.”

“Social Security and Medicare in particular represent brilliant political achievements for American progressives. Both programs created a vast middle-class constituency, both programs are now thoroughly embraced by progressivism’s nominal opponents (conservatives), and both programs have become sacrosanct “rights” in the eyes of the public.”

The hard work is just beginning. Changing minds takes a generation. We’ve only been at this for the last decade. We have a lot more work to do. One person at a time.

 

 

 

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The Federal Reserve’s Money Laundering Scheme

Posted March 3, 2016 by austrianaddict
Categories: Econ. 201
Tags: , , , , , , ,

 

 

John Maynard Keynes from “The Economic Consequences of the Peace”, 1919; “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side off destruction, and does it in a manner which not one man in a million is able to diagnose.”

The above quote says it is difficult to understand what happens when government prints money {debases the currency}. So difficult in fact that if you and I understand what happens, there are over 2 million people who don’t understand it. In this article titled Understanding The Federal Reserve’s Shell Game, at mises.org, Dan Sanchez does a great job explaining the abstract economic concept of what happens when The Fed electronically prints counterfeit money.

Here are some excerpts from the article.

‘The Federal Reserve is a key component of the American Transfer State. Under the guise of “macroeconomic management,” it redistributes vast amounts of wealth on an ongoing basis through inflation. The victims of these transfers are ordinary Americans. The beneficiaries are the government and its elite cronies.”

“The true wealth of society  —  what actually sustains human life and makes it more comfortable and delightful  —  is the stuff we buy with money; not money itself. It’s the food, clothing, housing, smartphones, mountain bikes, and other consumers’ goods. It’s also the farmland, factories, robots, raw materials, labor and other producers’ goods used to make those consumers’ goods.”

“Creating new money does not create any additional stuff to go around.”

“The new money reaches some people early and some people late. By the time the new money reaches the late receivers, bidding up their selling prices, it has already bid up the prices of the things they buy to an even greater extent. So the late receivers get poorer, while the early receivers get richer.”

“And the earliest receivers always include the government and its partners, while the late receivers are usually workers and small business owners who don’t have such lofty connections. So these “commoners” are effectively taxed for the benefit of the government-connected elite. But, since the taxation was effected through inflation, the public doesn’t realize that.”

“Instead of obnoxiously demanding that the public hand over its wealth, the government just quietly siphons it away. This way it avoids public outrage and resistance, and so is able to maximize the loot. As Jean Baptiste Colbert (finance minister to King Louis XIV of France) put it, “The art of taxation consists in so plucking the goose as to get the most feathers with the least hissing.” With inflation, the geese hardly hiss, because they think they are simply molting, and are unaware they are even being plucked.”

Read the whole article it walks you through how the money laundering happens.

In the article it talks about a general inflation as the money leaks out into the whole economy. But as we saw in the housing boom and bust in the early 2000s, and as we now see in the current financial bubble, the printed money can be pushed into particular sectors of the economy. But the result is the same. The first receiveea benefit at the expense of the people farther down the food chain.

At some point people have to be made to understand that they are getting fleeced by the Federal Reserve’s monetary policy. We have to educate people one person at a time because as Keynes said, “…it’s done in a manner that not one in a million is able to diagnose.” Elite politicians, bureaucrats, and our educators won’t educate people because they benefit from the money printing. It has to come from the bottom up. Spread the word.

In another article titled The Long History of Government Meddling In The American Marketplace, at mises.org, Mike Holly shows that money printing isn’t a new thing, the Federal Reserve started counterfeiting money almost as soon as it came into existence in 1913.

Here are some articles to help understand Fed money printing.

Related Article –A Tornado vs. The Fed: Which Is More Destructive, at austrianaddict.com.

Related Article – Thomas Woods Explains The Austrian Business Cycle Theory, at austrianaddict.com.

Related Article – Federal Reserve Policies Cause Booms And Busts, at austrianaddict.com.

 

 

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Economic Forces Eventually Win: Let’s Look At Oil

Posted March 2, 2016 by austrianaddict
Categories: Econ. 101
Tags: , , , , , , ,

Mark J. Perry’s recent post at Carpe Diem Blog titled; Some Charts And Updates On America’s Amazing Shale Revolution, It’s Not Over Yet, shows how economic forces are always in play even when we think they’re not. When the price of oil was over $100 dollars a barrel and gas was close to $4 a gallon in 2014, who thought oil would get down to $30 dollars a barrel and gas would sell for under $2 a gallon?

The law of supply and demand states that more will be produced at a higher price than a lower price. Higher oil prices made fracking economically viable. The American shale industry took off, in spite of the Obama administration making oil rich government land off limits to fracking. The shale industry started drilling on private land. Even though a portion of the investment in the shale industry may be an artificial bubble, thanks to the fed printing money, the reality is that fracking is now viable at lower and lower prices per barrel. Some marginal companies are going bankrupt because of the lower prices, but you can rest assured these evil oil companies won’t be bailed out by our green energy loving government, which is good. These marginal producers will be purchased by more viable companies and whatever malinvestment the Fed created will be purged from the shale industry. The housing bubble should have been allowed to find the bottom, instead of the Fed pumping money to keep the correction from happening. This is what should have happened to GM instead of being bailed out by Bush and Obama.

Economic forces are always in play even though government tries to keep them at bay through regulation, taxes, or money printing. Even though it may take some time, economic forces always win. Just ask the leaders of the former Soviet Union.

Here are some charts and quotes from Mark J. Perry’s article (click above).

US oil production is almost up to early 1970s levels.

oil

US natural gas production is at all time highs.

natgas

Low oil prices have had a positive economic impact, even though the Wall Street experts say the low prices are bad. In fact the Obama administration couldn’t claim any US job growth if it wasn’t for the jobs created in the fracking industry. And the Obama did everything it could to halt fracking. Excerpt from the article.

“The plunge in energy prices is driving a U.S. building boom for plants that turn crude oil and natural gas into motor fuels, chemicals and fertilizer. Energy companies proposed or received approval to build 140 petrochemical projects in the last five years as falling oil and natural gas prices made it cheaper to refine and process the raw materials…”

We are becoming more energy self sufficient. The OPEC Cartel has been brought to its knees by the American shale revolution.

netoil

Excerpt from the article:

“America’s Amazing Shale Revolution is arguably one of the most remarkable energy, economic, entrepreneurial, and technological success stories in history. The charts, data and reports above help to tell part of that remarkable story.”

“And make no mistake, the shale revolution is not going away, it’s here to stay and will be part of the global energy landscape for a long time. Despite a temporary slowdown and setback in domestic oil production in response to low oil prices, America’s bonanza of shale resources won’t vanish, but will remain available and accessible when needed…. America’s petropreneurs….stand ready to start drilling shale oil again as soon as oil prices rebound back above $40 per barrel. And the shale producers will come back leaner and meaner than ever in the upcoming Shale 2.0 period, thanks to ongoing technological improvements in drilling and extraction technologies, less costly and shorter drilling times for new wells, and increases in the initial shale output flowing from new wells…”

America’s shale revolution isn’t going anywhere. In fact we are probably at the end of the beginning of the revolution.

Related Article – Free Market Fracking Trumps Government Solutions When It Comes To Producing Energy, at austrianaddict.com.

Related Article – Wind And Solar Energy Is Diluted and Intermittent, Which Means More Costly, at austrianaddict.com.

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Must Reads For The Week 2/27/16

Posted February 27, 2016 by austrianaddict
Categories: Must Reads For The Week
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Pentagon Orders Military To Prioritize Global Warming In All Actions, at hypeline.com. I can see it now. The military can’t act until they do an environmental impact statement. Government intervention makes everything more difficult.

4 Reasons To Fear Encryption Back Doors Even Though You’re Not A Terrorist, by Scott Schackford, at reason.com. Apple is standing against the FBI grabbing power that it doesn’t possess. Here is an excerpt from the article: “…the federal government has made it very abundantly clear that they want to bypass encryption not just in this one case, but in others as well, including cases where the suspected criminal is alive but uncooperative or unavailable. The government is attempting to coerce citizens into assisting the government to gain access to somebody else’s property. This sets a dangerous precedent that is easy to ignore because of the circumstances of this case.”

Judge Orders Discovery, Testimony From State Department On Hillary’s EMail, at tammybruce.com. Judge orders that Judicial Watch will be able to question Hillary’s staff under oath about her e-mails. Judge says there is “reasonable suspicion” that staff members tried to thwart the Freedom of Information Act. I find it hard to believe that a Clinton would stonewall, delay, and outright defy the law! There is no pattern of this, Is there? Read here, Hillary and Benghazi: Call In The Cleaners.

Germany’s Looming Demographic Cliff, at zerohedge.com. Demographics is destiny. In a totally unrelated article, Germans Cheer As Refugee Center Burns, Crowds Stop Firefighters From Extinguishing Blaze, at zerohedge.com.

Greek Attempt To Force Use Of Electronic Money Instead Of Cash Fails, at zerohedge.com. The Greek government will start to ratchet up the force to get people to use electronic money instead of cash. The carrot didn’t work, get ready for the stick.

New Campus Social Justice Cause: Fat Liberation, at tammybruce.com. Fat studies courses are popping up at colleges. Students go into large amounts of debt to take these rigorous academic courses that every business wants their future employees to take. Fat studies is a game changer for these students.

Clinton And Sanders And Progressivism, by Walter E. Williams, at jewishworldreview.com. Excerpt from the article,”…progressivism sought to grant the state vast new authority to manage all walks of American Live while at the same time weakening traditional checks on government power, including private property rights adn liberty of contract, two principles that progressives hold in contempt.”

Why Women Pay Higher Prices For The “Same” Products, by John Dotson, at mises.org. The operative word is “same”. Just because a product may be similar doesn’t mean it is the same. Subjective value by consumers also contributes to price differences between similar (not the same) products. Since men and and women value things differently, price differences shouldn’t be a shock to anyone.

The Economics Of Free Stuff, by Jonathan Newman, at mises.org. Free stuff costs somebody something. When government is giving out free stuff, who do you think bears the cost? Good answer!

Cartoons From The Burning Platform

Political Cartoons by Lisa Benson

Political Cartoons by Nate Beeler

 

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