Last Updated: Oct 22nd, 2010 - 15:35:08 Newsletters : 2009 Newsletters : 14 August 2009 Thought for the Day One of the problems we have in trying to get a handle on how the economy is going is that the unemployment statistics do not reflect reality. This is because the definition of unemployment as used by the Statistics Department is very restrictive and many people are labeled as Jobless which has two categories. And there maybe other categories that a reasonable person would call unemployed but the Stats Dept. does not. My rough calculation last year indicated that reality was about double the official number. What is the point of fooling ourselves? Perhaps the Inland Revenue Department should publish instead the PAYE tax receipts each month. That would certainly be a very good indicator of the amount of employment going on! Even better would be to separate out the public from the private sector. Then we would REALLY know how the REAL economy was going. And why not publish the GST receipts every month as this would give a clear indication of the amount of business activity? We can only make sensible decisions if we have sensible data. Let us move out of La-La Land where we have buried our heads for 10 years! Aug 14, 2009, 09:05 Newsletters : 2009 Newsletters : 14 August 2009 Green Jobs: Fast-tracking Economic Suicide It is quite clear that the Greeny concept of Climate Change caused by humans burning things and creating too much carbon is not based on Science. The argument has now descended into "Believers" versus "Deniers". The Greeny Belief System has attained religious status. So logical discussion from well founded and agreed scientific fact to develop a sound theory which can then be properly tested by scientific experiment is out and religious belief is in. The argument is now about the cost. This attached story gives us some idea of the cost to Spain due to the Greeny Belief system. If Spain continues to operate like this then we may be able to stay ahead of them in the OECD wealth tables. Aren't we trying to climb up the wealthy list? Aug 13, 2009, 11:43 Newsletters : 2009 Newsletters : 14 August 2009 Economics of Oblivion In the end you either have capitalism OR socialism. We have had full fledged socialism and one glance at North Korea will confirm socialism's failure to benefit the population. We have never had capitalism as it has always been subverted by Kings, Emperors and other dictators or by the imposition of the Welfare State with its many socialist imperatives. So we do not know how capitalism without restraint would work in our REAL world. We may be surprised. What does surprise me is the very unscientific and illogical thinking of many of the founders of modern economics. This article describes my thoughts on the matter very well. [ Visit Website ] Aug 12, 2009, 21:35 Newsletters : 2009 Newsletters : 14 August 2009 Price Fixing in Ancient Rome You may may recall Muldoon's era ended after he tried to control the economy by fixing prices, wages and interest rates. He was desperate as the economy he had controlled so closely for so long was headed steeply into decline. Much as Helen left our economy recently. Price controls have been tried before with disastrous results. Even 2000 years ago! [ Visit Website ] Aug 12, 2009, 12:06 Newsletters : 2009 Newsletters : 14 August 2009 The Optimum Size of Government The Inland Revenue Department of New Zealand did a study of this question in the 1990s and the international consultant who did the analysis came to the conclusion that our optimum size of Government was around 19.6%. But in any case it was certainly not 46% which is where we are very rapidly headed. Or 40% which is where we are now. A new generation of thinkers is starting to ask the right questions! [ Visit Website ] Aug 11, 2009, 11:21 Newsletters : 2009 Newsletters : 14 August 2009 Germany's Gold is in U.S. Custody, Bundesbank Confirms International journalist Max Keiser has just posted a nine-minute documentary he has done about the British government's gold sales that were begun in 1999 and now are disparaged as "Brown's Bottom," after then-Chancellor, now-Prime Minister Gordon Brown, who decided upon the sales and remains unashamed that they marked the bottom of the gold market. Keiser's documentary is based largely on an interview with Conservative Party opposition Member of Parliament Phillip Hammond, who is shadow chief secretary of the treasury and who remarks that the British gold sales seem to have been structured precisely to knock the price of gold down rather than to maximize the return to the British government. Hammond also wonders aloud whether "something other than achieving the best price" might have been the objective of the gold sales scheme. But Keiser's documentary may be sensational for getting an acknowledgement from the German central bank, the Bundesbank, that Germany's gold reserves are actually in the custody of the United States. This is a detail the Bundesbank long has denied to others who have inquired and is potentially a matter of great controversy in Germany. It raises the question of whether the German gold reserves are actually intact at all or whether they have been used by the U.S. government as part of its long-time gold price suppression scheme or have been comingled and diminished with the gold reserves of other countries held in the United States. While Keiser's documentary does not identify the Bundesbank spokesman who confirmed the transfer of the German gold reserves to New York, it does provide the date and location of the confirmation: March 17, 2008, at Bundesbank headquarters in Frankfurt. The documentary shows that Keiser was there and got the interview. After his interview at the Bundesbank, Keiser remarks: "The most fascinating thing I've heard is that all the gold in Germany is in New York." Indeed. Keiser's documentary is titled "Brown's Bottom" and you can watch it at YouTube here: [ Visit Website ] Aug 11, 2009, 10:13 Newsletters : 2009 Newsletters : 14 August 2009 Socialism in Medicine Krugman in the gun again. Aug 9, 2009, 10:36 Newsletters : 2009 Newsletters : 14 August 2009 The Next Five Years It is interesting how the principles and theories of Austrian Economics produce a very REAL point of view on the student. Investment theories are very different from what we read in our daily newspapers and are well worth mulling over. This helps us all to get a sound picture of the world of economics. You will notice that the four basic causes of economic change in the world as promoted by Kenneth Gerbino in this article are all caused by governments. Economics is not the natural phenomenon that it once was. It is now government controlled and directed - to every-ones' detriment. Unless you can see what is going on! [ Visit Website ] Aug 6, 2009, 10:28 Newsletters : 2009 Newsletters : 14 August 2009 End the Fed? A Not-so-Crazy Idea George Selgin is a senior fellow at the Cato Institute and a professor of economics at the University of Georgia. Central Banks and paper money is a bad idea. A little bit of history confirms this basic thesis. Aug 5, 2009, 11:27 Newsletters : 2009 Newsletters : 14 August 2009 Predictions One of the problems for economists who follow mainstream thought is that their models do not work. Their predictions are wrong. There are very good reasons for this which is a subject for another day. However there are many people who did predict the housing bust in America so obviously it is possible. Perhaps we can learn something from reading what they had to say. One of our dedicated newsletter readers, has been observing property bubbles for some time now and has compiled a list of writers who had successfully predicted the American bubble from way before Alan Greenspan was asserting that it was not possible to detect a bubble until after it had burst. You may like to see who has been successful where mainstream economists have failed. It might be worthwhile listening to their advice! Aug 5, 2009, 10:28 Newsletters : 2009 Newsletters : 14 August 2009 Why Bernanke Is in Panic Mode Congress is now considering whether they should audit the Federal Reserve. Is this the end game for Ben Bernanke and the big banks or can they keep this audit at bay? The result of this tussle will have major ramifications around the world. [ Visit Website ] Aug 4, 2009, 11:10 Newsletters : 2009 Newsletters : 14 August 2009 Quote for the Week With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people. Friedrich von Hayek Aug 3, 2009, 15:15