Last Updated: Mar 25th, 2013 - 16:46:15 Newsletters : 2011 Newsletters : 25 February 2011 Thought for the Day My sister was taking a shower at a city gym when the earthquake struck Christchurch this week. She was one of the lucky ones who got out without damage and was able to help others in the immediate aftermath. Others have not been so fortunate. I am sure that New Zealanders are doing all they can to help those in need. After the September earthquake a few economists proclaimed that this was a good thing because their "God number" the GDP would go up as the city was rebuilt. We sent them back to Economic Primer School and they have been quiet this time round. However one writer in the DomPost claimed that the earthquake was a "Zero sum game". That is, the end result will be to leave the Cantabrians no worse off than they would have been without the earthquake. This, of course is arrant nonsense. The first result of the earthquake action is the sudden loss of around $10,000,000,000 of accumulated wealth. Houses, commercial buildings, land and roads destroyed. This is mostly insured and so eventually this money will be transferred from insurance companies and used to reinstate the city. So the city is back together again but the $10,000,000,000 in capital that the insurance industry had invested in wealth creating businesses around the world is now not invested in those enterprises and that is the net result of the earthquake. Insurance just shifts the net loss from individuals in Christchurch to the insurance companies who may well need to increase premiums to keep their operations viable. However we look at it an earthquake is a "negative sum game" if we can use that "game" expression. A zero sum game is like two friends playing poker at home in the evening with their spare change. Nobody takes any fee out of the betting pool and nobody adds money to the betting pool. At the end of the game the amount of money is identical to the amount at the beginning. Their may be a winner and a loser and what one wins the other loses. this is a zero sum game. A "Positive Sum Game" is one where after the players have finished the winnings and losings add up to something more than zero. This happens when an entrepreneur starts up and runs a successful business. The customers gain as they will only be buying when they prefer the product to the money in their pocket. The entrepreneur wins as he makes a profit and his workers win as they get jobs that pay them more than they can get elsewhere (presumable else they would have left) and the sum total of this effort is the creation of wealth. Money from hard and intelligent work. When Central Bankers just increase the money supply they are playing a zero sum game. They add nothing of value and the money eventually becomes worth less in proportion to the amount inserted into the economy. We have more money in our pockets but everything costs more. This positive sum game is called the Golden Goose and it will lay us many golden eggs if we can only stop our government from interfering with it. Feb 25, 2011, 10:52 Newsletters : 2011 Newsletters : 25 February 2011 Central Economic Planning at its Worst The American problem is clear. The solution is understood and well explained. Ron Paul explains it again in a very straight forward way. Can we in New Zealand ever understand REAL Economics and pursue the same solution to our problems or are we doomed to worsening poverty until a catastrophe energizes us into action? Time will tell. [ Visit Website ] Feb 23, 2011, 19:11 Newsletters : 2011 Newsletters : 25 February 2011 Gold, the States, and Federal Monetary Policy Ralph Benko, a member of the bar of the State of New York, is Senior Adviser, Economics, of the American Principles Project, and was called by the United States Department of the Treasury to testify before the U.S. Gold Commission on the constitutional history of American monetary policy. Twelve American State legislatures are examining the steps necessary to move away from US Federal Paper Money and back to REAL Money. Serious people are becoming very serious! [ Visit Website ] Feb 23, 2011, 11:30 Newsletters : 2011 Newsletters : 25 February 2011 Germany Must Choose EMU Fusion or Fission The world paper money system continues to disintegrate. It is not possible for a frail human politician to withstand the pressures and stop the printing presses. Our paper money system will expand - one way or another until it collapses. Ms Merkel is well and truly on the horns of a dilemma. But the end result will be the same. Gold will be the last money standing. [ Visit Website ] Feb 23, 2011, 10:48 Newsletters : 2011 Newsletters : 25 February 2011 Don't go Dutch It will be an interesting old world if the people of the Western Welfare States rise up against the Paper Money Merchants just as the Arab World is rising up against their tyrants. I don't think we have heard the last of this story. [ Visit Website ] Feb 22, 2011, 08:56 Newsletters : 2011 Newsletters : 25 February 2011 China Gold Demand Growing at "Explosive" Pace: ICBC The Chinese government seems to have the opposite point of view from the Dutch government. Not only have the Chinese become the world's largest miners of gold and silver they are also importing gold and silver at a rapidly increasing pace. No wonder their students laugh at Timothy Geuthner's talk of a "strong dollar policy". [ Visit Website ] Feb 22, 2011, 07:08 Newsletters : 2011 Newsletters : 25 February 2011 Jay Taylor on Inflation Vs. Deflation Jay Taylor is a REAL Investment adviser whose newsletter goes to around 100,000 subscribers. Before becoming an investment adviser he worked in commercial and merchant banks. How can our economy thrive in the current world conditions. We would be better off thinking carefully about survival. [ Visit Website ] Feb 21, 2011, 12:16 Newsletters : 2011 Newsletters : 25 February 2011 Silver Rises to 30-Year High as Mints Start to Ration Coins For those of you who are interested in preserving wealth in REAL Assets. Silver is up 80% last year and 20% so far this year. There will continue to be huge fluctuations in the future but people are starting to realise the difference between REAL Money and the pretend kind. Wait till the mania phase strikes! [ Visit Website ] Feb 19, 2011, 13:08 Newsletters : 2011 Newsletters : 25 February 2011 Farewell to Europe's Old Guard In 1790 Sir Isaac Newton introduced the gold standard in England and thus ushered in the golden age of capitalism and wealth creation. In 1913 a conspiracy of US Bankers on Jekyll Island plotted to introduce a Central Bank and paper money into America and thus introduced a century of boom and bust and wealth concentration as never seen before. For all that time the general public remained ignorant of the Central Bank secret. Now the internet is changing all that. Let everyone know. [ Visit Website ] Feb 19, 2011, 12:29 Newsletters : 2011 Newsletters : 25 February 2011 Weber's Exit Highlights Merkel's Euro Problem Bankers' hazard claims another victim. [ Visit Website ] Feb 18, 2011, 13:01 Newsletters : 2011 Newsletters : 25 February 2011 China's Inflation Overhaul Clouded by Data Doubts How very interesting. Does anyone believe official government statistics from any country these days? [ Visit Website ] Feb 18, 2011, 12:24 Newsletters : 2011 Newsletters : 25 February 2011 The Chancellor's Lead Balloon The Europeans are still working on ways of conjuring more money out of thin air without actually appearing to do so and lend each other more money to pay off existing debts - a bit. The Bankers' Moral Hazard is roiling around the world. We will never be able to complete proper economic calculations until we are living with sound money. The paper stuff just don't cut the mustard. [ Visit Website ] Feb 18, 2011, 08:56 Newsletters : 2011 Newsletters : 25 February 2011 Interview Between Hugo Salinas Price and James Turk Hugo is one of the wealthiest men in Mexico and he is working with his government to use silver as money in Mexico. He is interviewed here by James Turk who founded goldmoney.com which allows depositors to save their money as either gold or silver deposited in a Swiss or British bank and which operates a bit like Paypal if you wish. The idea being that your savings will retain their value as the various governments around the world compete to devalue their currencies and boost their exports. The competition known as the "Game With No Winners". Mexico currently has legislation before the house and being considered now for introducing the new currency of silver coins. If this goes ahead it will be very interesting watching the reactions around the world. [ Visit Website ] Feb 16, 2011, 16:26 Newsletters : 2011 Newsletters : 25 February 2011 Losing Faith in Paper Money It is better to laugh than to cry. Laugh along with the Mogambo Guru as he relates this latest little gem from J P Morgan. [ Visit Website ] Feb 16, 2011, 09:35 Newsletters : 2011 Newsletters : 25 February 2011 Russia Moving to Gold Standard? Russia, Belarus, and Kazakhstan have signed up for a free trade agreement. Are they moving to use a golden ruble as the common currency? Times are certainly changing! [ Visit Website ] Feb 15, 2011, 16:49 Newsletters : 2011 Newsletters : 25 February 2011 Could the U.S. Central Bank go Broke? Reuters is usually a good source of information. You may find some other interesting stuff here. [ Visit Website ] Feb 15, 2011, 16:40 Newsletters : 2011 Newsletters : 25 February 2011 IMF Calls for SDR-Denominated Bonds As the world's countries find their paper money turning to trash and their reserve currency being devalued by trillions each year they are looking for an answer. Can they be serious about combining all their paper currencies into IMF issued SDRs? Then all the debt in the world will owed by all the workers of the world and we will all be taxed by the IMF to pay for the trillions (quadrillions by then) of debt owed by all countries. A world government controlling a world paper currency and collecting world taxes to pay the interest. I'm going back to my cave. [ Visit Website ] Feb 15, 2011, 15:25 Newsletters : 2011 Newsletters : 25 February 2011 The Fiat Kilogram? I have made this point a number of times and it is nice to see the "main stream" press also point it out. They have done a much better job of it than I. [ Visit Website ] Feb 13, 2011, 11:07 Newsletters : 2011 Newsletters : 25 February 2011 Quote for the Week And now for a little irony: "The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist." John Maynard Keynes Feb 12, 2011, 16:13