TCC Director Steve Baker with Peace One Day Ambassador Jude Law
The Cobden Centre exists to promote social progress through honest money, free trade and peace. As you can see from those links, we have touched on each issue from our founding but, events being what they are, we have concentrated on honest money over the last year.
Our CEO, Dr Tim Evans, intends to deliver a step change in our activities as we move through 2011. In addition to deepening our work on money and banking, we will also develop our work on free trade and peace, making appointments to our team of Senior Fellows and our Advisory Board.
In that context, I was delighted to attend an event this week in Parliament held by Peace One Day and hosted by my colleague Nadhim Zahawi MP.
As Member of Parliament for Wycombe, I am acutely aware of the widespread consequences of armed conflict on individuals across the world. For example, many of my constituents hail from Kashmir and Pakistan and their extended families and friends continue to be directly affected by the conflicts in the region and their fallout. Many are of Sri Lankan descent and have lived through conflict there, often having lost loved ones.
The tragedies of violence around the world come home to my constituents day after day. For anyone serious about promoting human flourishing, peace must be a prerequisite and the initiation of violence anathema.
It was an incredible privilege to meet Peace One Day founder and Chairman Jeremy Gilley, as well as their Ambassador, Jude Law. From their website:
In 1999, preoccupied with questions about the fundamental nature of humanity and the most pressing issues of our time, filmmaker Jeremy Gilley launched Peace One Day and set out to find a starting point for peace. He had a mission: to document his efforts to establish the first ever annual day of global ceasefire and non-violence with a fixed calendar date.
Remarkably, two years on, he achieved his primary objective when the 192 member states of the United Nations unanimously adopted 21 September as an annual day of global ceasefire and non-violence on the UN International Day of Peace. We call that day Peace Day.
Astonishingly, for three consecutive years, Peace Day has been observed in Afghanistan on a national scale.
To learn more, please watch Peace One Day’s introductory film:
I was humbled to learn of the achievements of Jeremy Gilley and Peace One Day. As The Cobden Centre sets out to grow in new ways, I hope we may deliver even a fraction of that contribution made by this inspiring man and organisation towards human flourishing.
Davies discusses how the sovereign debt euro crisis has entwined itself with a major global banking crisis and led us to the point where if a new Irish government emerges in the New Year which refuses to swallow the recent EU forced bailout, then the whole euro shooting match could come crashing down in short order, with all of Club O’Med falling in sequence like dominoes.
“The fiat currency system is one big Ponzi scheme.”
If the EU do manage to buy time by creating a Brady-style EU bond to support all of these peripheral EU countries, thinks Davies, then this will only push the viability of the euro down the road. However, with all of the fudging that has gone on around this currency since its inception, Davies trusts gold much more than he trusts the future of the euro.
He therefore thinks it likely that the euro will thus fail sometime in 2011 and 2012, perhaps precipitated by the situation in Ireland, and is preparing himself and his investors for this eventuality.
On this cold and snowy English Sunday, with many Cobden Centre readers tucked up for Christmas with possibly only one last difficult food shopping expedition to manage before the big day, I thought some of our more gold buggish clientele might like some reading matter to pass the time, while they figure out how they’re going to dig out and operate their two-wheel drive vehicles.
In the challenging piece below, Howard Marks, of Oaktree Capital Management, discusses the intrinsic value of gold, as opposed to fiat government currency:
If you haven’t subscribed yet, one of the best podcasted programmes out there in ‘Austro-World’, is the Financial Sense Newshour, with Jim Puplava. With many hours of programming each week, covering a wide range of topics, the main interviewer, Jim Puplava, really is the Obi-Wan Kenobi of ‘Austro-Presenters’ in ‘Austro-World’, and one really does wonder where he gets all of the time to do all of the reading he must do, to know as much as he does when he speaks to his guests.
However Mr Puplava does it — and I suspect either Brazilian gene cloning or the multi-dimensional use of a string-theory time machine — he did a really great job this week with the highly respected John Williams, speaking to Mr Williams about the American economy in general and the chances of US hyperinflation in particular (which Mr Williams regards as baked into the cake and almost virtually inevitable).
John Williams is the man behind Shadowstats.Com and seems to be almost as well read as Jim Puplava about the way the world is going. If you have a spare seventeen minutes or so, check out their illuminating conversation below, with links that should last a few weeks:
You may also wish to subscribe directly to the podcast. It certainly keeps me going on the 6:53 from Twyford each morning, on these increasingly cold and snowy mornings brought on by global warming:
The Austrian money manager, Mr Peter Schiff is back with another one of his Schiff reports. In this YouTube he tries to seek out what is catalysing a weak dollar, weak bonds, and rising commodity prices.
He thinks Catalyst #1 is the increasing inflationary heating in China, caused by their export of goods to the U.S. in return for container ships full of U.S Treasury I.O.U.s, to import uncontrolled American inflation into China, with Chinese food prices rising 12% in the last calendar year.
Schiff describes the only way China can reduce its inflation rate, which is to let the Chinese Yuan rise. When they do this — which Schiff thinks is inevitable — then price inflation will funnel back to the United States, which will produce higher U.S. interest rates, which will then pull the rug out from under any of the Fed’s “stimulus” money printing programmes.
Catalyst #2, says Schiff, was Obama’s platitudinous set of folksy homilies delivered last weekend, which promised more tax cuts, more unemployment benefits, and more government spending — all paid for with fresh air and fairy dust — as combined with the thoughts of Chairman Ben Bernanke, as broadcast on 60 Minutes, on how this sagacious doge stands ever-ready with a firm hand on the plunger wired up to nuke the printing press, which absolutely no-one, including himself, believes he will ever press.
If Ben Bernanke does fail to raise interest rates in 15 minutes, when the Tsunami of price inflation washes in from China, says Schiff, then all of the U.S. government spending obligation chickens will come flying home to roost, plucked and ready to cook; this will then send the U.S. into massive price inflation. Hoist by his own petard, if Mr Ben Bernanke does raise interest rates in 15 minutes, as he promised to do on 60 Minutes, then the gargantuan U.S. economic collapse he has been holding off with massive money printing for the last two years will melt down the roost, instead.
Either way, thinks Schiff, this is a Sophie’s Choice that the Federal Reserve has long been dreading, while it has been cowering for the last two years betwixt a rocky printing press and a hard monetary fire pit, hoping beyond hope that all those dreadful people shouting at it will go away when the leprechauns at the World Bank find some fiat currency solution to this horrible mess that it has created for itself in the last forty years of its insane money printing madness.
Philipp Bagus is an associate professor at Universidad Rey Juan Carlos, Madrid and a visiting professor at Prague University. He has just written a new book for the Mises Institute — The Tragedy of the Euro — which has just been freely released for download as a PDF, with a foreword by Jesús Huerta de Soto.
The recent crisis of the Eurosystem has shaken financial markets and governments. The Euro has depreciated strongly against other currencies at a pace worrisome to political and financial elites. They fear losing control. The monthly bulletin of the European Central Bank (ECB), published in June of 2010, acknowledges that the European banking system was on the brink of collapse in the beginning of May. Several European governments, including France, were on the verge of default. In fact, default risks for some European banks, as measured by credit default swaps, surged to higher levels than they did during the panics that followed the collapse of Lehman Brothers in September of 2008.
In reaction to the crisis, the political class has tried desperately to save the socialist project of a common fiat currency for Europe. They have been successful — at least for the time being. After intense negotiations, an unprecedented €750 billion “rescue parachute” has been created to support European governments and banks. At the same time, however, the ECB has started what many had regarded as unthinkable before: the outright purchase of government bonds, an action which undermines its credibility and independence. The public and market perception of the monetary setup of the European Monetary Union (EMU) will never be the same.
Resistance to these unprecedented measures is on the rise, especially in countries with traditionally conservative monetary and budget policies. A poll in Germany showed that fifty-six percent of Germans were against the bailout fund.
It is not surprising that the majority of Germans want to return to the Deutschmark. They seem to understand intuitively that they are at the losing end of a complex system. They see that they are saving and tightening their belts on a regular basis while other countries’ governments embark on wild spending sprees. A prime illustration is the “Tourism for All” program in Greece: the poor receive government funds toward vacations. Even amid the crisis, the Greek government continues the program, albeit reducing the number of subsidized vacation nights to two. The Greek government also upholds a more generous public pension system than Germany does. Greek workers get a pension of up to eighty percent of their average wages. German workers get only forty-six percent, a number that will fall to forty-two percent in the future. While Greeks get fourteen pension payments per year, Germans receive twelve.
Germans assess the bailout of Greece as a rip off. The bailout makes the involuntary transfers embedded in the EMU more obvious. But most people still do not understand exactly how and why they pay. They suspect that the Euro has something to do with it.
The project of the Euro has been pushed by European socialists to enhance their dream of a central European state. But the project is about to fail. The collapse is far from being a coincidence. It is already implied in the institutional setup of the EMU, whose evolution we will trace in this book. The story is one of intrigue, and economic and political interests. It is fascinating story in which politicians fight for power, influence and their own egos.
Here are the contents:
Introduction
Two Visions for Europe
The Dynamics of Fiat Money
The Road Toward the Euro
Why High Inflation Countries Wanted the Euro
Why Germany Gave Up the Deutschmark
The Money Monopoly of the ECB
Differences in the Money Creation of the Fed and the ECB
Before Alan Greenspan stood down from his chairmanship of the Federal Reserve, Ron Paul got him to sign a copy of Greenspan’s 1966 essay, “Gold and Economic Freedom” — originally written for the Objectivist newsletter — an essay which you can still find lurking within the Ayn Rand book, “Capitalism: The Unknown Ideal“.
Here’s a quote to tempt you to read the whole thing, which is almost prescient, given that today gold, silver, and copper all hit record highs:
“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”
The most amazing thing about this astounding essay, is that when Dr Paul got Rand’s “Undertaker” to autograph it, Greenspan said he still stood by every word. You can watch Dr Paul talk about this particular strange encounter in the very watchable Mises Media video below, at 32:00 minutes on the clock:
The lesson is thus clear. If you want to prevent Ben Bernanke and other central bank governors from stealing your life’s wealth, to benefit their masters in government, then do what central banks do and what Alan Greenspan implied you do; protect yourself with physical gold. And keep it out of the banking system, to prevent either outright Roosevelt-style confiscation or other dubious shenanigans.
They spoke about the failure of the EU to get the toothpaste back in the tube on Club O’Med; the relationship of this failure to the rise in the gold price; the ongoing prospect of much more global money printing to produce politically-acceptable inflation; and the rise of silver towards $30 dollars an ounce.
Okay, so once the central banking cartel gets its increasingly clumsy act into gear, the silver price will fall below $30 dollars an ounce again, to temporarily hide the ongoing failure of the 39-year experiment in global fiat currencies, since the dollar became a detached paper currency in 1971.
However, I thought we ought to mark the occasion of silver hitting the remarkable $30 dollars an ounce anyway, just to mark some kind of psychological watershed. Next step, after the attempted crippling, the magical $50 dollars, which really ought to mark the beginning of the end for dishonest paper money, though I’m sure the dishonest paper money cartel will come up with some excuse as to why it won’t.
I’m not sure how likely Max Keiser’s $500 dollar silver is, in the short term. However it should be fun watching the cartel trying to get the price back down under $30 dollars again over the next few days, perhaps with another rise in silver future margin requirements being the first port of call.
“We are on the verge of seeing a potential massive squeeze in the gold market. We witnessed this last month, and it appears to be rehearsing for the same play this month. Physical demand out of Asia is overwhelming the egregious paper gold shorts. If we are thinking this for gold, it is cubed for silver.”
Let us see if the cartel has as much success in nobbling the silver vigilantes as they had in crippling the Hunt brothers. My guess is that they’ll have some short-term success, but this time the long-term silver genie really is out of the bottle. You just cannot keep pouring all of that paper out of the printing press without something giving.
Oh how central bankers must hate physical gold and silver. If you have any, make sure it’s safe and cannot be confiscated by their friends in the world’s governments and treasuries, as that may be their final card if this precious metal embarrassment keeps growing and making a mockery of their Keynesian nonsense that real wealth can be printed on a press.
Following up on our Cobden Centre Radiodiscussion last week, Professor Gerard Casey’s article on The Scholastics today appeared on Mises.org. Here is the introduction:
Given the standard accounts of the origins of economics, the claim that the Scholastics made a significant contribution to economic theory may seem somewhat surprising, even perverse.
Many histories of economics, especially if they are anglophone, locate the beginnings of economics with Adam Smith’s Wealth of Nations, together with the works of David Ricardo and the Mills, James and John Stuart. Others, more historically ecumenical and less Britannically insular, might look upon the Mercantilists of an earlier age as protoeconomists; still others would include the Franco-Hibernian Richard Cantillon and the Physiocrats among the originators of economics. While the names of the founders and significant contributors of economics may differ from list to list, the suggestion that there is anything of value to economic theory to be found in the speculations of Scholastic philosophers is likely to invite skepticism.
