I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.- Thomas Jefferson.

debt clock

Tuesday, May 17, 2011


Faced with the embarrassing fact that sea level is not rising nearly as much as alarmist computer models predict, the University of Colorado’s NASA-funded Sea Level Research Group has announced it will begin adding a scientifically unjustified 0.3 millimeters per year to its Global Mean Sea Level Time Series.

Human civilization readily adapted to the seven inches of sea-level rise that occurred during the twentieth century. Alarmists, however, claim global warming will cause sea level to rise much more rapidly during the coming century. The United Nations Intergovernmental Panel on Climate Change (IPCC) gives a mean estimate of 15 inches of sea-level rise during the twenty-first century. High-profile alarmists often predict three feet. Some even predict 20 feet.

Satellite measurements show global sea level has risen merely 0.83 inches during the first decade of the twenty-first century (a pace of eight inches for the century) and has barely risen at all since 2006. This puts alarmists in the embarrassing position of defending predictions that are not coming true in the real world.

The University of Colorado Sea Level Research Group is coming to their rescue. The NASA-funded group claims glacial melt is removing weight that had been pressing down on land masses, which in turn is causing land mass to rise. This welcome news mitigates sea-level rise from melting glacial ice and shows another of the Earth’s remarkable self-adjusting processes.

However, it is very inconvenient for alarmist sea-level predictions. Therefore, instead of reporting the amount by which sea level is rising in the real world, the Sea Level Research Group has begun adding 0.3 millimeters per year of fictitious sea-level rise to actual sea levels.

-- James M. Taylor

Monday, May 9, 2011

The Upside-Down World of MMT

I was not familiar w MMT before reading this.  That's all we need is another theory advocating govt deficit spending

Mises Daily: Monday, May 09, 2011 by Robert P. Murphy

Modern Monetary Theory (MMT) is a hip economic/financial paradigm apparently sweeping a world unsatisfied with mainstream economics. Over the past year, I have been hearing a growing number of people refer to MMT: either fans who think it blows up my Austrian views, or foes who think it deserves a full-scale critique.

MMT's underground popularity derives from its seeming mathematical rigor, its disagreement with the obviously flawed doctrines of standard neo-Keynesian orthodoxy, and its underlying message of hope that the perceived constraints on government deficit spending are an illusion. The MMT proponents tell us that fiat monetary systems have removed the shackles associated with the gold standard, and that our economic recovery is limited only by our failure to understand how modern money and banking work.


Wednesday, May 4, 2011

Ben Bernanke’s Lone Positive Legacy: A Return To The Gold Standard

May. 3 2011 - 11:52 am

I’ll make two predictions with utter confidence. The first is that one day Federal Reserve Chairman Ben Bernanke will be ridden out of town on a rail, joining Arthur Burns in that special circle of hell reserved for monetary debauchers. The second is that in the aftermath of our pending inflationary disaster we will see the gold standard return.

The Federal Reserve long ago lost control of inflation, now ravaging several sectors of our economy. This is obvious to every economist not a member of Bernanke’s Greek chorus, singing lyrics provided by the gnomes in the Bureau of Labor Statistics. Their modern re-interpretation of the dance of the seven veils uses statistical “adjustments” instead of scarves, but these keep the evidence of inflation as hidden as Salome’s charms. My favorite fudge has to be the “hedonic quality adjustment.” What are you going to believe, the government’s regression coefficient estimates or your own lying eyes?

What Bernanke made clear now that he launched his own reality TV show is that his primary mission is no longer ensuring a stable currency, or even pursuing the illusory goal of full employment. Rather, Helicopter Ben will make his last stand managing inflationary expectations. As long as he maintains the illusion of monetary stability the Fed’s printing presses can run flat out. What could please his masters more, who get to spend this fresh dough before it floods into the economy to dilute ours?

Reading from the playbook of successful defense attorneys the game is on to Deny, Deny, Deny! All evidence of inflation is explained as transitory. High food prices? It’s the weather. Gasoline? Blame speculators or oil industry profits. Ben knows he can get away with this dodge for at least two or three more quarters. After that? Don’t you worry; if inflation ever raises its ugly head Ben the Beneficent will rise up and smite it immediately!

Do you have a friend that is a high function alcoholic? “Back off, I can handle it! I’m doing fine at work. Things at home have never been better. What’s the big deal; it’s just a few traffic tickets. If my drinking becomes a problem I can stop any time.” After he wraps his car around a tree, loses his job, and his wife leaves him you’ll be there to check him into rehab. But his life will never be the same.

Nor will our economy after the triple whammy of double digit unemployment, double digit inflation, and an uncontrollable budget deficit comes down on our heads. That’s why I think the gold standard will make a comeback. It’s too bad the country has to be dragged through so much avoidable misery, but perhaps that’s the only way we can put a stake through the heart of fiat currency.

Don’t be melodramatic; we survived the seventies without restoring the gold standard didn’t we? Sure. But last time Washington went on an inflationary binge the world was a simpler place, and we sat firmly atop it. There was no Euro. China was the world’s largest penal colony barely able to feed itself, not a manufacturing giant and our biggest creditor. The evil empire threatened. Fax machines were the latest thing in international communications. World financial markets were neither integrated nor interconnected by broadband. And citizens got their news from three government regulated TV networks.

Paul Volcker had a far more manageable problem dumped in his lap than will Bernanke’s successor, who will be confronted by genuine challenges to the U.S. dollar as the world’s reserve currency. And therein lies the opportunity for gold.

Faced with the alternative of ceding monetary supremacy to the Chinese the gold standard will be the only politically palatable option. In addition, all those gold cranks the liberal media spent decades portraying as fools are going to look pretty smart when gold hits $2,000 an ounce. With enough think tanks in Washington rehabilitating gold as a respectable monetary anchor and ratings agencies threatening to reduce T-bills to junk bond status, hard money will have its day in court.

And it will win because the gold standard makes but one promise, and that is to stabilize the value of money. At that task it has never failed, unlike every fiat currency in history. Gold makes no false promises to cure unemployment, direct credit to the unworthy, juice a slack economy, boost exports, deliver stealth tax hikes, erode unfunded liabilities, or all the other things that fiat currency advocates promise. A gold peg merely sets immutable ground rules for exchange and leaves us alone to work out the rest. By taking the distorting levers away from Washington elites a hard money standard grounds the economy on our own productive efforts and not the whims of bureaucrats. And productivity is a playing field on which America has always done its best.

Laugh at the gold standard if you’d like, but don’t count on laughing last. When Bernanke’s funny money takes its inevitable fall, gold will still beckon.

Bill Frezza is a writer and venture capitalist living in Boston. He can be reached at bill@vereverus.com.