For an inability to know prices.
Prices signal the markets to attend to scarcity. But prices must be in money, and in USA we use little if any money, just as they did in Soviet Union. Currency is issued, but it has only the most tenuous relation to money.
Through regulations and subsidies, we have access to a tightly constricted range of goods and services. And in every sector, overall the quality is dropping as the price is rising: food, clothing, housing, medicine, education, tools, even religion and entertainment (if for no other reason on the latter two that religion is becoming entertainment and entertainment a religion.) I say overall, for contrary to the masses, there is an elite who have access to first rate in those categories, due to their exceptional personal wealth. Here again, all this was true of the Soviet Union.
The United States saved the Soviet Union by extending it credit, by means of the ExIm Bank, in essence taxpayer-backed vendor financing. Capitalists love that sort of thing, keep the profits, socialize the losses.
Just as the USSR depended on USA State credit, so USA industry is depending on USA State credit to continue operations. GM is a failed corporation, with 30 recalls so far this year, some on lethal defects, and plans on losing 400 million next quarter. GM has not had a profit in Europe since 1999. yet it is kept alive by the USA taxpayers. Our banks at the end of every business day go to the FED for another bailout. Big Ag, Med, Ed, etc are all on life support, but life support for enterprises arrayed on the capitalist model.
All of this "credit" (it even fails as credit since it has insufficient asset to back the nominal credit extension) distorts all other prices. By limiting through regulation and subsidy what medicine, housing, food, education, clothing, religion, entertainment you may have, inevitably we end up paying more and getting less quality.
By extending credit to favored asset classes, we get asset class-specific inflation: housing, medicine, food, education, equities. Overinvestment and malinvestment proliferate.
It all gets down to price signals, in money. Think of a disaster like Katrina, in which fuel and water were most in demand. Merchants instantly raise prices to what the market will bear, and when the signal goes out the prices for bottled water or gasoline are rising fast, wholesalers redirect truckloads of both to outlets in the disaster zones. Ft. Wayne does without a 7 day supply while New Orleans gets urgent needs met. The Red Cross buys water for $100,000 a truckload for the poor and needy, COD and ever more trucks turn South on the news. The rich also pay the price. This is price signal in extremis.
But the State outlaws this, never mentioning the top price lasts about ten minutes, and soon enough when supplies reach a weeks reserve, prices start to drop below wholesale as johnny-come-lately would rather unload at a loss in NOLA than take a bigger loss bringing the load back to Ft. Wayne.
We make "gouging" illegal (price signalling) while subsidizing monopolies, which in turn truly gouge. While regulations and subsidies jack up the price on that very narrow range of goods and services we are allowed to buy, just as in the Soviet Union. And likewise, it makes cost accounting impossible, no company can possibly know where they stand. With assets wittingly not marked to market, all valuations are whimsy.
At some point there will be those cascading cross defaults of which Greenspan warned. be ready to trade on asset backed credit and know what money is, and what it is not. Just as with the Soviet Union, the functionaries have no idea where we are.
Feel free to forward this by email to three of your friends.
Prices signal the markets to attend to scarcity. But prices must be in money, and in USA we use little if any money, just as they did in Soviet Union. Currency is issued, but it has only the most tenuous relation to money.
Through regulations and subsidies, we have access to a tightly constricted range of goods and services. And in every sector, overall the quality is dropping as the price is rising: food, clothing, housing, medicine, education, tools, even religion and entertainment (if for no other reason on the latter two that religion is becoming entertainment and entertainment a religion.) I say overall, for contrary to the masses, there is an elite who have access to first rate in those categories, due to their exceptional personal wealth. Here again, all this was true of the Soviet Union.
The United States saved the Soviet Union by extending it credit, by means of the ExIm Bank, in essence taxpayer-backed vendor financing. Capitalists love that sort of thing, keep the profits, socialize the losses.
History: EIBW established under DC charter by EO 6581, February 2, 1934, to assist in financing U.S. trade with the Soviet Union.What could go wrong? At worst a Soviet Union saved by the taxpayers could go to war with the USA, and then the capitalists would win again. The Human face to all this support of communism was Armand Hammer. Armand Hammer was the go-between for Lenin & Stalin and the USA powers-that-be, with a particular friend in the Gore family, of Tennessee. But Armand Hammer's big political contributions were to Republicans like Nixon, etc. Like opposing lawyers milking clients dry, the capitalists and communists worked closely together. Jimmy Carter, my favorite president after Grover Cleveland, knew well what he was saying when he declared we had "an inordinate fear of communism." Carter was not allowed to elaborate.
Just as the USSR depended on USA State credit, so USA industry is depending on USA State credit to continue operations. GM is a failed corporation, with 30 recalls so far this year, some on lethal defects, and plans on losing 400 million next quarter. GM has not had a profit in Europe since 1999. yet it is kept alive by the USA taxpayers. Our banks at the end of every business day go to the FED for another bailout. Big Ag, Med, Ed, etc are all on life support, but life support for enterprises arrayed on the capitalist model.
All of this "credit" (it even fails as credit since it has insufficient asset to back the nominal credit extension) distorts all other prices. By limiting through regulation and subsidy what medicine, housing, food, education, clothing, religion, entertainment you may have, inevitably we end up paying more and getting less quality.
By extending credit to favored asset classes, we get asset class-specific inflation: housing, medicine, food, education, equities. Overinvestment and malinvestment proliferate.
It all gets down to price signals, in money. Think of a disaster like Katrina, in which fuel and water were most in demand. Merchants instantly raise prices to what the market will bear, and when the signal goes out the prices for bottled water or gasoline are rising fast, wholesalers redirect truckloads of both to outlets in the disaster zones. Ft. Wayne does without a 7 day supply while New Orleans gets urgent needs met. The Red Cross buys water for $100,000 a truckload for the poor and needy, COD and ever more trucks turn South on the news. The rich also pay the price. This is price signal in extremis.
But the State outlaws this, never mentioning the top price lasts about ten minutes, and soon enough when supplies reach a weeks reserve, prices start to drop below wholesale as johnny-come-lately would rather unload at a loss in NOLA than take a bigger loss bringing the load back to Ft. Wayne.
We make "gouging" illegal (price signalling) while subsidizing monopolies, which in turn truly gouge. While regulations and subsidies jack up the price on that very narrow range of goods and services we are allowed to buy, just as in the Soviet Union. And likewise, it makes cost accounting impossible, no company can possibly know where they stand. With assets wittingly not marked to market, all valuations are whimsy.
At some point there will be those cascading cross defaults of which Greenspan warned. be ready to trade on asset backed credit and know what money is, and what it is not. Just as with the Soviet Union, the functionaries have no idea where we are.
Feel free to forward this by email to three of your friends.
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