Russia Mismanaging Embargo

In a free market, during a disaster, say a flood which makes all municipal water unpotable, the price of bottled water will rise to say $100 a gallon.

This is good.

First, that price lasts about 15 minutes.  Second, every truck driver with a load of bottled water, will either turn his truck toward the disaster area or be ordered to do so by the owner of the water.  Within a day or two there will be so much water available the price will drop below the going rate before the disaster. Some truchers cleaned up, most lost money.  No one went thirsty.

This excellent result in a free market is deemed criminal in capitalism and socialism.

Russia did the right thing for the wrong reason.  It began embargoes on all sorts of highly subsidized food items in response to the embargoes placed on Russian goods for silly reasons cooked up in the West.  Of course prices would rise for a while, but those high prices would spur domestic production in Russia.  So what does Russian do?

As a result of the ban on food imports, agricultural production grew, but so did food prices (which the devalued ruble also affected). According to the Federal Customs Service, in 2014 the import of animal products in Russia decreased by 42 percent, milk products by 33 percent, and meat and its byproducts by 32 percent.
At the end of 2014, according to the Rosstat Federal Statistics Service, prices on food products in Russia increased by 16.7 percent. The general prosecutor’s office studied the reasons for the growth of food prices in the largest retail networks and accused several of them of manipulating the market. In Moscow alone, 418 administrative proceedings were launched.
As a result, the networks introduced a temporary 20 percent price freeze 

Arrgggghhh!  Prosecute those who are making change happen, and then destroy the incentive present on the form of very short term price rises.  Lock in a 20% rise, which will make sure there is no domestic production to replace the embargoed goods.  Next, smugglers will get busy.

Ungh....  just as we need in the USA, Russia should have strict separation of state and commerce.

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LUCY! You Have Some 'splainin' To Do!

Straight out of Lucille Ball sitcom:

So this guy sells his truck to a dealership back in 2013, and begins to remove his logo wrap from the truck, but the dealership said they would handle the removal. Then in 2014 he sees his truck, with logo intact, being used by ISIS on the news. He’s seeking $1 million in damages from the dealership.

So along with cash, training, weapons, intel,  the USA must be passing off used trucks to ISIS too...  don't worry, we'll be deep into WWIII to soon to actually investigate what the USA military is up to.  Remember, the USA ambassador murdered in Benghazi was personally delivering embargoed arms to terrorists when elements of some displeased gov't whacked him.

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Playing China's Devaluation as an Importer

China is racing to the bottom against everyone else's currency, a goofy plan well elucidated here:

Market observers usually cite exports as the major reason for a cheaper currency. In theory, prices for Chinese goods would become cheaper on international markets so volumes would pick up.

But people miss the point...  this is in conjunction with interest rate cuts...  so Chinese vendor financing of USA importers is the game to play.  As usual, cheap labor is sheer nonsense, cheap management gathering cheap credit and vendor financing backing USA importers with solid markets.

Worked great for WalMart as it hollowed out the USA economy.  Now it is small businesses' turn to reverse the process, starting by importing toasters from China, then restart making them in USA as China runs out of play.

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Stockman Rolls The Dice

There is not a better expositor and insider critiquing the status quo working today than David Stickman.  Smartly, her has outsourced the tedious list maintenance and promoters at Agora.  Together, they have made a free video that offers a plan.  I haven't seen it.  I don't need ot.  With fear of contradiction, it will lead to disaster.

I was there, before he died, when Hitler flying ace and Austrian economics maven Sennholz received a lifetime award for his work in Austrian economics.  Now there was a man who had lived a full, real life.

In his acceptance speech he made one simple point  the powers that be always have 1,000 more options of play than you think they do.  Stockman and Agora are advocating a specific play in their video, no doubt about it.  There is the error.  all politicians careers end in disgrace, and Stockman was once a politician, briefly.  He will not escape his fate, as unique and superior as he is.

Consider a working American who spent 40 years at the median wage, lived frugally, and managed to accumulate a nest egg of $250,000.
If he is now retired and needs to stay liquid for health or family reasons or out of just plain prudence and therefore has his money invested in CDs or treasury bills, here’s what he gets: $750 annually.
That’s less than one Starbucks cappuccino per day! That’s right. One cappuccino for a lifetime of thrift.

No one has said it better.  If enough people short the market, the powers that be will simply do a short squeeze and wipe them all out.  The bad guys are not going anywhere, ever, or at least as long as we live.  Don't try to beat them.. I beat them, but they just changed the rules after I did.

If you think wealth is personal accumulation, then you are a sucker for shorting the market and gaining massive personal accumulation.  But they will simply charge the rules, or screw it, just seize it.  China is doing that right now, and throwing winners in prison for good measure.

No, the only way to play the next forty years is self-employed (better yet, customer employed) with the correct definition of wealth as an ever widening and more responsive array of goods and services accessible by an ever widening demographic with their own earnings.  That means you too, but it means everyone, or it does not work.

You can try to short the hegemon.  Good luck.  they don't call him the hegemon for nothing.  Better to start up a small business, and life your lifestyle.

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The Wonderful 2nd Circuit Madden v. Midland Ruling

When the hegemon's minions speak of usury, they mean a violation of interest-rate limit laws, not usury.  The 2nd Circuit threw a monkey wrench into the works, accidently doing the right thing ina small way, and this case is now headed to the Supreme Court.  There is a use for courts in capitalism, and that is for free-market people to take a look at what is being argued and see the reality of the game. In this case:

The usury element holds special significance for the likes of Lending Club, Prosper and Avant, all of whom use WebBank to originate their loans. That relationship, as FT Alphaville previously noted, is why WebBank’s is name on the $28,500 loan to Syed Farook and not Prosper’s (or Citi’s, who the Wall Street Journal revealed as the ultimate buyer of the loan, since sold back to Prosper).
It is by renting WebBank’s bank license that those marketplace lenders are able to make loans that would otherwise be usurious in states with caps on loan interest rates. For example, on a call with analysts in August, Lending Club chief executive Renaud Laplanche said that around 12.5% of all its loans are made at rates above local state usury caps.
The question as to whether or not a company like Lending Club or Prosper is acting on behalf of a national bank like WebBank is crucial, as noted by Fitch Ratings’ in its review of the current Citi-sponsored securitisation of Prosper loans (coincidentally the intended destination for Farook’s loan.)
The fact that WebBank originates the loans and holds them for one day before selling them to Prosper, which, in turn, sells the loans to institutional investors, raises the question as to which entity is the true lender.

And note the point is to write up as many of these junk loans and sell them off to pensions.  Your pension.  And when it all goes bad, who is responsible?  Why, no telling.  Imagine that.  With all of the banking regulation we have at the town, county, state and federal level, we have people who cannot be traced making billions lending "money" that does not exist to people coerced into avoiding tax burdens into investing in "securitized notes" sold by people specially licensed by the hegemon.  When the next crash comes, and these notes are worthless, the hegemon will do nothing except seize the rest of your assets "to save them from the speculators."

And people say deregulation was the problem in 2008!

The only safe way out of this mess is a complete deregulation of our economic system.  Then in a free market none of these things can get out of hand (they will happen, but not be blown to such disastrous heights do to hegemon regulation.)  Some greedy people will get burned and live and learn.  Today, the honest and earnest, the hardworking and productive, all get burned like saps.

The article cited is on another topic, completely obtuse to the import of the court case.  The article is well worth a read, talking about, gee whiz, what will happen when (if) the Fed raises interest rates.  Probably nothing much.  Despoilment is baked into this cake, and usually something irrational brings it down, not what everyone is looking at.  But the article is otherwise well worth reading.

Update before I could even post:

We’re not sure which of those categories “jihadist massacre” falls under (we assume “special occasion”), but as Reuters reports, San Bernardino mass shooters Syed Farook and Tashfeen Malik, obtained a $28,500 loan through Prospernot long before killing 14 and injuring nearly two dozen in a bloody rampage last Wednesday.

A loan is ethically always a charitable event.  It is creative and unitive.  Making them a business event is destructive and polarizing.  Look at all of the polarization and destruction since we began allowing banks to lend credit at interest.  This example is astonishing.

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We Should All Be In Jihad

Good to see a Christian who actually considers some reservations about usury:

Obviously, this is a tremendous source of conflict between the Muslim world and capitalism, whose lifeblood and basis for existence is usury. As a matter of fact, the Christian Bible prohibits usury too, but most Christians ignore it. There are actually way more verses against usury in the Bible than verses that talk about homosexuality.

But of course...  homosexuality is practically inconsequential compared to taking or giving a loan at interest.  Yet putative Christians who have huge mortgages, or are heavily invested in mortgage backed securities, are all in a lather about homosexuals.

O well, nothing to be done.  The entire article is a good reflective piece, especially on jihad.

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Trade Show Renaissance

An economic crash is coming, and the trade shows we have support the old, false economy.  Just as everything else has been bidden up in the false economy, so has trade show space.

Also, another kind of trade show has simply disappeared, the terminal markets.  Flower dealers were up at 2 am to receive the flowers from growers to be auctioned off at 5 am.  So with meat and produce.  Spot prices everyday.  Markets cleared every day.  With "get big or get out" came "take it or leave it" and the death of small business relationships.

When this yet 40 year hellish experiment ends, we'll have a renaissance in small business, and a return to spot auction markets to clear the produce of the countless small growers who will be trying to make a living locally.

Mega-shows will break back down to regional shows, and retailers will need to clear not only the inventory of te new, but the old and used.  Powell's did this first in Portland with books 40 years ago, first to see where hegemon policies would lead, but as Home Deport dies local hardware stores will re-emerge selling not only new, but used and liquidated goods as well.

If you cannot start a wholesale level business, think retail.  Location location location is key, but you'll get it cheap soon.  Don't market online, it is a waste of time, just use the net, for as long as it lasts, as an electronic yellow pages listing.  And everyone who says something nice about you ask them to repeat it on yelp.

The USA is not over, but this economic phase is.  Divide and conquer:  don't get into the coming brawl the hegemon will sponsor with groups fighting over scraps of handouts from the dwindling economy.  There are mountains of unsold inventory to move, there will be new and better needing markets discovered.

If your definition of wealth is personal accumulation, then you will condemned to join the ever more vicious fight for a share of the dwindling reserves, from Boeing to the trailer mom and her seven dwarves.  If your definition of wealth is the ver widening goods and services offered at falling prices available to an ever widening group of people with from their own earnings, then you know what to do the next forty years.

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Salt as Money

When considering this definition, with my addition of disinfectant, we can see how salt became money too...

Aristotle identified 5 essential attributes that are necessary for a money:  It has to be durable, divisible, convenient, consistent, and have value in itself. 

I've added antibiotic as an element for these reasons:

And if something has more attributes, rather unseen, then all the better.  For example, gold and silver are antibiotic.  That is to say when merchants make a payment, the medium they use, when the trade from hand to hand, is antibiotic.  This suppresses the spread of disease.  Silver does this as well, and copper and nickel to a much lesser degree.  And curiously, as atomic scientists have discovered more elements over the last two centuries, those that have antibiotic properties end up being offered as coins, such as rhodium and platinum, those elements that have no antibiotic properties for some reason never make it into the form of coin such as tantulum and iridium (except in novelty quantities).

and disinfectant

There is a definition I’ll add, that Aristotle could not have noticed, a characteristic I noticed: money is disinfectant.  Since money is usually used in international trade, while the goods laden on the vessel or camel are transferred to another conveyance, the merchant captain and the broker actually trade metal (gold or silver).  The disease on the hands of the traders are killed by the medium of exchange.  What is interesting is as new metals are discovered, the ones that are antibiotic are made into coins and the others are not.

Salt is not as durable as gold, in fact is is consumable, divisible, convenient, not as consistent as gold (very many kinds and grades), and has value in itself, and is both disinfectant and antibiotic on many forms.

Salt can be made more valuable than gold, and thus used as money, by hegemon-enforced monopoly. It can also emerge by itself, but it is not ideal, and there is usually gold and silver where salt is available.

Is salt money, or just a tally, if hegemon-sponsored?  Bad money drives out good, like bad food drives out good food.  Unless there is a free market, the salt is likely just tallies.  Otherwise, it too can be money. 

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