Gold Smuggling: A Deepening Trend Not Just in the Philippines

Economic repression leads to the informal economy. That's because people respond to the incentives brought about, not only by environment, but also from social policies.

In the gold mining sector, increased economic restriction has driven the expansion of smuggling activities. Moreover, unseen to the eyes of the mainstream and politicians, interventionism in the gold mining sector inflates the risk of environmental hazards, corruption, violence and political instability as I earlier pointed out here. This is simply called the law of unintended consequences.

Well, the prolific peripatetic analyst Simon Black of the Sovereign Man echoes my observation on smuggling (bold original)

Like most places, unfortunately, the Philippine government is idiotic and continues to pass new laws and taxes in order to get their ‘fair share’ of other people’s sweat, especially related to mining projects.

As the law stands, all gold and silver produced must be sold to the Bangko Sentral, the country’s central bank.  Yet after the government started enforcing a 7% tax on precious metals last year, most small-scale producers are now selling to smugglers instead. 

According to Assistant Central Bank Governor Manuel Torres, who heads the bank’s refinery operations, as much as 95% of all the gold mined in the Philippines is now being sold to smugglers and moved out of the country illegally.

And the trend has been accelerating. In 2011, central bank gold purchases dropped at an annualized rate of 4%, then 76%, then 88% during the second, third, and fourth quarters. In the first quarter of 2012, gold purchases were down 92%. It’s staggering.

And of course, someone’s foolishness could present as opportunity for another.

Most of this smuggled gold finds its way here to Hong Kong, and then onward to China, where there is a voracious demand for gold despite rising prices. 

Of course, it’s perfectly legal to bring gold, tax-free, into Hong Kong.This is why when Hong Kong reports its official trade statistics, ‘gold imports’ from the Philippines are 30 times higher than what the Philippines government reports as ‘gold exports’ to Hong Kong!

It’s an enormous discrepancy, and it gives a huge indication of how much gold smuggling is really going on.

Gold smuggling in the Philippines looks like a symptom of a larger global disorder

In Mongolia, so called ‘ninja miners’ also use crude methods to avoid government tax, mining and smuggling gold across the border to China. Gold smuggling in Sierra Leone became so problematic that the government finally had to capitulate, slashing its mining tax in half for small-scale producers.

It’s certainly an important lesson that governments should heed, further proof that obtrusive attempts to impose heavy taxes only push economic activity into the black market.

While the Philippines gets much of the attention for such glaring and embarrassing policy failures, incidences of gold smuggling seems to be mushrooming around the world: Nepal and Bhutan, Burma, India, Italy, Congo,  Russia, Turkey and elsewhere for the same reasons: economic repression.

Given that monetary inflationism have become the dominant policy in combating the seemingly interminable government sponsored debt crisis, economic restrictions will only intensify the cat-and-mouse dynamic between guerilla capitalism (informal) and governments. 

Guess who will prevail?

The Strategy Behind the US War on Terror: Initiate Terrorism to Justify Overthrow of Governments

The US foreign policy of the "war on terror" may have been a grand covert scheme engineered to promote the political and economic interests of several highly connected power blocs implemented through "false flags".

Writes the Washington's Blog (bold highlights original) [source lewrockwell.com]

Wesley Clark, Supreme Allied Commander NATO, testifies in this 2-minute video that the US planned to overthrow seven countries after 9/11: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran.

The Pentagon admitted a strategy to do so (here, here, here):

1. the US conducts acts of terrorism in nations they want to control,
2. the US continues terrorism to provoke an act of reprisal,
3. the US labels the reprisal “terrorism” to justify covert and overt military operations to overthrow targeted governments.

Therefore, the US caused the “war on terror” as a policy choice; 9/11 was pretense and not the cause.

Indeed, war law and two UN Security Council Resolutions provided international cooperation for factual discovery of the 9/11 terrorists, arrests, and trial for lawful justice all nations supported.

The US rejects the rule of law, violates treaty obligations, killed over a million human beings from armed attacks since 9/11, and so far has long-term costs of $4 to $6 trillion to US taxpayers ($40 – $60,000 per household).

This rogue state of the US ends when enough Americans in military, law enforcement, government, media, education, and the general public have sufficient intellectual integrity and moral courage to accept the “emperor has no clothes” obvious facts.

This unlawful policy choice of the US for Wars of Aggression has killed 20-30 million people in covert and overt wars since 1945.

Read the rest here 

In the world of politics, one should be leery of what "appears" to be.  Or what has been peddled or communicated to the public as the cause, by politicians and the politically influenced mainstream media, may most likely just be the effects of an underlying unseen design or plot.

What the $4.2 million Gold Christmas Tree in Tokyo Implies

A posh gold Christmas tree will highlight Tokyo’s celebration of the yuletide season

From Timescolonist.com (picture also from them)

For those seeking a glow to their Christmas this year, a jewellery store in downtown Tokyo has just the answer: a pure gold revolving “tree” covered in Disney characters such as Mickey Mouse, Tinker Bell and Cinderella.

The tree-like ornament is made of 40 kg (88 pounds) of pure gold, standing about 2.4 metres (7.9 ft) high and 1.2 metres in diameter. It is decorated with pure gold plate silhouette cutouts of 50 popular Disney characters and draped with ribbons made of gold leaf.

The price tag? A mere 350 million yen ($4.2 million).

Gold priced in yen has been approaching its previous record or a 13 month high as the BoJ continues to debase their currency.

(chart from gold.org)

This only means that the gold fever has been seeping into the public’s psyche. 

In contemporary terms, this could be seen as a bubble. But the real bubble has been in Bank of Japan’s balance sheet activities via QE nth edition. (chart from Dr. Ed’s Blog)

As Goldmoney founder and chairman James Turk recently pointed out

when the price of gold rises, wealth is simply being transferred from people who hold currency to people who hold gold. This wealth being transferred already exists. It is wealth held in the form of purchasing power

Tokyo’s $4.2 million gold Christmas tree may thus be seen as a sign or symbol of the growing recognition of gold’s status as the refuge of wealth.

Online Education: Movement for College Credits Gain Momentum

One of the main objections to online education has been in the aspect of credentials, i.e. it is not recognized by traditional universities and or colleges which makes them less appealing to prospective employers.

I’ve been saying that the deepening of information age will radically transform people’s lifestyle which should include education.

This will happen for many reasons; such as cost efficiency (more profitable), increasing network (more online graduates percolating the job markets will become future bosses, thus will likely decrease resistance; an estimated 4 million students are enrolled online in the US), better performance, greater specialization and or simply more tolerance for online graduates or a combination of all these and perhaps more unidentified factors.

In his defense essay at Cato Unbound on the online education debate, George Mason University Professor and Marginal Revolution blogger Alex Tabarrok (who along with colleague Professor Tyler Cowen has their own free online learning platform university called MR University)  notes of the other advantages:

1. Leverage of the best professors teaching more students.

2. Large time savings from less repetition in lectures (students in control of what to repeat) and from lower fixed costs (no need to drive to university). 

3. Greater flexibility in when lectures are consumed (universities open 24 hours a day) and in the lecture format (no need to limit to 50 minutes).

4. Greater scope for productivity improvements as capital substitutes for labor and greater incentive to invest in productivity when the size of the market increases.

5. Greater scope for randomized controlled trials of educational strategies thus more learning about what works in education.

Read the insightful arguments on the online education here.

Academicians can debate the merits or demerits of online education but the world has been moving forward: traditional colleges are now considering to give credit to online courses.

Notes the USA Today:

The American Council on Education, a non-profit organization that represents most of the nation's college and university presidents, is preparing to weigh in on massive open online courses — MOOCs, for short — a new way of teaching and learning that has taken higher education by storm in recent months.

A stamp of approval from the organization could enhance the value of MOOCs to universities and lead to lower tuition costs for students, who could earn credit toward a college degree for passing a particular course. At issue is whether the quality of the courses offered through MOOCs are equivalent to similar courses offered in traditional classrooms.

The popularity of MOOCs, which have been around for barely a year, has intensified quickly. Top faculty at dozens of the world's most elite colleges and universities are teaching hundreds of online courses in a variety of disciplines to millions of students around the world. The courses are free, but they don't count toward traditional degree programs

Online education will pop the government inflated education bubble and democratize ‘education’ via the competitive free markets. 

In the future I envision the proliferation of domestic graduates of Mises Academy, Coursera, Khan Academy, Academic Earth, MIT-Harvard, MR University, Stanford, University of People and more.

Traditional universities will either have to adapt or perish.

Thanksgiving Day: The Triumph of Capitalism

Americans celebrate the traditional Thanksgiving day today.

But many fail to realize that the quintessence of Thanksgiving is the showcase triumph of the experimentation of property rights, division of labor, and voluntary exchange or laissez faire capitalism over collectivism.

From a 2003 article by Bloomberg’s Caroline Baum…

One of the traditions the Pilgrims had brought with them from England was a practice known as ``farming in common.'' Everything they produced was put into a common pool, and the harvest was rationed among them according to need.

They had thought ``that the taking away of property, and bringing in community into a common wealth, would make them happy and flourishing,'' Bradford recounts.

They were wrong. ``For this community (so far as it was) was found to breed much confusion and discontent, and retard much imployment that would have been to their benefite and comforte,'' Bradford writes.

Young, able-bodied men resented working for others without compensation. Incentives were lacking.

After the Pilgrims had endured near-starvation for three winters, Bradford decided to experiment when it came time to plant in the spring of 1623. He set aside a plot of land for each family, that ``they should set corne every man for his owne particular, and in that regard trust to themselves.''

A New Way

The results were nothing short of miraculous.

Bradford writes: ``This had very good success; for it made all hands very industrious, so as much more corne was planted than other ways would have been by any means the Govr or any other could use, and saved him a great deall of trouble, and gave far better content.''

The women now went willingly into the field, carrying their young children on their backs. Those who previously claimed they were too old or ill to work embraced the idea of private property and enjoyed the fruits of their labor, eventually producing enough to trade their excess corn for furs and other desired commodities.

Given appropriate incentives, the Pilgrims produced and enjoyed a bountiful harvest in the fall of 1623 and set aside ``a day of thanksgiving'' to thank God for their good fortune.

``Any generall wante or famine hath not been amongst them since to this day,'' Bradford writes in an entry from 1647, the last year covered by his History.

With the benefit of hindsight, we know that the Pilgrim's good fortune was not a matter of luck. In 1623, they were responding to the same incentives that have been adopted almost universally four centuries later.

Remember the lessons of Thanksgiving

Happy Thanksgiving Day!

The Paradox of the ASEAN, China, Japan and the US Free Trade Agreement Talks

From Japan Times

The Association of Southeast Asian Nations and its six regional partners, including Japan, China and India, declared Tuesday the start of negotiations for a free-trade agreement that could create a huge integrated market compromising more than 3 billion people.

The move toward creating the Regional Comprehensive Economic Partnership comes as the United States is seeking to create another vast free-trade bloc through the Trans-Pacific Partnership initiative.

If the RCEP and TPP, which is currently being negotiated by 11 countries, are created, each could be similar in economic size to the European Union. The 16 countries involved in the RCEP negotiations have a combined nominal gross domestic product of about $19 trillion, or about 30 percent of the world's GDP.

The RCEP negotiations are expected to begin early next year and to be completed by the end of 2015. But it will be a challenge for the 16 countries with their diverse backgrounds to realize a high-quality agreement to liberalize trade in goods, services and investment.

The countries involved are the 10 ASEAN members — Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam — plus China, Japan, South Korea, India, Australia and New Zealand.

Two things here

Any thrust towards the expansion of voluntary trade is always welcome.

Although free trade doesn’t really require FTAs as nations can just unilaterally engage in reducing all forms of trade restrictions (tariffs or non tariff based).

This means that FTAs are not necessarily "free" as they conditional to certain terms and or to specific industries or to particular areas of the economy.

As the great dean of Austrian Economics Murray Rothbard wrote,

If the establishment truly wants free trade, all it has to do is to repeal our numerous tariffs, import quotas, anti-"dumping" laws, and other American-imposed restrictions on trade. No foreign policy or foreign maneuvering is needed.

If authentic free trade evers looms on the policy horizon, there'll be one sure way to tell. The government/media/big-business complex will oppose it tooth and nail. We'll see a string of op-eds "warning" about the imminent return of the 19th century. Media pundits and academics will raise all the old canards against the free market, that it's exploitative and anarchic without government "coordination." The establishment would react to instituting true free trade about as enthusiastically as it would to repealing the income tax.

Yet inflationist policies undertaken by all these nations, especially by the US, Japan and China, which signifies a form of protectionism, essentially offsets any free trade agreement that would be forged.

Nonetheless this leads us to the second point. We have repeatedly been told that frictions over territorial claims have led to political brinkmanship in the region. 

And indeed the open display of mutual animosity has even adversely affected trading output between two major participants, China and Japan, in the FTA.

Tourism between both countries, aside from car sales of Japanese brands have reportedly slumped in September, even after the end of anti-Tokyo protest. 

It has been alleged that China's anti-Tokyo street protests has been orchestrated by the Chinese government that even led to a water cannon shootout between the coast guard patrol boats of Japan and Taiwan, another claimant on the disputed island.

So we are once again seeing the strange case of Dr. Jekyll and Mr. Hyde in terms of regional political and economic relationships between China and Japan (over Senkaku) and China and ASEAN (Scarborough and Spratlys). 

Certainly the conflicting status in trade relations and regional politics means one is a signal and the other is a noise. That’s unless there has been little coordination within their respective governments or that one of the two represents a smokescreen for other veiled agenda.

US Military Suicides at New Record High

Apparently US foreign imperial policies have been countenanced with an internal blowback (which I earlier called this as the enemy from within) through continuing record rates of military suicides. 

From PressTV

US troop suicides are still maintaining high levels despite years of tracking the effects of mental trauma on soldiers.

With 2012 coming to an end. US officials report that the Army and Navy are already reporting record numbers of suicides.

Similar record numbers are being recorded in the Air Force and Marine Corps--making 2012 the worst year for military suicides since diligent tracking began in 2001. The traumatic effects are war are lasting say experts.

As researchers study the causes of suicides in the military, doctors are evaluating the ratio of suicide rates and frequent deployments.

According to latest estimates, suicides are happening faster than the rate of one per day. Last week, suicides among active military personnel reached 323, breaking the Pentagon's previous high of 310 suicides set in 2009.

Wars have torturous psychological and emotional impact on individuals. Being distant from families can be part of such anguish. However more important is that of the trauma from combat violence. This can bring about the deeply rooted Post Traumatic Stress Disorder (PTSD); common symptoms of which are “combat fatigue” or “shell shock”, that may lead to depression and subsequent suicides. Otherwise, traumatic war experiences could morph into health issues which may exacerbate mental disease that also leads to risks of suicides.

Politicians hardly care about this though. As they relentlessly pursue interventionists policies that always leads to war. It’s not their lives at stake anyway. Besides, wars have always served as justifications for expanding political and economic control over society, which is why the incessant propaganda, abetted by the mainstream media, on nationalism.

As economist Dr. Antony Mueller recently commented,

Clausewitz wrote that war is politics with other means. I say that war is the quintessence of politics. All politics leads to war. War is the ultimate fulfillment of politics. In order to abolish war we must abolish politics. The question is how.

Quote of the Day: The Energy Available to a Society Depends on the Organizational System

Civilizations based on conquest inevitably decline when they meet their match…or just run out of energy. Civilizations that expend their energy building huge monuments have little energy left to defend themselves against invaders or other challenges. But perhaps most often, civilizations die like humans, from the inside out. They develop power structures, aka government, with almost exclusive monopolies on the use of violence. Then, elite groups get control of the government and use it to shift more resources and energy to themselves. The rich get richer. That is why government is fundamentally a reactionary institution; it is almost always used to protect existing interests. Future interests don’t vote…children don’t stab you in the back…and tomorrow’s industries don’t make campaign contributions. In effect, government moves energy from the future to the past…from what will be to what used to be…and finally, to what will be no more…

Joseph Tainter, in his Collapse of Complex Societies, believes the decline in civilizations can be traced to problem solving. Each challenge, he says, leads to a solution, which involves greater complexity. Bureaucracies, hierarchies, rules, and regulations are imposed. These things cost time, energy and resources. Eventually, the cost is too great and the downside is reached.

In the Roman Empire, for example, agricultural output per person dropped as population increased. The problem was addressed by a policy of conquest.

The Romans took resources — grain, slaves, gold — from their neighbors. But this required a large army, which was an expensive, energy-consuming enterprise. The return on investment declined…and eventually went negative. The Empire collapsed. That was not necessarily a bad thing. When the decline on energy investments is negative, you are better off stopping the program. And archeological evidence from bones and teeth suggest that many people were actually better fed after the collapse of the empire.

As the size and complexity of society grows, the governments that are most competitive are those that draw on the most support (energy) of their subject peoples. That is why the Roman policy of conquest was so successful. They were able to turn the conquered peoples into supporters of the regime, with most of the army eventually comprised of non-Roman soldiers. The British Empire was good at this too. The empire began by subduing the Scots, who became the backbone of the British Army. Today’s American army, too, depends heavily on soldiers from the southern states, who were conquered by Abraham Lincoln’s armies in the 1860s.

The energy available to a society depends on many things, probably the least important of which is beneath the ground. More important is the organizational system and its stage of development. In an early stage, the system tends to be robust and efficient — or ‘simple,’ in Tainter’s terms. Later, additional complexity degrades returns on energy investments. While this complexity may be described as a form of problem solving, it is better understood as an attempt by elite groups to hold onto their wealth and power.

This excerpt is from Bill Bonner, publisher of the Daily Reckoning, discussing the ontological cycles of human societies or "the rule of the downside"

Nassim Taleb on AntiFragility: 5 Rules Where Society can Benefit from Volatility

At the Wall Street Journal, my favorite iconoclast Black Swan theorist and author Nassim Nicolas Taleb explains his 5 rules where society can benefit from randomness, volatility or anti-fragility

Definition of fragility and antifragility:

Fragility is the quality of things that are vulnerable to volatility. Take the coffee cup on your desk: It wants peace and quiet because it incurs more harm than benefit from random events. The opposite of fragile, therefore, isn't robust or sturdy or resilient—things with these qualities are simply difficult to break.

To deal with black swans, we instead need things that gain from volatility, variability, stress and disorder. My (admittedly inelegant) term for this crucial quality is "antifragile." The only existing expression remotely close to the concept of antifragility is what we derivatives traders call "long gamma," to describe financial packages that benefit from market volatility. Crucially, both fragility and antifragility are measurable.

As a practical matter, emphasizing antifragility means that our private and public sectors should be able to thrive and improve in the face of disorder. By grasping the mechanisms of antifragility, we can make better decisions without the illusion of being able to predict the next big thing. We can navigate situations in which the unknown predominates and our understanding is limited.

Mr. Taleb’s five rules accompanied by excerpted elucidations (italics mine)

Rule 1: Think of the economy as being more like a cat than a washing machine.

We are victims of the post-Enlightenment view that the world functions like a sophisticated machine, to be understood like a textbook engineering problem and run by wonks. In other words, like a home appliance, not like the human body. If this were so, our institutions would have no self-healing properties and would need someone to run and micromanage them, to protect their safety, because they cannot survive on their own.

By contrast, natural or organic systems are antifragile: They need some dose of disorder in order to develop. Deprive your bones of stress and they become brittle. This denial of the antifragility of living or complex systems is the costliest mistake that we have made in modern times. Stifling natural fluctuations masks real problems, causing the explosions to be both delayed and more intense when they do take place. As with the flammable material accumulating on the forest floor in the absence of forest fires, problems hide in the absence of stressors, and the resulting cumulative harm can take on tragic proportions…

Rule 2: Favor businesses that benefit from their own mistakes, not those whose mistakes percolate into the system.

Some businesses and political systems respond to stress better than others. The airline industry is set up in such a way as to make travel safer after every plane crash. A tragedy leads to the thorough examination and elimination of the cause of the problem. The same thing happens in the restaurant industry, where the quality of your next meal depends on the failure rate in the business—what kills some makes others stronger. Without the high failure rate in the restaurant business, you would be eating Soviet-style cafeteria food for your next meal out.

These industries are antifragile: The collective enterprise benefits from the fragility of the individual components, so nothing fails in vain…

Rule 3: Small is beautiful, but it is also efficient.

Experts in business and government are always talking about economies of scale. They say that increasing the size of projects and institutions brings costs savings. But the "efficient," when too large, isn't so efficient. Size produces visible benefits but also hidden risks; it increases exposure to the probability of large losses. Projects of $100 million seem rational, but they tend to have much higher percentage overruns than projects of, say, $10 million. Great size in itself, when it exceeds a certain threshold, produces fragility and can eradicate all the gains from economies of scale. To see how large things can be fragile, consider the difference between an elephant and a mouse: The former breaks a leg at the slightest fall, while the latter is unharmed by a drop several multiples of its height. This explains why we have so many more mice than elephants…

Rule 4: Trial and error beats academic knowledge.

Things that are antifragile love randomness and uncertainty, which also means—crucially—that they can learn from errors. Tinkering by trial and error has traditionally played a larger role than directed science in Western invention and innovation. Indeed, advances in theoretical science have most often emerged from technological development, which is closely tied to entrepreneurship. Just think of the number of famous college dropouts in the computer industry.

But I don't mean just any version of trial and error. There is a crucial requirement to achieve antifragility: The potential cost of errors needs to remain small; the potential gain should be large. It is the asymmetry between upside and downside that allows antifragile tinkering to benefit from disorder and uncertainty…

Rule 5: Decision makers must have skin in the game.

At no time in the history of humankind have more positions of power been assigned to people who don't take personal risks. But the idea of incentive in capitalism demands some comparable form of disincentive. In the business world, the solution is simple: Bonuses that go to managers whose firms subsequently fail should be clawed back, and there should be additional financial penalties for those who hide risks under the rug. This has an excellent precedent in the practices of the ancients. The Romans forced engineers to sleep under a bridge once it was completed…

Read the rest here

In complex systems or environments, it is a mistake to see the world as operating mechanically like a ‘textbook engineering problem’ where any presumption of knowledge applied through social policies only leads to greater volatility and risks. 

Differently said, social policies that have been averse to change or designed to eliminate change leads to unintended consequences. Economist David Friedman’s take on the mistake of adhering to the change averse "precautionary principle" rhymes with Mr. Taleb’s antifragile concepts.

Also the idea of centralization only concentrates systemic risks and volatility. Whereas decentralization not only distributes and reduces the impact of volatility but also encourages innovation and thus progress.

Bottom line: Randomness, volatility and antifragility is part of human life. Society would benefit more by learning and adapting. Decentralized institutions are more suited to deal with antifragility. Presuming away the reality of change, which has been embraced by populist politics, only defeats the 'feel good' and ‘noble’ intentions of such social policies.

Quote of the Day: Why the Precautionary Principle is a Mistake

Over my lifetime, more still over the past century, the cultural and political institutions of the U.S. have changed substantially, for reasons that have very little to do with immigration. Over the past million years, the climate of the earth has changed radically, time after time, for reasons that have nothing to do with anthropogenic CO2. A rise in sea level of a foot or two would create problems in some parts of the world, but not problems comparable to the effect of half a mile of ice over the present locations of Chicago and London. 

The conservative mistake comes with its own pseudoscientific slogan, "the precautionary principle." It is the rule that no decision should be made unless one can be confident that it will not have substantial bad effects—the lack of any good reason to believe it will have such effects is not enough.

I have long argued that the principle is internally incoherent. The decision to (for example) permit nuclear power could have substantial bad effects. The decision not to permit nuclear power could also have substantial bad effects. If one takes the precautionary principle seriously, one is obligated to neither permit nor forbid nuclear power…

I am not arguing that there is never a good reason to fear change—sometimes a change can be reasonably predicted to have bad consequences. I am arguing that much opposition to change, across a wide range of different topics and disputes, is based on the mistaken assumption that if only that particular change is prevented, the next year, the next decade, perhaps even the next century, will be more or less the same as the present.

That is very unlikely.

This profound insight is from Economic Professor David Friedman on his blog discussing why the political hand waving against change is a mistake.

Ron Paul’s Suggested Book Read List

Retired US Congressman Mr. Ron Paul recommends some 50 books that expounds on the ideas of Freedom. You may want to consider them (some of them are available online via pdf) 

From LewRockwell.com

In Ron Paul's latest best-seller, Liberty Defined: 50 Essential Issues That Affect Our Freedom, he offers us his thoughts on a series of controversial topics, from Abortion to Zionism. His purpose is to inspire serious, critical, and independent thinking. Here are the books he cites for further study. Read 1, 2, or more:

Anderson, Terry. Free Market Environmentalism

Belfield, Richard. The Assassination Business: A History of State-Sponsored Murder

Burleigh, Anne Husted. Education in a Free Society

Caplan, Bryan. The Myth of the Rational Voter

Carter, Jimmy. Palestine: Peace Not Apartheid

Chodorov, Frank. The Income Tax: The Root of All Evil

De Jouvenal, Bertrand. The Ethics of Redistribution

Denson, John. A Century of War

___ Reassessing the Presidency:The Rise of the Executive State and the Decline of Freedom

Epstein, Richard. Forbidden Grounds: The Case Against Employment Discrimination

___ Takings: Private Property and the Power of Eminent Domain

Faddis, Charles S. Beyond Repair: The Decline and Fall of the CIA

Fisher, Louis. Presidential War Power

Fridson, Martin. Unwarranted Intrusions: The Case Against Government Interventions in the Marketplace

Flynn, John T. As We Go Marching

___ The Roosevelt Myth

Grant, James. Money of the Mind

Higgs, Robert. Crisis and Leviathan: Critical Episodes in the Growth of American Government

___ Depression, War and Cold War: Studies in Political Economy

Hoppe, Hans-Hermann. Democracy: The God That Failed

Horner, Christopher. The Politically Incorrect Guide to Global Warming

King, Martin Luther, Jr. The Autobiography of Martin Luther King

La Boétie, Etienne de. The Politics of Obedience: The Discourse of Voluntary Servitude

Larson, Edward J. The Creation-Evolution Debate: Historical Perspectives

Lott, John. More Guns, Less Crime

Mann, Vivian. Convivencia: Jews, Muslims, and Christians in Medieval Spain

Mencken, H. L. Notes on Democracy

Mises, Ludwig Von. Human Action: The Scholars Edition

___ The Theory of Money and Credit

___ Omnipotent Government

___ Nation, State and Economy

___ Theory and History

Morley, Felix. Freedom and Federalism

Napolitano, Andrew. The Constitution in Exile: How the Federal Government Has Seized Power by Rewriting the Supreme Law of the Land

Paterson, Isabel. The God of the Machine

Paul, Ron. Mises and Austrian Economics: A Personal View

___ The Case for Gold

___ A Foreign Policy of Freedom

Petro, Sylvester. The Labor Policy of a Free Society

Rockwell, Llewellyn H., Jr. The Left, the Right, and the State

Rothbard, Murray. An Austrian Perspective on the History of Economic Thought

___ For a New Liberty

___ Education: Free and Compulsory

Saenz-Baillos, Angel. A History of the Hebrew Language

Savage, Charlie. Takeover: The Return of the Imperial Presidency and the Subversion of American Democracy

Schoeck, Helmut. Envy: A Theory of Social Behavior

Slezkine, Yuri. The Jewish Century

Spooner, Lysander. Let's Abolish Government

Sowell, Thomas. Race and Culture

Thompson, C. Bradley. Neoconservatism: An Obituary for an Idea

Thornton, Mark. The Economics of Prohibition

Thoreau, Henry David, Civil Disobedience

Weiner, Tim. Legacy of Ashes: The History of the CIA

West, E. G. Education and the State: A Study in Political Economy

Woods, Thomas. Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked and Government Bailouts Will Make Thing Worse

___ Nullification: How to Resist Tyranny in the 21st Century

Japan’s Announces Fiscal Stimulus: 1 trillion Yen (US 12.3 B)

Not content with the previous rounds of QEs by the Bank of Japan (BoJ), Japan’s politicians has taken interventionism to the the next level through the announcement of more fiscal spending. 

From Bloomberg,

The Japanese government will spend 1 trillion yen ($12.3 billion) on a second round of fiscal stimulus as it tries to revive an economy at risk of sliding into recession.

The government will tap reserve funds from this fiscal year’s budget, Chief Cabinet Secretary Osamu Fujimura told reporters in Tokyo today. The latest measures follow the announcement of 750 billion yen of stimulus last month.

Ironically, the BoJ held off or refrained from further easing today, perhaps awaiting the results of the December elections, where the leading candidate Shinzo Abe has expressed preference for the BoJ to adapt the FED’s policy of unlimited QE

From another Bloomberg,

Opposition leader Shinzo Abe, the leading contender to become prime minister after a Dec. 16 election, has called for unlimited easing and an increase in the central bank’s inflation goal to as much as 3 percent from 1 percent. His comments last week triggered the biggest two-day decline in the yen against the dollar in a year as investors speculated that more aggressive monetary loosening is looming.

Never mind that the Japanese government had engaged in a string of major stimulus packages during the bubble bust from 1992 to 1999, yet got mired into what has been known as the “lost decade” or economic stagnation brought about by the Japan's bubble cycle.  

In reality, Japan's economic stagnation has two decades old (chart from tradingeconomics.com).

As economist Veronique de Rugy at the Reason Magazine explains,

Between 1992 and 1999, Japan passed eight stimulus packages, totaling roughly $840 billion in today's dollars. During that time, the debt-to-Gross Domestic Product (GDP) ratio skyrocketed, the country was rocked by massive corruption scandals, and the economy never recovered. All Japan had to show for it was a mountain of debt and some public works projects that look suspiciously like bridges to nowhere.

Japan’s latest pump priming will only worsen her already precarious fiscal conditions. 

Yet the new spending package by Japan’s government would lead to increasing dependency on the BoJ as chief financier of their government’s profligacy, as demand for Japanese Government Bonds (JGB) by retail investors has been on the wane.

The BoJ now holds 10% of JGB. The new or recent QEs means that the BoJ's share of JGBs will balloon.

It has been said that desperate times calls for desperate measures, but such measures of desperation are likely to speed up the coming government induced train wreck for the Japanese.

Talk about doing the same thing over and over again and expecting different results and not learning from the lessons of history.