Jack Welch Echoes Mark Twain on US Jobs Data: Lies, Damned Lies and Statistics

Statistics can be massaged with the furtive intent to promote political agenda of the incumbent.

Jack Welch formerly the CEO of General Electric stirred up the hornet’s nest when his ‘conspiracy theory’ tweet on the latest US jobs data went viral.

From Bloomberg,

A good conspiracy theory is irrefutable. A bad one usually collapses when confronted by reality.

The claim by some supporters of Republican challenger Mitt Romney that President Barack Obama’s Chicago-based campaign doctored September’s unemployment figures for political gain fall into the second category, according to members of both parties who have served in the government’s economic data system.

Jack Welch, the former chief executive officer of General Electric Co. (GE), touched off an Internet-based frenzy yesterday when he suggested on Twitter that Obama’s team lowered the country’s unemployment rate to 7.8 percent to give the president a boost. “Unbelievable jobs numbers. . . these Chicago guys will do anything. . . can’t debate so change numbers,” he wrote.

The charge then was picked up by Arizona Senator John McCain and Florida Representative Allen West, both Republicans.

Welch’s message was re-sent via Twitter 3,832 times, meaning each of those people re-broadcasted it to their groups of followers, in the first 10 hours. Rebuttals posted by journalists on Twitter, including Keith Olbermann and Politico’s Roger Simon, were re-tweeted at least 300 times combined. Representative West’s message of support was re-tweeted 592 times.

As caveat, popularity doesn’t necessarily translate to the truth. In most occasion it has been the opposite.

(from Bob Wenzel)

But it has been noteworthy that the tepid growth of the recent job data has not been broad based (see above) and which comes amidst declining labor participation rate…

This likewise reflects on the slowest job growth recovery since 1948…

(both charts from Doug Short)

Yet soaring claims on food stamps and disability benefits

(from Zero Hedge)

…could be an instrumental, if not a principal, dynamic which has contributed to the declining trend of labor participants, as previously discussed here, aside from the Baby Boomers.

As the Zero Hedge rightly observes: 

Finally, and putting it all into perspective, since December 2007, or the start of the Great Depression ver 2.0, the number of jobs lost is 4.5 million, while those added to foodstamps and disability rolls, has increased by a unprecedented 21 million. Oh and about $7 or $8 trillion in debt. Who's counting really. 

Jack Welch’s tweet essentially resonates on Mark Twain’s famous quotation on the condemnation of statistics:

There are three kinds of lies: lies, damned lies and statistics.

Markets in Everything: Speculating on Airfare, Beer for Space Travelers

How about this: When buying your airfare; get a discount if speculate right on fuel prices or pay more if you’re wrong.

From Business Opportunities Weblog Network

AllegiantAir wants it’s customers to be able to gamble on fuel prices. They’ve written a letter to the Department of Transportation asking for permission to allow their customers to be able to choose between a traditional fixed-price ticket and a discounted, variable-price one. If the price of jet fuel falls by the departure date, customers with a variable ticket would get some cash back. If the price climbs, they would pay more, up to a pre-disclosed cap.

Or how about specialized beer for astronauts and for space travelers?

From another Business Opportunities Weblog Network article

It’s too late for Oktoberfest, but the world’s first space beer will soon be available, if tests by Astronauts4Hire prove it has the right stuff.

The beer, produced as a joint venture between Saber Astronautics Australia and the 4-Pines Brewing Company, is a recipe designed for easy drinking in both in microgravity and on Earth. It is intended to meet anticipated demand from the nascent space tourism market.

Yes space tourism will be accessible to the paying public very soon.

A Looming Tax Revolt? Protesting French Entrepreneurs Goes Viral

Because government holds the badges and guns, they haughtily presume of the complete subjugation of their subjects. They fail to realize that as humans, their constituents will respond to policies based on the latter’s self-interests—which could mean either life or death.

In France, the class warfare policies of President Francois Hollande has compelled entrepreneurs to bond together to demonstrate or protest on the highly repressive tax regime being rammed down their throats. 

The French entrepreneur’s grievances has gone viral (above logo is from their Facebook page) 

From Bloomberg,

French entrepreneurs have a new mascot -- the pigeon.

Using the bird’s role in French slang as the “sucker,” owners of startups have formed a group dubbed “Les Pigeons” to show that President Francois Hollande’s new taxes make them the fall guys for France’s economic woes. They are protesting the almost doubling of the tax rate on capital gains generated from selling a business in Hollande’s budget for 2013.

The group has gathered more than 34,000 supporters in less than six days on Facebook Inc.’s social network and spurred more than 3,600 posts under the “#geonpi” tag on Twitter, with the founders of Iliad SA (ILD), Vente-Privee and Meetic SA (MEET) throwing in their voices of support.

“The government thinks France’s entrepreneurs are pigeons,” the movement’s initiators wrote on a dedicated Facebook page. “Anti-economic policies are crushing the entrepreneurial spirit and exposing France to a big risk.”

Entrepreneurs have for months called on France’s government to avoid slapping them with more taxes, saying it will dry up interest in creating new companies or drive startups away.

Socialist President Hollande, seeking to appease his base in his first annual budget last week, raised taxes on the rich and big companies and included a minimum of spending cuts to reduce the deficit. The government introduced a 75 percent tax for income above 1 million euros ($1.29 million).

Class warfare policies foster social divisions. This means that if the French government will remain recalcitrant in the pursuit of harsh socialist redistributionist policies, untoward consequences or the risks of capital flight,  tax revolt and or civil unrest rises. 

Moreover, by assailing the productive tax paying class, French fiscal position will likely worsen thus the likelihood of bringing down the entire euro project with it.

So instead of attaining “social justice”, class warfare policies will only lead to greater risks of intensifying the current crisis, a violent outcome and social instability.

Again politicians and their sycophants never learn.

Quote of the Day: How Fed Policies Distort the Law of Compounded Interest

Because growth is a natural phenomenon, the human race, in general, and any man, in particular, can take advantage of natural law by putting off consumption today and investing in the future. This is the force behind compound interest. A seed of corn not eaten but planted will multiply into a thousand seeds at the future harvest; an acorn nurtured and planted can produce a mighty oak; an olive grove cultivated now may take 40 years to mature but it will take care of future generations. Thus, the moral of the story is always the same: Save today, invest for the future, and reap fabulous rewards. If you can invest at 7.2% for ten years, your wealth will double!

The mathematics of finance should be incredibly simple and elegant to watch in motion but they're not, thanks to the efforts of the Federal Reserve.

Einstein came to America during a time of great turmoil in Germany and Europe. Germany was turning into a National Socialist Party with a dictator and command economy. In a command economy, interest can be fixed by the government at zero or even negative, and savings accounts can be stolen and used to fund the wishes of the state. The river of investment that runs forward creating capital can be forced by state-created inflation to run in reverse, destroying capital. In other words, seed corn rots if it's not eaten, and investment dries up because saving is for suckers.

Ah, welcome to 2012 America. The Fed has decreed interest rates at zero for four years, and promised to keep them there for at least another two. The Fed is still printing money out of thin air as well as buying long term treasuries. By locking the yield of the 10-year Treasury at 1.6%, it's well below the rate at which staples like food, energy, utilities, transportation, education, and health care, are rising in cost.

Today, and as far as the eye can see, real inflation is well above interest rates. Instead of savers being rewarded they are being taxed, mugged, and systematically destroyed by continued low interest rates with no return on capital as the Fed tries to get people to spend and not save to stimulate the economy. Where capitalism in our country as Einstein knew it used to flourish, we're now a land dedicated to eating its seed corn, and encouraging people not to waste their time planting acorns for the future.

Is it any surprise that pension funds that assume they will earn an 8% return are all headed to insolvency? It is now a simple mathematical fact that with spending encouraged and savings taxed and given a negative return, only the superrich can set aside sufficient resources to take care of themselves as they age. The average American is destined to be a ward of the state.

Einstein understood physics and natural law. He knew that if interest rates are set at zero and well below the rate of inflation, capitalism would die. Trying to run an economy without real interest rates is like trying to run the universe without gravity. It doesn't work.

(emphasis mine)

This is from Richard Benson at 321Gold.com (hat tip LewRockwell.com).

In the mind of the political agents and their zealot followers, their edicts, statutes and regulations are superior to, and have the power to control, manage and regulate the laws of demand and supply to their whims. 

Graphic of the Day: Unelected Dictators

Below are the four unelected “Lords of the Rings” whom has wielded more power than the elected counterparts.

And speaking of currency, market manipulators and insider trading…

From Zero Hedge/Goldman Sachs

Food Crisis Watch: World Food Prices at 6 month High

For the mainstream’s view of the world, price inflation has hardly been a concern.

Yet in reality, price inflation appears to be seeping into the global economy mostly channeled through the commodity spectrum (one must add health, education costs among the other contributors).

A particular cause of concern has been rising international food prices which according to the FAO is at a 6 month high.

chart from FAO

From Businessweek/Bloomberg 

World food prices rose in September to the highest in six months as dairy and meat producers passed on higher feed costs to consumers, the United Nations’ Food & Agriculture Organization said.

An index of 55 food items tracked by the FAO rose to 215.8 points from a restated 212.8 points in August, the Rome-based agency reported on its website today. Dairy costs jumped the most in more than two years.

Livestock breeders and dairy farmers are passing on the higher cost of feed, after grain prices jumped in June and July, according to Abdolreza Abbassian, an economist at the FAO in the Italian capital. Higher prices don’t mean a food crisis is imminent, he said today by phone.

“Despite a very difficult market, the fundamentals that suggest a food crisis are just not there,” Abbassian said. “Market sentiment is now accepting high prices more as a rule than as an exception.”

Surging food crisis has been associated with social strife, particularly as one of the major trigger to the recent Arab Spring revolts. (chart from Sovereign Man)

While changes in weather patterns have proven to be a catalyst, many other policies such as tariffs, subsidies (agri and bioethanol) and others plays a role in exacerbating the supply side situation.

Importantly, massive inflationism by global central banks has been a key contributor to the demand side.

A continued ascent in food prices will amplify the risks of stagflation especially pronounced for emerging markets.

This is one very important dynamic to keep an eye on.

Have some steak today before they become pricey.

Japan’s First Shale Gas Discovery

I made my case that Shale gas will be the energy of the future which means this will become an international phenomenon (see here, here, and here)

I have also pointed out that Argentina and China have began to access Shale as with Israel’s recent major discovery.

This time it is Japan’s turn.

Japan’s baptism with Shale gas from Japan Times, (bold emphasis mine)

Japan Petroleum Exploration Co. has succeeded in extracting shale oil from the Ayukawa oil and gas field in Akita Prefecture, a first for Japan, company officials said Wednesday.

Japan is trying to diversify its energy sources and develop untapped resources following the Fukushima nuclear disaster.

Japan Petroleum, known as JAPEX, succeeded in obtaining crude oil by pumping hydrochloric acid into a shale rock layer about 1,800 meters deep to remove limestone that clogs cracks in the rocks, the officials said. It started drilling Monday.

Shale oil was confirmed after the extracted liquid substance was put into a centrifugal separator.

Interest in developing shale oil, or oil contained in deep underground shale rocks, has been growing globally, with a sharp increase in commercial production of shale oil and gas in the U.S

JAPEX said it will analyze the ingredients of the crude oil while preparing to dig a new oil well next business year, which starts April 1, and proceed with the drilling process.

The company estimates shale oil deposits at some 5 million barrels for the Ayukawa and neighboring oil and gas fields. For all of Akita, shale oil reserves are projected at 100 million barrels, worth nearly 10 percent of Japan's annual oil consumption.

This again gives evidence that geopolitical frictions from territorial disputes has hardly been about oil, gas or natural resources or about history. These are excuses. 

Territorial controversies are essentially about political smoke and mirrors

As I recently wrote,

War has always been used as opportunities to exploit society (through financial repression) and suppress internal political opposition in order to advance the interests of the ruling political class whose interest are interlinked with the politically favored banking class, the welfare and the warfare class.

The shale gas boom will ultimately expose such political charlatanism.

As a side note, beneficiaries of fossil fuels see Shale gas as a considerable competitive threat so they launch propaganda offensive against it through, for instance, the latest movie by Matt Damon "The Promised Land" has been financed by the United Arab Emirates

Notes the Heritage Fondation 

While left-leaning Hollywood often targets supposed environmental evildoers, Promised Landwas also produced “in association with” Image Media Abu Dhabi, a subsidiary of Abu Dhabi Media, according to the preview’s list of credits. A spokesperson with DDA Public Relations, which runs PR for Participant Media, the company that developed the film fund backingPromised Land, confirmed that AD Media is a financier. The company is wholly owned by the government of the UAE.

Expect more false evangelism from detractors of Shale gas and of the laissez faire capitalism from which Shale gas has been a product of.

Quote of the Day: The Perils of Unlimited Democracy

Of course there is something very wrong with unlimited democracies. There is simply no justification for the majority of the population in a country imposing its will on everyone. The idea is completely misguided. Why on earth should a great number of people have the authority to force a small number to obey them? There is no argument anywhere in the history of political philosophy and theory that would make out the case for this? If it were a valid point, it would imply that a large number of thugs somehow have the right to subdue other people to serve them. The famous example of the lynch mob that hangs an accused person make the point without difficulty. Expanding the will of vicious people doesn’t make it virtuous. And even if what the larger group wants is actually virtuous, forcing it on others is still not justified since they would have to make the free choice to be virtuous. Human virtue must be a matter of free choice. Only in self-defense may force be applied to others!

The election process in so called democratic countries is anything but justified or moral. Even when it hides behind the term “we” as it tries to do in too many instances--just listen to politicians anywhere around the globe and notice how often they pretend to be speaking for and acting in behalf of everyone--the will of the majority simply has no moral authority, none! Anyone who can dodge it successfully is perfectly justified to do so!

This is from Philosophy Professor Tibor R. Machan at weblogbahamas.com

Investing Lessons: Sir John Templeton’s 16 Rules For Investment Success

Precious investing lessons from the legendary investor Sir John Templeton's 16 Rules for Investing Success

1. Invest for maximum total real return 

2. Invest — Don’t trade or speculate 

3. Remain flexible and open minded about types of investment 

4. Buy Low 

5. When buying stocks, search for bargains among quality stocks. 

6. Buy value, not market trends or the economic outlook 

7. Diversify. In stocks and bonds, as in much else, there is safety in numbers 

8. Do your homework or hire wise experts to help you 

9. Aggressively monitor your investments 

10. Don’t Panic 

11. Learn from your mistakes 

12. Begin with a Prayer 

13. Outperforming the market is a difficult task 

14. An investor who has all the answers doesn’t even understand all the questions 

15. There’s no free lunch 

16. Do not be fearful or negative too often 

Sir Templeton gives an explanation for each

1. Invest for maximum total real return 

This means the return on invested dollars after taxes and after inflation. This is the only rational objective for most long-term investors. Any investment strategy that fails to recognize the insidious effect of taxes and inflation fails to recognize the true nature of the investment environment and thus is severely handicapped. It is vital that you protect purchasing power. One of the biggest mistakes people make is putting too much money into fixed-income securities. Today’s dollar buys only what 35 cents bought in the mid 1970s, what 21 cents bought in 1960, and what 15 cents bought after World War II. U.S. consumer prices have risen every one of the last 38 years. If inflation averages 4%, it will reduce the buying power of a $100,000 portfolio to $68,000 in just 10 years. In other words, to maintain the same buying power, that portfolio would have to grow to $147,000— a 47% gain simply to remain even over a decade. And this doesn’t even count taxes

For the rest, read them at FranklinTempleton.com

My comment:  

Most of John Templeton's investing tips signify as common sense and self-discipline which should be used by any "serious" investors. I say serious because some people dip their hands on the markets for other reasons than just profits, e.g. ego trip, social desirability bias and etc...

However when dealing with "quality, value, bargain, buy low" these ultimately depends on the operating environment, which in the past had been "conventional". 

Today, we are in unprecedented and uncharted territory when it comes to inflationism and interventionism that has massively distorted and obscured price signals of the marketplace.

In other words, conventional rules may not apply under the current setting which means go back to rule number 3--remain flexible and open minded.

Laissez Faire Capitalism: Private Jet Gets Bigger, Faster and Cheaper

Ah, the beauty of laissez faire capitalism as revealed by the Private Jet industry.

First, the financial bubble bust which affected the private jet industry, forced the sector to undergo painful adjustments through the market clearing process. 

From CNBC: (bold highlights mine)

The private jet industry is gaining altitude again after its death spiral during the recession. But jet makers, brokers and fractional companies say it will be years before the industry reaches its pre-crisis peak – if it does at all.

Used jets are still selling for half of their 2008 prices, while inventory remains high and jet use remains well below peak levels, as companies and the super-wealthy pare back their flights. As the industry rapidly reinvents itself to adapt to the shifting demand, the price of flying private is falling to record lows.

“It’s been a brutal downturn for this industry, followed by dashed expectations for recovery,” said Richard Aboulafia, analyst at the Teal Group, the aviation-research firm based in Fairfax, Va. “But the features are in place for a recovery and I think we’re already starting to see some slow and steady progress.”

This year, there have been a total of 172 new jets sold in North America – a drop of more than 70 percent from the 658 new jets sold during the same period in 2008, according to JETNET, the Utica, N.Y.-based jet research firm. The volume of used planes sold is about on pace with 2008 and 2009, yet prices for used planes are still down by a third or more from their 2008 peaks.

Price signals has then led to the re-coordination or the reallocation of resources towards areas preferred by the consumers.

Moreover, competition has prompted producers to tailor fit their products to the demand of consumers leading to lower prices, faster, bigger and more efficient planes.

Again from the same CNBC report…

The weak demand and prices has led to a radical restructuring in the private jet business, forcing all segments of the industry to conform to the new realities of flying private.

For jet makers, the future is about emerging markets like China, India, Brazil and the Middle East. Jet manufacturers are ramping up their sales staffs and expanding offices and support teams around the world to capture business from companies and the newly rich in these regions.

The jet makers are also launching products better suited to the new market. The top end of the market – with the biggest, fastest, most expensive planes – has been the most resilient…

In the mid-range and lower end of the market, aircraft builders are aiming for faster, more efficient planes…

For fractional and charter and companies, the new game is providing lower prices, better service and more flexible offerings. The industry has seen a large rotation among jet owners and short-term customers, as those private fliers who used to own planes outright now opt for lower-priced fractional shares or charters.

The surplus of jets in the market has led to a boom in the sales of seats or shares on individual flights. JetSuite, the California-based charter company, is now offering last-minute deals for $499. Travelers this week could charter one of JetSuite's Phenom jets – which seat four people  – from Los Angeles to Las Vegas or from Washington to Boston. The $499 price was valid as long as the customers registered through Facebook.

Many other charter companies are offering larger jet charters for $5,000 or less per flight.

Given this trend to relentlessly satisfy the consumers, one cannot discount that even the middle class, one day, may be able to access private jets.

This invaluable lesson from Joseph A Schumpeter’s classic Capitalism Socialism and Democracy (Google Books preview).

There are no doubt some things available to the modern workman that Louis XIV himself would have been delighted to have—modern dentistry for instance. On the whole, however, a budget on that level had little that really mattered to gain from capitalist achievement. Even speed of traveling may be assumed to have been a minor consideration for so very dignified a gentleman. Electric lighting is no great boon to anyone who has enough money to buy a sufficient number of candles and to pay servants to attend them. It is the cheap cloth, the cheap cotton and rayon fabric, boots, motorcars and so on that are the typical achievements of capitalist production, and not as rule improvements that would mean much to the rich man.  Queen Elizabeth owned silk stockings. The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within reach of factory girls in return for steadily decreasing amounts of effort.

Unfortunately, for governments despite their army of bureaucrats and academic supporters, they all fail to comprehend on such fundamental a lesson.

Laissez faire capitalism or economic freedom is the key solution to the world’s economic woes.

Hyperinflation in Iran

From Cato’s Steve Hanke:

Since the U.S. and E.U. first enacted sanctions against Iran, in 2010, the value of the Iranian rial (IRR) has plummeted, imposing untold misery on the Iranian people. When a currency collapses, you can be certain that other economic metrics are moving in a negative direction, too. Indeed, using new data from Iran’s foreign-exchange black market, I estimate that Iran’s monthly inflation rate has reached 69.6%. With a monthly inflation rate this high (over 50%), Iran is undoubtedly experiencing hyperinflation.

When President Obama signed the Comprehensive Iran Sanctions, Accountability, and Divestment Act, in July 2010, the official Iranian rial-U.S. dollar exchange rate was very close to the black-market rate. But, as the accompanying chart shows, the official and black-market rates have increasingly diverged since July 2010. This decline began to accelerate last month, when Iranians witnessed a dramatic 9.65% drop in the value of the rial, over the course of a single weekend (8-10 September 2012). The free-fall has continued since then. On 2 October 2012, the black-market exchange rate reached 35,000 IRR/USD – a rate which reflects a 65% decline in the rial, relative to the U.S. dollar.

The rial’s death spiral is wiping out the currency’s purchasing power. In consequence, Iran is now experiencing a devastating increase in prices – hyperinflation.  As Nicholas Krus and I document in our recent Cato Working Paper, World Hyperinflations, there have been 57 documented cases of hyperinflation in history, the most recent of which was North Korea’s 2009-11 hyperinflation. That said, North Korea’s hyperinflation did not come close to the magnitudes reached in the recent, second-highest hyperinflation in the world, that of Zimbabwe, in 2008, nor has Iran’s hyperinflation – at least not yet.

Since hyperinflation destroys the division of labor and causes social disorder, the risks of another Middle East war is looming large.

By the way, one can’t discount that the US economic warfare policies could contributing to Iran’s hyperinflation through the CIA’s surreptitious counterfeiting of the rial.

In Fantasyland Price Inflation has been Imaginary

One of the popular mainstream deceptions or mendacity employed by the apologists or lackeys of the state has been to repeatedly claim that there has been “no visible signs of inflation”.

Really?

Then how come even the OECD acknowledges that price inflation exists? 

From AFP,

Higher energy prices forced annual inflation in advanced economies to rise to 2.0 percent in August from 1.9 percent in July, the OECD said Tuesday.

"Energy price inflation accelerated sharply to 3.5 percent in August, up from 0.7 percent in July, while food price inflation slowed to 2.1 percent in August, compared with 2.3 percent in July," said the Organisation for Economic Cooperation and Development in a statement.

Excluding food and energy, the annual inflation rate slowed to 1.6 percent in August compared with 1.8 percent in July, according to the data for the 34-member OECD.

By individual countries, inflation gained pace in Germany, reaching 2.1 percent in August from 1.7 percent in July, while in the United States it advanced to 1.7 percent from 1.4 percent.

In Japan, however, consumer prices dipped 0.4 percent in August.

Outside the OECD area, annual inflation accelerated in India to 10.3 percent in August from 9.8 percent in July.

Inflation also rose in Russia to 5.9 percent from 5.6 percent and in China to 2.0 percent from 1.8 percent, the organisation said.

Annual inflation was stable in Brazil from July to August at 5.2 percent and Indonesia at 4.6 percent.

Let us put this way, if central banks were to acknowledge that price inflation exists then what justifies their current policies of inflationism?

Here is an example. The Bloomberg Businessweek quotes Fed Chairman Ben Bernanke

Five years of low interest-rate policies “have not led to increased inflation,” and the public’s expectations for price gains “remain quite stable,” Bernanke told the Economic Club of Indiana.

In reality, the policy of inflationism has been justified based on the supposed non-existence or non-threat of price inflation. Should inflation become a menace, central banks might be forced to resort to tighten or to exit from the current accommodation phase which will spoil Bernanke-global central banks support for their cronies. 

And may I also reiterate that Ben Bernanke’s explicit goal has been to support the asset markets.

I quoted Mr. Bernanke in my last stock market outlook  

The tools we have involve affecting financial asset prices. Those are the tools of monetary policy. There are a number of different channels. Mortgage rates, other rates, I mentioned corporate bond rates. Also the prices of various assets. For example, the prices of homes. To the extent that the prices of homes begin to rise, consumers will feel wealthier, they’ll begin to feel more disposed to spend. If home prices are rising they may feel more may be more willing to buy home because they think they’ll make a better return on that purchase. So house prices is one vehicle. Stock prices – many people own stocks directly or indirectly. The issue here is whether improving asset prices will make people more willing to spend. One of the main concerns that firms have is that there is not enough demand…if people feel their financial position is better they’ll be more likely to spend….

 So are we not seeing asset price inflation?

The post Bernanke’s QE forever or infinity has brought back the Risk ON environment as I earlier noted

This has been back led by US Stocks (SPX).

Risk ON means that world equities (MSWORLD), commodities (CCI) and even the euro (XEU) have risen in tandem.

Junk bonds have been booming too.

Inflationism does not necessarily translate to price inflation but to boom-bust cycles. But given the concerted efforts by all major central bankers to reflate (manipulate) the system, not only just boom bust cycles, but price inflation poses as clear and present danger.

Yet like incantation, the political pious repeatedly mumbles of the supposed NO price inflation environment. 

Go figure.

The following charts are all from tradingeconomics.com.

Euroland

United States

United Kingdom

Japan (the only exception)

China

Brazil

Russia 

India

And all these considers the accuracy of the respective statistics. As stated above, governments are likely to under declare inflation rates for political reasons.

One thing the above suggests is that the world is headed initially for stagflation. 

Updated to add: 

Ironically, the New York Fed's economic model predicts of "explosive inflation" 

From Zero Hedge:

Carlstrom et al. show that the Smets and Wouters model would predict an explosive inflation and output if the short-term interest rate were pegged at the ZLB (Zero Lower Bound) between eight and nine quarters. This is an unsettling fi nding given that the current horizon of forward guidance by the FOMC is of at least eight quarters

The Information Age and the Philippine Cybercrime Law

Amidst fiery protest by many Philippine cyberspace users, the newly enacted Cybercrime Prevention Act of 2012 RA 10175 took effect today (BBC). 

So far, according to Freedom House in 2012 the Philippines ranks 6th in the world in internet freedom.

I am pretty sure that the law will diminish the current state of internet freedom, regardless of the excuses given by politicians, and regardless of the relative standings of internet freedom in the world overtime. Although I expect some of the current activities to shift to the informal cyberspace.

Just read all the clauses containing the term “misleading” as punishable by law to understand the law’s arbitrariness. This simply means legalistic vagueness could be used to harass political opposition or anyone on the whims of the politicos.

As of this writing the government website hosting RA 10175 is down. This could be because of heavy traffic or could be down due to protest activities undertaken by hacktivists (Examiner)

As a side note, I am also quite delighted to see the passionate responses even by statists against internet censorship. It’s a bizarre world though, when curtailment of freedom involves them, the statists balk, resist and join the commotion, but when curtailment is applied only to others they cheer.

Nevertheless, here are the top 10 Countries who censor the internet most.

From 24/7 Wall Street based on Freedom House's ranking of internet freedom

1. Iran

2. Cuba

3. China

4. Syria

5. Uzbekistan

6. Ethiopia

7. Myanmar

8. Vietnam

9. Bahrain

10. Saudi Arabia

The next list is from the Committee to Protect Journalists 

The growing crusade by governments against the internet or internet censorship should be expected and constitutes resistance to change as forces of decentralization (internet) and centralization (governments) have been on a head-on collision course.

This essentially represents part of the volatile and turbulent transition process towards the deepening of the information age.

The lists of the 10 countries who apply internet censorship most reveals that despite governments’ acts to suppress free expression, the freedom of internet expression still thrives, albeit underground.

To give some examples

-China’s shadow or informal social media users continue to swell despite the government’s prohibition.

-Cuba’s repressive government has repeatedly failed to stop domestic political activist blogger who became an international sensation Yoani Maria Sánchez Cordero.

-There is the ongoing harassment against Wikileaks through  founder Julian Assange and the war against eponymous group Anonymous (who ironically appears to have taken up the cudgels of domestic cyber activists) for exposing on government malfeasances.

-Also the Iranian government’s attempt to convert her cyberspace into a national intranet has dramatically backfired where Iran’s government has been forced to retreat.

From Gizmodo,

After seriously flipping out, cutting of Iranian access to Google and basically herding all its citizens into a tiny little government-approved intra-net pen, the Iranian government has softened its Internet ban just a little bit and restored access to Gmail.

Though the outcry against censoring the Internet at large was loud, the backlash against cutting users off from Google services such as Gmail was particularly strong. Many Iranians (reportedly around half) resorted to using VPNs to get outside of the the intra-net bubble, creating millions of dollars in profit for local VPN firms. Even government officials railed against the lack of Gmail, and complained that local clients just weren't up to snuff.

Given that the penetration rate of internet users in the Philippines is nearly at 30% of the population (internetworldstats.com), from which the bulk comes from the elite and the middle class, it would not be surprising if a sustained uproar would end up with a political ‘compromise’ ala Iran.

Bottom line: Global governments including the Philippines will continue to do everything to try to control and regulate the flow of information in order to preserve the status quo. However and unfortunately for them, the free market in the internet, people’s newfound fondness with connectivity and the knowledge revolution will give them quite a challenge.

Yet there is no stopping the march towards the information age.

Quote of the Day: The Ethics of Fascism

Fascist ethics begin ... with the acknowledgment that it is not the individual who confers a meaning upon society, but it is, instead, the existence of a human society which determines the human character of the individual. According to Fascism, a true, a great spiritual life cannot take place unless the State has risen to a position of pre-eminence in the world of man. The curtailment of liberty thus becomes justified at once, and this need of rising the State to its rightful position.

This is from Mario Palmieri in The Philosophy of Fascism 1936 (Liberty Tree).  

A alter ego of fascism is nationalism. 

From Wikipedia: Fascism ( /ˈfæʃɪzəm/) is a radical authoritarian nationalist political ideology