This week’s rant of the week is the Audacity of Doing Nothing by Philip Greenspun.
The scale of angry comments that he has received is quite amusing. People refused to believe that pain can be good. And they refuse to believe that there is not some magical pill out there that will make the pain go away.
For a change, we are putting forth a short, simple, and easy to understand essay for this week’s essay of the week. Like all short and simple things, The German Hyperinflation by George J.W. Goodman has its shortcomings. For one thing, the author’s knowledge of economics is poor. There is nothing mysterious or hard to fix about hyper inflation. One simply has to stop running the printing presses.
But such quibbles aside, the essay is full of valuable anecdotes for those who are not well acquainted with the history of German hyper inflation. The one lesson to take from this short essay is that inflation can get very bad and still not bring about the apocalypse. The apocalypse did come to Germany, but it came after the hyperinflation had been brought under control.
In other words, hell on earth does not come from economic systems that are not functioning properly. Rather, it comes from men who have been deified.
A discussion on the latest evidence on the effectiveness of Satins. Comments more interesting then the post.
The socks that America’s special forces want to wear. Here is the company web site.
Texas tries to decided how it will deal with the fall out if Mexico collapses. The debate centers around the question of whether they should shoot them as they cross the river or build concentration camps? (I am exaggerating for shock value, but actual practices probably won’t differ too much from the spin I am putting on the choices being considered.)
But European banks may be in far worse shape. Bruno Waterfield of the London Daily Telegraph reports to have seen an eyes-only document prepared by the European Commission for the finance ministers of the various EU member countries. The problem revealed in the report is an estimated write-down by European banks in the range of 16 trillion pounds, or about $25 trillion dollars! The concern is that bailing out the various national banks for such an unbelievable amount would push the cost of government borrowing to much higher levels than we see today.
From the Telegraph (Bold Tags added to highlight the shocker)….
The sums needed are beyond the limits of the IMF, which has already bailed out Hungary, Ukraine, Latvia, Belarus, Iceland, and Pakistan – and Turkey next – and is fast exhausting its own $200bn (€155bn) reserve. We are nearing the point where the IMF may have to print money for the world, using arcane powers to issue Special Drawing Rights.
Its $16bn rescue of Ukraine has unravelled. The country – facing a 12pc contraction in GDP after the collapse of steel prices – is hurtling towards default, leaving Unicredit, Raffeisen and ING in the lurch. Pakistan wants another $7.6bn. Latvia’s central bank governor has declared his economy “clinically dead” after it shrank 10.5pc in the fourth quarter. Protesters have smashed the treasury and stormed parliament.
Based on my dim understanding of what the special drawing rights are, I don’t think it is fair to characterize them as giving the IMF the ability to print money. But I am hardly an expert on the IMF so what do I know?
For what it is worth, here is the IMF description of Special Drawing Rights and here is the the IMF description of its lending constraints.
A three-judge panel has tentatively ordered California to reduce the population of its desperately overcrowded prisons by as much as one-third, or as many as 55,000 prisoners, over the next three years. The ruling was an extreme step — but a necessary one. Like many states, California is putting too many people behind bars for too long, and it doesn’t have the money to build more facilities.
It’s been taking place slowly, week after week, but low gas prices have brought gasoline demand back up. There has been anecdotal evidence that suggested demand might be heading higher, such as recovering sales of gas guzzling cars. But for watchers of This Week in Petroleum, the data confirm the anecdotes: Gasoline demand has recovered to the point that it is now higher in the U.S. than it was a year ago. This week’s Summary of Weekly Petroleum Data (off of which This Week in Petroleum is based) shows that the 4-week rolling average has for the first time in recent memory increased above (albeit slightly) the level of a year ago.
Granted, gas prices have fallen a lot. But for gas demand to have risen above where it was at last year shows that America can’t be that badly off yet.
If the government’s stress test is anything like Creditsights’s stress test, then Wells Fargo will need another $119 billion; BofA, $99 billion; JPMorgan, $124 billion; Citi, $101 billion; Goldman Sachs, $47 billion; and Morgan Stanley, $34 billion. That’s over half a trillion dollars right there, for those of you counting along at home.
Is the CIA’s controversial drone war on Pakistani militants actually being flown out of Pakistan itself?
That’s the apparent bombshell dropped Thursday by Senator Diane Feinstein, during a Senate Select Committee on Intelligence hearing. Depending on who you ask, it’s either a king-sized security breach, or a ho-hum replay of the press has already reported.
The fact that some media people may have already figured that out is irrelevant. Anybody with any brains has already figured out that Pakistan and the US had some kind of secret back door deal. And by the same token, everyone who had any brains understood why everything was being kept hush hush, and it was not to hide anything from the US people. By shooting her mouth off she made Obama’s job harder.
I believe that the American people have a right to know who their country is fighting and killing. But I don’t believe they have a right to know where the attacks are being flown from. Keeping such information hidden has always been part of warfare.
From the Wall Street Journal….
Pentagon brass, satellite industry executives and NASA leaders for years have publicly expressed concern about the dangers of orbital debris. But the odds of a direct hit between satellites were considered so small as to be basically unthinkable. The ground-based and space-based reconnaissance tools available to the Pentagon generally were considered adequate to keep close track of larger objects.