Policing for Profit

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John Cleese on Creativity

The Good Crisis

In the short run the crisis in Europe may be good for America and the value of the dollar. Why could this counter-intuitive result occur? While it is more tradition than reality, the US Dollar is perceived as a safe haven for troubled times. 

In Russia for example a lot of people keep their savings in dollars. On my first trip to that country several years ago, there were men who stood outside banks whose sole job was to exchange dollars for rubles, and visa versa, at a slightly better rate than you could get inside the bank. The government cracked down on these entrepreneurs and they are gone now.

But the desire to not rely on the ruble is deep seated. Oddly enough to compensate for this the rate you get for timed deposits in Russia is about 5%. This is highly competitive. If I was a currency speculator, the ruble would be on my short list of potential investments. 5% is pretty good in our current artificially low rate. Last time I checked the ruble was up versus the dollar. 

For a period the Euro was preferred to the dollar in Russia. But with the current troubles in Europe I bet this has changed and the dollar is riding high again. 

What I am saying is those that are predicting the demise of the dollar are premature by several years. As the old saving goes, in the land of the blind, the one-eyed man is king. America is that one eyed-man. But be careful as Obama has a sharp pointy stick. 

This video below disagrees with my suggestion that austerity is needed. I guess from Krugman's perspective I am an austerian, a play on words for the Austrian School of economics. 

What this video forgets is that government only has three sources of revenue. It can tax, driving money out of the economy. It can borrow, crowding out other borrowers. Or it can print money, potentially and eventually leading to inflation. None of these are good. Budget cutting needs to be a part of a total package. 

A Young Paul KrugmanKrugman is at least honest about what he wants: he wants inflation, he wants money printing. He wants to have his cake and eat it too. 

As Krugman's guru once famously said:

In the long run we are all dead. (Lord Maynard Keynes)

He was right about this. It is one of the few things he was correct about. Keynes is dead and we live in his long run. 

In the short run I expect the dollar to go up in value. But this cannot last. At some point if current trends continue investors will refuse to buy new government debt or roll over maturing debt. When this happens it will not be pretty. 

A Warning To Mockers

I thought this video was amusing. For those of you who do not know, Ronald Weinland is one of the two witnesses, so he says. He has predicted that Jesus will return today on Pentecost. (Technically he is predicting Saturday night at Jerusalem.) This was about 24 hours ago. Hopefully he was wrong. Just to be safe I have not mocked him untill now. I am writing this on Friday to automatically post on Sunday at 10 AM-so if the world ended yesterday please ignore this blog post.

Saturday 10 AM: Of course he was ready with an explanation. Apparently Weinland misinterpreted a word in Strong's concordance. Interesting that he came up with this so quickly, almost like he had an explanation ready. When you have a person like Weinland you are faced with four choices. He is a prophet, he is fake, he is self deceived, or he is crazy. The fact he had this plan B all ready tells us he is the the fake category. There is actually a significant chance of nuclear war next year, or its equivalent, when Israel bombs Iran's nuclear energy sites and it has a similar result as a nuclear weapon as it will spread radioactivity everywhere in Iran

Pentecost Message

Today I am posting a message I gave on Penetecost a few years ago. If you are wondering why I have not progressed more toward a podcast, the audio quality of this video is unfortunately representative of the way I sound. I am working on this and hope to start podcasting in July.