The question many of us had going into today was whether the no follow-through allowed rule would be implemented yet again by The Gold Cartel for the zillionth time in a row.
Almost a year ago, in February 2012, Zero Hedge decided to "think outside the box" and take Keynesianism and post-Chartalism (or whatever three letter acronym it is better known as these days) to their absurd, thought-experimental limits with "A Modest Proposal To Boost US GDP By $852 Quadrillion: Build The Imperial Death Star" - a suggestion that instead of growing US debt in dribs and drabs (because as any Ivy league tenured econ Ph.D will tell you, "debt is wealth"), that the US should go the whole hog and just splurge some $852 quadrillion in new debt (don't worry, MMT says that's just a token, no pun intended, amount) to build an Imperial Death Star, a project that would immediately hike US GDP by a factor of 56,000 and create several trillion new jobs, ensuring economic utopia in perpetuity, not to mention galactic dominance. We were mostly joking. We also assume that the creator of a White House petition launched in November to "Secure resources and funding, and begin construction of a Death Star by 2016" was also mostly joking. However, as that petition promptly accumulated well over 34,000 signatures, the White House had no choice but to respond. Here are the White House's thoughts on becoming the next iteration of the Galactic Empire (and, by implication, Barack Obama becoming Emperor Palpatine reincarnated).
The $1 trillion platinum coin saga took a surprising turn as the Central Bank of Mars has expressed interest in buying 100 of the proposed coins. Interpreters are puzzling over the meaning and subtexts of the Martian communique. Opinion on the Martian offer is divided. A small cadre of analysts suspect the Martian Central Bank naively believes the fantasy that the arbitrary creation of assets, either via platinum coins or electronic entries in the Federal Reserve's balance sheet, creates actual value. Though this credulity borders on the fantastic, these analysts point to the many commentators in the U.S. who have bought into the platinum coin fantasy. If Paul Krugman et al. have swallowed the fantasy that something of real value can be created from nothing, then why not the Martian Central Bank?
Maybe I should get a Nobel, that, or maybe PK shouldn't have one…..
The Bank of Korea increased gold reserves 20% last month to diversify investments, boosting holdings for the fourth time since June 2011 and underscoring increased demand by central banks according to Bloomberg. The bank added 14 metric tons in November, bringing the total to 84.4 tons, the bank said in a statement today. By value, holdings increased about $780 million to $3.76 billion, equivalent to 1.2% of total reserves, the bank said. “Gold is a physical, safe asset,” the Bank of Korea said in the statement. The precious metal “is a way of diversification, which helps reduce investment risk in terms of foreign-exchange reserves management,” it said. The Bank of Korea bought 16 tons in July, 15 tons in November 2011 a further 25 tons over a one-month period from June to July last year.
The greater story behind Mark Carney’s appointment to the Bank of England may be the completion of Goldman Sachs’ multi-tentacled takeover of the European regulatory and central banking system. But let’s take a moment to look at the mess he is leaving behind in Canada, the home of moose, maple syrup, Jean Poutine and now colossal housing bubbles. George Osborne (who as I noted last month wants more big banks in Britain) might have recruited Carney on the basis of his “success” in Canada. But in reality he is just another Greenspan — a bubble-maker and reinflationist happy to pump the banking sector full of loose money and call it “prosperity” before the irrational exuberance runs dry, and the bubble inevitably bursts.
Back in the late 1980s, the entire business world was obsessed with Japan. It's no wonder that this was the case: here was a country which had emerged from the ashes of World War 2 and had become the world's second-largest economy. They made high-quality cars, consumer electronics, semiconductors, plus they seemed to have a management style and work ethic that put the "good old USA" to shame.
While markets are digesting the probabilities of a dramatic rise in taxes and cut in spending as we approach the fiscal cliff, it appears that behind-the-scenes there has been a secret plan that we can only imagine is designed to rocket-boost us over the cliff - new manned missions to the moon. As Space.com reports, NASA is serious about sending astronauts back to the moon's neighborhood and will likely unveil its ambitious plans soon now that President Barack Obama has been re-elected, experts say. They go on to comment that "The space agency has apparently been thinking about setting up a manned outpost beyond the moon's far side, both to establish a human presence in deep space and to build momentum toward a planned visit to an asteroid in 2025. The new plans have probably already been cleared with the Obama Administration but have been kept under wraps in case Republican candidate Mitt Romney won Tuesday night's (Nov. 6) presidential election." While the claims are that this will not increase the budget, we suspect out-of-this-world manned outposts cost a little more than the $17.7bn budgeted for NASA in 2013... someone is clearly eating space-cakes. Ironic really given our earlier post...
The losers in elections often take the loss badly. Just as some Gore supporters in 2000 shouted about moving to Canada, some Romney supporters have taken the loss particularly badly too. All the Republican rage made me think about the origins of America. For those who want to strike out into the unknown in the pursuit of self-governance, such options don’t exist anymore. There is no great sparsely inhabited continent spread out (except perhaps Antarctica which is already claimed-for). Where is the next America? Where is the next land that people seeking self-governance can emigrate to? The hunger for self-governance led to the birth of America. It seems highly likely, in the very long run, that the hunger for self-governance will be the force that leads not only to local space colonisation. Powerful central government drives nonconformists to find ways to escape it. If the only road to self-governance left is up into space, then that is the road that will be taken.
We know two things about the future: 1) Borrowing 35% of Federal expenditures every year is unsustainable; and 2) The Baby Boom generation of 75+ million may be working longer, but they are also retiring en masse, joining the ranks of Social Security and Medicare beneficiaries at the rate of 10,000 per day, a flood that will not ebb until the late 2020s. This raises the obvious question: if Federal spending must decline, then where is the money going to come from to fund 75 million retirees? Calling the Central Bank of Mars: Greetings, Martian friends.
Everyone is aware of a multitude of problems that besets our world, however the nature of these problems and why they exist is distorted by the media and by governments all over the world. Our leaders, corporate heads, military top-brass etc. all have a fairly good idea of what is really happening, they just don’t want us – the ignorant masses known as the general public to know what they know. The multiple crises on this planet are caused by our insane mode of living – one that seems to be dominated by economics. Our way of life (unfortunately now for most of the world) depends on an ever-expanding economic system, for if it is not expanding it is contracting. This system was all well and good while there was plenty of capacity for continued expansion, but unfortunately for all of us the limits of expansion are not far off.
Obama may want to throw this one in the unsolicited communist dictator endorsement pile. From CNN: "President Barack Obama received one endorsement he definitely did not ask for Monday: Venezuelan President Hugo Chavez. The leftist leader and strong man, who has used strong anti-United States language in his political rallies and official speeches, told state-owned VTV, "In the point of view of his politics, if I were voting, I would vote for Obama and I believe that if Obama was from Caracas, he would vote for Chavez." Whatever one says or thinks about the Caracas head guy who recently is quoted as saying that "perhaps Mars had life at one time but then evil capitalism showed up and finished the planet off" (and Mars didn't build that life he forgot to add) or his foray into US elections, where he now shares the view of socialist Europe, he sure knows a gold bar in the local safe is worth two in the LBMA vaults in London.
- The bankers are coming: Banker Plan Would Fund Super-PACs to Sway U.S. Senate Elections (Bloomberg)
- Risk Increases of Prolonged World Slowdown, BOJ’s Miyao Says (Bloomberg)
- Spain Seeks to Stem Its Banking Crisis (WSJ)
- Deadly shooting mars new Quebec premier's victory rally (NBC)
- Democrats Keep Tax-Raising Focus On Top 2% Of Households (Bloomberg)
- Merkel Swings Into 2013 Election Mode Evoking Crisis, China (Bloomberg)
- Europe’s money market funds future in focus (FT)
- Pressure Mounts on ECB to Bring Down Bond Yields (Reuters)
- Swiss bank vows to hold franc down (FT)
- Australia economy still solid in Q2 despite GDP miss, but threats mount (Reuters)
- Clinton Brings to Beijing Plea for Maritime Solution (Bloomberg)
- The End of a 1,400-Year-Old Business (BusinessWeek)
Otherwise… No titbits…
Nada. Rien. Nichts. Nothing.