pawel-l
26.06.09, 12:45
Chciałem wam polecić serwis The Daily Reckoning
Dostaję go na skrzynkę pocztową i w wolnych chwilach przeglądam. Na
początku to była nauka angielskiego. Teraz jest to raczej przegląd
bieżących wydarzeń w świecie finansów.
Bill Bonner, który najczęściej pisze ma wolnorynkowe poglądy, a do
tego umiejętność sięgania do historii, moralności itp.
Fragment ostatniego eseju:
One of the big problems is too much capacity. We mentioned it
yesterday. During the Bubble Epoque the squanderers would buy
anything. So, you could make an almost unlimited amount of money by
providing them with things to buy. This meant building
factories...buying trucks...and renting retail space. Now, however,
the squanderers have come to their senses. They want to save their
money. So, no need for so much retail space in the malls, so many
trucks on the highways or so many factories in China.
America's middle class has rediscovered thrift.
There are a number of sit-down restaurant chains that cater to the
middle class - Applebee's...Chili's...Ruby Tuesday and a few others.
They expanded greatly during the '90s and '00s in order to meet the
desires of the big spending masses. But now that the masses aren't
so free and easy with their money, The New York Times reports that
they are in desperate competition for remaining diners. This
competition is manifesting itself as price deflation.
Applebee's offers dinner for two for only $20. Chili's advertises
entrees for just $7. Ruby Tuesday's is going for a 2-for-1 deal. Buy
one meal, get one free. All of them are making heavy use of discount
coupons.
Oversupply is producing deflation. Prices are falling as suppliers
fight for demand by offering more for less. And over at the Red
Roof...the roof has already caved in as the chain has defaulted on
its mortgage debt.
This is what you'd expect at the end of a long period of credit
expansion. EZ credit brought forth too much demand and too much
supply. Now, the demand is disappearing...and the suppliers struggle
to hold on.
Even now, we're facing an economy in which 70% of our economic
output depends on consumer buying. No buyers, no recovery.
This is natural, normal and perhaps necessary to a market economy.
And it will take years to sort out. Roofs have to fall in on
thousands of enterprises, speculators and households. Then, the
rebuilding can begin.
But the Bernanke Fed is not about to let nature take her course. The
Fed is on the road to ruin...and it's not about to "exit" yet.
Deflation is still enemy number one. Don't expect any tightening
from the Fed anytime soon, dear reader...it is far too soon for that.
Governments are essentially parasites on productive activity. So the
best governments are the smallest - meaning, the least
parasitic. "That government is best which governs least", is how
Jefferson put it.
But now we are in the third and fatal stage of a great country - the
political stage. In this stage, the parasites take over. Government
governs a lot. And governing a lot costs a lot of money. In England,
the government budget is bumping up against half the total GDP of
the nation. In America, health care is still largely a private
matter, so the government spends a smaller percentage of GDP...but
it is a percentage that is rising quickly.
Where will the money come from? Taxes. Gordon Brown has already put
the income tax rate up to 50%. Michael Caine, an English actor who
moved to California to escape the high taxes of the '70s, says he
will tolerate 50%...but not a penny more.
"If it goes to 51% I will be back in America," he says.
Ahem...he might have to try somewhere else. Everybody's gunning for
the rich - in America as well as England. Obama has pledged to raise
taxes on the rich. The states, notably California, are desperate for
more revenue too. Add federal, state and local levies...and private
health care costs...and you could easily be over the 50% bracket in
America too.
But when you rob the productive Peters to pay the parasite Pauls two
things happen. The Peters get their backs up. And you've soon
cleaned them out anyway.
So, governments need to find other sources of financial support.
Typically, they borrow money.
The history of European monarchies is largely a history of debt.
Kings and queens squeezed what they could out of the turnips. Then
they turned to the moneylenders. These lenders had to be careful.
They were happy to extend monarchs credit, because in this way they
gained a measure of control over them. But there were many dangers.
Kings lost their heads...or went broke. Or, often, the monarchs
could turn the tables on the moneylenders...and have their heads cut
off. Reading the history of the loans to the French crown it is eye-
opening. It is amazing anyone wanted to lend at all. The risks were
great; the rewards were few. Rarely were the loans settled
honorably.
What you come to see is that lending to the government - which
always has the power to betray the loan and behead the lender - is
merely another form of taxation. Government raises money. Sometimes
it repays the loan with revenues from other taxes. Sometimes, it is
the lender who pays the tax himself - either because the government
defaults...or because inflation reduces the value of his money.
This week...indeed, this year...lenders are turning over massive
amounts of money to the US government. There is so much demand for
US paper that the yield on the 10-year note fell yesterday to 3.64% -
despite the huge new supply of T-notes coming on the market. It is
breathtaking to watch. But it is a story that will end badly. We
predict that lenders will end up like the financiers who lent to
Louis XIV and later regretted that they ever met the man.
"Every loan always diminishes the free revenue and necessitates, at
the end of a certain time, either bankruptcy or the increase of
taxes," explained Turgot to a later Louis. "In times of peace it is
permissible to borrow only in order to liquidate old debts, or in
order to redeem other loans contracted on less adventurous terms."
Any borrowing in excess of that puts you on the road to ruin, Turgot
went on to explain.
More on Turgot - a man sadly neglected by historians - in upcoming
reckonings.
