Sunday, January 29, 2012

Fox on Greece

05/07/10 Stockholm, Sweden – Rep. Ron Paul (R-TX) was on Fox News yesterday, discussing Greece and describing how the financial crisis has become a currency crisis… which is much worse. He sees an attack on the dollar in terms of gold, and has no doubt that the currency crisis is a worldwide problem.

Referring to whether or not Greece-like riots could take place in the US he says:

“Absolutely, there’s going to be anger. There’s going to be riots in the streets as well. But this is all a consequence of the fact of why and how government could spend like this. It’s because they don’t have sound money.

“When we run up deficits, we tax, but never enough. We can’t tax, it would ruin the economy. Then we borrow, and we get away with that for a long time. But, we rely on printing presses from the Federal Reserve to create money and that’s where the problem is [...] we can’t have fake money, this is counterfeit.”

India abandons US dollar to purchase Iranian oil

UK Treasury to take charge in next bank crisis

(Reuters) - Britain's finance ministry will have the power from next year to take charge in any future banking crisis, including being able to tell the Bank of England (BoE) to pump money into the financial system.
Finance minister George Osborne published a draft law on Friday reforming the way Britain's financial system is regulated and setting out who has ultimate authority in a crisis.
The legislation is an attempt to draw a line under the regulatory failings that forced taxpayers to stump up hundreds of billions of pounds to shore up the banking sector in 2008.
It will scrap the Financial Services Authority from 2013 and hand power to supervise banks and insurers to the central bank.
"When taxpayers' money is at risk in a crisis this legislation gives the Chancellor (of the Exchequer) the power to direct the Bank of England to act," Osborne said in a speech to world political and financial leaders in Davos, Switzerland.
He said the Chancellor would direct specific funding help for individual entities, the system for winding up ailing banks as well as intervention "to preserve stability as long as the government is willing to take responsibility for the action and take the resulting risk on its balance sheet."
"There will be no ambiguity about who is in charge," Osborne said.
A failure of the 15-year-old "tripartite" system of financial regulation at the time of the 2008 financial crisis was a lack of clear lines of responsibility between the BoE, the FSA and the Treasury, which shared the role.
The tripartite committee did not meet for almost a decade and allowed the now majority state-owned Royal Bank of Scotland to take over Dutch bank ABN Amro when credit markets had already frozen up, Osborne said.
The finance ministry will have the power to direct the BoE only "if the direction is necessary to resolve or reduce a serious threat to the stability of the financial system of the United Kingdom," according to the Financial Services Bill.
Alistair Darling, finance minister during the 2008 crisis, said in his memoirs last year he had been frustrated at not being able to order the BoE to do what he felt was right.
"The Bank was independent and the Governor knew it. We did not agree on what to do," Darling wrote.
The British Bankers' Association, which represents lenders like Barclays, HSBC, Lloyds, and RBS, said it "believes it is vital to bring the Chancellor into crisis management decisions at an early stage - and sooner than the current proposals suggest."
The FSA had no comment on the bill.
The bill also said a future BoE governor should serve only a single eight-year term rather than the current renewable five-year term. Mervyn King's term is due to expire in mid-2013.
The bill confirmed that the Financial Services Authority would be scrapped next year and replaced by two separate bodies to end the pre-crisis regulatory "tick box" culture.
One body, the Financial Conduct Authority (FCA), will police markets and have power to regulate consumer credit, currently handled by the Office of Fair Trading.
The bill stops short of giving the FCA competition powers, which it had sought, but strengthens its remit to ensure there is enough competition in markets.
The FCA will have powers to be more intrusive in its supervisory approach and be able to ban harmful financial products, a reform which follows two decades of mis-selling scandals that cost the industry 15 billion pounds in compensation.
A second body, the Prudential Regulatory Authority, will be a subsidiary of the BoE and will concentrate on day-to-day supervision of banks, making the BoE one of the world's most powerful central banks, and raising concerns about its accountability.
The Bank's Governor also chairs the Financial Policy Committee (FPC) established a year ago on an interim basis, to identify risks to financial stability in the UK and direct regulators to take action.
To counter worries about a lack of accountability, the Bank of England's supervisory body, the Court of the BoE, proposed setting up an oversight committee for financial stability, made up of its non-executive members, to scrutinize the BoE's policymaking committees.
The Court suggested that the oversight committee should commission reviews of the process and implementation of policymaking from external authorities like the International Monetary Fund.
In addition, the legislation will oblige the oversight committee to commission internal reviews of financial stability policymaking, not only from the FPC but from other parts of the Bank with responsibilities relevant to financial stability.
(Editing by Helen Massy-Beresford and David Cowell)

California Jews Shake Down Mel Gibson For Reparations

by Keith Johnson
Does it ever end? Get a load of this…
Congregation Beth Shalom in Corona, California has sent Mel Gibson a letter in hopes of guilting him into forking over some cash to bail them out of a bad investment they made on their local synagogue. Apparently, the group took out a giant loan that they can’t afford to pay back and are now facing foreclosure.
In a move reminiscent of something out of post-war Germany, the Southern California synagogue is looking to Gibson as though he should pay some kind of “Holocaust” style reparations for the so-called anti-Semitic tirade he made back in 2006.
I guess it’s not enough that Mel has already spent millions of dollars contributing to Jewish charities, including $5 million to the Jewish Cedars Sinai Hospital. Not to mention getting down on his knees and apologizing to the Jewish community on numerous occassions—only to have his career railroaded anyway.
Entertainment website TMZ apparently got their hands on the letter. Here’s what it says:
“Our proposal to you, Mr. Gibson, is since you have been cited as an Anti-Semitic, and have denied those allegations, what better way to prove to all your fans and the nay Sayers — than to endorse and help raise funds for our cause — SOS, Save Our Synagogue…“Mr. Gibson, we offer you to be a Mensch and make a sizable contribution to our cause.”
That’s what you call CHUTZPAH, folks!

Confessions of a Communist Taxi Driver in Laos: A Lesson in Free Markets

Mekong River in Vientiane Loas
Bohemian Travelers image
Activist Post

While on our family adventure around the world, we had an interesting encounter with a taxi driver in the capital of Laos, Vientiane. This jovial local with excellent English aspired to move to America, and was ultra inquisitive of our first-hand experience as Americans.

First, our initial observations about Laos are important to help frame this story. After crossing into Laos from Thailand we noticed a distinct difference between the two countries. The rawness of Laos was evident. Not in a way that reeked of desperation, though, but in a way that is unspoiled by multinational corporations (you can always seem to get a Coca-Cola though).

Laos seemed every bit as peaceful and beautiful as Thailand, but Thailand was clearly more civilized, if that’s what you call having a 7-11 store on every other block. It’s almost the identical contrast experienced when crossing into Nicaragua from the more developed and “open” economy in Costa Rica.

Besides the similarity in the lush tropical landscape shared by Thailand and Costa Rica, they also share longer tradition of trading with the West than does Laos and Nicaragua. In short, they’d be considered “more developed.”

The other thing we noticed in Laos was the communist flag flying everywhere, including on the Best Western Hotel -- the lone Western hotel we saw in Vientiane. We could read all about the history of Laos to learn about what these labels like “communism” are supposed to mean, but we thought asking people in the trenches would be more enlightening.

 So, in the taxi ride to visit the Buddha statue park, our driver was thrilled to practice his English and learn about America. His perception was that America was so free, and that everyone has an opportunity to make lots of money. He longed to move there to experience that which he’d likely learned on TV.

We then began to ask him about the system in Laos. “Can you vote for the leaders here?” He laughed heartily before replying “No.”

“How does healthcare and school work?” we asked. “The government provides it, and it’s good enough,” he answered vaguely. However, everyone told us that Thailand’s healthcare is far better -- much like Costa Rica’s is far superior to Nicaragua’s.

“We don’t notice much desperate poverty here,” we led with. He said, “Most have what they need and the homeless children are taken in by the monks.” To which he admitted he’d been a monk…for a week. “It’s really hard. They can only eat in the morning,” he complained. And it’s food that is donated as offerings when the monks parade the streets at dusk.

We asked him what he’d do if he was able to get America. “I don’t know. Maybe open a shop or a food stand.” And this is where the conversation got interesting.

We explained that you can’t open a food stand in America without a license, various permits, insurance, and a tax number from the government. He was flabbergasted. “Really! Anyone can open a stand here with none of that.”

He asked us what happened when businesses are caught operating without those things. We told him they’re shut down by the government, and sometimes their equipment is confiscated and they’re arrested.

He couldn’t believe that the U.S. government would be that controlling of small businesses. “People don’t need permission to survive in Laos.”

This became very noticeable as our journey in Laos progressed. There were countless makeshift food stands selling all sorts of cuisine including grilled bats, bugs, and fried baby chicks – the whole chick! We went to restaurants where we literally used the bathroom in the owner’s living room. There were no health department regulations, no business licenses framed on the wall, and never any taxes calculated on our bill.

Deep-fried baby chicks and grilled bats (Click to enlarge)
Choosing which restaurants or food stands are safe while traveling follows the golden rule of the free market; eat at places that are frequented by locals -- because a busy place is a proven place -- or get firsthand recommendations of a good place.

The ability to obtain licenses and permits or to meet mandatory regulations plays no role in food quality. Sometimes you win and sometimes you lose and spend a day or two on the toilet. But, ultimately, the free market weeds out the overpriced or unsanitary competition.

There were also dozens of makeshift taxi services without licenses, insurance or standardized meters. There are tuk-tuks powered by motorbikes; song thaew, which are pickup trucks with bench seats in the bed, and our personal favorite, the modified rototiller with a wagon.

Makeshift rototiller taxi crosses private toll bridge in Vang Vieng Laos
The rototiller taxi is an example of the how people can use ingenuity to figure out ways to survive in an unregulated marketplace. As cool as it is, though, the lack of conformity or insurance seems very unsafe to the conditioned mind of a Westerner. But just like with the restaurateurs whose livelihood depends on the quality of their vittles, the taxi driver’s livelihood depends entirely on keeping his vehicle clean, serviced, and out of accidents.

By the time we finished our brief taxi ride in Vientiane; we, including our driver, got the sense that the everyday individual in Laos has more freedom and flexibility to provide for themselves than people in the US, and that regulation is governed by the free market. Our driver’s deflated perception of economic freedom in America was evident. It’s an ironic conclusion to come to in a communist country.

Perhaps these regulations exist and the government simply doesn’t have the capacity or the will to enforce them unless a business becomes large enough to care about extracting protection money from. And perhaps the free market can only regulate quality when the vendor’s absolute livelihood is at stake.

Regardless, what we’d call the working class definitely appeared to have more freedom, and there was noticeably less desperation than their nominal poverty would suggest.

India to neglect sanctions on Iranian oil