Big Lie

Cyprus and the Unraveling of Fractional-Reserve Banking

"The 'Cyprus deal' as it has been widely referred to in the media may mark the next to last act in the the slow motion collapse of fractional-reserve banking that began with the implosion of the savings-and-loan industry in the U.S. in the late 1980s. This trend continued with the currency crises in Russia, Mexico, East Asia, and Argentina in the 1990s in which fractional-reserve banking played a decisive role. Even more than the unprecedented financial crisis of 2008, however, recent events in Cyprus may have struck the mortal blow to fractional-reserve banking. For fractional-reserve banking can only exist for as long as the depositors have complete confidence." Continue reading →

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Betray Your Bank Before Your Bank Betrays You

"The way it’s supposed to work at failing banks is that shareholders get wiped out first. Next the losses go up the ladder from junior debt holders to senior bondholders, and then all the way to uninsured depositors, if need be. Taxpayers and insured depositors shouldn’t have to absorb others’ losses or put money at risk to spare them. Troubled banks should have to fend for themselves. This was the approach imposed on Cyprus. In ordinary circumstances, it would be considered fair. The best argument for why it wasn’t is that Cyprus had been lulled into believing it would be treated just as well as Europe’s other bailout recipients." Continue reading →

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Evaluating Drug Decriminalization in Portugal 12 Years Later

"Twelve years ago, Portugal eliminated criminal penalties for drug users. Since then, those caught with small amounts of marijuana, cocaine or heroin go unindicted and possession is a misdemeanor on par with illegal parking. Experts are pleased with the results." Continue reading →

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Repeal the “War on Terror”

"When Congress approved the post-911 'Authorization for Use of Military Force' on September 14, 2001, Democratic Congresswoman Barbara Lee of California was the only member of the House to vote against it. The Authorization for Use of Military Force has been used to justify torture, warrantless surveillance, and now summary execution of terror suspects – including at least three US citizens, among them a 16-year-old boy – by drone strikes. That measure is the American equivalent of the 'Enabling Act' passed by the German Reichstag in 1933 – a blank check for both foreign military adventurism and domestic repression." Continue reading →

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Maryland Senate Votes To Cover Up Speed Camera Errors

"Earlier this year, a number of lawmakers in Maryland vowed to reform the way speed cameras were operated in the state. Officials were rocked by the revelation that more than 5 percent of photo ticket recipients in Baltimore were likely innocent with lax oversight and faulty photo radar equipment to blame for the bogus citations. On Monday, the state Senate voted 46-1 to cover up future errors." Continue reading →

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Post-Cyprus Blues: Confusion and an Erosion of Faith

"It may be misleading to project the crisis and resolution in Cyprus onto other quite different financial crises in other quite different economies. The common ground may be a rising fear of capital controls and the search for safe havens that won't implode or change the rules overnight. The sudden emergence of risk in what was perceived to be a safe haven will likely spark interest in non-banking safe havens, for example, precious metals, and what correspondent Mark G. calls the Glass Jar Bank, which he observes is still a popular alternative in Eastern Europe to entrusting one's cash to banks." Continue reading →

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War Without End

"There has been much in the news over the past two weeks commemorating the 10th anniversary of the beginning of the pre-emptive Iraq War. The above YouTube video commemorates the ending of an even greater conflict, World War I, which began in 1914 and ended in 1918. This is one of the most powerful and heart-wrenching documentaries you will ever watch, especially the never-to-be-forgotten recitation of the Siegfried Sassoon poem, Aftermath, by actor Jeremy Irons at the end of the program (which garnered an Emmy Award)." Continue reading →

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Actuarial study: Obamacare law to bring double-digit percent increases to insurance premiums

"Medical claims costs — the biggest driver of health insurance premiums — will jump an average 32% for Americans' individual policies under the Affordable Care Act health care law, according to a study out Tuesday by the nation's leading group of financial risk analysts. While some states will see medical claims costs per person decline, the report prepared by the Society of Actuaries concluded that the overwhelming majority will see double-digit increases in their individual health insurance markets, where people purchase coverage directly from insurers. Much of the reason for the higher claims costs is that sicker people are expected to join the pool, the report said." Continue reading →

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The Centralization of Intellectual Control Proceeds Apace

"How has publishing in top economics journals changed since 1970? First, annual submissions to the top-5 journals nearly doubled from 1990 to 2012. Second, the total number of articles published in these journals actually declined from 400 per year in the late 1970s to 300 per year most recently. As a result, the acceptance rate has fallen from 15% to 6%, with potential implications for the career progression of young scholars. Third, one journal, the American Economic Review, now accounts for 40% of top-5 publications, up from 25% in the 1970s." Continue reading →

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Whom to Believe on Gold: Central Banks or Bloomberg?

"Based on current data, the net increase in central bank gold buying for 2012 was 14.8 million troy ounces – and that's before the final 2012 figures are in for all countries. This is a dramatic increase, one bigger than most investors probably realize. To put it in perspective, on a net basis, central banks added more to their reserves last year than since 1964. The net increase – so far – is 17% greater than what was added in 2011, which was itself a year of record buying. Whatever gold's price movements, positive or negative, central bank officials have continued adding a lot of ounces to their reserves." Continue reading →

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