Other People’s Money

While we may display genuine and heartfelt  compassion for those in need of it, ultimately we all have a compassion fatigue point at which our self interest – be it physical or spiritual – ultimately triumphs. While that may sound like the writing of a consummate cynic, any such ethos is open to interpretation. From the view of  Oscar Wilde  that a cynic is ‘A man who knows the price of everything and the value of nothing”  to George Bernard Shaw  saying that “The power of accurate observation is commonly called cynicism by those who have not got it”.  I find myself becoming increasingly cynical about the role that economic theory plays in the ‘creation of money’ and the role played by politicians,  either ‘in’ or ‘out of’ government,’ in the manipulation of ‘economic theory’.  When economist, politicians and ultimately governments introduce fiscal measures it always involves other people’s money.  

Moonglow

I posted Music and Lyrics as a tribute to the lyricist, rarely given credit for the words that make a melody most memorable. I have a number memorable scenic moments from films, with perhaps one of the most memorable being that of Kim Novak stepping toward William Holden to the music of Moonglow, which was being played by an off scene orchestra.  This was the theme music to the film Picnic and while I should probably file the film, along with many others, in my category of films ‘Enjoyed the film, but didn’t get any subliminal messages‘, I did fall in love at this moment with Kim Novak and the musical theme Moonglow.

Sherlock Holmes (the never-ending story)

During the war when I used to go to Saturday morning pictures - three pence to get in and no refund if it was bombed while you were inside.  Incidentally threepence in say 1944  becomes around £4.50 today – so it was considerably more expensive to go to the Saturday cinema in 1944.

Dinner for One (Euro-style)

A German reworking of a 1960s British comedy sketch has become an internet hit.

Euronomics

There is a view (especially in France) that the enemies of the Euro are the AS (Anglo-Saxons).  In my opinion this is not so.  I do not believe the AS are against the Euro but, in common with the Austrian School of Economics,  they are against its inherent flaws. As Martin Feldstein  points out in his article ‘The French Don’t Get It.  The French government just doesn’t seem to understand the real implications of the euro.   French officials apparently don’t recognize the importance of the fact that Britain is outside the eurozone, and therefore has its own currency, which means that there is no risk that Britain will default on its debt.  By contrast, the French government and the French central bank cannot create euros.  There is a second reason why the British situation is less risky than that of France. Britain can reduce its current-account deficit by causing the British pound to weaken relative to the dollar and the euro, which the French, again, cannot do without their own currency.  The eurozone fiscal deficits and current-account deficits are now the most obvious symptoms of the euro’s failure. But the credit crisis in Europe, and the weakness of eurozone banks, may be even more important. The persistent unemployment differentials within the eurozone are yet another reflection of the adverse effect of imposing a single currency and a single monetary policy on a heterogeneous group of countries.  These comments may be valid but in making the ‘French connection’, either Feldstein hasn’t been following recent European events very well, or he simply doesn’t understand the nature of the Anglo/French relationship, which is based on mutual distrust.

Season’s Greetings to you all!

I haven’t time to post over the Christmas Season, but if you do occasionally look in then:

EU CAP on Prosperity

The EU’s CAP on prosperity Written by Mads Egedal Bruun | Thursday 21 July 2011

More than ten million people are currently lacking food in the Horn of Africa, and estimates show that one million children are at severe risk of dying. If the EU had refrained from its heavy protectionism we might be in a different place to the sad, avoidable reality of today.

Inflationary money – ‘let it be done’ (fiat)

Owl was telling Kanga an Interesting Anecdote full of long words like Encyclopædia and Rhododendron to which Kanga wasn't listening.

Unlike Owl I always have a problem spelling Tuesday - my shortcomings here saved by a spellchecker, google, and an intuitive notion that something doesn’t look right.  When extraordinarily large valuations are put on artifacts, it simply doesn’t look right, especially when the artifact being purchased appears to be trivial, like a comic book.  But this of course misses the point, which is that the investment in artifacts can be a means of hoarding wealth.  This also means that large exchanges of money for artifacts has to take place.  However: regardless of the price that an artifact may sell for, in a world where the medium of currency exchange is fiat money, any sum of money becomes irrelevant.  With fiat money, there is no need for money to exist in a form that requires its physical exchange. The ability to buy a Renoir, Buggatti, Louis Quinz, or the first issue of the Superman comic, incurring large financial transactions, relates more to a credit rating than the actual ability to produce the money required. The first issue of the Superman comic sold recently for a record $2.16m and it’s highly unlikely that the buyer attended the sale with a suitcase full of money or even attended the sale at all, being able to make the purchase by telephone or some other electronic means.

A Universal Debt!

I posted the video below as I found its message quite appealing, given the censure being heaped on bankers and financiers. However, I found the solution offered to the hypothesis of ‘money as debt’ somewhat optimistic, for in whatever form money is regulated, politicians will attempt to manipulate the supply of money to service their own political agenda. I have always eschewed the conspiracy theorists, Illuminati, Bilderberg, Freemasons, et al, but perhaps what is most surprising about conspiracy theories, is their popularity. There is a wide, if somewhat sceptical, acceptance of the possibility of a conspiracy, balanced by a naïve belief that somehow protection from such conspiracies is inherent in a democracy.

A Peace of Keynes – The Cake

John Maynard Keynes was temporarily attached to the British Treasury during the First World War and was their official representative at the Paris Peace Conference up to June 7, 1919; he also sat as deputy for the Chancellor of the Exchequer on the Supreme Economic Council. He resigned from these positions when it became evident that there was no hope of substantial modification in the draft Terms of Peace. The grounds of his objection to the Treaty, or rather to the whole policy of the Conference towards the economic problems of Europe, are contained in his book THE ECONOMIC CONSEQUENCES OF THE PEACE.  Written in 1919, when Keynes was 36 years old, this book brought him fame. It is, in part, condensed in the following, which covers Keynes’ deliberations on the accumulation and division of wealth leading up the First World War and the impact that war may have on it.