The news media was rattled early this week by the apparently unlawful disclosure of some 90.000 secret documents pertaining to the war in Afghanistan. As far as I can gather, the event made headlines on just about every television network and had people glued to newspapers for days on end.
Surprised? I must say I was. The world has seen its fair amount of leaks, but the dimension of this one is simply mind-boggling. It's a whole archive, dammit! And, what's more, straight out of the Fort Knox of intelligence! Amazing!
There are many angles to this story, but one is unavoidable. When you have got a mole this size running around your backyard, whether you like it or not, it raises some questions as to your ability to tender to the vegetable patch. In fine, it makes you look pretty ridiculous.
The other angle is that, whatever the mole's motives, and I am no in position to assess them, the whole exercise amounts to theft of information. And theft is theft, however you may want to explain it. The semantics of it I leave to any lawyer who may be able to turn the most heinous murder into a pious act of charity.
More startling than the event itself, though, was the official reaction to it. There was measured anger in Washington and sheer fury in Berlin.
Anger? Fury? Funny! If I remember correctly, those feelings were strangely absent when the Germans unlawfully bought information stolen from the Liechenstein banks and then went on to sell it to the Americans. Then there was much celebratory rubbing of the hands and patting on the back.
By definition, no one is above the law. Not even governments. Theft is a crime anywhere in world, and so is the receipt of stolen property. When governments behave like common thugs, they ought not to expect their citizens to respect them like honourable institutions. They deserve to be treated like common thugs. Full stop.
I know, I know. There is a perfectly good explanation for their actions on the bank question. But, fellows, this time you will need more than the semantics of a lawyer to convince me. As your own courts of law were totally silent on the matter, you will need the shrewdness of a theologian to bring me around to your point of view. Even then, I am not sure that what is good for the goose is not good for the gander.
So, what do I say to these hypocrites on both sides of the pond? You undermine your own moral authority. And what goes around, comes around.
Oh, and I almost forgot. I hope some foreign power pays this Washington deep throat a hefty sum of money and provides him with a new identity. Then the scales of morality will finally have been balanced.
Thursday, 29 July 2010
Saturday, 24 July 2010
THREE BLIND MICE
At first I thought I was dreaming. So I got up, washed my face and picked up the paper again. It turns out I wasn't. And I laughed heartily.
A Spanish daily reported yesterday that Maradona went to Caracas to elicit advice from Hugo Chávez on his future.
Now seriously, Diego, my son, I think you would be better off investing in a white cane and a guide dog.
A Spanish daily reported yesterday that Maradona went to Caracas to elicit advice from Hugo Chávez on his future.
Now seriously, Diego, my son, I think you would be better off investing in a white cane and a guide dog.
Thursday, 22 July 2010
ADVICE
Many years ago, for a brief period during the 80's, I became severely addicted to books on investment. It was so bad that I read the print off the pages, in such a way that you would swear they had not seen the printing press.
Many impressed me. They seemed to have been written by very knowledgeable people whose mere style, not to mention the complexity of the contents, left you feeling like a midget. It was sheer awe. Here were these writers who had applied these wonderful formulas for financial success to their own lives, and yet now, quite unselfishly, were willing to sacrifice their precious time to show you the path to wealth. Philanthropy, I thought.
I was particularly taken up by a treatise on how to leverage your way into a real estate empire. If correctly followed, the method would enable you to have a legion of tenants covering your bond payments. As property prices increased, you could refinance your mortgages in order to acquire even more property. In the end, you could retire rich and delight in a sense of true achievement.
I would have followed the advice, if it were not for a flaw of character to which I readily admit. Whenever anything good happens to me, I'm inclined to stress the negative aspects. What if the tenants do not pay the rent? What if you have to go to court to evict them? What if they wreck the place and you have to refurbish? What if property prices do not continue to go up? What if, for some reason, the bank recalls the loan? What if? In the end, I did nothing.
If you also read the book and followed the advice, you are probably now begging for your dinner on the streets of New York. Cheer up! Not everything is negative, though. Take comfort in the thought that your purchase of the book helped the author pay off his mortgage in Beverly Hills.
Many impressed me. They seemed to have been written by very knowledgeable people whose mere style, not to mention the complexity of the contents, left you feeling like a midget. It was sheer awe. Here were these writers who had applied these wonderful formulas for financial success to their own lives, and yet now, quite unselfishly, were willing to sacrifice their precious time to show you the path to wealth. Philanthropy, I thought.
I was particularly taken up by a treatise on how to leverage your way into a real estate empire. If correctly followed, the method would enable you to have a legion of tenants covering your bond payments. As property prices increased, you could refinance your mortgages in order to acquire even more property. In the end, you could retire rich and delight in a sense of true achievement.
I would have followed the advice, if it were not for a flaw of character to which I readily admit. Whenever anything good happens to me, I'm inclined to stress the negative aspects. What if the tenants do not pay the rent? What if you have to go to court to evict them? What if they wreck the place and you have to refurbish? What if property prices do not continue to go up? What if, for some reason, the bank recalls the loan? What if? In the end, I did nothing.
If you also read the book and followed the advice, you are probably now begging for your dinner on the streets of New York. Cheer up! Not everything is negative, though. Take comfort in the thought that your purchase of the book helped the author pay off his mortgage in Beverly Hills.
Wednesday, 21 July 2010
LIFE IS A PARADOX
Yesterday a man was executed by lethal injection in Texas.
At any time, the loss of a life is a tragic event. Whatever the circumstances.
Perplexing is the fact that the staunch supporters of the death penalty are the same fierce opponents of abortion and euthanasia. All on religious grounds.
What I love about religion is just how charmingly accommodating it can be.
At any time, the loss of a life is a tragic event. Whatever the circumstances.
Perplexing is the fact that the staunch supporters of the death penalty are the same fierce opponents of abortion and euthanasia. All on religious grounds.
What I love about religion is just how charmingly accommodating it can be.
Tuesday, 20 July 2010
ASPIRATIONS
One advantage you have when you are rich is that you can afford the luxury of being hated. When you are poor, that delight is positively out of your reach. Because, when you are poor, all you can get is compassion. And don't you just love that!
In fact, the whole thing is very puzzling. I have never heard rich people stating categorically, even in their most private conversations, that they hate the poor. Conversely, I hardly meet anybody who doesn't openly wish they could win the lottery. What for? So they can stop being loved and start being hated? The whole thing doesn't make sense to me.
Of course, taxing the rich can make you immensely popular. It is like if you were to establish a tax on opium consumption. As most of the people do not indulge in the habit, you would just be hated by the minority, but loved by the majority. If you became fiery enough about it, you could even get elected to the presidency. If you are not careful, I mean.
I read somewhere that anger is a blocked wish. So I have often wondered whether socialist leaders don't secretly aspire to become Wall Street tycoons. Deep down, that is.
In fact, the whole thing is very puzzling. I have never heard rich people stating categorically, even in their most private conversations, that they hate the poor. Conversely, I hardly meet anybody who doesn't openly wish they could win the lottery. What for? So they can stop being loved and start being hated? The whole thing doesn't make sense to me.
Of course, taxing the rich can make you immensely popular. It is like if you were to establish a tax on opium consumption. As most of the people do not indulge in the habit, you would just be hated by the minority, but loved by the majority. If you became fiery enough about it, you could even get elected to the presidency. If you are not careful, I mean.
I read somewhere that anger is a blocked wish. So I have often wondered whether socialist leaders don't secretly aspire to become Wall Street tycoons. Deep down, that is.
Saturday, 17 July 2010
SO, HOWZIT?
The moment I heard it I knew it was Moshe Kaplan phoning from Johannesburg. He sounded positively upset. Not only was his son going out with a shiksa, but his financial advisor had told him to short the euro. It never rains but it pours. I felt Moshe was ready to pluck out his beard.
Moshe, I said, already last week it was an overcrowded trade. There was bound to be short covering. Then the Europeans managed to place their public debt with ease and consumer confidence in the US fell sharply. When the yield on the 10-year Treasury Note started going down, your financial genius should have got you out of that trade. Unless he was on the other side of it, in which case he is just a gonif.
He sighed from the depths of Africa. Then he asked me whether he should get a lawyer.
Moshe! Moshe, I shouted in anguish, why be robbed twice within a week? What you need to do is to approach the guys at the ANC Youth League. They are young, bright and full of ideas. Maybe they can show you how to make a fast buck.
Moshe, I said, already last week it was an overcrowded trade. There was bound to be short covering. Then the Europeans managed to place their public debt with ease and consumer confidence in the US fell sharply. When the yield on the 10-year Treasury Note started going down, your financial genius should have got you out of that trade. Unless he was on the other side of it, in which case he is just a gonif.
He sighed from the depths of Africa. Then he asked me whether he should get a lawyer.
Moshe! Moshe, I shouted in anguish, why be robbed twice within a week? What you need to do is to approach the guys at the ANC Youth League. They are young, bright and full of ideas. Maybe they can show you how to make a fast buck.
Friday, 16 July 2010
BACK FROM THE DEAD
Fidel Castro has finally appeared in public. For four years I have worried myself sick that he might have died. I feared that the regime might have had him stuffed and propped up on chair to make the world believe he was still with us. The only person to have reportedly seen him was Hugo Chávez, and you know how reliable that is...
How I can be certain that it was him is that he actually advised the US not carry out a nuclear attack on Iran. An impersonator would most probably have advised Iran not pursue its nuclear aspirations.
I must say he looks quite well. Compared to the Egyptian mummies, he looks amazingly well.
How I can be certain that it was him is that he actually advised the US not carry out a nuclear attack on Iran. An impersonator would most probably have advised Iran not pursue its nuclear aspirations.
I must say he looks quite well. Compared to the Egyptian mummies, he looks amazingly well.
Thursday, 15 July 2010
WE ARE ALL DIFFERENT, AFTER ALL
Years of political indoctrination have led us to believe that we are all equal.
Not so, says science. Whites make much better swimmers, blacks much better runners. That's all due to the higher or lower positioning of the navel, which acts as the centre of gravity.
Baffling! So, if you cannot swim or run, your navel is probably on your forehead. What does that make you? Green?
Not so, says science. Whites make much better swimmers, blacks much better runners. That's all due to the higher or lower positioning of the navel, which acts as the centre of gravity.
Baffling! So, if you cannot swim or run, your navel is probably on your forehead. What does that make you? Green?
Tuesday, 13 July 2010
UNION MAN
In the Middle Ages, guilds sought to protect their members through a rigorous process of professional self-improvement that ultimately led to an unmistakable guarantee in quality of craftsmanship. That seal of excellence would, in turn, lead to higher earnings.
Modern trade unions originated around the period of the English Industrial Revolution, but, unlike their predecessors, they seek to improve the livelihood of their members through the process of collective bargaining. When no agreement is reached, the invisible gun of prolonged strikes is held at the employer's head in the hope that he will eventually surrender.
One could perhaps go along with the methodology, if one did not pause to think. Once one begins to dwell on the foundations of the matter, one comes to a quite different conclusion. The whole concept is heavily flawed.
The three presumptions on which the modern movement lies are nothing but pillars of clay that have not stood the test of time. Yet, stubbornly, they continue to be held sacred in some parts of the globe.
The first flaw that one can find is that trade unions assume that labour is not part of the business equation. They take it for granted that, just because two employees have the same job description, they should earn the same wage. On the surface, it seems just. However, invariably, one of those workers will achieve better levels of productivity than the other. By exacting equal rates, unions are hiding economic inefficiencies that will impact the balance sheet of the business. Furthermore, constant demands for higher wages will, in the end, lead to a loss competitiveness. Labour is an input like all the other inputs. Instead of protecting jobs, unions are active agents in the destruction of those same jobs.
Then, they ignore the existence of economic cycles. For them, the law of supply and demand does not exist. When the latter slackens, all inputs of the business equation have to shrink too. Labour is no exception. If, by legislation, it becomes difficult to fire labour, unless the employer is prepared to pay ridiculous amounts of severance pay, he will be less likely to hire and, if, during the expansion phase of the cycle, he was imprudent and he hired too many workers, his only option is bankruptcy.
Finally, the last presumption of trade unions is that employers will not get tired of the process and go elsewhere in search of less troublesome conditions. Stability is an essential element of confidence.
Although, in many parts of the world, people have realised that the Industrial Revolution is over, in others, they are still living in the 19th century. The reason for it is that they have been hijacked by political parties that wish to achieve that which their meagre public support does not allow them to accomplish in national parliaments. In some countries, trade unions are nothing but the Communist Party at prayer.
So, I'm not sure what President Obama means when he says he supports trade unions.
Modern trade unions originated around the period of the English Industrial Revolution, but, unlike their predecessors, they seek to improve the livelihood of their members through the process of collective bargaining. When no agreement is reached, the invisible gun of prolonged strikes is held at the employer's head in the hope that he will eventually surrender.
One could perhaps go along with the methodology, if one did not pause to think. Once one begins to dwell on the foundations of the matter, one comes to a quite different conclusion. The whole concept is heavily flawed.
The three presumptions on which the modern movement lies are nothing but pillars of clay that have not stood the test of time. Yet, stubbornly, they continue to be held sacred in some parts of the globe.
The first flaw that one can find is that trade unions assume that labour is not part of the business equation. They take it for granted that, just because two employees have the same job description, they should earn the same wage. On the surface, it seems just. However, invariably, one of those workers will achieve better levels of productivity than the other. By exacting equal rates, unions are hiding economic inefficiencies that will impact the balance sheet of the business. Furthermore, constant demands for higher wages will, in the end, lead to a loss competitiveness. Labour is an input like all the other inputs. Instead of protecting jobs, unions are active agents in the destruction of those same jobs.
Then, they ignore the existence of economic cycles. For them, the law of supply and demand does not exist. When the latter slackens, all inputs of the business equation have to shrink too. Labour is no exception. If, by legislation, it becomes difficult to fire labour, unless the employer is prepared to pay ridiculous amounts of severance pay, he will be less likely to hire and, if, during the expansion phase of the cycle, he was imprudent and he hired too many workers, his only option is bankruptcy.
Finally, the last presumption of trade unions is that employers will not get tired of the process and go elsewhere in search of less troublesome conditions. Stability is an essential element of confidence.
Although, in many parts of the world, people have realised that the Industrial Revolution is over, in others, they are still living in the 19th century. The reason for it is that they have been hijacked by political parties that wish to achieve that which their meagre public support does not allow them to accomplish in national parliaments. In some countries, trade unions are nothing but the Communist Party at prayer.
So, I'm not sure what President Obama means when he says he supports trade unions.
Monday, 12 July 2010
DOWN UNDER
It has been public knowledge for a while now that the Australian Labour Government reached an agreement with the mining groups on the question of the proposed supertax. After all, it was inevitable. When a politician talks himself into a corner, the only way out is to negotiate from a position of weakness. That's exactly what happened after Kevin Rudd mounted his successive displays of bravado.
In a damage control exercise, the new prime minister, Julia Gillard, was able to find common ground, albeit at much lower levels. Looking at the succession of events, nobody could expect a different outcome.
It must be said that the socialist idea that a country can solve its budgetary problems by attending to the revenue side of the balance sheet, while disregarding the expense side is simply ludicrous. No one doubts that Rudd's proposal was positively business unfriendly and it would have led to a pronounced slowdown in economic activity. Anywhere in the world, if exorbitant taxation leads to the disincentive of investors, they just pick up their luggage and go elsewhere. Then, the only people left are the unproductive idiots who were hoping to sponge on them.
For business, the agreement was a win-win situation. Gillard must have given an undertaking that, if re-elected, she will not go back to the nonsensical high rates that her predecessor wanted to impose. Mining corporations, however, must have agreed in the knowledge that she is unlikely to win, in which case the supertax will simply be scrapped.
Signs of hope were mirrored by the rise in the exchange rate of the Australian dollar. If Gillard loses, it is likely to appreciate even further. Should Australians make the mistake of voting Labour at next general election, I'm afraid, that, this time, they will be really down under. Or worse, down and out.
In a damage control exercise, the new prime minister, Julia Gillard, was able to find common ground, albeit at much lower levels. Looking at the succession of events, nobody could expect a different outcome.
It must be said that the socialist idea that a country can solve its budgetary problems by attending to the revenue side of the balance sheet, while disregarding the expense side is simply ludicrous. No one doubts that Rudd's proposal was positively business unfriendly and it would have led to a pronounced slowdown in economic activity. Anywhere in the world, if exorbitant taxation leads to the disincentive of investors, they just pick up their luggage and go elsewhere. Then, the only people left are the unproductive idiots who were hoping to sponge on them.
For business, the agreement was a win-win situation. Gillard must have given an undertaking that, if re-elected, she will not go back to the nonsensical high rates that her predecessor wanted to impose. Mining corporations, however, must have agreed in the knowledge that she is unlikely to win, in which case the supertax will simply be scrapped.
Signs of hope were mirrored by the rise in the exchange rate of the Australian dollar. If Gillard loses, it is likely to appreciate even further. Should Australians make the mistake of voting Labour at next general election, I'm afraid, that, this time, they will be really down under. Or worse, down and out.
Sunday, 11 July 2010
LITERATURE
It has been reported that, in Portugal, one of the presidential candidates is a poet.
Well, I never! Mind you, their budget has, for years, been an exercise in fiction, but do they really need to get lyrical about it?
Well, I never! Mind you, their budget has, for years, been an exercise in fiction, but do they really need to get lyrical about it?
Friday, 9 July 2010
THE POOR IN SPIRIT
If there is one concept with which I have never been really comfortable is wealth redistribution. The most obvious reason lies undoubtedly with some of the mechanisms it employs. State providence shares one common flaw with many charity institutions: by the time you finish putting the final touches on the structure, there is hardly any money left to fulfil the social purpose for which it was created. So the people you employ to carry out your noble intent, whom you hadn't in mind contemplating in the first place, end up being the true beneficiaries of the exercise. What's the purpose then?
Wealth redistribution made a lot of sense in the past, when societies were arranged in rigid social structures that did not permit social mobility but for the very rare exceptions. Two ways to escape the system at the time were to take refuge in a religious career or fight your way through in the army. Otherwise, if you were born poor, you were condemned to die in squalor. Yet, when it was most needed, it did not exist in any formal way. The Church filled the gap.
It would take an absolute fool not to recognise that societies are vastly different today, So are the causes of poverty. The most incredible paradox of them all is the fact that the very governments that are purported to protect their citizens can be the root cause of their ruin: you can be taxed into oblivion and harassed with so many bureaucratic burdens that you end up engrossing the numbers of the poor. Or they can set interest rates at such unreasonably low levels to try and compensate for the economic mistakes for which they were solely responsible that the meagre amount you saved over the years, with a lot of sweat, is eventually insufficient to cover your bare necessities. This time, with the State on the altar, you are in the poorhouse.
Of course, you don't need the help of State to become poor. You can do that all by yourself. If you are financially imprudent or fall prey to one or more of the tempting vices, your route to poverty is clearly set out. Am I, as your co-citizen, responsible for the end result? The State seems to think so. I don't.
Today truly disadvantaged people have ample opportunities to improve their educational and professional skills, and thus their economic situation. If that still doesn't help, you as an individual have to consider looking for prosperity in another city, in another state or in another country. Many are those that have picked up their walking sticks and have made it to the other side. If you choose to sit all day in your underwear, drinking beer and smoking pot, why should I subsidise you?
So, when these pseudo-pious politicians come to me extolling the moral virtues of wealth redistribution, I've got only two words for them:
- Sod off!
Wealth redistribution made a lot of sense in the past, when societies were arranged in rigid social structures that did not permit social mobility but for the very rare exceptions. Two ways to escape the system at the time were to take refuge in a religious career or fight your way through in the army. Otherwise, if you were born poor, you were condemned to die in squalor. Yet, when it was most needed, it did not exist in any formal way. The Church filled the gap.
It would take an absolute fool not to recognise that societies are vastly different today, So are the causes of poverty. The most incredible paradox of them all is the fact that the very governments that are purported to protect their citizens can be the root cause of their ruin: you can be taxed into oblivion and harassed with so many bureaucratic burdens that you end up engrossing the numbers of the poor. Or they can set interest rates at such unreasonably low levels to try and compensate for the economic mistakes for which they were solely responsible that the meagre amount you saved over the years, with a lot of sweat, is eventually insufficient to cover your bare necessities. This time, with the State on the altar, you are in the poorhouse.
Of course, you don't need the help of State to become poor. You can do that all by yourself. If you are financially imprudent or fall prey to one or more of the tempting vices, your route to poverty is clearly set out. Am I, as your co-citizen, responsible for the end result? The State seems to think so. I don't.
Today truly disadvantaged people have ample opportunities to improve their educational and professional skills, and thus their economic situation. If that still doesn't help, you as an individual have to consider looking for prosperity in another city, in another state or in another country. Many are those that have picked up their walking sticks and have made it to the other side. If you choose to sit all day in your underwear, drinking beer and smoking pot, why should I subsidise you?
So, when these pseudo-pious politicians come to me extolling the moral virtues of wealth redistribution, I've got only two words for them:
- Sod off!
Thursday, 8 July 2010
THE DARK SIDE OF LIFE
It never ceases to amaze me. Extraordinary times! In Germany there is an octopus that can predict the outcome of soccer matches and in South Africa a sangoma that has a python that lets you communicate with your ancestors.
Well, the sangoma has had his snake confiscated, which must have caused him a lot of pain. Now, if anything happens to the octopus, it will be back to disembowelling chickens. After all, economics is like hindsight – an exact science.
Well, the sangoma has had his snake confiscated, which must have caused him a lot of pain. Now, if anything happens to the octopus, it will be back to disembowelling chickens. After all, economics is like hindsight – an exact science.
CARRY ON SPYING
I must say this latest spying incident made no sense to me. Somehow, I feel all guilty inside. It just shows you one should not jump to conclusions too soon. As my muter used to say, in the end, one always finds out the truth.
There is as yet no official version of events, but, the way things are developing, I reckon the invisible ink spies were caught at the request of the Russian themselves who, in turn, had caught some American spies trying to send smoke signals to the US, and were keen to promote an exchange. See? All is well that ends well.
I hope that, now that they are done with their busy schedule, there might be some time left to go after the Al-Qaeda cells. Or maybe that's just too dangerous...
There is as yet no official version of events, but, the way things are developing, I reckon the invisible ink spies were caught at the request of the Russian themselves who, in turn, had caught some American spies trying to send smoke signals to the US, and were keen to promote an exchange. See? All is well that ends well.
I hope that, now that they are done with their busy schedule, there might be some time left to go after the Al-Qaeda cells. Or maybe that's just too dangerous...
Tuesday, 6 July 2010
CAMELS ON THE HORIZON
I have, for some time now, suspected that the Middle East is running out of oil. This morning I have seen my fears confirmed.
Some countries in the region are going into the mass production and marketing of camel milk, which will soon be available on shelves all over the world. According to reports, it is highly beneficial, as it does not cause allergies and is very rich in vitamin C.
Well, I'm willing to try anything, at least once. I have two questions, though. How many miles will I get to the gallon? With continued use is one likely to develop the odd bump?
Oh, and one final thing. Is it safe to shower with it after unprotected sex?
Some countries in the region are going into the mass production and marketing of camel milk, which will soon be available on shelves all over the world. According to reports, it is highly beneficial, as it does not cause allergies and is very rich in vitamin C.
Well, I'm willing to try anything, at least once. I have two questions, though. How many miles will I get to the gallon? With continued use is one likely to develop the odd bump?
Oh, and one final thing. Is it safe to shower with it after unprotected sex?
Monday, 5 July 2010
PROMISES, PROMISES
My friend Moshe Kaplan phoned me this morning from Houghton. He started off by saying that, on account of the high mobile tariffs in South Africa, he first considered sending me a message by African drum, but that he then thought that, with all the noise that the vuvuzelas are making throughout the continent, I might not be able to make head or tail of his communication. He also feared that, with all the festivities, the drummers might put in an extra beat here and a kink there, which might further complicate the situation. So he opted for the phone.
I congratulated him on his excellent choice, which only came to prove to me that there was still enough electricity left in South Africa for him to charge his cell phone. The way the politicians there are enlightened, I sometimes worry you will all end up in the dark, I ventured. In the shvartze, I emphasized, in case he hadn't heard right the first time.
Well, Moshe confided to me that he was still very puzzled about some of the mechanisms that lead countries to become indebted. You see, he is like that, a worrier by nature. Nothing you can do about it.
Moshe, I said, you don't have to feel guilty about it. It is not your fault. Modern democracies are built upon the biggest lie ever invented after the first woman whispered to the first man “I love you” - the electoral promise. To get elected, politicians have to promise everything to everybody. Once elected, their first concern is to give their cronies cabinet posts. Then they have the obligation of placing their own party workers in the civil service, even if they have to invent posts for them, so those no-goodniks are assured of a lifetime job with comfortable pension upon retirement. Finally they set about trying to fulfil the rest of the promises to ensure they can get re-elected.
Butterfly collecting? A very respectable activity with long cultural traditions in the country. Let's allocate some money for subsidies. As a matter of fact, the National Association of Butterfly Collectors voted for us in the last general elections. And so it goes on and on.
Half way through their term of office, and with only half their promises fulfilled, they are suddenly surprised to find there is no money in the kitty. After all, there is only one cake and it is only so big. It's time to issue national debt. For a while they can breath a sigh of relief.
With the next general elections approaching, their promises become even more daring. They sit down with their sharp pencils and realise they have to issue more debt. When they do so, they find that part of the money that they are borrowing now is going straight to pay the interest on the previous loan. They wait until they are re-elected and then raise taxes, which they had promised not to do. In the meantime, the members of the National Association of Butterfly Collectors go on calmly about their cultural activity.
If by a sheer twist of fate, the opposition comes to power, the situation worsens. By law it cannot fire the civil servants appointed by the previous government. So it has to invent new posts to place its own party workers. In the meantime, the National Association of Butterfly Collectors re-invents itself as the National Association of Grasshopper Collectors and switches allegiance. New subsidies are created. The deficit is ballooning.
Moshe, I said, I can go on and on, but you are paying.
I know, he replied. So? What's new?
I congratulated him on his excellent choice, which only came to prove to me that there was still enough electricity left in South Africa for him to charge his cell phone. The way the politicians there are enlightened, I sometimes worry you will all end up in the dark, I ventured. In the shvartze, I emphasized, in case he hadn't heard right the first time.
Well, Moshe confided to me that he was still very puzzled about some of the mechanisms that lead countries to become indebted. You see, he is like that, a worrier by nature. Nothing you can do about it.
Moshe, I said, you don't have to feel guilty about it. It is not your fault. Modern democracies are built upon the biggest lie ever invented after the first woman whispered to the first man “I love you” - the electoral promise. To get elected, politicians have to promise everything to everybody. Once elected, their first concern is to give their cronies cabinet posts. Then they have the obligation of placing their own party workers in the civil service, even if they have to invent posts for them, so those no-goodniks are assured of a lifetime job with comfortable pension upon retirement. Finally they set about trying to fulfil the rest of the promises to ensure they can get re-elected.
Butterfly collecting? A very respectable activity with long cultural traditions in the country. Let's allocate some money for subsidies. As a matter of fact, the National Association of Butterfly Collectors voted for us in the last general elections. And so it goes on and on.
Half way through their term of office, and with only half their promises fulfilled, they are suddenly surprised to find there is no money in the kitty. After all, there is only one cake and it is only so big. It's time to issue national debt. For a while they can breath a sigh of relief.
With the next general elections approaching, their promises become even more daring. They sit down with their sharp pencils and realise they have to issue more debt. When they do so, they find that part of the money that they are borrowing now is going straight to pay the interest on the previous loan. They wait until they are re-elected and then raise taxes, which they had promised not to do. In the meantime, the members of the National Association of Butterfly Collectors go on calmly about their cultural activity.
If by a sheer twist of fate, the opposition comes to power, the situation worsens. By law it cannot fire the civil servants appointed by the previous government. So it has to invent new posts to place its own party workers. In the meantime, the National Association of Butterfly Collectors re-invents itself as the National Association of Grasshopper Collectors and switches allegiance. New subsidies are created. The deficit is ballooning.
Moshe, I said, I can go on and on, but you are paying.
I know, he replied. So? What's new?
Sunday, 4 July 2010
INDEPENDENCE
Today is the 4th of July. Americans all over the country will be celebrating their independence from Great Britain. It is only proper and fit that they should do that.
Indeed, in the life of many countries around the world, one of the most important days of the year, if not the most important, is the anniversary of the date on which they became independent from some other power. It's always with sense of pride that those celebrations take place.
Yet, when I look around at the way some countries are governed today and the idiots that guide their destinies, I often wonder whether those countries wouldn't be better off being ruled by some other foreign power.
For, you see, once ideological dogma takes precedence over economic reality, you start skewing the market place in order to fulfil your utopia. Dislocations in the prices of all asset classes begin taking place. Direct taxes go up in the name of social justice. Once you no longer can increase those, because of popular resistance, you have to resort to indirect taxation and the creation of “crimes” on the statute book that yield ridiculously high fines. To enforce the fulfilment of your imaginative creations you have to enlist an ever ballooning army of otherwise useless bureaucrats that keep parasitically eating away at your budget. Suddenly you realise that your deficit has gone ballistic and that you have, first, to devalue your currency and, later, to take the bold step of printing huge piles of paper money that might just as well be drawn with crayons, the way people sneer at it.
While all this is going on, some of the people you govern may even experience an illusion of wealth. Finally, as you find it increasingly more difficult to hide the truth, you have to go war with some foreign country, so that you can properly justify the failure of your utopia. The very same one that on paper made a lot of sense.
All over the world, governments have become like cancerous growths that are suffocating their citizens and controlling every minute detail of their daily lives in a way one would believe only happened in science fiction. The distinction between public and private has become so blurred that individual liberty is today a mere vague concept in the mind of some long-dead Greek philosopher.
An American writer, whose work I read some thirty years ago and whose name, to my chagrin, escapes me now, defined a slave as a man who pays 100% tax. He went on to say that, if you paid 50% tax, you were half a slave. Well, in some countries, I'm afraid people are exceeding those barriers.
What would then you call the world we live in? Modern? I would call it post-medieval. And, if you remember that the whole of Roman economy was based on slavery, we may be heading that way.
So, ladies and gentlemen, forget your smartphones! Why don't you rise with me and let's all drink a toast to the dawn of our brave new world?
Indeed, in the life of many countries around the world, one of the most important days of the year, if not the most important, is the anniversary of the date on which they became independent from some other power. It's always with sense of pride that those celebrations take place.
Yet, when I look around at the way some countries are governed today and the idiots that guide their destinies, I often wonder whether those countries wouldn't be better off being ruled by some other foreign power.
For, you see, once ideological dogma takes precedence over economic reality, you start skewing the market place in order to fulfil your utopia. Dislocations in the prices of all asset classes begin taking place. Direct taxes go up in the name of social justice. Once you no longer can increase those, because of popular resistance, you have to resort to indirect taxation and the creation of “crimes” on the statute book that yield ridiculously high fines. To enforce the fulfilment of your imaginative creations you have to enlist an ever ballooning army of otherwise useless bureaucrats that keep parasitically eating away at your budget. Suddenly you realise that your deficit has gone ballistic and that you have, first, to devalue your currency and, later, to take the bold step of printing huge piles of paper money that might just as well be drawn with crayons, the way people sneer at it.
While all this is going on, some of the people you govern may even experience an illusion of wealth. Finally, as you find it increasingly more difficult to hide the truth, you have to go war with some foreign country, so that you can properly justify the failure of your utopia. The very same one that on paper made a lot of sense.
All over the world, governments have become like cancerous growths that are suffocating their citizens and controlling every minute detail of their daily lives in a way one would believe only happened in science fiction. The distinction between public and private has become so blurred that individual liberty is today a mere vague concept in the mind of some long-dead Greek philosopher.
An American writer, whose work I read some thirty years ago and whose name, to my chagrin, escapes me now, defined a slave as a man who pays 100% tax. He went on to say that, if you paid 50% tax, you were half a slave. Well, in some countries, I'm afraid people are exceeding those barriers.
What would then you call the world we live in? Modern? I would call it post-medieval. And, if you remember that the whole of Roman economy was based on slavery, we may be heading that way.
So, ladies and gentlemen, forget your smartphones! Why don't you rise with me and let's all drink a toast to the dawn of our brave new world?
Friday, 2 July 2010
DON'T CRY FOR ME, VENEZUELA
I thought I wouldn't pick up the pen again today, but I have read this minute that Hugo Chávez has just nationalised some American oil rigs or something to that effect. I'm not a shareholder, so why should I care? In fact, I don't, but I'm just worried that the shmuck will soon run out of stuff to nationalise. What then?
Well, my concerns are relative, of course. I know he has a plan. It's not for nothing that he went to primary school with Fidel, to high school with Ahmadinejad, did his undergraduate studies with Kim Jong-il and, like Malema, he is planning to do his doctorate in economics with Mugabe.
Well done, Hugo! Reach for the stars, my boy!
Well, my concerns are relative, of course. I know he has a plan. It's not for nothing that he went to primary school with Fidel, to high school with Ahmadinejad, did his undergraduate studies with Kim Jong-il and, like Malema, he is planning to do his doctorate in economics with Mugabe.
Well done, Hugo! Reach for the stars, my boy!
GOLDSTEIN
In a way, I'm glad I was born Levin and not Goldstein. Don't take me wrong. I have nothing against the Goldsteins. On the contrary. In fact, I even know one who is a true mensch, bless his heart!
It's the Gold part that I am not too enthusiastic about. As I jokingly say to my customers, if I didn't like the Stein part, why would I have become a diamond dealer? Right?
You may find my remarks very puzzling, but the truth of the matter is that I have always associated gold with fear. Sure it's shiny. Sure women like it. However, it is the kind of metal you hold, just in case loose monetary policy foments an inflation environment of astronomical proportions and then, as if by magic, you see your hard-earned gelt slowly evaporate into thin air. Why otherwise would you want to hold a currency which, in real terms, yields nothing? So, as far as I am concerned, it's a bit creepy. Like the Swiss frank or the Japanese yen.
If you found my remarks puzzling, I am the one who is truly puzzled. And what has been occupying my mind lately is one central question: why are so many Americans buying gold? For, if gold is a hedge against inflation, why is 10-year US Treasury Note under 3%, thus pointing, in the best case scenario, to desinflation or, in the worst, to deflation?
After many sleepless nights, I think I have come up with the answer. What we Americans are really worried about is the risk that, some time in the future, the US may default on its sovereign debt. That's why we always expressing our concerns about Greece. The same way that, for years, we kept telling the Europeans that we believed in a strong dollar, while secretly maintaining the dollar at artificially low levels. But, no, the currency manipulators were the Chinese. Who else otherwise?
It's the Gold part that I am not too enthusiastic about. As I jokingly say to my customers, if I didn't like the Stein part, why would I have become a diamond dealer? Right?
You may find my remarks very puzzling, but the truth of the matter is that I have always associated gold with fear. Sure it's shiny. Sure women like it. However, it is the kind of metal you hold, just in case loose monetary policy foments an inflation environment of astronomical proportions and then, as if by magic, you see your hard-earned gelt slowly evaporate into thin air. Why otherwise would you want to hold a currency which, in real terms, yields nothing? So, as far as I am concerned, it's a bit creepy. Like the Swiss frank or the Japanese yen.
If you found my remarks puzzling, I am the one who is truly puzzled. And what has been occupying my mind lately is one central question: why are so many Americans buying gold? For, if gold is a hedge against inflation, why is 10-year US Treasury Note under 3%, thus pointing, in the best case scenario, to desinflation or, in the worst, to deflation?
After many sleepless nights, I think I have come up with the answer. What we Americans are really worried about is the risk that, some time in the future, the US may default on its sovereign debt. That's why we always expressing our concerns about Greece. The same way that, for years, we kept telling the Europeans that we believed in a strong dollar, while secretly maintaining the dollar at artificially low levels. But, no, the currency manipulators were the Chinese. Who else otherwise?
Thursday, 1 July 2010
I HATE TO TELL YOU I WAS RIGHT
For months on end; I had to put up with people peppering me right, left and centre with this theory of economic decoupling, whereby China would save the rest of the world from the brink of the abyss. It made me so nauseous I wanted to brech!
I just couldn't see how a country with an economy the mere fraction of Europe and the US combined, totally dependant on exports to those regions, could have the capacity to perform such an enormous feat. Then I became acutely aware that real estate in China was commanding prices that had more digits in them than modern telephone numbers and started to worry that, either I wasn't focussing right, or that I was having stroke.
Well, just this morning, my concerns have been validated. The Chinese manufacturing index came in lower than expected, pointing to a slowing economy. So I was right.
That's not the only instance in which I was right. Do you remember my post on Monday this week, when I depicted Mr. Kevin Rudd in spandex tights trying to tax the mining companies out of the market in order to pursue his social mission of topping up pension funds? I said then that if, as I suspected, the Chinese economy was slowing down, Australia would be in a whole of trouble and a made a very particular prediction regarding the Australian dollar. Well, if you did not heed my warning and you did not put on your hard hat, this morning you might not be able to see the exchange rate, because you will have no neck left. So I was right.
Sorry, I had to interrupt writing this post, because I got a phone call from my friend Moshe Kaplan. He used to be my neighbour in Houghton, Johannesburg, when the place wasn't a slum. Unfortunately he still lives there. Shame!
Well, I won't bore you with the details. Basically he wanted to know if it was all right for him to hold the South African Rand. I positively shouted at him. Moshe, I said, the World Cup is coming to an end, you have got hundreds of mines closing down, you have got the new Mining Charter, you have the trade unions demanding a devaluation of the currency and unrealistic interest rates, you have got... Moshe, you must be mishuggah! I'd rather hold toilet paper!
He was so distraught on the other side that I did not know how to comfort him. So I just whispered:
- Say hello to Mr. Malema for me!
I just couldn't see how a country with an economy the mere fraction of Europe and the US combined, totally dependant on exports to those regions, could have the capacity to perform such an enormous feat. Then I became acutely aware that real estate in China was commanding prices that had more digits in them than modern telephone numbers and started to worry that, either I wasn't focussing right, or that I was having stroke.
Well, just this morning, my concerns have been validated. The Chinese manufacturing index came in lower than expected, pointing to a slowing economy. So I was right.
That's not the only instance in which I was right. Do you remember my post on Monday this week, when I depicted Mr. Kevin Rudd in spandex tights trying to tax the mining companies out of the market in order to pursue his social mission of topping up pension funds? I said then that if, as I suspected, the Chinese economy was slowing down, Australia would be in a whole of trouble and a made a very particular prediction regarding the Australian dollar. Well, if you did not heed my warning and you did not put on your hard hat, this morning you might not be able to see the exchange rate, because you will have no neck left. So I was right.
Sorry, I had to interrupt writing this post, because I got a phone call from my friend Moshe Kaplan. He used to be my neighbour in Houghton, Johannesburg, when the place wasn't a slum. Unfortunately he still lives there. Shame!
Well, I won't bore you with the details. Basically he wanted to know if it was all right for him to hold the South African Rand. I positively shouted at him. Moshe, I said, the World Cup is coming to an end, you have got hundreds of mines closing down, you have got the new Mining Charter, you have the trade unions demanding a devaluation of the currency and unrealistic interest rates, you have got... Moshe, you must be mishuggah! I'd rather hold toilet paper!
He was so distraught on the other side that I did not know how to comfort him. So I just whispered:
- Say hello to Mr. Malema for me!
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