This is a very, very big deal. Gold and silver money = liberty. Governments hate gold and silver. They only want you to value money for which they own a printing.

* Bernanke is ready to keep printing.
* STOP DEFLATION! STOP DEFLATION! STOP DEFLATION! (Deflation would actually be a very good thing. It would reveal who is productive, and who is unproductive.)
* Saint Louis Fed Chairman James Bullard DOES NOT ANTICIPATE A DOUBLE DIP RECESSION. Let’s remember he said this. Shall we?
* Bill Ford, former Atlanta Fed Chairman, makes the same prediction — no double dip recession, though he offers some good analysis. Perhaps that’s why no longer with the Fed.

* People are surprised by recent bad news in the housing market, but they’ve got much further to fall. It’s government stimulus propping up prices.

* Renting vs. owning.

* Dollar made low against Yen. Would have fallen further if Japan’s central bank didn’t make easing announcement. This drove up precious metals.

* WSJ article about Peter Schiff portrays him as charlatan, ignores his accurate predictions: worst recession since Great Depression, over 10% unemployment, housing bubble would burst, 30% drop in real estate prices, Fannie and Freddie would go bankrupt, many leading banks would fail, government would bail them out, 1-2 trillion dollar a year deficits.

* Bernanke reiterates commitment to inflation. Gold and silver responds.

* Deflation fears misplaced.

* Some economists (Roubini) are now increasing their prediction of a recession. Duh.

* Gold stocks & the WSJ interviewer’s interest in Peter’s crib

One of the sacred cows of statism is the idea that government needs to protect us from predatory price-cutting. Large corporations, according to this argument, have big advantages in the marketplace. They can cut prices, drive out their competitors, then raise prices later and gouge consumers. Antitrust laws are needed, so the argument continues, to protect small businesses and consumers from those corporations with large market shares in their industries.

The story of Herbert Dow, founder of Dow Chemical Company, is an excellent case study for those who think predatory price-cutting is a real threat to society. Dow, a small producer of bromine in the early 1900s, fought a price-cutting cartel from Germany. He not only lived to tell about it; he also prospered from it.

. . . .

For Dow Chemical to become a major corporation, it had to meet the European challenge. The Germans in particular dominated world chemical markets in the 1800s. They had experience, topflight scientists, and monopolies in chemical markets throughout the world. For example, the Germans, with their vast potash deposits, had been the dominant supplier of bromine since it first was mass-marketed in the mid-1800s. Only the United States emerged as a competitor to Germany, and then only as a minor player. Dow and some small firms along the Ohio River sold bromine, but only within the country.

About 30 German firms had combined to form a cartel, Die Deutsche Bromkonvention, which fixed the world price for bromine at a lucrative 49 cents a pound. Customers either paid the 49 cents or they went without. Dow and other American companies sold bromine in the United States for 36 cents. The Bromkonvention made it clear that if the Americans tried to sell elsewhere, the Germans would flood the American market with cheap bromine and drive them all out of business. The Bromkonvention law was, “The U.S. for the U.S. and Germany for the world.”

Dow entered bromine production with these unwritten rules in effect, but he refused to follow them. Instead, he easily beat the cartel’s 49-cent price and courageously sold America’s first bromine in England. He hoped that the Germans, if they found out what he was doing, would ignore it. Throughout 1904 he merrily bid on bromine contracts throughout the world.
A Visit from the Cartel

After a few months of this, Dow encountered in his office an angry visitor from Germany—Hermann Jacobsohn of the Bromkonvention. Jacobsohn announced he had “positive evidence that [Dow] had exported bromides.” “What of it?” Dow replied. “Don’t you know that you can’t sell bromides abroad?” Jacobsohn asked. “I know nothing of the kind,” Dow retorted. Jacobsohn was indignant. He said that if Dow persisted, the Bromkonvention members would run him out of business whatever the cost. Then Jacobsohn left in a huff.

. . . .

Dow, however, was determined to compete with the Bromkonvention. He needed the sales, and he believed his electrolysis produced bromine cheaper than the Germans could. Also, Dow was stubborn and hated being bluffed by a bully. When Jacobsohn stormed out of his office, Dow continued to sell bromine, from England to Japan.

Before long, in early 1905, the Bromkonvention went on a rampage: it poured bromides into America at 15 cents a pound, well below its fixed price of 49 cents and also below Dow’s 36 cents. Jacobsohn arranged a special meeting with Dow in St. Louis and demanded that he quit exporting bromides or else the Germans would flood the American market indefinitely. The Bromkonvention had the money and the backing of its government, Jacobsohn reminded Dow, and could long continue to sell in the United States below the cost of production. Dow was not intimidated; he was angry and told Jacobsohn he would sell to whomever would buy from him. Dow left the meeting with Jacobsohn screaming threats behind him. As Dow boarded the train from St. Louis, he knew the future of his company—if it had a future—depended on how he handled the Germans.

On that train, Dow worked out a daring strategy. He had his agent in New York discreetly buy hundreds of thousands of pounds of German bromine at the 15-cent price. Then he repackaged and sold it in Europe—including Germany!—at 27 cents a pound. “When this 15-cent price was made over here,” Dow said, “instead of meeting it, we pulled out of the American market altogether and used all our production to supply the foreign demand. This, as we afterward learned, was not what they anticipated we would do.”

Dow secretly hired British and German agents to market his repackaged bromine in their countries. They had no trouble doing so because the Bromkonvention had left the world price above 30 cents a pound. The Germans were selling in the United States far below cost of production, and they hoped to offset their U.S. losses with a high world price.

Instead, the Germans were befuddled. They expected to run Dow out of business; and this they thought they were doing. But why was U.S. demand for bromine so high? And where was this flow of cheap bromine into Europe coming from? Was one of the Bromkonvention members cheating and selling bromine in Europe below the fixed price? The tension in the Bromkonvention was dramatic. According to Dow, “The German producers got into trouble among themselves as to who was to supply the goods for the American market, and the American agent [for the Germans] became embarrassed by reason of his inability to get goods that he had contracted to supply and asked us if we would take his [15-cent] contracts. This, of course, we refused to do.”

. . . .

More Price-Cutting

The confused Germans kept cutting U.S. prices—first to 12 cents and then to 10.5 cents a pound. Meanwhile, Dow kept buying cheap bromine and reselling it in Europe for 27 cents. These sales forced the Bromkonvention to drop its high world price to match Dow and that further depleted the Bromkonvention‘s resources. Dow, by contrast, improved his foreign sales force, often ran his bromine plants at top capacity, and gained business at the expense of the Bromkonvention and all other American producers, most of whom had shut down after the price-cutting. Even when the Bromkonvention finally caught on to what Dow was doing, it wasn’t sure how to respond. As Dow said, “We are absolute dictators of the situation.” He also wrote, “One result of this fight has been to give us a standing all over the world. . . . We are . . . in a much stronger position than we ever were.” He added that “the profits are not so great” because his plants had trouble matching the new 27-cent world price. He needed to buy the cheap German bromides to stay ahead, and this was harder to do once the Germans discovered and exposed his repackaging scheme.

The bromine war lasted four years (1904–08), when finally the Bromkonvention invited Dow to come to Germany and work out an agreement. Since they couldn’t crush Dow, they decided to at least work out some deal so they could make money again. The terms were as follows: the Germans agreed to quit selling bromine in the United States; Dow agreed to quit selling in Germany; and the rest of the world was open to free competition. The bromine war was over, but low-priced bromine was now a fact of life.

Dow had more capital from the bromine war to expand his business and challenge the Germans in other markets. For example, Dow entered the dye industry and began producing indigo more cheaply than the dominant German dye cartel. (Read more from thefreemanonline.org)

Lecture from last summer @ Iowa City public library. Sorry for the poor quality.

I’m also categorizing this under war on commerce, because government run insurance kills business opportunities for entrepreneurs who might insure profitably by actually measuring risk.

In Wilkinson County, Miss., a home has been flooded 34 times since 1978.

Extraordinary as the damage may be, even more extraordinary is that an insurer has paid claims every time, required no flood proofing, never raised premiums after a claim and vowed to continue insuring the house. Forever.

The home’s value is $69,900. Yet the total insurance payments are nearly 10 times that: $663,000.

It’s no surprise that the insurer faces huge financial problems.

The insurer? The federal government. (Read more from usatoday.com)

Bureaucratic management at its finest. I can hear the rebuttal of my socialist friends now: “If we don’t like the way the government does flood insurance, we can vote them out. If it’s a corporation, we’re stuck.”

FOX & ABCNNBBCBS: MOSQUE AT GROUND ZERO! MOSQUE AT GROUND ZERO! THE EERANIANS AR COMIN TO GIT YOU!

* Bond Fund manager and Freddie/Fannie-guaranteed mortgage holder Bill Gross advocated the Freddie/Fannie bailout. He has recently suggested government should 100% nationalize Freddie and Fannie, and allow everybody to refinance at a lower rate.

* Bill Gross argued this would stimulate consumer spending and thereby the economy. Of course, what our economy needs is more savings, not spending.

* Real Estate prices are still too high and should never have been propped up. They need to come down. Artificially high prices for homes deprive more productive endeavors of resources.

* Do not buy Government Motors IPO. Some profit might be made by those with good timing, but they will go bankrupt again. The bailout prevent the restructuring they needed. They company is not run to produce good cars at a profit. It is run to serve labor.

* Dollar strengthens despite bad news based on weakness in stocks. Old habits (like buying dollars on bad news) die hard.

* Congressional Budget Office increases deficit estimate, but the estimate remains complete bullshit. Nothing to do with reality.

* Big Media (Robert Reich) continues to sing the praises of debt, and demonize saving.

* Peter’s predictions about Freddie and Fannie come true.

* Refinancing homes at (artificially suppressed) lower rates is creating a ticking time bomb for banks who will be holding 30-year paper. Once the paper becomes worthless there will be rampant bank failures.

* NY Times publishes BS article about why we won’t have a recession. Sheer propaganda. The implicit argument is that a zero Fed rate will avoid a recession. This is nonsense.

* Bonds remain overpriced, as Americans who attempt to save decide to lend money to the government. Inflation will punish bond-buyers.

* A better scheme for unemployment benefits would be an initial lump sum. This would avoid the disincentive to work. Of course, we’d all be better off if people decided for themselves whether or not to buy unemployment benefits, creating a market for various flavors of unemployment insurance.

* Peter has bet against the advice he gives. If the government actually followed his advice, it would undermine his investments.

* The sooner the crash happens, the better, because the longer the malinvestment persists, the more effort it will take for the economy to restructure.

President Barack Obama Friday sought to rally support around the government intervention to keep General Motors and Chrysler afloat.

Obama, speaking during visits to GM and Chrysler plants in Michigan, sought to highlight the benefits to workers at the now-revived companies to blunt criticism of the federal bailout, one of the most frequently criticized actions of his presidency so far. (Read more from rttnews.com)

Reaction #1:

B-R-O-K-E-N W-I-N-D-O-W F-A-L-L-A-C-Y !!!!!!!!11

Reaction #2:

“Is the controversy over building a mosque near ground zero a grand distraction or a grand opportunity? Or is it, once again, grandiose demagoguery?

“It has been said, “Nero fiddled while Rome burned.” Are we not overly preoccupied with this controversy, now being used in various ways by grandstanding politicians? It looks to me like the politicians are “fiddling while the economy burns.”

“The debate should have provided the conservative defenders of property rights with a perfect example of how the right to own property also protects the 1st Amendment rights of assembly and religion by supporting the building of the mosque.

“Instead, we hear lip service given to the property rights position while demanding that the need to be “sensitive” requires an all-out assault on the building of a mosque, several blocks from “ground zero.”

“Just think of what might (not) have happened if the whole issue had been ignored and the national debate stuck with war, peace, and prosperity. There certainly would have been a lot less emotionalism on both sides. The fact that so much attention has been given the mosque debate, raises the question of just why and driven by whom?

“In my opinion it has come from the neo-conservatives who demand continual war in the Middle East and Central Asia and are compelled to constantly justify it. (Read more from caffeinatedthoughts.com)

It’s hardly unusual to hear small-business owners gripe about licensing requirements or complain that heavy-handed regulations are driving them into the red.

So when Multnomah County shut down an enterprise last week for operating without a license, you might just sigh and say, there they go again.

Except this entrepreneur was a 7-year-old named Julie Murphy. Her business was a lemonade stand at the Last Thursday monthly art fair in Northeast Portland. The government regulation she violated? Failing to get a $120 temporary restaurant license.

Turns out that kids’ lemonade stands — those constants of summertime — are supposed to get a permit in Oregon, particularly at big events that happen to be patrolled regularly by county health inspectors.

“I understand the reason behind what they’re doing and it’s a neighborhood event, and they’re trying to generate revenue,” said Jon Kawaguchi, environmental health supervisor for the Multnomah County Health Department. “But we still need to put the public’s health first.”

[The only thing this bureaucrat is protecting is her job.]

. . . . After 20 minutes, a “lady with a clipboard” came over and asked for their license. When Fife explained they didn’t have one, the woman told them they would need to leave or possibly face a $500 fine.

Surprised, Fife started to pack up. The people staffing the booths next to them encouraged the two to stay, telling them the inspectors had no right to kick them out of the neighborhood gathering. They also suggested that they give away the lemonade and accept donations instead and one of them made an announcement to the crowd to support the lemonade stand.

That’s when business really picked up — and two inspectors came back, Fife said. Julie started crying, while her mother packed up and others confronted the inspectors. “It was a very big scene,” Fife said.

Technically, any lemonade stand — even one on your front lawn — must be licensed under state law, said Eric Pippert, the food-borne illness prevention program manager for the state’s public health division. But county inspectors are unlikely to go after kids selling lemonade on their front lawn unless, he conceded, their front lawn happens to be on Alberta Street during Last Thursday.

“When you go to a public event and set up shop, you’re suddenly engaging in commerce,” he said. “The fact that you’re small-scale I don’t think is relevant.”

Kawaguchi, who oversees the two county inspectors involved, said they must be fair and consistent in their monitoring, no matter the age of the person. “Our role is to protect the public,” he said.

The county’s shutdown of the lemonade stand was publicized by Michael Franklin, the man at the booth next to Fife and her daughter. Franklin contributes to the Bottom Up Radio Network, an online anarchist site, and interviewed Fife for his show.

Franklin is also organizing a “Lemonade Revolt” for Last Thursday in August. He’s calling on anarchists, neighbors and others to come early for the event and grab space for lemonade stands on Alberta between Northeast 25th and Northeast 26th. (Read more from oregonlive.com)

It’s official: The Chevrolet Volt, the new plug-in electric hybrid car from General Motors, will cost $41,000—that’s a four-seat hatchback for about the base price of a BMW 335i. To be sure, a $7,500 federal tax credit cuts that to $33,500, and electricity is cheaper per mile than gas. But barring some huge oil price spike or stiff new gas tax, it would take more than a decade to offset the higher purchase price.

. . . .

And that’s my problem with the Obama administration’s energy policy, or at least with his lavish subsidies for the Volt, Nissan’s all-electric Leaf (likely sticker price $33,000), and Tesla’s $100,000 all-electric Roadster: Where does the federal government get off spending the average person’s tax dollars to help better-off-than-average Americans buy expensive new cars? (Read more from slate.com)

Surprising that this was publish by the leftist, pro-state, pro-green Slate.com.

(Read more from wsj.com)