Global Market Watch
Trying to Outlaw Speculation
In Switzerland, it is a far more democratic process than in the USA. You need 100,000 signatures to create a proposition to alter the Constitution that then is put to a general vote for the people. What is going on is that the Socialists have gathered about 130,000 signatures to ban speculation in commodities. We have weighed in of this one with Michel writing a piece in German explaining the markets and the absurdity of trying to outlaw speculation (see piece: nzz__Mi_20131023_KPLBF_16.00) , which has now been picked up by Reuters.
This is the great problem we face. As the world falls deeper into debt, the socialists will be urging to shut down the free markets and create their Utopian world. These people have an agenda. There is no real debate with them – they know all the answers. If the world falls to their hands, communism will return. They want the free markets shut down and have convinced themselves that “paper” contract make prices higher. Of course the Goldbugs claim the opposite that they suppress the price of gold. Both have targeted the futures “paper” contracts to support their particular view. The Goldbugs argue eliminate futures and prices will soar. The Socialist claim eliminate futures and prices will decline. Eliminating the futures markets will destroy production and introduce greater risk while creating the incentive to not produce at all.
The Socialists in Switzerland are making the same mistake about the markets as did the Silver Democrats. All markets are really international and thus the USA used a 16:1 ratio of silver to gold that was out of line with the free markets. This created massive unsound finance.
These types of manipulations up or down only lead to economic disaster. They see the world capital as a pretty Butterfly. They fail to realize they must compete internationally.
Here is a chart of the volatility in wheat back to the 13th century. As markets expanded volatility declined. Volatility rose only when we began to see World War I and II devastate the European economy. Expanding markets reduces volatility creating stable prices.
John Kerry Admits Some NSA spying went Too Far
John Kerry admits that some NSA spying went TOO FAR as reported by the BBC. Kerry said he will work with Obama to “prevent” further inappropriate acts by the NSA. But what is also emerging in Asia is a rising protest that this has been a joint effort assisted by Australia and in Europe Britain. What these people FAIL to understand is that if you SPY on everyone, you will change the behavior of everyone.
Not only has the NSA trashed the image of the USA worldwide where now nobody trusts whatever the USA says, but the entire legal system is seen as a joke right down to not prosecuting any major banks for destroying the world economy. One client wrote:
COMMENT: “Snowden has illustrated how even in your case the US press refuse to address the facts and how the New York Times backed down after government made phone calls to them and Bloomberg News is hopelessly prejudiced. It took the Guardian in London to expose the NSA – not anyone in the American press. This simply demonstrates the lack of free press in the USA. When your movie comes out next year it will pull the curtain back exposing the inherent corruption that has consumed the United States political and banking systems.”
The legal system, spying system, judicial system, and political system, have degenerated into precisely what Edward Gibbon wrote about Rome; “unless public liberty is protected by intrepid and vigilant guardians, the authority of so formidable a magistrate will soon degenerate into despotism.” Indeed, Gibbon also wrote:“Suspicion was equivalent to proof; trial to condemnation.” This applies to the USA and the NSA today.
We have lost everything that so many generations before us fought and died for – the preservation of liberty, justice, and the Constitution. All have fallen to dust and crumbled to the ground. Gibbon concluded his Decline and Fall of the Roman Empire with this passage.
“Her primeval state, such as she -might–appear in a remote age, when Evander entertained the stranger of Troy, has been delineated by the fancy of Virgil. This Tarpeian rock was then a savage and solitary thicket; in the time of the poet, it was crowned with the golden roofs of a temple, the temple is overthrown, the gold has been pillaged, the wheel of Fortune has accomplished her revolution, and the sacred ground is again disfigured with thorns and brambles. The hill of the Capitol, on which we sit, was formerly the head of the Roman Empire, the citadel of the earth, the terror of kings; illustrated by the footsteps of so many triumphs, enriched with the spoils and tributes of so many nations. This spectacle of the world, how is it fallen! how changed! how defaced! The path of victory is obliterated by vines, and the benches of the senators are concealed by a dunghill. Cast your eyes on the Palatine hill, and seek among the shapeless and enormous fragments the marble theatre, the obelisks, the colossal statues, the porticos of Nero’s palace: survey the other hills of the city, the vacant space is interrupted only by ruins and gardens. The forum of the Roman people where they assembled to enact their laws and elect their magistrates, is now enclosed for the cultivation of pot-herbs, or thrown open for the reception of swine and buffaloes. The public and private edifices that were founded for eternity lie prostrate, naked, and broken, like the limbs of a mighty giant, and the ruin is the more visible from the stupendous relics that have survived the injuries of time and fortune.”