Apr 2, 2020

Pink Floyd's 1980 song "Mother" anticipates 2020 nanny state and Covid-19 panic

First chorus:

Hush now baby, baby, don't you cry.
Mama's gonna make all of your nightmares come true.
Mama's gonna put all of her fears into you.
Mama's gonna keep you right here under her wing.
She won't let you fly, but she might let you sing.
Mama's gonna keep baby cozy and warm.
Ooh baby, ooh baby, ooh baby,
Of course mama's gonna help build the wall.

Second chorus:

Hush now baby, baby, don't you cry.
Mama's gonna check out all your girlfriends for you.
Mama's won’t let anyone dirty get through.
Mama's gonna wait up until you come in.
Mama will always find out where you’ve been.
Mama's gonna keep baby healthy and clean.
Ooh babe, ooh babe, ooh babe,
You’ll always be baby to me.

~ Pink Floyd, "Mother," 1980

Pink Floyd – Mother Lyrics | Genius Lyrics

Apr 1, 2020

Ronald Reagan on government

The nine most terrifying words in the English language are: I'm from the government and I'm here to help.

~ Ronald Reagan

Publicity Kit - Ronald Reagan Stamp First-Day-of-Issuance Ceremony

Mar 31, 2020

Mises Insitute on the unseen costs of government-imposed lockdowns

In 1850, French economist Frédéric Bastiat helped the world understand the “seen and unseen costs” of state policies. It is simple to see how quarantines and lockdowns will slow the spread of COVID-19. It is critical, but not so simple, to see the costs and harms caused by the economic shutdown.

Only then can we rationally understand the tradeoffs involved. 

How many Americans suffering from other illnesses cannot see a doctor now? How many Americans will lose their jobs, their life savings, their retirement prospects, and their incalculable feeling of self-worth? How many will succumb to depression, drug or alcohol abuse, and suicide? How many will lose their homes, divorce their spouses, or suffer abuse? How many will never recover in their careers? How many small businesses, including the vital ones of doctors, dentists, and veterinarians, will vanish from your community? How many young people will “fail to launch”?

~ Mises Institute editors, "End the Shutdown," Mises.org, March 31, 2020

Shuttered Business

Jim Grant on dealing with a complex, uncertain future

The scale of government response is something new. So these things are unprecedented and so one must be very careful about drawing lessons from the past....

But for me, the lesson I have learned, or reinforced, is that … I’m going to quote a screenwriter from Hollywood... William Goldman, who I think wrote Butch Cassidy and Sundance Kid, apropos of the predictability of box-office receipts, William Goldman, from his lips fell one of the great quotations pertaining to all attempts at forecasting and prognostication.

“Nobody knows anything.”

We can know tendencies. We can observe patterns of behavior. We can project. So what the events of the past, the violent events of the past two weeks, have reinforced to me is the necessary humility to stay relatively diversified, relatively liquid and to choke down any thought that begins to resemble certitude. We can’t be immobilized by our ignorance of the future.

We can understand how complex the future is and how predictably, indeed predictably, it can surprise you.

~ Jim Grant, "Nobody Knows Anything," interview with Albert Lu of Sprott Media, March 24, 2020

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Jim Grant on the reasons for owning gold

The point is to have liquid wealth available when opportunity presents itself. Gold is many things but it’s not regenerative. And there’s nothing as an investment like a well-priced, successful, profitable well-financed business. So what you want is gold for opportunities. You also want it, not so much as a hedge against monetary disorder because we have that, you want it as an investment in monetary disorder. That’s a second reason. So I guess that’s a little bit of Scrooge McDuck reason but I hold it for those two reasons. I think that it’s going to be helpful for both.

I look forward to liquidating some of my gold bullion, as modest as that stack of coins is. I look forward to, at some point, liquidating that, if I have the nerve and the opportunity to accumulate something that is going to be yielding dividends and cash flow. But the other portion, well I think, I hope, I’ll never sell — that’s the bottom dollar: an investment in the evident tendency of monetary affairs. The arc of monetary evolution points to greater and greater interventions, more radical policy which begets still more radical policy, financial repression and more of that. We got more QE this week than they did under the Bernanke Fed.

So to me the arc of this is very clear and you want gold, both for the inevitable spills in the market for financial assets as well as for the seemingly inevitable destruction, or certainly impairment, of the government-issued money. Those are my reasons.

~ Jim Grant, "Nobody Knows Anything," interview with Albert Lu of Sprott Media, March 24, 2020

Will gold keep shining?

Jim Grant on how not to deal with the coronavirus

I was on CNBC a while ago... and somebody said, there’s no trade-off between health and commerce. Of course there is. We suffer, collectively, 40,000 deaths a year on the highways. We could reduce that substantially by posting a 20 mile an hour speed limit. We don’t do that, not because we’re callous but because we live our lives. We take chances. You get up in the morning, you’re taking a chance.

I speak, as few talking heads do speak, with certifiably no epidemiological knowledge at all. I skipped that course entirely. So I don’t pretend to speak from anything more than newspaper reading prejudice on this matter. But I think that the go-hide-in-a-hole approach is probably not well advised.

~ Jim Grant, "Nobody Knows Anything," interview with Albert Lu of Sprott Media, March 24, 2020

California governor orders statewide stay-at-home order

Jim Grant on unintended consequences of ZIRP and complacency about inflation

So one of the other unintended consequences of this 10 years of suppressed interest rates and predictable Financial interventions by the Fed, well they’ve given us near record-high equity valuations — they did about 15 minutes ago until it ended or at least paused. We don’t know. They gave us, perhaps, more corporate debt for unit of corporate earning power than ever before, and much of this debt is very low quality. They have given us unicorns. They have given us zombies. They have given us all manner of things, some pleasant to be sure but many corrosive.

What they have not given us is any economy wide or political community wide new revelation into the dangers of the manipulation of the most sensitive prices and capital, namely interest rates. That’s my hobby horse but I think it’s a very dangerous road. We haven’t even talked about inflation. Nobody talks about inflation, right?

Imagine we were even in this conversation, like 35 or 40 years ago, when inflation was still at thing, and I said, Albert, what do you suppose the consequences might be of an immense infusion of new bank credit and to the fiscal program that is likely to reach 10% of GDP? How will you guess that would affect the price level?

And you would think to yourself, that idiot. And you would say, because you’re polite, Jim, I suspect that might lead to above higher inflation. But today no one thinks that. You can look at the futures curve and various interest rate derivatives that reflect current thinking on the likely course of rates and inflation and they’re flat.

Nobody is anticipating any adverse inflationary outcome from this, which I find is a remarkable commentary on the complacent thinking. You’re not thinking of complacency with, on most days, VIX readings at 75 and 80. But with respect to inflation and its prospects, there is certainly complacency rampant[ly] so.

~ Jim Grant, "Nobody Knows Anything," interview with Albert Lu of Sprott Media, March 24, 2020

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