Remembering Bob K.

A revolution is coming — a revolution which will be peaceful if we are wise enough; compassionate if we care enough; successful if we are fortunate enough — But a revolution which is coming whether we will it or not. We can affect its character; we cannot alter its inevitability. 

(R. F. Kennedy, 1925 - 1968 ; Speech in the United States Senate, 9 May 1966) 

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Our answer is the world's hope; it is to rely on youth. The cruelties and the obstacles of this swiftly changing planet will not yield to obsolete dogmas and outworn slogans. It cannot be moved by those who cling to a present which is already dying, who prefer the illusion of security to the excitement and danger which comes with even the most peaceful progress. This world demands the qualities of youth: not a time of life but a state of mind, a temper of the will, a quality of the imagination, a predominance of courage over timidity, of the appetite for adventure over the love of ease.[...]

First, is the danger of futility: the belief there is nothing one man or one woman can do against the enormous array of the world's ills — against misery, against ignorance, or injustice and violence. Yet many of the world's great movements, of thought and action, have flowed from the work of a single man. [...]

It is from numberless diverse acts of courage and belief that human history is shaped. Each time a man stands up for an ideal, or acts to improve the lot of others, or strikes out against injustice, he sends forth a tiny ripple of hope, and crossing each other from a million different centers of energy and daring those ripples build a current which can sweep down the mightiest walls of oppression and resistance.[...]

The second danger is that of expediency: of those who say that hopes and beliefs must bend before immediate necessities. Of course, if we must act effectively we must deal with the world as it is. We must get things done. But [...] there is no basic inconsistency between ideals and realistic possibilities, no separation between the deepest desires of heart and of mind and the rational application of human effort to human problems.[...because] it ignores the realities of human faith and of passion and of belief — forces ultimately more powerful than all of the calculations of our economists or of our generals. Of course to adhere to standards, to idealism, to vision in the face of immediate dangers takes great courage and takes self-confidence. But we also know that only those who dare to fail greatly, can ever achieve greatly.[...]

And a third danger is timidity. Few men are willing to brave the disapproval of their fellows, the censure of their colleagues, the wrath of their society. Moral courage is a rarer commodity than bravery in battle or great intelligence. Yet it is the one essential, vital quality of those who seek to change a world which yields most painfully to change.[...]

For the fortunate amongst us, the fourth danger, my friends, is comfort, the temptation to follow the easy and familiar paths of personal ambition and financial success so grandly spread before those who have the privilege of an education. [...] 

There is a Chinese curse which says, "May he live in interesting times." Like it or not we live in interesting times. They are times of danger and uncertainty; but they are also more open to the creative energy of men than any other time in history. And everyone here will ultimately be judged — will ultimately judge himself — on the effort he has contributed to building a new world society and the extent to which his ideals and goals have shaped that effort. 

(R. F. Kennedy, 1925 - 1968 ; Day of Affirmation Address, 6 June 1966)

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     O captain! dear father! 

     This arm beneath your head; 

     It is some dream that on the deck, 

     You've fallen cold and dead. 

My Captain does not answer, his lips are pale and still; 

My father does not feel my arm, he has no pulse nor will; 

The ship was long ago anchor'd safe and sound, its voyage since never closed and done; 

From fearful trip, the victor ship, has yet to come in with object won; 

(inspired by W. Whitman - 1865)

The day of the last Nobel Memorial Prize laureate in Economics

 A small part of the population knows that the "Nobel Prize in Economics" is in fact the "Swedish Central Bank Prize in Economic Sciences in Memory of Alfred Nobel". There are many similarities between the selection for the regular Nobel Prizes and for the Swedish Central Bank Prize in Economic Sciences, and there is indeed a deliberate will to be consistently identified with them. 

But only a few persons remember that this Prize in Economics was first awarded in 1969, i.e. 68 years after the regular ones. 

Some brief statistics have been published about the laureates, by country in which are located the universities where they worked (cf references). I have updated these results to take into account the years 2011, 2012, 2013 : 

Okay, nice shoot from anglo-saxon scholars. Now with such an overwhelming share of first-class thinkers awarded for their achievements during their life-long careers (specially in macroeconomics domain), the U.S. and UK economies should be huge successes, shouldn't they ?

1- Mainstream economists (both Friedman's side and Keynes' side) are always very reluctant to confront their models and their past predictions with long term and updated data series.
Let's just have a look if they really won the match since 1960's :

• How close to an exponential trend is the growth of U.S. Total Public Debt :

Source: Conscience-Sociale.org, using Fed data up to 2013Q1

• How close to an exponential trend is the growth of Federal Total Public Debt (In 2013 Q1, it reached US$ 16.8 Trillion) :

Source: Conscience-Sociale.org, using Fed data up to 2013Q1

• Interest rates in US and UK :

 

• U.S. Net Export of Goods and Services :

• Real Trade Weighted U.S. Dollar Index :

• Consumer Price Index :

(note the log scale)

• "Civilian Unemployed and Not Looking Ratio" is the proportion of the civilian non institutionalized population aged 16+ that is unemployed and not looking for work :

• US Population receiving food stamps :

• Ratio of Corporate dividends over wages & salary :

• There are now more people under “correctional supervision” in America (more than six million) than were in the Gulag Archipelago under Stalin at its height :

• US total monetary base priced in tonnes of Gold :

• 1 U.S. $ priced in mg of Gold :

• Annual U.S. and UK output produced (GDP per capita) priced in troy ounces of gold :

Source: Conscience-Sociale.org; data series 1791-2012 from MeasuringWorth 

2- Observations:

* these results are the worse seen in recorded history. 

* The only "positive" result is the historical high and ever rising level of incomes only for the top 1% and above :

* the creation of Nobel memorial Prize in Economics was first announced in 1968, at the same time where neoconservatism in US appeared and neoliberal ideas started to develop.

* all mainstream commentators have analyzed the economical policy of the U.S. and UK to use neoliberals ("Chicago school") principles, and more Keynesian policies since 2008.

3- Then we can affirm :

- either the US/UK Nobel Memorial laureates in economics were listened by the US/UK governments, but others economists would have given better advices : the observed results prove their Prize was not deserved ;

- or the US/UK Nobel Memorial laureates in economics were listened by the US/UK governments, but others economists would not have been able to give better advices : then the observed results prove economics is still not a science, but only a art. The laureates then deserve an Oscar-like prize, but not a Nobel-like prize ;

- or the US/UK Nobel Memorial laureates in economics were not listened by the US/UK governments, despite the highest level of promotion and audience given, and the observed results prove their Prize was useless and all mainstream commentators were clueless ;

4- In any case, the Nobel Memorial Prize in Economics has proven that deep reforms are required in the way laureates are chosen, at least. Given  the historic and catastrophic failure of neoliberalism and therefore the huge loss of credibility of the whole mainstream economics, this will be surely been done.
But given the very low speed of reforms by EU academies, the lock by Swedish Central Bank from one side, and the current global shift of power from the other side, we can anticipate that BRICS will announce the creation of a new "Prize in Economics funded by a BRICS organisation" and elected by the BRICS academies, before any process reform for Nobel Memorial Prize in Economics takes place. This is an anticipated consequence of both the global geopolitical dislocation and the scientific crisis in economics.

We anticipate this announcement within 4 years at the latest, depending on the number of future laureates working in universities located in BRICS countries, or eventually from non mainstream school of economics (for instance A. Fekete from NewASoE but this award alone would finalize a paradigmatic change).

The day of this announcement will be the day of the last Nobel Memorial Prize laureate in Economics.

Updated 10/14/2013:
- including results of 2013 awards ;
- My congratulations to Shiller who is pursuing a good work using data and facts about the housing market., although I did not agree with his sale of the rights to build the Case-Shiller index to a private company.

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References: 

• List of laureates in Economics
• Brief Statistics of the Nobel Prize Winners for Economics, IONECI M., ENE S., 2011; The period observed was 1969-2010.
• The U.S. Debt Dashboard
• Dashboard of US Economy
• The UK Debt Dashboard
• The Gold Basis

Did JPM ask knowledgeable investors or baboons ?

 The question was clear : "How much do you think 10-year UST yields will change in the event in the event of a technical default (i.e. a coupon or principal payment on US debt is delayed by a short amount of time) ?", but the range of answers is truely amazing (chart below), and reveals how much the understanding of financial markets is upside down.  

Keep in mind we are talking here about the most important rate in the current international monetary (fiat) system. When every market are rigged and "virtually artificial", a measurement does not mean anything because the standard used is stretched. And you can't control what you can't measure with reliability.

In this case, we should compare UST rate with a "gold bond" rate. Ooh, there is none ? Yes... and what about to launch again a new "gold bond" (i.e. a bond that is denominated in gold, pays its interest in gold, and pays the principle back in physical gold, and not a gold backed bond denominated in fiat currency) ? A single one would be sufficient to compare with UST, and it can be done by any country in the world, at any time. It would create an enormous attraction and interest by investors.
Why should we force ourselves to navigate blind and tied by the hands in the storms of financial markets ? I guess some BRICS countries at least have perfectly understood the message.  

(Source)

Update 10/09:
Clarified definitions for gold bond and gold backed bond, as kindly pointed by K.Weiner.
Gold bond idea was first introduced by A. Fekete.
The 'baboons' word refers to this study (or here in french).

The monetary war in seventy-one seconds

James Rickards has given few days ago a very interesting interview to Mineweb Radio in South Africa.

I consider this as the best summarized description of monetary war (so called 'currency war'), albeit a very short one.

I only disagree with a point : Rickards described 3 phases in the monetary war : 1921-1936 ; 1967-1987 ; 2010-now.

In fact, the current crisis is rampant since 1967. One major event has temporarily covered up the monetary crisis: the strategic partnership between US and China, which has sustained the international role of the US dollar, but without reforming any fundamental weaknesses. The CBGA first gold agreement in 1999 was a significant sign that the monetary crisis, like a dormant virus, was still there.

The US/China monetary partnership has been broken since 2009/10, and this has unveiled a new wave of the monetary crisis.
Here are a few pictures from my Research Pages to illustrate the major trends:

Chinese exports of goods to US as a % of total Chinese exports ;

Data serie since 1985

U.S. : Velocity of M2 money stock (lhs; using GDP/M2); 

Velocity using M2 / StLouis Fed non-adjusted monetary base (rhs); 

Data series since 1959

source

Carving #freedom, 4350 years before Paul Eluard

 [1] 

Urukagina, the leader of the Sumerian city-state of Girsu/Lagash, led a popular movement that resulted in the reform of the oppressive legal and governmental structure of Sumeria. The oppressive conditions in the city before the reforms is described in the new code preserved in cuneiform on tablets of the period: "From the borders of Ningirsu to the sea, there was the tax collector." During his reign (ca. 2350 B.C.) Urukagina implemented a sweeping set of laws that guaranteed the rights of property owners, reformed the civil administration, and instituted moral and social reforms. Urukagina banned both civil and ecclesiastical authorities from seizing land and goods for payment, eliminated most of the state tax collectors, and ended state involvement in matters such as divorce proceedings and perfume making. He even returned land and other property his predecessors had seized from the temple. He saw that reforms were enacted to eliminate the abuse of the judicial process to extract money from citizens and took great pains to ensure the public nature of legal proceedings. 

[2] 

As can be gathered from what has already been said about social and economic organization, written law played a large role in the Sumerian city. Beginning about 2700 B.C., we find actual deeds of sales, including sales of fields, houses, and slaves. From about 2350 B.C., during the reign of Urukagina of Lagash, we have one of the most precious and revealing documents in the history of man and his perennial and unrelenting struggle for freedom from tyranny and oppression. This document records a sweeping reform of a whole series of prevalent abuses, most of which could be traced to a ubiquitous and obnoxious bureaucracy consisting of the ruler and his palace coterie; at the same time it provides a grim and ominous picture of man's cruelty toward man on all levels—social, economic, political, and psychological. Reading between its lines, we also get a glimpse of a bitter struggle for power between the temple and the palace—the "church" and the "state"—with the citizens of Lagash taking the side of the temple. Finally, it is in this document that we find the word "freedom" used for the first time in man's recorded history; the word is amargi, which, as has recently been pointed out by Adam Falkenstein, means literally "return to the mother." However, we still do not know why this figure of speech came to be used for "freedom."     

[3]

[4]

[5]

Le Louvre Museum | number AO 24414 | Foundation tablet | Dimensions 25.7*13.7*7.2 cm  

En-metena E l. 9. 5. 5a

A sixteen-line inscription found on foundation tablets and bricks records En-metena's construction of the E-mus temple.

Translation:

iii 10 - iv 3) He cancelled obligations for Lagas, restored child to mother and mother to child. 

iv 4-5) He cancelled obligations regarding interest-bearing grain loans. 

iv 6 - v 3) At that time, En-metena built for Lugalemus, the E-mus ("House — Radiance [of the Land]") of Pa-tibira, his beloved temple, restoring it for him. 

v 4-8) He cancelled [obligations for the citizens of Uruk, Larsa, and Pa-tibira. 

v 9-11) He restored (the first) to the goddess Inanna's control in Uruk, 

vi 1-3) he restored (the second) to the god Utu's control in Larsa, 

vi 4-6) he restored (the third) t[o] the god Lugal-emus's control in the E-mus (in Pa-tibira). 

[6] 

Le roi En-metena (2404-2375) a régné sur la cité-état de Lagash. La tablette de pierre provient des fouilles effectuées à Tello, ancienne Girsu, située dans l'actuel Iraq. Elle était une pierre de fondation du grand temple de la ville de Bad-Tibira [l'E-mus de Pa-tibira]. Elle date d'environ 2400 av. J.C.  Elle est actuellement conservée au Musée du Louvre, qui l'a acquise en 1971.

[7] !! 

Pour la lecture des inscriptions, la numérotation des cartouches par Frayne se suit de bas en haut et de gauche à droite.

 

[8]

... 

Sur les images dorées
Sur les armes des guerriers
Sur la couronne des rois
J’écris ton nom
...

Et par le pouvoir d’un mot
Je recommence ma vie
Je suis né pour te connaître
Pour te nommer 

Liberté 

(Paul Eluard, 1942) 

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Références:

[1] (S.N. Kramer, 1897 – 1990 ; From the Tablets of Sumer: Twenty-Five Firsts in Man's Recorded History, 1956) 

[2] (S.N. Kramer, 1897 – 1990 ; The Sumerians. Their History, Culture and Character, 1963)

[3] (K. D. Irani, M. Silver ; Social justice in the ancient world, 1995)

[4] (J.S. Bergsma ; The Jubilee from Leviticus to Qumran: A History of Interpretation, Volume 115, 2007)   

[5] (D. Frayne ; Pre-Sargonic Period: Early Periods, Volume 1 (2700-2350 BC), 2008)

[6] Références complètes de la tablette de pierre : Musée du Louvre

[7] Source des images de la tablette et sa localisation dans le musée, pour conclure ces 15 heures de recherche dans notre mémoire commune.
[8] (Paul Eluard, 1895 - 1952 ; Poésies et vérités, 1942)