Dear Reader, It’s always darkest before the dawn. Isn’t that the saying? If it’s true, then it’s a good job the winter solstice has come and gone in Australia. The point at which the sun reaches its most northerly point relative to the equator means it’s a short day. A dark day. Looking at the headlines, it sure does feel dark. Victoria’s Daniel Andrews is talking about reimposing lockdown in Australia’s second largest state. Someone — probably the Communist Party of China — appears to be engaged in a giant hacking attack on Australia. And it’s taken stimulus equal to one-fifth of the world’s GDP to prevent the c-virus from plunging the world in a second Great Depression (so far). Let’s start with the particular and move to the general. First, did you know Australia has only 585 ‘active cases’ of coronavirus? There have been 7,461 total cases, according to the Federal government’s Department of Health. The latest figures show that 6,896 people have recovered. Hmmm. But wait. There’s more. How many people are in Intensive Care Units in Australia due to coronavirus right now? According to the Federal government, exactly two. And how many people are in hospital due to coronavirus? Exactly 15. That doesn’t seem like much of a pandemic. And according to the government’s own numbers, the vast majority of the 102 fatalities due to the virus have been in those over the age of 60 years old. In other words, the virus is extremely dangerous for anyone who is older, obese, has existing respiratory conditions, or other comorbidities. Yet a full-out assault on the entire economy, led by state and local politicians continues. A look at the headlines overnight and you can see that Australia’s going tribal (and bonkers) in its c-virus responses. Queensland’s government has labelled all of Melbourne a virus ‘hot spot’. South Australia is reconsidering its plan on opening up the border with neighbouring Victoria. All this after an apparent spike in new c-virus cases in Victoria. In response to the recent ‘spike’, Victoria’s Premier has extended the ‘state of emergency’ until 20 July. Previously expanded limits on the number of people in your home or in public gatherings, cafes, pubs, cinemas, and gyms have been rolled back. Small businesses that staffed and prepared for relaxed restrictions today will have to burn cash, wait, and hope the politicians change their mind. There’s no doubt the virus is real. And there’s no doubt it’s dangerous for some people more than others. And it’s common sense we should all do our best to protect those most vulnerable to the virus. But a second lockdown that will put millions more people on the unemployment roles and be a final death blow for many small businesses is surely NOT the answer. What’s also clear now — at least to some of us — is that the coronavirus has become a pretext for an all-out assault on small business, free enterprise and individual liberty. In place of that system, you’ll have permission-based living and working, where government bureaucrats decide when you can work, how much you can make and how and when you can socialise with your family, friends or even strangers (freedom of assembly and public gathering). If you think I’m exaggerating, ask Deputy Chief Medical Officer Nick Coatsworth. He said restrictions (on work, family, religion, public assembly) would continue until a vaccine for the virus is found. This isn’t ‘flattening the curve’ to stop the spread of the virus so we can get back to normal. This is permanent lockdown until the virus is crushed, which of course is not even possible. What about the next virus from a Chinese wet market (or bioweapons lab)? What about the next natural disaster? What about the next public emergency that requires the suspension of normal commerce, of normal family gatherings, of church services, of basic individual rights and civil liberties it took hundreds of years to establish and enshrine in the Western legal system? ‘Too bad! None of it matters! It’s a crisis! Quit being selfish! Shut up and stay home and watch Netflix you would-be murdering, beer-swilling libertine!’ Meanwhile, another 227,000 jobs were lost between April and May, according to the Australian Bureau of Statistics. The unemployment rates increased from 6.4% to 7.1%. The ‘underutilisation rate’ — which is a combination of the unemployment rate and the underemployment rate — is 20.2%. And the labour force participation rate — a measure how many people are working who CAN work — fell to a 19-year low of 62.9%. All of this would be normal if this were just a case of Australia’s first recession in 30 years. But it’s not normal. At least not to the extent that it’s caused by the government’s draconian response to a public health crisis. Yet here we are, on the verge of inflicting more needless pain on the vast majority of Australians. If you want to talk about a real and long-lasting crisis, try an economy where young people can’t go to work, are saddled with debt, can’t buy a house and are robbed (by their government) of the basic opportunity to improve their lives through hard work and enterprise. Imagine turning a whole generation of Australians into wards of the state, dependent on the handouts of governments who are borrowing from the future the same money they’re so generously giving out in the present. It’s like we’ve entered an era of mass delusions, hallucinations and erratic behavior. And to top it all off, the Chinese communists are stirring the pot. Australia has come under a massive and coordinated cyber-attack in recent months, according to news reports over the weekend. It’s not clear if these ‘hacks’ were designed to steal sensitive data or simply probe for weaknesses in Australia’s government and private sector computer networks. Probably both. It’s possible that these distributed denial of service (DDOS) attacks are seen as punishment dished out by China for Australia’s support of an independent inquiry into the origins of coronavirus, as well as Australian support for US/UK positions on Hong Kong and Chinese expansion in the South China Sea. China’s communists are letting Australia know that future economic partnership comes with political strings (of course this is also true of Australia’s partnership with the US deep state…but the strings are different). And how are markets dealing with all this? By becoming more addicted to credit. Bank of America analysts reckon there’s been $18.4 trillion in ‘stimulus’ in 2020 to deal with the pandemic/depression. $10.4 trillion of that is ‘fiscal stimulus’ or government spending and direct handouts. The other $8 trillion is ‘monetary stimulus’ from central banks, which has mostly gone to support financial asset prices (stocks and corporate/government bonds). There have been 134 rate cuts by global central banks, this year alone! Take away the $18 trillion punch bowl, add in a global depression and you have a potent mix for much lower stock prices. Only the dulled senses and credit-addled brains of investors have yet to see that. But they will see the light soon. It’s dark now. But the fires of inflation are going to light everything up soon enough. Regards, | Dan Denning, Editor, The Rum Rebellion |
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The Case for Reparations By Bill Bonner Week 14 of quarantine ‘In those days they shall say no more, the fathers have eaten a sour grape and the teeth of their children are set on edge…’ Jeremiah, 31:29 SAN MARTIN, ARGENTINA — Many years ago, during the anti-war riots of 1970, we attended a student rally at the University of New Mexico. Jane Fonda had come to Albuquerque to support the protestors. Speaker after speaker got up and railed against the war, and against racism. Each one was careful to include the local victims — ‘Chicanos’ (Hispanics) and ‘Native Americans’ (the American Indians, who were an important minority at the University of New Mexico). Then, after Ms Fonda had left the podium, we heard drums…and saw a contingent of Indians headed toward the stage. One, a stout young man, took the microphone: ‘Stop using us, man’ was all he said. The crowd was silent. What did he mean? Weren’t they trying to help? The Indians marched off and the rally went back to its usual windy complaints. Reparations And today, here at the Diary, we end this week’s ramble by looking at where bad ideas and bad money come together. That is, we will look at ‘reparations’…and a group that has been badly used for centuries. In preview: Once you begin handing out free money, it is hard to stop. For years, reparations seemed like just another dumb gripe. But it’s becoming real. Last week, the California Assembly agreed to take the case for reparations seriously. Joe Biden says he is not opposed to the idea, as long as American Indians are included. Settling the debt for centuries of mistreatment involves a substantial amount of money. The numbers we see most often are between $40,000 and $60,000 per Black person. That would tote to about $2.5 trillion in total. Would that be a good ‘investment’? Would it right the wrongs committed over so many years? At first, you will think this is absurd. You did nothing wrong, Dear Reader; your teeth are not on edge. Why should you reach into your pocket to give money to someone you never met and never harmed? People are not normally required to pay for the wrongs committed by their great-great-great-grandparents. Nor do people normally get a ‘recompense’ for something suffered by their ancestors. Besides, many Americans can trace their family tree to an ancestor who died in the War Between the States, fighting (supposedly) to end slavery. And many millions of others arrived long after slavery ended. On neither side — neither tort nor injury — is there any way to prove the case. At least, not in the traditional, fact-based, objective-reality world of post-Enlightenment Western jurisprudence. Useful myth But wait. The claim may be counterfeit…but so is the money that would settle it. The Trump Administration just distributed about the same amount — nearly $3 trillion — to people with no real claim to the money at all. And the Federal Reserve gave about an equal amount to the top 10% — $2.8 trillion — boosting their capital asset values by about $10 trillion. Again, the recipients neither deserved, earned, nor even needed the money. So why not give out reparations to the African Americans who make up 13% of the population? Reparations would also be a major departure from the ‘social contract’ that holds the nation together. In the Declaration of Independence, the 14th Amendment, and the Civil Rights Act of 1964, is the idea that all people are supposed to be treated equally badly by the government. Martin Luther King described it when he said: ‘I have a dream that one day, this nation will rise up and live out the true meaning of its creed: “We hold these truths to be self-evident, that all men are created equal.”’ Of course, it was always a ‘myth’. But it was a useful one. Equality is a physical impossibility. But the idea that we should be treated equally was a guiding principle. Like the North Star, you never get there…but at least it keeps you headed in the right direction. Open and shut case In practice, some people were treated worse than others. And one group has been used badly — Blacks. Slavery was common in the ancient world — even in pre-Columbian US. But race-based slavery was a US innovation. The first immigrants from Africa to Virginia were not slaves. They were indentured, just as your editor’s own ancestor was. But in 1655, a Virginia court was asked to consider the case of Mr Anthony Johnson of Northampton County. Mr Johnson was from West Africa. He had worked off his indenture and now had indentured servants of his own, including another African named John Casor. Indentures were generally for seven years, so Casor expected to be released after his indenture expired. Instead, Mr Johnson kept him in servitude for a further seven years, until the case came to court: The original court document tells the story: ‘The deposition of Captain Samuel Goldsmith taken (in open court) 8th of March Sayth, That beinge at the howse of Anthony Johnson Negro (about the beginninge of November last to receive a hogshead of tobacco) a Negro called John Casar came to this Deponent, and told him that hee came into Virginia for seaven or Eight yeares (per Indenture) And that hee had demanded his freedome of his master Anthony Johnson; And further said that Johnson had kept him his servant seaven yeares longer than hee ought, And desired that this deponent would see that hee might have noe wronge, whereupon your Deponent demanded of Anthony Johnson his Indenture, hee answered, hee never sawe any; The said Negro (John Casor) replyed, hee came for a certayne tyme and had an Indenture Anthony Johnson said hee never did see any But that hee had him for his life…and the said Anthony Johnson did not tell the negro goe free.’ The case seems simple enough. Open and shut. Mr Johnson was in the wrong. But laws are written, and popular ideas evolve, sometimes in nasty directions. The court handed down its verdict. Mr John Casor thus became perhaps the first ‘legal’ slave in the US. (Later, the gods had their revenge on the Johnson family. Mr Johnson’s children were not allowed to inherit their father’s property — because they were Black.) Disastrous consequences Even after slavery was abolished, the Black man still didn’t get a fair shake. The Ku Klux Klan, the Jim Crow laws, the ‘Separate but Equal’ doctrine…all seemed to keep him in his place. But they didn’t stop him. For a hundred years following the Emancipation Proclamation in 1862, Blacks continued to make progress — more or less like every other immigrant group — learning skills, entering the professions, setting up their own businesses, and closing the gap between themselves and Whites. But then, do-gooders and world-improvers began to use Blacks in a novel way — with disastrous consequences. In 1964, came the War on Poverty, which gave money to Blacks — but only if they didn’t marry and didn’t work. It also created a new, cronyfied Black elite — who figured out how to game the $21 trillion poverty/racism industry, getting jobs, grants, and special privileges for ‘minority’ enterprises. Then, in 1971, the War on Drugs brought a whole new level of violence, as gangs fought for market share. Drug laws put millions of Blacks behind bars…nurturing a criminal culture and making it harder than ever for many to get jobs in the normal economy. And then came the funny money. Over decades, it shifted manufacturing jobs overseas (it was easier and cheaper to buy things from overseas with fake money than it was to make them here). This, along with minimum wages, kicked the bottom rung out from under the labouring classes — Black and White. And in 2009, the Federal Reserve kicked its program of money-printing into high gear…with a massive transfer of wealth from the middle and lower classes to the top 10%. And if that weren’t enough, as mentioned above…the Fed has now gone all out…with huge bailouts to Wall Street, in which very few Blacks participate. Overall, by our estimate, in the last 90 days, the typical Black got only 1/33rd as much fake money as the top 10%. New solution And now…with this sorry history in front of us all…what to do? The elite, the insiders, the opinion mongers — Black and White…the same people who created this situation — have a new solution. What else? More fake money! Crazy? But when you can buy votes, temporary peace, crony support, and campaign donations by passing out counterfeit money, even the craziest scams seem to make sense. And it will ‘stimulate’ the economy. A better idea That’s why the ‘reparations’ argument is not likely to go away. It ‘ticks the boxes’ of many of our fantasies…and excites the grubby self-interest of the elites. It would make the White elite ‘feel good’ about themselves. It would give more power and money to the Black elite, allowing them to exploit their own people even more ruthlessly. It wouldn’t cost anything — the money is free. It would give the average Black person a temporary buying spree…but leave him more dependent on the elite and more desperate than ever. It would help destroy the economy, shifting another $2.5 trillion worth of resources from investment to consumption. It would cause much of the White US to resent Blacks…and ‘gun up’, anticipating a violent confrontation. Reparations? Yes, another jackass idea. We have a better one. How about this…instead of reparations, why not just stop using Blacks? End the War on Poverty. End the War on Drugs. De-mob the troops…defund the elites…shutdown the Fed and its funny-money scam…and finally take the feds’ knee off their necks? Stay tuned… | Bill Bonner, For The Rum Rebellion |
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