Reading Mao’s Great Famine, but Not Sure I can handle it

I bought Frank Dikötter’s “Mao’s Great Famine” on Black Friday. It just arrived. It took over a month because the State controls the post office. That seems rather benign, but this book shows how scary even that is. Dikötter got special permission to peruse over 1,000 documents in previously restricted Chinese communist archives.

I am four pages into the preface of the book, and already, my eyes are welling with tears. I don’t know if I can handle reading this thing. I was both excited and scared to read it. Now I’m more scared than excited. But I’m going to try hard to get through it without losing my mind.

Here is a taste.

A vision of promised abundance not only motivated one of the most deadly mass killings of human history, but also inflicted unprecedented damage on agriculture, trade, industry and transportation. Pots, pans, and tools were thrown into backyard furnaces to increase the country’s steel output, which was seen as one of the magic markers of progress. Livestock declined precipitously, not only because animals were slaughtered for the export market but also because they succumbed en masse to disease and hunger – despite extravagant schemes for giant piggeries that would bring meat to every table. Waste developed because raw resources and supplies were poorly allocated, and because factory bosses deliberately bent the rules to increase output. As everyone cut corners in the relentless pursuit of higher output, factories spewed out inferior goods that accumulated uncollected by railway sidings. Corruption seeped into the fabric of life, tainting everything from soy sauce to hydraulic dams. The transportation system creaked to a halt before collapsing altogether, unable to cope with the demands created by a command economy. Goods worth hundreds of millions of yuan accumulated in canteens, dormitories and even on the streets, a lot of the stock simply rotting or rusting away. It would have been difficult to design a more wasteful system, one in which rain was left uncollected by dusty roads in the countryside as people foraged for roots or ate mud.

The book also documents how the attempt to leap into communism resulted in the greatest demolition of property in human history – by far outstripping any of the Second World War bombing campaigns. Up to 40 per cent of all housing was turned into rubble, as homes were pulled down to create fertiliser, to build canteens, to relocate villagers, to straighten roads, to make room for a better future or simply to punish their occupants. The natural world did not escape unscathed either. We will never know the full extent of forest coverage lost during the Great Leap Forward, but a prolonged and intense attack on nature claimed up to half of all trees in some provinces. The rivers and waterways suffered too: throughout the country dams and canals, built by hundreds of millions of farmers at great human and economic cost, were for the greatest part rendered useless or even dangerous, resulting in landslides, river silting, soil salinisation and devastating inundations…

Any attempt to understand what happened in communist China must start by placing the Great Leap Forward squrely at the very centre of the entire Maoist period. In a far more general way, as the modern world struggles to find a balance between freedom and regulation, the catastrophe unleashed at the time stands as a reminder of how profoundly misplaced is the idea of state planning as an antidote to chaos.

What is so disturbing to me is this one sentence:

Countless people were killed indirectly through neglect, as local cadres were under pressure to focus on figures rather than on people, making sure they fulfilled the targets they were handed by the top planners.

Focus on figures rather than on people. This is what governments do. This is the argument behind every single regulation. Figures rather than people. I see echoes of the Great Leap Forward in every GDP calculation, every figure-based argument for minimum wage or drug law, every attempt to increase exports by manipulating the money supply. It’s all the same evil. It’s just a question of degree.

Mao took statism to its penultimate conclusion, and 45 million people were murdered. Not even Stalin took it that far.

Why does nobody know or care? Why does everyone know that 6 million Jews were murdered in a race war, but not that 45 million Chinese were murdered in an economic war? Many reasons, but my wife had some wise words. Jews have a cultural memory. We are perhaps the tightest knit group of people on the planet. Kill us, and we can mobilize to the point that everyone will be hearing about it forever.

But most people are just individual people. Nobody will mobilize for them. But I will do my best to remember those 45 million faceless Chinese who are remembered by nobody, as statues of Mao still stand in Beijing and China is about to undergo another gigantic crash fueled by insane money printing that has expanded the Yuan supply by a factor of 23.5 since 1996.

It won’t be as bad as the Great Leap Forward of course, but it will be quite bad.

Model Portfolio Change

After yesterday’s drop I have added a position to the model portfolio. $3,000 worth of SPY April 15 2016 calls at a strike of $203. Check the model portfolio page at the menu bar.

There is no reason for stocks to fall so hard now, as the money supply is expanding rapidly. This will be reversed in a few days, if not today and we should be able to sell the calls for a quick profit sometime in late January or early February.

The reason I picked the $203 strike is that it has the least open interest in near the money contracts, meaning the lowest amount of people trading it. That generally gives it a discount over other strikes as the demand is lowest.

I always go out a little farther than I plan to sell them in case my timing is off. It’s worth it to pay the extra time premium rather than rely on impeccable timing which I almost never have.

Anti Fed Economics Goes Mainstream as Jared Blikre Does it Again

Something amazing is happening at Yahoo Finance. It’s a tool I use almost daily for stock research, but the articles and commentary are generally blah mainstream Keynesian Fed cheerleading nonsense.

Not anymore.

I reported on Jared Blikre last week, who actually made mention of the excess reserves problem at the Federal Reserve. This is an enormous financial elephant in the room that will eventually (and soon) destroy the dollar. I suspected he may have Austrian leanings. That is now confirmed.

Blikre is a friend of Bob Wenzel, and Austrian economist and publisher of EconomicPolicyJournal and TargetLiberty. I emailed Blikre’s last article to Bob and it turns out he had already linked to the very article I sent him 5 days before I even found it on the Yahoo front page. That means it was floating as the feature Yahoo Finance article for 5 whole days, though there are probably IP based permutations and algorithms governing who sees that article as the feature and who doesn’t.

So yes, we have someone high up at Yahoo Finance reporting on actual relevant financial news out of the Fed. On December 31, Blikre struck again, detailing some strange goings on in the Fed funds rate and humongous overnight treasury auctions that signal something’s up. It reads like a slightly toned-down version of a Zerohedge piece, but Blikre clearly has a deep understanding of the mechanisms of Fed operations and money creation that even I am unfamiliar with.

Read Blikre’s piece in full. It’s real financial journalism.

 

Medical Marijuana Government Monopoly to Sarel has been Broken, but not for long

Moshe Feiglin announced today on his Facebook page that Sarel, the company with a government monopoly on supplying government hospitals, has lost its privilege as the only company allowed to supply government hospitals. Feiglin got interested in Sarel when it was suddenly given monopoly privilege over the entire medical cannabis industry. This is a great thing of course, and Feiglin deserves credit for putting pressure on whatever mafia boss is in charge of determining who gets a monopoly on the government health care sector.

However, the problem is that nothing has been solved. Listen to this stupidity:

Government hospitals are in extreme debt, meaning the government health ministry is over budget. They’ll raise taxes to fix that of course. Nothing is being cut. The health ministry itself is what determines that its own hospitals must buy from a favored company, this case Sarel. When a monopoly is established, prices rise, and Sarel was of course charging prices over market value for all the equipment they sold to government hospitals. So government hospitals were forced into debt by the health ministry which runs the hospitals which forced the hospitals to buy equipment over market value by forbidding it to buy from anyone else under threat of imprisonment.

Why would the “owners” of a company, in this case the Health Ministry, force its own assets to buy equipment over market value? Because the “owners” of the Health Ministry are not owners of a company. They are tax loot distributors. They don’t have to make money. They just take it. And they give it to whoever they want, and it doesn’t matter how much their assets (hospitals) go into debt because they can always take more money from us. And they will, believe me they will.

Now Sarel has lost its monopoly privileges, for now. What is going to happen now is that some other favored company is going to get that privilege instead, and the same thing will happen again. They will frame it by saying that hospital equipment and medication must be properly supervised for quality and therefore it must only come from one company for public safety reasons, and whoever mafia thug is in charge of deciding which company will get that privilege will pick his best friends and get a big kickback for it in some offshore bank account in the Seychelles Islands.

Sarel is not the problem. Government hospitals are the problem. If government controls hospitals, the primates who run the operation in government will funnel the money to whoever they like best. Some other company is going to screw us now.

Demand a separation of government from health care. That is the only solution to ending this problem. In a few weeks, the monopoly will be transferred to some other company. Mark my words.

If I ever become a Knesset member, I will go after the whole system, not just one company that happens to benefit from the system at any given time. I wouldn’t even go by the title of Knesset Member, in Hebrew חבר כנסת. I will insist on the title אויב כנסת. Enemy of the Knesset. And I wouldn’t take a Shekel in tax funds for anything whatsoever.

The Excess Reserves Problem Actually Makes it Into Yahoo Finance Front Page!

I’ve been railing about this problem for 3 years. There are currently over $2.5 trillion in excess reserves sitting at the Fed. Here’s the graph.

Eventually those reserves are going to come out into the banking system and absolutely flood the entire world with a tsunami of dollars. The effect on price inflation will be extreme.

What surprised me, even shocked me to a degree, was that this story was actually featured on the Yahoo Finance front page today. My mouth was hanging open, because I have never seen a mainstream report on this. The author even uses the term “price inflation” to differentiate it from “inflation”. The former, inflation, means an increase in the unbacked money supply. The latter, price inflation, means a rise in prices as a result of inflation of the money supply.

Only Austrian economists differentiate the terms, because only Austrians are logical about economics. Everyone else is practicing voodoo. I have to think there is an Austrian, or an Austrian-leaning journalist at Yahoo. The guy’s name is Jared Blikre. I’ll be doing more research on him to see if there’s a mole from our side at the MSM, or if this is just a fluke.

Karma is a bitch, especially regarding torture

A friend of mine wrote this on Facebook. I’m sharing it here word for word. Truth bomb. You can’t support a government army occupation of a swath of land where torture by the same Shabak is routine against Arabs, and complain about Shabak torture of Jews. Well, you can, it’s just inconsistent.

Some will call me inconsistent myself because I benefit from the security of the occupation. I benefit from every service the government monopolizes and forces me to use. If the government monopolized the food industry I wouldn’t stop eating. Arabs also benefit from the occupation because they get the same security too. The IDF stops private Jews from attacking Arabs because only the IDF is allowed to do that. So what?

Somebody asked me if I have proof that the Shabak tortures Arabs. That’s funny.

Suddenly, human rights are in everyone’s mind in Israel’s vibrant right wing. A group of Israeli Jews who were arrested for perpetrating the firebombing of an Arab home, while the inhabitants were still in it, according to these rightists, aren’t being given the proper treatment in custody.

Here’s something I agree with them about: nobody should be tortured by their government. If they are in custody, they should be allowed to talk to an attorney. If there is not enough evidence to sustain a finding of probable cause, they should not have been arrested.

What’s amazing to me is that the Palestinians living under the occupation regime have experienced the same – or, in many cases, worse – treatment by an arbitrary and capricious Israeli/occupation Justice system.

The very same rightists who are moaning about the treatment of these Jewish terrorists support that. And that makes them dumb. And maybe a little bit evil, too.

If it’s good enough for the Palestinians, it will be good enough for the Jews. That isn’t Karma. It’s just how this works. If your country routinely violates human rights norms, and that’s ok with you, you might be next.

Naftali Bennett on the torture of children by the State

From here.

שר החינוך התייחס גם לעדויות על התנהלות החקירות בשב”כ ואמר כי כל החקירה מפוקחת ומבוקרת “שמענו המון דברים ואני יכול לומר שהפעולות שמבוצעות הן פעולות בבקרה ובפיקוח משפטי צמוד ובמטרה למנוע את הפיגוע הבא. אנחנו יודעים לסמוך על השב”כ, השב”כ מגן עלינו יום יום מפני אלפי פיגועים פוטנציאליים וצריך לסמוך עליו גם בפעולה הזאת”.

“The Education Czar spoke about the testimony (including torture) regarding the Shabak interrogation, saying that the investigation was being conducted with oversight. “We’ve heard a lot of things (about torture) and I can say that what is being done is being done with judicial oversight. (Meaning Judges say the torture is OK so it’s OK.) The purpose is to prevent the next terrorist attack. We know we can trust the Shabak. The Shabak protects us day in day out from thousands of potential attacks and we need to trust them on this.”

Ah, Bennett. You are my favorite. Love you. May you live forever.

Lesson being: Question not. Be loyal. And shut up.

Notice what the primate is doing here. By saying “the purpose is to prevent the next terrorist attack” he is saying that the torture is happening and that it is justified. Because the “law” in Israel is that torture is legal when it is to stop a ticking time bomb, but not regarding past events. Bennett is saying that the kids constitute a ticking time bomb because their interrogation is for the purpose of stopping the next attack. Theoretically you can say that about anybody. Which means torture is legal in Israel.

He’s saying, in his own politician way, that the torture is happening as it should.

Feiglin tears into Bayit Yehudi and others for condoning state torture of Jewish children

All 120 primates in the current Knesset are evil and should be expelled from the country. I have said repeatedly that I never support violence against State officials and discourage anyone from acting violently against the State. However, given that all 120 of them support the torture of children by jackbooted State thugs, if any of them died of natural causes I would not mourn their passing.

The back story here is that 2 kids are suspected by the State of arson against Arabs that ended up killing a family in a place called Duma. The kids have been tortured by the Shabak, including being strung up by the legs while having their testicles repeatedly squeezed, presumably to get a confession. One of them was not allowed a lawyer for 3 straight weeks with no contact with the outside world, not to mention his parents.

The government gang is now made up of 61 primates, the minimum number required for a ruling gang. That means any one of them could bring down the ruling gang in response to this torture by simply voting no confidence and showing there is some sort of humanity in them, but all of them are doing nothing, preferring to stay in the gang. They are therefore complicit in the torture of children, with all the moral implications of being complicit in such a crime. Even so, I still discourage active violence against them.

Here is Moshe Feiglin at his very best, the one and only human being in Israeli politics. Translation below:

אינני מצליח להבין כיצד חברי הכנסת של הבית היהודי והיותר לאומיים בליכוד – לא מפסיקים את הזוועה הזו.

הרי מענים את הילדים של הבוחרים שלכם עינויים קשים – עינויי תופת! אין שום תירוץ לדבר הזה, אין שום פצצה מתקתקת ולא שום דבר שמתקרב לזה.

בקואליציה של 61 כל אחד מכם יכול לעצור את הזוועה הזו בהינף אצבע – ואתם לא עושים את זה.

לא רק חיי הנערים ושפיותם תלויים בצואריכם, כל עתידה של המדינה תלוי באצבע הקטנה שלכם.

כי לאיזו מן סדום נתתם למדינה שלנו להתדרדר! איזו מן מדינה נשארת לנו אחרי שזוועה שכזו מתחוללת כאן “ברשות ובסמכות ובפיקוח”…

היום השמאל מענה את הימין, מחר הימין יענה את השמאל – איזה יופי… העיקר שהכל “ברשות ובסמכות”…

כשהיה צריך הצבעתי נגד (!) הקואליציה (כששחררו מחבלים ובמקרים עקרוניים נוספים) מדוע אתם לא מסוגלים לעשות זאת עכשיו?!

הרי הממשלה והבוגי מבצעים את הזוועה הזו מכוחכם!
אף אחד מכם לא יכול להגיד – “יש להם רוב ממילא גם בלעדי…” ואם האופוזיציה תתגייס לתמוך (והיא לא) אז לפחות לא מכם יידרש הדם.

כשמדובר היה בזכויות אדם – תמיד הצטרפתי לשמאל.
נגד מעצרים מנהליים, נגד הזנה בכפיה, בעד זכותם לסרב, הפגנתי נגד קציר האיברים בסין ועוד.

אם הימין היה היום באופוזיציה – הזוועה הזו לא היתה מתרחשת.

I don’t understand how Knesset Members from the Jewish Home and the more nationalist Likud members do not stop the horror of the torture of the Duma suspects. After all, they are severely torturing the children of your constituents. There is no excuse for this. They are not suspected of being ‘ticking bombs’ or anything even similar to that.
In a coalition of 61 Knesset Members, it takes only one person to topple the government and to stop the horror. And you are not doing it. Not only are the lives of these boys and their sanity on your shoulders. The future of the State of Israel depends on your vote.
What kind of Sodom has the State brought upon us? What kind of state will be left after this horror, taking place with the authorization and oversight of the ‘law’?
Today it is the Left torturing the Right. Tomorrow the Right will torture the Left. As long as it is all with the authorization and oversight of the ‘law’…
When it was necessary, I voted against the Coalition (when they released terrorists and on additional matters of principle). Why can’t you do the same now? The government and the Defense Minister are perpetrating this horror with your vote!
Not one of you can say, “The Coalition enjoys a majority even without me.” Even if the Opposition would support the continued administrative detention and torture (and it won’t) at least the blood would not be on your account.
If the Right was in the Opposition today, this horror would not be taking place.

What Libertarians really hear when people say…

Return to this post for future updates.

People say…

It’s unthinkable that some workers aren’t paid a living wage. The minimum wage should be raised to at least $15 an hour so that everyone who works can afford to buy XYZ.

A libertarian hears…

It’s unthinkable that some workers aren’t paid a living wage, even though I have never employed a single person in my life. Anyone who isn’t worth at least $15 an hour should not be legally allowed to work at all. If they dare work, the government should arrest both employer and laborer immediately. That way, only the people whose labor is worth $15 an hour will have jobs, and everyone else can live off taxpayers.

People say…

OPEC is a cartel that will do anything to drive the price of oil down in order to bankrupt the American oil industry. To protect the American oil industry from OPEC flooding the market and driving the oil price down, Obama should raise a 30% tariff on oil imports.

A libertarian hears…

The government should force Americans to pay 30% more for oil by having the government take 30% of it, instead of some other industry getting the difference. In fact, all trade with America should be forbidden so American companies can supply Americans with everything. In fact, each state should forbid commerce with every other state in order to protect all state-level companies. Same with cities, blocks, and individuals. The division of labor should be made illegal.

People say…

(REWIND 8 YEARS) Oil is too expensive because OPEC is a cartel and they’ll do anything they can to jack up the price of oil. The US needs to put pressure on Saudi Arabia to pump more oil.

A libertarian hears…

Facepalm.

People say…

I don’t buy goods produced in third world sweatshops because that is immoral.

A libertarian hears…

People who used to be starving and prostituting themselves on the street who are now working in sweatshops should go back to starving and prostituting themselves on the street, because sweatshops are immoral.

People say…

Women deserve equal pay to men in the workplace. Anything else is sexist.

A libertarian hears…

Any woman found accepting a job at a pay lower than what I think is reasonable, even though I don’t own or run a business and never have, should be forced to quit if she can’t get a raise. This should not apply to men. Anything else is sexist.

People say…

ISIS needs to be bombed so Islamic fundamentalist terror will finally stop.

A libertarian hears…

The best way to get people to stop wanting to kill you is to invade and bomb their country. Then they’ll give up and be your friend.

People say…

The US should bomb all the bad guys. Russia should get out of Ukraine because Putin is a megalomaniac.

A libertarian hears…

When the US bombs and invades anyone, it’s always good. When anyone else bombs and invades anyone, it’s always bad. Go red white and blue team!

People say…

The government needs to spend more to get the economy out of its funk

A libertarian hears…

$18 trillion of debt is not enough. If we up it to $30 trillion that should do it. Maybe it’ll take more though.