Tag: Inflation

Echoes of the Big Bang

The Universe got a little more amazing today. Thirty years ago, the theory of cosmic inflation was proposed. The idea is that, for about one billion billion billion billionth of a second, the universe expanded faster than the speed of light.

The inflationary theory explained a lot of things, such as the remarkable smoothness of the universe. And it had some interesting implications, such as the potential existence of other universes, perhaps with different laws of physics. But a scientific hypothesis isn’t really a theory until it has made a successful prediction.

That happened today:

Inflationary models predict that other marks were left on the Universe, and one of these is that as the Universe underwent rapid expansion, it would create ripples in the fabric of space-time called gravitational waves. These are literally small expansions and contractions of space itself, like a wave traveling down a Slinky. We know these exist—we see their effects in astronomy, and two astronomers won a Nobel Prize in 1993 for finding an example of gravitational waves—but seeing them coming from the inflationary period of the Universe is incredibly difficult.

We don’t see the waves themselves, but we can detect the effect they had on light coming from the early Universe. The waves would polarize the light, in a sense aligning the waves of light in certain ways. There are many different ways light can be polarized, but gravitational waves left over from inflation would do so in a very specific way (called B mode polarization, which twists and curls the direction of the polarization; see the image at the top of this post). Finding this kind of polarization in the light leftover from the fires of the Big Bang would be clear evidence of gravitational waves… and it was precisely this type of polarization that was finally detected by a telescope called BICEP2 (Background Imaging of Cosmic Extragalactic Polarization), located in Antarctica.

You should read Phil’s entire post. You should also watch this video of Andrei Linde, the father of inflation theory, getting the news that he was right.

Here’s the thing. BICEP2 closed shop two years ago. According to one source, they’ve have this result for three years but have spent those years making absolutely sure they were right. The patience involved in that relentless checking is amazing.

We live in a great time. First Higgs and now Linde vindicated by observations.

All the Coins That’s Fit to Print

A long time ago, the Simpsons did an episode about Congress creating a trillion dollar bill to rebuild Europe after World War II. Apparently, a few pundits and at least one Congressman think that was a documentary:

Rep. Jerrold Nadler has an admittedly “out of the ordinary” solution to the coming fight over the debt ceiling.

“There is specific statutory authority that says that the Federal Reserve can mint any non-gold or -silver coin in any denomination, so all you do is you tell the Federal Reserve to make a platinum coin for one trillion dollars, and then you deposit it in the Treasury account, and you pay your bills,” Nadler said in a telephone interview this afternoon.

I’ll let Doug Mataconis tackle the legal and statutory issues. A short version is that Nadler is using a bill for a purpose for which it was never intended. The authors of the bill have specifically said it was meant for making commemorative coins and such. The idea of avoiding the debt ceiling by printing an inflation-producing trillion dollar coin is way beyond any authority in the law. And even if it weren’t, Congress could override it in about ten seconds.

Stand by for a few, “well, actually…” articles from the left wing claiming this idea isn’t as stupid as it sounds. But rest assured, it is stupider than it sounds.

The Right Wing Meltdown: Knock It Off

It’s been downright painful watching conservatives come to grips with the reality that Obama was re-elected. A couple of my favorite sites are about ready to go all Jonestown about it and I haven’t bothered to give them more than a cursory glance for the past week.

Everywhere it’s “Why, why, why?” and “We have to change everything we believe!” and “We just had bad luck, it means nothing, nothing I tell you!” and even “We have to secede, obviously.”

It’s a collective temper tantrum. Liberals think it’s all hilarious, I might add.

At the risk of sounding like a big twat (ha, ha, ha: shut up), I’ve never been more ashamed of us as a movement or group or what-have-you. This is not the End of America, for fuck’s sake. If you’re waiting for the collective breakdown and war (or, worse, hoping for it), settle down.

It’s not Morning in America either, mind you. Let’s not kid ourselves. This country is in for a brutal decade. But that doesn’t mean that America is fatally wounded. Our country has made a shitload of really bad decisions, run up too much debt, and divided itself on some ridiculous issues that never should have become government problems. We have the bad misfortune to be home when the papers are being served.

We’re getting ready for the next act of The Great Devaluation.  Real estate and college got overvalued, made a bunch of people rich, and then it turned out to be unsustainable in the first act.  We’ve been in shit, but only ankle-deep.  The next wave hits EVERYBODY where it hurts: Our money.  We don’t have enough and what we do have is going to be worth less, if not worthless.  Stocks are going to take a major hit, companies are going to tighten their belts, and more.  This is all coming about because we built everything on crap and let our “leaders” get away with mortgaging our future with insane entitlements, limitless wars, and low taxes.    Well, welcome to the future.

Emigration isn’t an option for me and I’m not really jazzed about the idea of joining up with some asshole warlord in Civil War Episode II: Attack of the Self-Entitled Douchebags.  If you’re good with all that, then go ahead and start digging your bunker and just start waiting.  I don’t care.

The Democrats are not up to the task of handling what’s happening and frankly, I don’t think the GOP was either.  It’s too late and I think this is one of those disasters of American history that just has to happen before we can move on, like Pearl Harbor (the actual event, not the film).  I don’t know how else we break our bad habits without imposed austerity.

Now, plenty of pundits and politicians are getting their silly asses on television talking about how we need to change this and that.  Stop apologizing for rape, let the Mexicans run wild, and admit that the wage gap is deliberately caused by evil, stinky men instead of market forces.  If you want to keep going for the two party system of Democrat and Democrat-lite, that’s a personal choice.  I don’t think we need to go that far.

It is time to compromise though.  I still don’t know how to work out a “peace accord”, but I do know that we can call a truce and take the time to retrench without retreating

First, taxes must go up on high earners.  We have to give that away and I see no way we win the Battle of Fiscal Cliff without some casualties.  Coddling the rich isn’t doing us any good if they can’t even buy a Romney presidency.   It’s totally symbolic, it’s not going to help the deficit or jobs, and it’s against our beliefs.  Too bad.  We’re taking a break from worshipping the wealthy while the American people enjoy having their demagogues to spread the wealth pain around.  I still think letting all of the Bush tax cuts expire is fitting, but we should “let” the Democrats talk us out of it if they throw in something worthwhile.

Second, it’s time to end the War in Afghanistan and reduce and reorient the military to stick with what it has done best since the 19th Century: Defend North America.  Yeah, I’m going all Pat Buchanan on this.  Israel: I am really and truly sorry.  But if we’re really heading into a Civil War, it would probably be better to have our guys back here, right?

Next, let’s bite our tongues when the President takes full credit for the deal.  Let him have this last big fuckin’ deal.  I think Boehner sucks, you do too, but lets go easy on him this one time.

The unsustainability of Medicare, Social Security, and ObamaCare is not going to be seriously addressed or resolved by the federal government at this time.  Everything I’m proposing here is with the assumption that it won’t.  We get to watch and let the Democrats totally own the disaster.  When it’s time for them to give some things up and save what’s left of the Obama legacy, they’ll know.

The one issue I don’t think we should compromise on is any immigration reform that requires amnesty for those already living here.  I think America’s natural xenophobia will kick back in as those lettuce-picking jobs start looking better and better as the unemployment starts to dry up.  Be patient on this one.

MOST CONTROVERSIAL THRILL ARGUMENT EVER, COMING RIGHT UP.

Finally, screw the Constitution of the United States of America.   I think it’s time we all acknowledged that the Constitution needs a redo.  It is failing us and the American people clearly don’t believe in it or care anymore except when they want to cherry-pick one amendment or another to suit their causes.   It is almost a dead fucking letter and there are no longer any peaceful means of binding our current government back to it.

You want to scare the hell out of the DC establishment?  It’s time to call for a Constitutional Convention, through the states.  They laugh at your pathetic secession petitions but they’ll stop laughing and choke when they realize that we’re about to change the rules to fuck them over.  This isn’t a temper tantrum.  It’s a cold, dead-eyed threat of a long-term solution.  Start demanding this at every turn.  Americans are going to love the idea soon enough, if the doomsayers are right.

Conservatives and progressives simply do not agree on what kind of country we should be and what the Constitution means and independents in the middle are too brain-dead and disengaged to care.  We’re not going anywhere as a people until we firmly establish a new concept of the relationship between the federal government, the states, and the people.   Our government cannot do it at this point.

The Culture Wars were driven by the Supreme Court making these decisions for us and they’ve done an awful job.  They’re completely unpredictable and they barely even use the Constitution as the basis for rulings anymore.  Congress has ignored its fiscal duties and its members serve to benefit themselves.  The Presidency is imperial in everything but name.  Whole industries are crippled with executive orders and psychotic bureaucrats.  This has to stop.  We need to accept that the old Constitution has done nothing to restrain all three out-of-control branches of government and quit acting like the Founding Fathers were flawless gods.   What they created was beautiful, but it isn’t working anymore.

We stop the Right Wing Meltdown.   The game is still on and what is happening in Congress is everything right now (even though the Petraeus thing is the most awesome scandal of my lifetime).  My advice is to comment on the Jonestown Blogs that the histrionics are done and it’s time for a Constitutional Convention.  Start getting that into the public consciousness now.

I’ve been preaching the importance of staying on task ever since last Tuesday’s electoral calamity.  This isn’t because of my sunny disposition or optimistic outlook.  I have neither.  It’s because the United States needs a vibrant pro-Liberty movement and we’re it.

No more embarrassing theatrics.  Do it FOR THE CHIIIIIIILDREN, you bastards.

I invite all denunciations and mental health referrals.   Sometimes, you just gotta rant.

Paul vs. Paul

Ron Paul and Paul Krugman had a debate about economics (apologies for the link, which auto-plays). You can read Tyler Cowen’s commentary here. I agree with his final take:

There were too many times when RP simply piled polemic points on top of each other and stopped making a sequential argument. He overrates the costs of inflation, including in the long term, and for a believer in the market finds it remarkably non-robust in response to bad monetary policy. Still, given that Krugman is a Nobel Laureate in economics, and Paul a gynecologist, the score could have been more lopsided than in fact it was.

I have disagreements with Ron Paul on monetary policy and the Federal reserve. But I think Cowen understates Paul’s performance. There were several times where he got in points that Krugman had no response to (except to later whine with dubious factual accuracy on his blog). The fact is that the Keynesians really don’t have an explanation of how a 60% cut in federal spending after World War II produced an economic boom, other than to wave the “we owe the debt to ourselves” mantra. The fact is that they predicted Truman’s budget cuts would wreck the economy and they didn’t.

I think Krugman also, like most Keynesians, underestimates the potential danger of inflation. It is true that a moderate inflation can ease a financial crisis. But it’s very hard to manage a “moderate” inflation because the temptation to inflate away debts is strong and it is very easy to get into an inflation-interest rate spiral like we did in the 70’s. This is why the Federal Reserve has been keen to keep that beast in its cage for three decades.

Still, it tells you something about the intellectual weakness of the Left when they are preening/whining about, as Cowen said, a Nobel Laureate debating a 76-year-old Republican who is regarded as a crackpot by all “thinking people”. I suspect Krugman will next debate Milton Friedman. This may actually be an even match since Friedman is dead at the present time.

Here comes a recession, UNEXPECTEDLY!

Reading this CNBC article about the current plunge in economic data, you get the impression, yet again, that these “experts” in the MSM are constantly baffled by the continued negative economic news that keeps coming because they, after all the evidence to the contrary, still think that the destructive borrow-or-print & spend policies of the last 2 or 3 years from the anti-business Keynesian jackasses in charge, somehow should be working.

The last month has been a horror show for the U.S. economy, with economic data falling off a cliff, according to Mike Riddell, a fund manager at M&G Investments in London. “It seems that almost every bit of data about the health of the US economy has disappointed expectations recently,” said Riddell, in a note sent to CNBC on Wednesday.

“US house prices have fallen by more than 5 percent year on year, pending home sales have collapsed and existing home sales disappointed, the trend of improving jobless claims has arrested, first quarter GDP wasn’t revised upwards by the 0.4 percent forecast, durables goods orders shrank, manufacturing surveys from Philadelphia Fed, Richmond Fed and Chicago Fed were all very disappointing.”

“And that’s just in the last week and a bit,” said Riddell. Pointing to the dramatic turnaround in the Citigroup “Economic Surprise Index” for the United States, Riddell said the tumble in a matter of months to negative from positive is almost as bad as the situation before the collapse of Lehman Brothers in 2008.

Heh! WTF are they talking about? Did they miss all the people pointing out that the tack the democrats took – to make the deficit spending of the Bush years suddenly look like the good years, while targeting all the bloat towards their operatives, lobbyists, union & corporate buddies, and in general, any front they could use that would then funnel the money into their campaign coffers, cushioning the impact of the Dodd & Franks lending/financial industry collapse for state and federal government employees at the expense of the private sector – was a recipe for disaster? At least they aren’t claiming the problem was that they didn’t do double the stupid anymore.

Housing prices continue to fall because the fundamental underlying policy that caused the implosion remains untouched, Freddie & Fannie are still at it, while the new regulation that was passed to supposedly “protect” the American people from the “greed” of Wall Street, makes it virtually stupid for any lending institution to loan money to job creators. Job creators that even when doing fine BTW are not creating any jobs, because they simply can not predict the actions of this business-hostile government and the insane regulations it puts out. Regulation that instead of dealing with the problems are instead intended to make government responsible for picking the winners & losers, heavily favoring the idiotic industries and giant corporations the left feels will help it grow it’s political & financial power, at the tax payer’s expense. In the mean time the private sector hunkers down and hopes to whether the storm.

And let’s not forget that we have not had a budget for over 2 years now. The democrats call any attempt to roll back the most massive expansion of the welfare state since the days of FDR “draconian”, and infer the people that are calling for fiscal sanity want to kill granny, kids, pets, and the planet. All so they can avoid actually having to admit their fiscal policies are insane and unsustainable. They refuse to propose any changes to address the looming and massive entitlement spending problem and the out of control deficit spending that is tacking trillions to our debt each year, and demagogue those that dare propose any changes that don’t involve fleecing the productive sector even harder than they already do. They rammed through a government takeover of healthcare bill that will drastically impact not just healthcare, but puts us on a quicker path to financial implosion. They have virtually had no energy policy, other than to drive up the prices of the types of cheap energy sources that stand in the way of them gauging people, to the tune of hundreds of billions of dollars, while pushing both inefficient and marginal “green” technologies nobody would go for otherwise. Their job policy has consisted of funneling billions of tax payer dollars to temporarily prop up government/public jobs over tax payer/private sector jobs, and it shows. The list of other such economic transgressions is long and replete of idiocy. It’s why we are seeing soaring inflation and a dramatic deflation in the value of the dollar. Heck, despite falsely blaming military spending for our predicament, they up and started another war in the Middle East, this time to steal oil for real, which I remind you should be ironic considering how that’s what they falsely accused their predecessor of, and completely ignoring all the politically motivated grandstanding they did back when, proving yet again that the only thing important to them is power at all costs. Think all of that isn’t going to come back home to roost?

“The correlation between the economic surprise index and Treasury yields is very close, so the lesson is that whatever your long term macro views are regarding hyper inflation vs. deflation or the risk of the US defaulting, the reality is that if you want to have a view about government bond prices, the best thing you can do is look at the economic data to see what’s actually going on,” said Riddell.

“And right now, the economic data is suggesting that however measly you may think a 3 percent yield is on a 10-year Treasury, the yield should probably be a fair bit lower given what’s going on in the US economy,” said Riddell. “You’ve also got to wonder at what point the markets for risky assets start noticing, too.”

The markets noticed. And while they may claim to be baffled, they are now seeing the obvious end game. The economic path the left has us on right now is unsustainable. The deficit spending to grow government was wrong during the Bush years, it affected the 2008 elections, and it is magnitudes of orders more wrong now that the left is doing orders of magnitude more insane spending. Gird your loins people. The ride is about to get even more bumpy, and the morons refuse to accept the fact that the gravy train is about to run off the proverbial blown up bridge.

Some economic perspective..

Everyone seems to be focused on the great news that bin Laden was finally sent to hell by SEAL team 6 a couple of days ago, and that’s awesome, but there are other things we should not lose track of like the fact that our economy is in a death spiral as government keeps spending far beyond what it can afford and the anti-business policies of the left keep putting pressure on any kind of bounce back. Things look real bad, but most of us are not realizing how bad because they are hiding it. The dollar is getting hammered, the cost of energy is out of control, and inflation, real inflation, not the crap they are hiding behind, is over 10%;

the reason the CPI is losing credibility is that, as economist John Williams tirelessly points out, it’s a bogus index. The way inflation is calculated by the Bureau of Labor Statistics has been “improved” 24 times since 1978. If the old methods were still used, the CPI would actually be 10 percent. Yes, folks, double-digit inflation is back. Pretty soon you’ll be able to figure out the real inflation rate just by moving the decimal point in the core CPI one place to the right.

It’s not only the BLS that speaks with a forked tongue. Members of the Council on Foreign Relations last week heard Treasury Secretary Tim Geithner say: “Our policy has been and will always be … that a strong dollar is in the interest of the country.” Fact: the dollar has depreciated relative to other currencies by 17 percent since 2009.

We are getting hammered from both ends. The dollar is losing its buying power as it devalues, and the cost of everything is going up and going up at a scary pace. And it is becoming obvious that this is happening because of either a determined strategy to do so or as a real world effect of stupid collectivist dream strategies that simply don’t work in the real world. In the first case we have a government that is actively destroying the wealth in America so it can keep spending, borrowing, and growing, all so the collectivist’s agenda can keep moving on. The later simply is the real world responding to the fact the economic beliefs of the left are insane and unrealistic. In either case we will end up with misery and economic ruin: the destruction of any middle class, which is BTW whom they claim they are doing all this crap for. The fact is that we are running out of other people’s money, and this whole grand collectivist scheme is crashing down. It’s not sustainable, and no amount of confiscation of other people’s wealth or pretense that all wealth is shared equally will change that. This system, portending to try to seek “social justice” does nothing of the sort. In fact, all it serves as is a system to punish the success of those that the ruling class, the self appointed guardians of the downtrodden and the ones doing most of the trodding down, don’t like, for whatever reason.

I make a pretty decent chunk of change, and I am seeing how my money doesn’t go nearly as far as it used to. Lucky for me I am not loaded with crazy debt either. But, I can not imagine how much harder it is for people that make less than I do. And yet, so many of these people think the very people that are doing this to us all are looking out for them? Even worse, we have a media that shills for these crooks and covers constantly, all because of ideology, while the house of cards collapse aournd us. Talk about insanity.

You know your policies are hurting the poor when

Wal-Mart starts pointing out they are not spending as much as they used to on purchases as they used to:

NEW YORK (CNNMoney) — Wal-Mart’s core shoppers are running out of money much faster than a year ago due to rising gasoline prices, and the retail giant is worried, CEO Mike Duke said Wednesday. “We’re seeing core consumers under a lot of pressure,” Duke said at an event in New York. “There’s no doubt that rising fuel prices are having an impact.” Wal-Mart shoppers, many of whom live paycheck to paycheck, typically shop in bulk at the beginning of the month when their paychecks come in. Lately, they’re “running out of money” at a faster clip, he said. “Purchases are really dropping off by the end of the month even more than last year,” Duke said. “This end-of-month [purchases] cycle is growing to be a concern.

Gasoline prices are up, inflation has reared its ugly head, and the poor are going to be socked the hardest by these things. Bet you the democrats, the party of the little people, will blame evil oil companies, evil capitalist Wal-Mart, and in general everyone else, but their policies for this. Despite whatever bullshit they say, oil prices are up because of two reasons: the dollar has plummeted in value, and the new Obama Admin policy of blocking oil exploration and extraction is making speculators basically believe oil supplies are going to be negatively impacted sooner than later.

As the dollar loses value and energy prices continue to rise, because of the lack of any real and viable strategy from the left other than to steer billions to their friends pretending this green energy shit is a sound investment, the cost of everything that needs to be moved, refrigerated, and uses plastics, is going to go up. Drastically. Obama is hell bent on beating the malaise of the Carter years it seems. The poor should remember that.