Free Week and deflation

I’d recommend having a look at this week’s Free Week at Elliott Wave International, as Prechter’s Elliott Wave Theorist of 8/24 is especially interesting. He lays out his theory of how asset managers, especially hedge fund managers, have prolonged this remarkably long top due to their willingness to take greater risks with other people’s money.

Click on the EWI ad on the right side if you want to check it out. There is a registration, but I don’t think they hound you continually. Perhaps someone who’s registered for a free week in the past could shed some light on that.

I’ve never been particularly impressed with their ability to predict the stock markets in the near term, but I’ve found them quite good in some of the commodity markets. Commodities and currencies are better for wave investors anyhow, since there’s no inherent upward bias as there is with stocks.

Full disclosure: I don’t get paid anything for this, but I do get comped on some of their services.

UPDATE: Jeanne notes: Prechter wrote a book a few years back called “Conquer the Crash” in which he predicts a upcoming super grandcycle that will result in a hugh deflationary depression. He predicts the DOW will go as low as something like 700. Of course, I have heard other experts claim that a depression cannot happen again and that the Fed has the ability to prevent one.

The monster question is inflation vs deflation. The vast majority of people think that the Fed will simply print money and inflate their way out of trouble. I have to admit that I always assumed this would be the case until I did some research on it.

The problem with the hyperinflation theory is that the Fed tried this in 1930-1934 and it didn’t work. Contrary to popular opinion, the Fed was not tightening the money supply during that time, but aggressively loosening it. Increasing the money supply is not a matter of simply printing money, it’s a matter of finding buyers for government debt. The Fed can’t create money without debt, hence the theoretical problem they call pushing on a string. The Law of Supply and Demand being what it is, interest rates will continue to rise in an attempt to interest creditors.

Since there is already something like a 37 trillion dollar debt hanging over the US economy, Prechter believes that it is not possible for the Fed to inflate its way out since there won’t be anyone interested in buying debt or taking on more debt. The fact that the Fed has now raised interest rates 10 straight times – even though they are still negative when compared with the CPI – tends to support his position.

If the Dow goes below 8000 and interest rates continue to climb while prices are falling, we’ll know that the odds favor Prechter (finally) being right. If prices continue to climb and we’re paying $8 per gallon at the pump, we’ll know that he’s probably wrong.

In light of contrarian theory, I found this article to be interesting. Since government is usually the last to respond, serious federal concern over rising prices would tend to be a signal that falling prices are just around the corner.

Show him the money

Minnesota Vikings center Matt Birk will try to play through the pain of a torn labrum in his hip this season if the team guarantees the Pro Bowler’s contract for 2006, the player’s agent said Wednesday night.

Birk needs surgery to repair the injury to his left hip, which came about as a result of his early return from a torn labrum and sports hernia in his right hip. The four-time Pro Bowl center has been cleared to play with the injury with the help of painkilling injections.

“He’s happy to play when he shouldn’t be playing, but he wants assurances that he will be with the team next season before that happens,” Birk’s agent, Joe Linta, told The Associated Press late Wednesday night. That would guarantee his nearly $4 million salary that is due him for the 2006 season. If the Vikings do not guarantee his contract, Linta said, Birk will have surgery that would keep him out of action for about three months.

Guaranteed contracts are a pox on sports – one of the many reasons why the NFL is far and away the best professional league – but in this case, considering what is at stake, Birk’s request for a guarantee is totally reasonable. Considering how he’s willing to let the Vikings rescind the guarantee if he ends up needing surgery, it should be an absolute no-brainer for the team’s management.

It’s not quite a make-or-break year for the Vikes, but having Matt Birk at center gives them a much better opportunity of winning an NFC that looks very up for grabs. Birk is smart, loyal and an All-Pro center. They can’t possibly screw this one up… can they?

Mailvox: always with the consistency

Constantine comments:

Frustrated with the way the world works, you simply cling to the fiction that one day — poof! — all your problems will disappear in a full swoop of inevitability. We also saw this attitude amongst the Y2K-apocalyptics and the Marxists holding out for the Revolution.

Um, I’m the one that you left-wingers repeatedly dismiss as the rich guy, remember? I’m more than content with that which God has blessed me, or, if you prefer, the hand that fate has randomly dealt me. I’m just fine, thanks.

But stick to your theory if you like, by all means. I think it works for you.

The point is that very few people are capable of seeing the cracks in the foundation, even as they widen and spread. Thus, when the structure collapses suddenly, it is a surprise to most. This has happened again and again; when the tipping point for the West will arrive, it’s impossible to say. But unfortunately, no society lasts forever and ours will be no exception. One need not anticipate something negative in order to expect it.

Circular thoughts from Kansas

Thoughts From Kansas answers:

A few days ago I asked “Why don’t Republicans all agree that women have to be allowed to vote?” I was worried that people would think I was making a little straw man there…. Women are people. How’s that for an argument? Women are people, and people have a right to self-determination, and voting is how people in democracies determine the direction their lives go. Vox apparently doesn’t think much of democracy, but I’m not going to refight the battles of 1776 right now.

If that’s a straw man, you’d think it would be a lot easier to knock down. What TFK proposes is not much of an argument at all. Children are people. Criminals are people. Tourists are people. Immigrants are people. Illegal aliens are people. And still, none of them have the right to vote. Therefore, voting is not predicated on personhood, which undermines his entire argument. Furthermore, the United States is not a democracy. However, TFK is right; like the Founding Fathers, I don’t think much of democracy. I would nevertheless prefer true democracy to the fraudulent bi-factional system of false representation we now have in place.

If the Will of the People is all, why don’t we move towards true democracy? We have the technology for it, after all. The truth is that most of those who consider themselves to be defenders of democracy don’t actually want it either.

Vox tosses out bullshit statistics (Correlation between rising government spending and a women’s vote? Do I really have to explain the gross methodological flaws in any such study?) and justifies his misogyny in various ways. And Jesus Christ, Singapore and Hong Kong are not democracies to be praised. One is a subservient to the repressive communist China, the other is a repressive regime that restricts free speech in ways that are intolerable. The fact that it’s undemocratic is the least of its worries.

Yes, you do have to explain the gross methodological flaws before you can dismiss any such study. I provided the link, either demonstrate how the study is flawed or concede the point. Surely TFK would not wish to imitate the defenders of women in the labor force by making the absurd assertion that adding billions of women voters over the past 85 years has had no effect on the nation whatsoever?

The problem voting rights fix is that some people can’t vote. They aren’t out there so that we can reduce crime, or have lower taxes, or whatever. Monarchal Great Britain abolished slavery before democratic America did, but that’s not an argument for monarchy.

That is circular reasoning at its worst. The end is the entire point of voting, which is why every quasi-democratic state has a constitution limiting what the people and their elected “representatives” are permitted to vote for. And yes, if slavery is considered to be evil, then the fact that a monarchy abolished slavery before a “democracy” would be an argument for monarchy. It might not be a clinching argument for it, but it is an argument for it nonetheless.

In a Kantian framework, he’s treating all women as means to an end. That’s not moral (it violates the Categorical Imperative) and it’s not fair. If Vox were to “Act only according to that maxim by which you can at the same time will that it would become a universal law,” would he advocate restricting the civil liberties of any person if some other person would benefit from that? What if that were a universal law, that anyone’s vote could be taken away if doing so would achieve some laudable goal? What if it were Vox’s vote, or Vox’s right to speak freely?

No, I am treating voting as a means to an end, which is precisely what it is. Kant doesn’t enter into the question. Not that it is particularly relevant to the matter in question, but I do act according to that maxim. I have lived for years in quasi-democratic societies where despite being a person, I am not allowed to vote, and yet my life, liberty and property rights were protected. I had no problem with that then and I would have no problem with it now. Bringing up freedom of speech is a red herring, it is primarily Democrats, with their speech codes and campaign finance reform, who wish to limit freedom of speech.

Thinking women who value their freedom, who value life, liberty and property rights, understand that allowing women to vote is demonstrably anti-freedom, which is why many of them support my position. Of course, even more women don’t value such things, which is why they are offended, and since they are fascists at heart, would very much like to eliminate my ability to espouse such offensive ideas.

In any event, I’ve concluded that it doesn’t really matter what anyone thinks. I estimate that within 40 years, Western women will lose most of their perceived gains, including the right to vote. It took 70 years for Soviet-style Communism to fall apart, and the sterility and social pathologies of the equalitarian society cause me to conclude that it is even more precarious.

Amanda buries herself too

This is the most pathetic bit of rationalizing I’ve seen in a long time. For fuck’s sake, first we pretend Nazis were left-wingers and what next? Holocaust denial?

The Left has a tendency to twist its tiny little maleducated minds around vicious circles. If the Marxian Communists represent the left wing and the National Socialists the right, that political spectrum cannot explain anything from Burkean conservatism to Misean libertarianism.

What they are describing is, in fact, the political spectrum of the leftmost half of the Left wing. Where do the Fascists fit, for example, in between National Socialists and Communists? They don’t. Amanda’s mention of the Holocaust reflects the typical left-liberal’s belief that being racist is an inherently right-wing phenomenon. It would be interesting to know how she would explain these quotes from an anti-semitist and an anti-bourgeois:

“Let us consider the actual, worldly Jew — not the Sabbath Jew, as Bauer does, but the everyday Jew. Let us not look for the secret of the Jew in his religion, but let us look for the secret of his religion in the real Jew. What is the secular basis of Judaism? Practical need, self-interest. What is the worldly religion of the Jew? Huckstering. What is his worldly God? Money. Very well then! Emancipation from huckstering and money, consequently from practical, real Jewry, would be the self-emancipation of our time…. We recognize in Jewry, therefore, a general present-time-oriented anti-social element, an element which through historical development — to which in this harmful respect the Jews have zealously contributed — has been brought to its present high level, at which it must necessarily dissolve itself. In the final analysis, the emancipation of the Jews is the emancipation of mankind from Jewry”. – Karl Marx

The bourgeois is about to leave the historical stage. In its place will come the class of productive workers, the working class, that has been up until today oppressed. It is beginning to fulfill its political mission. It is involved in a hard and bitter struggle for political power as it seeks to become part of the national organism. The battle began in the economic realm; it will finish in the political. It is not merely a matter of pay, not only a matter of the number of hours worked in a day-though we may never forget that these are an essential, perhaps even the most significant part of the socialist platform-but it is much more a matter of incorporating a powerful and responsible class in the state, perhaps even to make it the dominant force in the future politics of the Fatherland. – Joseph Goebbels

It’s worth noting that the concept on the historical inevitability of bourgeois decline is an overtly Marxist one.