Monday, January 19, 2009

The rough guide to leaving in your socks

What we are seeing now in England is the full national socialist road to serfdom laid out before us by a hard core group of former Trots and other assorted Marxists, a.k.a. The British government. They have no idea what they are doing. They have no end game, no middle game, and barely a beginning game, except for the throwing of a lot of other people's wealth at problems of which they have no clue or even vague understanding.

The solution to this problem, however, is laid out for anyone with the wit to see it, in the 1912 book by Ludwig von Mises, "The Theory of Money and Credit":


The solution for these "uncharted waters", fully mapped out by Mises a hundred years ago, is to do absolutely nothing, for the chips to fall, and for us then to pick up the pieces. If the government must do something, it must cut government spending and regulation. The absolute golden rule is that it must stop inflating.

So what do these fools in British government do, to preserve power, wealth, and privilege for themselves and their friends? They are going to inflate us into oblivion, and while they're at it, they are going to increase government spending and regulation.

They plan to pay for all of this monstrous stupidity with large future tax rises, which everyone knows is coming. Alas, when they get round to this, the only available targets for the taxman will either have left the country or will be broken upon the rocks of crass economic mis-management. What will be left are millions of other people dependent upon government taxation or regulation for their income.

Perhaps they should just increase the taxes on well-paid government sector workers?

To think about that even for a second is to realise the trickery behind the fabrication that any government worker pays taxes, which fools even most government workers, no matter how highly intelligent they believe themselves to be.

The only answer to the government's financing problem, especially when the bond bubble bursts, will be the time-honoured printing press solution favoured by other socialists in times past, in France, Germany, Brazil, Argentina, the USA, and Zimbabwe.

When that solution fails, there are two follow-up answers. The first is usually military dictatorship. The French revolution created enormous inflation; the answer? Why, Monsieur Napoleon. The German Weimar republic created enormous inflation; the answer? Why, Herr Schicklgruber.

The other follow-up answer is usually one of long-term punitive interest rates. The breakdown of the Bretton-Woods agreement in 1971 created enormous inflation in the USA; the answer? The 20% interest rates of Mr Paul Volcker, a man recently appointed by His Godliness Barack Obama, to head Obama's Economic Advisory Board. The Harold Wilson and Edward Heath governments of the 1970s created enormous inflation here in the UK; the answer? The brutal rate-rising government of Mrs Margaret Thatcher, which love her or loathe her, created an earthquake within British society which is still reverberating to this day.

So we have two choices in this country, when the inevitable destructive inflation hits. We can either go for the military dictator solution or the punitive interest rate solution. My bet is on the first one, despite the usual preference for English-speaking people to loathe being told what to do; I just don't think this country is capable of accepting punitive interest rates any more, not with so many people owning so many large mortgages. With a 20% interest rate, someone with a half million mortgage will be asked to pay out £100,000 pounds a year, for 25 years, just for the interest. Most such people will prefer a hyper-inflationary state managed by the Army, where they will get their houses for free, at the expense of having all of their liberties stolen.

Whatever happens, I would rather be elsewhere when the choice takes place, if I can manage it.

Have I advised you to try to leave yet? If you can't leave, at least get liquid. Become as prepared as possible to get on the first available plane out of here in your socks, with as few financial regrets as possible. Get your debts pared down or even cleared to zero. Have enough gold laid aside to buy tickets on a plane to the destination of your choice. This will be a country with several of the following Anglo-spheric characteristics: small, low-debt, low-tax, low-regulation, commodity-rich, English as a business language, business-friendly, defendable, and discerning as to who they let in. Targets include, Dubai, Singapore, Switzerland, Australia, New Zealand, Hong Kong, Canada, and God Forbid, possibly South Africa (at a very tight squeeze and probably only acceptable if you've lived there before).

The main former British Empire target to avoid is the USA (which is going to crack up much worse than the UK, if that's possible, despite having a God as their President-Elect).

Right, must get on with my own tortuous plans. Why is life so complicated?


not an economist said...

I began to get nervous when Darling and Brown started saying "We will do whatever is necessary ..."

"Whatever is necessary". Those words stuck in my mind.

Jack Maturin said...

Say it in a clipped German accent, and then imagine Darling delivering the line in a military uniform. Then it's REALLY scary. (Or really funny, depending how much of your wealth and liberties he's about to steal, to fund this idiocy.)

BTW, I notice British government bond yields started going up after the announcement. I don't think we're into the bond bubble bursting just yet.

That may come when this second bank bailout has also failed, and they launch a THIRD bailout, in a few months' time.

With every economic "expert" and opposition politician also agreeing with this plan, they have enough cover until then.

It just shows you how dumb all of the economics schools are that all they can produce are maths-obsessed Keynesians who believe Brown's nonsense, today, that wealth can be generated on a printing press.

Fortunately, I don't think the British people are quite so fooled.