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Saturday, September 3, 2011

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BookDaily Update
Sunday September 4, 2011

Duplicate

By Harris Dickson Shortle
ISBN: 9781607993193
 

Saturday, August 11, 1934, was etched permanently in John Laronde’s mind. It had begun as any other, with no premonition of the terror waiting at his office.

He dallied over his breakfast, savored a second cup of coffee, and had his usual morning chat with his lovely Ruth and their beloved daughter, Helen, in the cool, old-fashioned dining room of Windsong, their magnificent plantation manse. Typical in fine Southern homes built one hundred years earlier, a magnificent, hand-polished, mahogany ceiling punkah, or fly fan, hung lazily above the Louis XIV dining table.

Sterling silver trays, chafing dishes, and incidental crystal pieces—gathered over many trips to...

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Dervish Is Digital

By Pat Cadigan
ISBN: 9780330391078
 

Sitting on the fake leather chair in the cheesy hotel room, Konstantin thought, This will be a very serious weapon.

"Now, this," said the slim, angular woman sitting on the bed, "this is a very serious weapon." Konstantin could see that she was a very serious arms dealer, meticulously well dressed, the tasteful, classic lines of her jacket and pleated skirt suggesting a high-ranking officer of a yacht club that would not, for one moment, consider admitting Konstantin or anyone like her. Especially not in those leggings with that tunic. The one detail that said otherwise, the detail you had to watch for so you could tell the ...

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Today's Business & Economics Chapter

 
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Business & Investing
Sunday September 4, 2011
Special Events: The Roots and Wings of Celebration (Wiley Event Management)
by Joe Goldblatt
 

Welcome to Event Leadership: The Roots and Wings of Celebration

In This Chapter You Will Learn How To:

* Understand and appreciate the historic roots of celebration

* Recognize and understand the demographic changes affecting the global events industry

* Utilize the psychographic changes affecting event length, purpose, and outcomes to improve performance

* Identify new and emerging career opportunities

* Understand why education has become the most important factor in Event Leadership growth

* Identify industry certification programs

* Advance your career throughout the twenty-first century

* Develop new ways to sustain your career

The professional Event Leadership host knows that the word Welcome! is an essential part of the guest experience at any event. Therefore, I warmly welcome you to the fifth edition of Special Events. However, in the global spirit of the fifth edition, allow me to add:

* Beruchim Habaim! (Hebrew)

* Benvenuto! (Italian)

* Bien venue! (French)

* Bienvenidos! (Spanish)

* Dobre doshli! (Bulgarian)

* Dobro pozhalovat! (Russian)

* Fun ying! (Cantonese Chinese)

* G'day! (Australian English)

* Hos geldin! (Turkish)

* Huan ying! (Mandarin Chinese)

* Kali meta! (Greek)

* Kwaribu! (Swahili)

* Laipni ludzam! (Latvian)

* Sabah al kher! (Arabic)

* Tusanyuse Kulamba! (Bugandan)

* Urakasa neza! (Kinyarwandan)

* Urseo oh se yo! (Korean)

* Velkomst! (Danish)

* Willkommen! (German)

* Yokoso! (Japanese)

With the rapid development of the Internet, the world as we once knew it has rapidly changed. For example, to learn how to say "welcome" in over 325 different languages, visit www.elite.net/~runner/jennifers/welcome.htm. The local or regional nature of the Event Leadership business was replaced with lightning speed by global connections throughout the world. I discovered this while seated at my home computer receiving e-mail messages from distant lands. "Thanks for your excellent book-it changed my perspective about the profession," wrote one industry member from the Far East. These types of messages were quickly followed by requests for information and, ultimately, offers to fly me to lands that I had only read about. Indeed, the Internet has had the same (or perhaps a greater) influence as that of Gutenberg's printing press. The World Wide Web has woven the Event Leadership profession together into a new global community. As a result of this new "web," each of us now has far greater opportunities for career and business development than we previously imagined or aspired to.

During the past two decades (since the first edition of Special Events), the field of Event Leadership has seen numerous changes, and Figure 1.1 summarizes these paradigm shifts.

These six aspects of the profession reflect how the Event Leadership field has experienced sweeping changes in the past decade. The letters above the massive doors to the National Archives in Washington, DC, announce "Where past is prologue." And so it is with our profession of Event Leadership. To go forward, we must first reflect on the historical roots of a field of study.

From Roots to Wings

The term special events may have first been used at what is often described as the "happiest place on earth." In 1955, when Walt Disney opened Disneyland in Anaheim, California, he turned to one of his imagineers, Robert Jani, and asked him to help solve a big problem. Each day at 5:00 P.M., thousands of people, in fact almost 90 percent of the guests, would leave the park. The problem with this mass exodus was that Walt's happiest place on earth remained open until 10:00 P.M. This meant that he had to support a payroll of thousands of workers, utilities, and other expenses for five hours each day with no income.

To correct this problem, Robert Jani, then director of public relations for Disneyland and later the owner of one of the most successful Event Leadership production companies in the world, Robert F. Jani Productions, proposed the creation of a nightly parade that he dubbed the "Main Street Electric Parade." Dozens of floats with thousands of miniature lights would nightly glide down Main Street, delighting thousands of guests who remained to enjoy the spectacle. This technique is used today in all Disney parks, with perhaps the best example at Epcot, where a major spectacular is staged every night. According to the producers, this spectacle results in millions of dollars of increased spending annually.

One of the members of the media turned to Robert Jani during the early days of the Main Street Electric Parade and asked, "What do you call that program?" Jani replied, "A special event." "A special event-what's that?" the reporter asked. Jani thoughtfully answered with what may be the simplest and best definition: A special event is that which is different from a normal day of living. According to Jani, nowhere on earth does a parade appear on the main street every night of the year. Only at Disneyland, where special events are researched, designed, planned, managed, coordinated, and evaluated, does this seemingly spontaneous program take place every night. Jani, who would later produce National Football League Super Bowl half-time spectaculars as well as the legendary Radio City Music Hall Christmas Show, among many other unique events, was a man whose motto was "Dream big dreams and aim high."

Anthropological Beginnings

Some 35 years later, in the first edition of this book, I defined special event as a unique moment in time celebrated with ceremony and ritual to satisfy specific needs. My definition emerged from that of anthropologist Victor Turner, who wrote: "Every human society celebrates with ceremony and ritual its joys, sorrows, and triumphs." According to Turner and other researchers whom I had studied in my exploration of anthropology, ceremony and ritual were important factors in the design, planning, management, and coordination of special events.

The term event is derived from the Latin term e-venire, which means "outcome." Therefore, every event is in fact an outcome produced by a team that is led by the Event Leader. After interviewing thousands of experts in special event leadership for the past five editions of Special Events, I have discovered that, while special events may represent many professions, one person is always at the helm of this large vessel. That person is the Event Leader.

Growth Opportunities

Only six decades ago, when an orchestra was needed to provide music for a wedding or social event, one consulted an orchestra leader. Very often, the orchestra leader would provide references for additional talent to enhance the event. Mike Lanin, of Howard Lanin Productions of New York City, tells the story of a meeting his father, Howard Lanin, the renowned society maestro, had with a client in Philadelphia during the late 1920s. Having already asked Lanin to provide music for her daughter's coming-out party being held at the Bellevue-Stratford Hotel (now the Park Hyatt at the Bellevue), the client asked that he provide decor as well. When Lanin asked how much the client would like to spend, the client replied, "Just make it lovely, Howard-just make it lovely." Lanin immediately realized that making this huge ballroom "lovely" might require an investment of five figures. With inflation, the cost of such an undertaking today would well exceed six figures. But Lanin was fortunate to have earned his client's total trust. Without further discussion, the orchestra leader and decorator went to work. Few clients of any era would offer such an unlimited budget. But more and more often, special events professionals such as the Lanins are being asked to provide more diversified services. And although orchestra leaders may have been comfortable recommending decorations and other services and products for social events three decades ago, they and others with specific areas of expertise found that, when it came to events designed for advertising and public relations opportunities, they required specialized assistance.

Public relations is a proud ancestor of the celebrations industry. Less than 50 years ago, the modern profession of public relations and advertising became an accepted tool in American commerce. When a corporation wished to introduce a new product, increase sales, or motivate its employees, its corporate leaders turned to public relations and advertising professionals to design a plan. Today, the celebrations industry includes tens of thousands of hardworking professionals, who, for the first time in the industry's history, are truly working together to offer their clients the excellent services and products they deserve. As an example of the growth of Event Leadership in the public relations field, consider this comment from the first person in the United States to receive a master's degree in public relations, Carol Hills, now a professor at Boston University: "My students are extremely interested in events. They recognize that public relations and events are inseparable. Event leadership is certainly a growth area in public relations practice."

According to the International Council of Shopping Centers (ICSC) in New York, marketing directors who produce events for local and regional shopping centers can earn in the high five figures. Marketing professionals have recognized the need for specialized training and the benefits of certification within their industry. Events help attract and influence consumers to purchase specific products and services from small retail stores up to major regional shopping centers with hundreds of shops. In this age of entrepreneurship, the creation of new business is far greater than the growth of established firms. With each new business created, there is a new opportunity to celebrate through a grand opening or other special event. There are over 1 million new businesses created annually in the United States that may require an event leader to produce an opening celebration.

The 2005 convention of the International Amusement Parks and Attractions revealed even more changes occurring in the leisure field. According to recent studies, the newest lifestyle trends bear watching. Fifty percent of the new so-called baby boomer or limbo generation have discretionary income. Due to longevity and what is defined as vacation starvation, they are spending this income on leisure products.

Many of these individuals are described as "wanderlust singletons" because most are indeed single adults. They are socially aware and environmentally sensitive, support fair trade, and desire nature-based tourism experiences.

They have a strong need to escape a working environment that is increasingly stressful and therefore seek experiences in the great outdoors, where there is a greater opportunity for controlled risk through activities such as whitewater rafting with an experienced guide.

One final psychographic change identified at this meeting was the development of "tribing" and mass customization. Affinity or special interest groups, where individuals can bond with people of similar interests and experience levels, and the need to customize experiences are both growing in importance. Therefore, the ability to satisfy both needs, tribal as well as individual activities, will determine in the future which Event Leaders will succeed and which may fail.

Demographers believe that India and China will soon emerge as the major exporters of tourists due to the population density and the rising average income. However, in developed countries such as the United States, a new group nicknamed "SKIN" is developing. SKIN means "spending kids' inheritance now." As adults find new ways to extend their lives as well as the quality of their lives, leisure, through special events, will become even more popular.

An Event Leader historically was a person responsible for researching, designing, planning, coordinating, and evaluating events. You will learn about each of these phases in the pages to come. However, the logical question one may ask is: What is the Event Leadership profession?

The Event Leadership Profession

Event Leadership is a profession that requires public assembly for the purpose of celebration, education, marketing, and reunion. Each of these overarching activities is encompassed by the profession of Event Leadership. Although it can be argued that, like tourism, Event Leadership is actually comprised of many industries, increasingly, as data are gathered and scientific tests conducted, it becomes more apparent that Event Leadership represents a unique body of knowledge.

According to experts in the field of professional certification, all professions are represented by three unique characteristics: (1) the profession must have a unique body of knowledge, (2) the profession typically has voluntary standards that often result in certification, and (3) the profession has an accepted code of conduct or ethics. The profession of Event Leadership meets each of these qualifications.

Let us explore further the definition of Event Leadership. The term public assembly means events managed by professionals who typically bring people together for a purpose. Although one person can certainly hold an event by him- or herself, arguably it will not have the complexities of an event with 10 or 10,000 people. Therefore, the size and type of group will determine the level of skills required by a professional Event Leader.

The next key word is purpose. In daily lives, events take place spontaneously and, as a result, are sometimes not orderly, effective, or on schedule. However, professional Event Leaders begin with a specific purpose in mind and direct all activities toward achieving this purpose. Event Leaders are purposeful about their work.

The third and final key component consists of the four activities that represent these purposes: celebration, education, marketing, and reunion.

Celebration

Celebration is characterized by festivities ranging from fairs and festivals to social life-cycle events. Although the term celebration can also be applied to education, marketing, and reunion events, it serves to encompass all aspects of human life where events are held for the purpose of celebration.

When one hears the word celebration, typically one has an image of fireworks or other festivities. In fact, the word celebration is derived from the Latin word celebro, meaning "to honor." Another commonly accepted definition is "to perform," as in a ritual. Therefore, celebrations usually refer to official or festive functions such as parades, civic events, festivals, religious observances, political events, bar and bas mitzvahs, weddings, anniversaries, and other events tied to a person's or organization's life cycle or of historical importance.

Education

From the first event in preschool or kindergarten to meetings and conferences where many adults receive continuing education throughout their entire adult lives, educational events mark, deliver, test, and support growth for all human beings. This growth may be social, such as the high school prom, or it may be professional, such as a certification program. Regardless of the purpose, a school public assembly may be primarily or secondarily educationally related.

(Continues...)

 
 
 
 
 
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A Lesson Worth Learning

D.R. U.S. versionThe Daily Reckoning U.S. Edition Home . Archives . Unsubscribe
More Sense In One Issue Than A Month of CNBC
The Daily Reckoning | Saturday, September 3, 2011

-------------------------------------------------------

  • The aftermath of political stupidity left in Irene's wake,
  • More on what Hell or what Heaven, if any, do we men deserve?
  • Plus, all this past weeks issues, neatly archived for your labor- less weekend reading...
-------------------------------------------------------

URGENT Crisis Alert: Where's the Bottom of this Market Correction?

Trillions in wealth has vanished from the stock market in the past month. Europe's on the brink of economic collapse. China's growth is slowing down.

Making matters worse, banks around the world scramble to avoid complete failure (again!) And the US public has finally stood up to years of reckless federal spending...

How do you beat it all? Watch this right now for the answer. Hurry — time is short.

Dots
A Lesson Worth Learning
Joel Bowman
Joel Bowman
Checking in from Buenos Aires, Argentina...

The lesson of Frederic Bastiat’s “That which is seen and that which is unseen” essay is so important that most modern economists have gone out of their way not to learn it. Chris Mayer, editor of Capital & Crisis, revisited this timeless piece of wisdom in the aftermath of Hurricane Irene...and the debris of political stupidity it left in its wake.

Your managing editor couldn’t explain it any better than the always- thoughtful Mr. Mayer...so we’re not even going to try. Here’s Chris’s essay, our feature column of the week.

[This week’s feature essay was originally published in The Daily Reckoning on Wednesday, August 31, 2001.]

Dots
The Daily Reckoning Presents
The Broken Window Fallacy
Chris Mayer
Chris Mayer
So hurricane Irene is over with, but it didn’t take long for economic commentators to make fools of themselves.

David Kotok is the chairman and chief investment officer of Cumberland Advisors. He was on the radio with Larry Kudlow, who asked him about the economic impact of Irene. Kudlow noted how Irene tracked over 1/10th of the nation’s economic output. Here is Kotok writing about it to his investors afterward about Cumberland’s response:

“We are now upping our estimate of fourth-quarter GDP in the US economy. Billions will be spent on rebuilding and recovery. That will put some people back to work, at least temporarily. We speculate that Washington may set aside the usual destructive and divisive partisan political wrangling and act in the interest of the nation. That means there will be a flow of federal financial assistance to the disaster areas.”

This is horrible, horrible reasoning. It is the old broken window fallacy, which we see trotted out by otherwise intelligent people anytime there is a natural disaster. These people say that destruction is an economic boost, as we busily rebuild what was lost.

It’s a shame people continue to repeat this. The great economist Frederic Bastiat killed this idea decisively in an 1850 essay, “That Which Is Seen and That Which Is Unseen.” It remains a classic essay on economic reasoning.

In his usual witty manner, Bastiat wrote a parable about a boy who breaks a window. The “seen” is the glassmakers who have new business they didn’t have before. That’s what people like Kotok focus on. But as Bastiat wrote:

“It is not seen that as our shopkeeper has spent 6 francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his 6 francs in some way, which this accident has prevented.”

Kotok’s point about federal assistance is particularly depressing, because he seems unable to recognize that this is simply money taken from someone else.

Please don’t fall for the broken window fallacy. And please correct anyone you hear using it. It seems the first step in basic economic literacy. Hurricane Irene was a dead loss for the economy. Period.

By the way, Frederic Bastiat is an old favorite of mine and was influential in shaping my economic views early on. I have a handsome two-volume collection of his works, put out by the Ludwig von Mises Institute. I highly recommend the set for anyone looking for sound logic applied to economic questions. Bastiat is enjoyable to read and not like any economist you’ve ever read.

Our friends at Laissez Faire Books will take 20% off Political Economy — collected Bastiat essays — including “That Which Is Seen and That Which is Unseen.”

Claim your discount by going to this link.

For those not inclined to read that much, I recommend Henry Hazlitt’s Economics in One Lesson. Hazlitt devotes a whole chapter to the broken window fallacy. His book is my No. 1 recommendation for anyone looking to learn the key ideas of economics. It’s a classic.

Laissez Faire Books will give you 20% off when you go here.

Now, let’s turn our attention to the volatile stock market...

The market is rallying off its recent lows. This rebound is surprising if you focus on the bad economic news and the potential for another recession. But it’s not surprising if you look at stocks compared with what else you might do with your money.

A couple of weeks ago, I wrote about how “relative to Treasuries, stocks haven’t been this attractive in more than 30 years.” Shortly after the panic, lots of money came out of the market and went to Treasuries. It was a tidal wave of money, which pushed the short- term T-bill negative for a brief moment. But it would be irrational to stay there for long, given where stocks are.

James Bianco, of Bianco Research, added to that thesis in a report to clients. His chart shows price-earnings ratios for the last half- century, along with his projection of 2011 earnings. Take a look:

The Price to Earnings Ratio of the S&P 500

“Low rates benefit p/e (price-earnings ratios) more” than slowing economic growth hurts them, Bianco maintains. Based on the 10-year Treasury rate of 2.2%, he thinks fair value for the S&P 500 would be at least 14 times earnings. That’s 1,358 on the S&P, which would mean a 13.5% rise from here.

Of course, you could poke holes in this a few different ways. Interest rates could rise. And earnings could fall. So far, neither has happened. Corporate profits for the first half of the year have been strong, for example.

I find the above interesting, but I don’t really care all that much either way. In my investment letters, Capital & Crisis and Mayer’s Special Situations, I never recommend “buying the stock market.” I recommend buying specific stocks. Specific businesses. And I look to hold onto them and not trade them. I will use the market to add to or sell when prices suit me. But otherwise, I let the market do what it will do.

Still, it can be helpful sometimes to have a sense for the backdrop on the overall market. In the late 1990s, it helped to understand the market was frothy. By 2000, it made no sense at all, with even ho-hum companies like Coca-Cola commanding a price-earnings ratio of 50 times. It helped to know in the late 2000s that there was a housing bubble. It meant you skated around banks, real estate and housing stocks.

Today, though, there are no such extremes in the stock market as a whole. I think the market is in some gray middle area — neither cheap nor dear.

Regards,

Chris Mayer,
for The Daily Reckoning

Joel’s Note: It is exactly this kind of patient, rational, non- “modern economist” thinking that has led Chris to the kind of success he and his readers have enjoyed in both Capital & Crisis and Mayer’s Special Situations. His next investment alert is due out this coming Friday. Find out how to get yourself on his mailing list here.

Dots
Who gives a damn about America’s credit rating?

I’m SICK of hearing about Keynesian vs. Austrian, fiat currency vs. Gold, US credit ratings and other BORING economic theories you have ZERO control over.

“WHO CARES!?”

Truth is, if you want to make money in the markets, none of that stuff even matters!

Let me prove it to you by showing you.

Dots
ALSO THIS WEEK in The Daily Reckoning...
33,500 Reasons to Like Aircraft Suppliers
By Chris Mayer
Gaithersburg, Maryland


You know how high oil prices tend to create boomlets in certain businesses? Alternative energy, small car manufacturers and the like get a boost. Aircraft suppliers may also see a boost. Fuel is the largest expense for the airline industry — at 30% of operating costs. And the airline industry faces pressures to cut costs. Recently, the Air Transport Association forecast that the airline industry would make $4 billion this year, down 78% from last year. So there is pressure (again) to cut costs.


2008, Redux
By Byron King
Pittsburgh, Pennsylvania


Who says there’s no such thing as time travel? It’s starting to feel like the fall of 2008 all over again. Indeed, the demons of 2008 are like those characters you see in the Halloween horror movies. You can kill and bury the monsters, but a few scenes later, they reappear.


The “Good Fed” and Other Fairy Tales
By Eric Fry
Laguna Beach, California


“World stock markets rallied on Wednesday,” the Associated Press explains, “as investors hoped that the Federal Reserve would respond to mounting signs of weakness in the global economy by providing more stimulus to the US economy.” In other words, the worse the outlook for the economy, the brighter the prospects for the stock market.


Political Promises and Wall Street Tripe
A WBAL Interview with Addison Wiggin


“They [Daily Reckoners] have experience with the real world, so they’re looking for ways to manage their own money primarily, but they’re skeptical of political promises and even the kind of tripe that we get from Wall Street from time-to-time.”


Dots
The “Lost” Gold Bible Congress Never Wanted Anyone To See

“Locked away” for almost 3 decades. Kept virtually secret...until now.

You’ll soon discover why all the secrecy surrounds this book...and why it would to your great benefit to read this book now.

Click here to read more.

Dots
The Weekly Endnote...
Today’s reader mail is a little longer than usual...but so is your weekend, so stop complaining. This delightful musing comes from reckoner “Bill D.” We’re not sure if Mr. D. wishes his name to be shared or not, so we’ll err on the side of caution. All the same, a fantastic essay awaits. Please enjoy...

Thanks for some very interesting articles on economics and gold. First, I’ll address the issue raised by your question “What Hell or what Heaven, if any, do we men deserve?” The issue is not what we men deserve, it’s what basic economics dictates we will get. So what does basic economics dictate?

IF we continue down the present fraudulent money creation road, a return of another dark age is inevitable. Sounds really radical huh? Let’s examine a little basic economics and history and see if such a conclusion is justifiable.

When money is created without a corresponding increase in commodities, prices rise. This is because prices in the long run are determined by the ratio of the quantity of money to the quantity of commodities. This is usually expressed in such ratios as dollars per pound of potatoes. For example when the quantity of money increases but the quantity of potatoes is kept the same, it will take more dollars to buy a pound of potatoes. This is known as the quantity theory of money, which is explained in detail in Ludwig von Mises book “The Theory of Money and Credit.” As Professor Mises explains, other factors, such as the subjective theory of value, also affect prices on a short term basis, but long term, the quantity theory holds. Next let’s apply this well known relationship between money and commodities to present day monetary policies.

The Federal Reserve System (FED) has been creating fraudulent money ever since it went into operation in 1914. Between 1914 and 1920, wholesale prices increased 126.7% (see “Economics And The Public Welfare” by Dr. Benjamin McAlester Anderson, economist for the Chase National Bank from 1920 to 1939). Why? Because the quantity of money in circulation increased faster than the quantity of commodities. Of course the destruction of commodities during WWI didn’t help.

The “roaring twenties” were fueled by FED created money and it didn’t end with the 1929 crash. Here are statements made during hearings of the House Committee on Banking and Currency, September 30, 1941. Eccles was Chairman of the Federal Reserve Board at the time of these hearings.

Congressman Patman: “How did you get the money to buy those two billion dollars worth of Government securities in 1933?

Governor Eccles: “Out of the right to issue credit money.”

Patman: “And there is nothing behind it, is there, except our Government’s credit?”

Eccles: “That is what our money system is. If there were no debts in our money system, there wouldn’t be any money.”

Of course fraudulent money creation by the FED continued during WWII and has never stopped. The focus of attention seems to be on money creation to fund government debt, but this is only the tip of the iceberg. The money created by the banks to fund private, public and business debt is purchasing power that drives prices higher. When banks approve a loan, the debt created is used to purchase things and is therefore a demand on commodities, domestic and foreign. Thus Eccles was absolutely correct, debt is our money system and when it’s included in the money supply the numbers make $9 trillion look like penny ante.

Since creation of the FED on December 23, 1913, enormous amounts of this fraudulent money has been created, large sums of which are being held by foreigners. For example foreigners hold more than $8 trillion due to the trade deficit alone. This does not include foreign aid to 158 out of 192 countries in the world, or bank loans to third world countries, or dollars (or claims to dollars) loaned to foreign countries through the IMF. The IMF has estimated that there are close to $200 trillion in derivatives held by banks and investment firms — where did that money come from? There is only one entity in the United States that can legally counterfeit money, it’s called the Federal Reserve System.

When new money is created which is not backed commodities, it drives prices up as described above. The next time the FED, or politicians, want to “stimulate” the economy, they must pay the higher prices caused by the previous money creation. This process continues until such enormous amounts of money are being created, and its purchasing power is dropping so fast, that no one will accept it in exchange for commodities any more. IF that happens, the U.S. will return to the barter system. Now can you even imagine what this country will be like on a barter system?

This is not some phantasy tale, it’s exactly what happened to France between 1789 and 1796 and to Austria and Germany in 1922 and 23. From a basic economics viewpoint it’s also what happened to Rome, except they didn’t do it with printing presses and paper money. They did it by alloying cooper with the silver denarius until it lost 98% of its purchasing power and Emperor Diocletion (284-305 A.D.) was minting 300-pound bags of copper coins.

In one month, the month of November, 1923, German printing presses churned out 397quintillion 833 quadrillion marks in the process of “furnishing credit.” (A quintillion is a 1 with 18 zeros behind it) In the closing months of 1923, Germany reverted to a barter economy.

But neither France, Austria nor Germany collapsed into a dark age like Rome. Why? Because they were isolated cases and there were other countries surrounding them with whom they could trade and dig themselves out of a hole. In his book “When Money Dies”, Adam Fergusson gives this account of the salvation of Austria in 1922:

“Refusing to await supinely the approach of ruin, Dr. Seipel at last resolved to trade part of his country’s independence in return for its survival at all. 'Now was seen’ said one commentator, 'the hitherto unparalleled spectacle of an Austrian Chancellor touring Europe offering his country to the highest bidder.’”

But Rome was an empire and the coin of the realm was the denarious. When Rome fell the Empire fell and there was no one to bail out Rome. Here’s a few quotes that illustrate the dire conditions that brought Rome to its knees.

From “Caesar and Christ”, a history of Rome by historian Will Durant:

“As the state had not yet discovered the plan of public borrowing to conceal its wastefulness and postpone its reckoning, the cost of each year’s operations had to be met from each year’s revenue. To avoid returns in depreciating currencies, Diocletion directed that, where possible, taxes should be collected in kind: taxpayers were required to transport their tax quotas to governmental warehouses, and a laborious organization was built up to get the goods thence to their final destination. ... Since every taxpayer sought to evade taxes, the state organized a special force of revenue police to examine every man’s property and income; torture was used upon wives, children, and slaves to make them reveal the hidden wealth or earnings of the household; and severe penalties were enacted for evasion.”

From “Legacy of Freedom” by George Charles Roche III, former President of Hillsdale College:

“... the receivers of taxes began to be more in number than the payers, so that by reason of consumption of husbandmen’s goods and by the excess of land taxes, the farms were left waste until the lands turned into forest ...

“... when by various evil deeds he (Diocletion) caused a prodigious scarcity, he essayed by law to fix the prices of goods in the market. Then much blood was shed for trifling in faulty wares, and through fear nothing appeared in the market ...”
This last quote is from an eyewitness account by Lactantius, a teacher of rhetoric appointed by Diocletion.

When government consumes most of the people’s production and they stop producing, there’s nothing to support government and it collapses into anarchy and eventually a dark age. This is exactly what happened to Rome and we are following in Rome’s footsteps. IF we continue, the result will be the same because we are also an empire and there will be no one big enough to bail us out. Furthermore, the rest of the world will be in essentially the same condition.

This will raise a question of timing — how long will it take for this to happen? I don’t profess to know, but I would be astounded if it takes more than 30 more years. The economy is in much worse shape than most seem to realize.

Isn’t China the bright star of the future? Absolutely not! China is still a Communist country and communism is simply an advanced stage of socialism. Anyone who has read Professor Mises’ book “Socialism” knows that it is an inherently self-destructive system that can not survive.

Yes, it’s presently putting on quite a show to distract the world from the underlying rot, but it will fail. Socialism consumes wealth, it does not produce it. It should be remembered that Russia put on a similar show in the late 20s and early 30s while six million people were starving to death. As Mises proved in his book, calculation is impossible under pure socialism and if you can’t calculate, you can’t plan. If you can’t plan, natural resources are distributed by official edicts, which consume more than they produce. Obviously, consuming more than is produced will destroy the economy of a country; we don’t have to visit China to find that out, we can watch it happening at home.

Regards,

Bill D.
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Joel Bowman
Managing Editor The Daily Reckoning

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