02 July 2012

That Most Dangerous Time in the History of a Great Nation


Someone reminded me of this passage from an old history book today. It was a memory of days gone by for me, when I studied Roman history for a whimsical second major in Classics as a bright eyed undergraduate.

People have been comparing the US to the Roman Empire in decline since at least the 1950's. It was a favorite meme of my mother, child as she was of the Great Depression and the Second World War.  And yet we sometimes look back now to that early postwar period as 'the good old days.'

Unstable times bring great risks. A.H. Beesley wrote this history shortly after the First World War, when the flower of Europe had been lost in the trenches and the British Empire was staggered.  Most people are not aware of the foundation of the Roman Republic with the overthrow of the monarchy around 500 BC, and the four hundred year period of the popular consuls, with their own decline, the third servile revolt of Spartacus, and the rise of the princeps, clever politicians and powerful generals, epitomized finally by the dictator, Julius Caesar.

Beesley asks the rhetorical question in 1921 that a Roman citizen might have asked in 70 BC, 'The hour for reform was surely come. Who was to be the man?'

And so, seemingly, here we are again.

Universal degeneracy of the Government, and decay of the nation

Everywhere Rome was failing in her duties as mistress of the
civilised world. Her own internal degeneracy was faithfully reflected
in the abnegation of her imperial duties. When in any country the
small-farmer class is being squeezed off the land; when its labourers
are slaves or serfs; when huge tracts are kept waste to minister to
pleasure; when the shibboleth of art is on every man's lips, but ideas
of true beauty in very few men's souls; when the business-sharper is
the greatest man in the city, and lords it even in the law courts;
when class-magistrates, bidding for high office, deal out justice
according to the rank of the criminal; when exchanges are turned into
great gambling-houses, and senators and men of title are the chief
gamblers; when, in short, 'corruption is universal, when there is
increasing audacity, increasing greed, increasing fraud, increasing
impurity, and these are fed by increasing indulgence and ostentation;
when a considerable number of trials in the courts of law bring out
the fact that the country in general is now regarded as a prey, upon
which any number of vultures, scenting it from afar, may safely
light and securely gorge themselves; when the foul tribe is amply
replenished by its congeners at home, and foreign invaders find any
number of men, bearing good names, ready to assist them in
robberies far more cruel and sweeping than those of the footpad or
burglar'--when such is the tone of society, and such the idols before
which it bends, a nation must be fast going down hill.

A more repulsive picture can hardly be imagined. A mob, a moneyed
class, and an aristocracy almost equally worthless, hating each other,
and hated by the rest of the world; Italians bitterly jealous of
Romans, and only in better plight than the provinces beyond the sea;
more miserable than either, swarms of slaves beginning to brood
over revenge as a solace to their sufferings; the land going out of
cultivation; native industry swamped by slave-grown imports; the
population decreasing; the army degenerating; wars waged as a
speculation, but only against the weak; provinces subjected to
organized pillage; in the metropolis childish superstition, whole sale
luxury, and monstrous vice.

The hour for reform was surely come. Who was to be the man?

A.H. Beesley, The Gracchi Marius and Sulla, 1921


30 June 2012

Lords of Finance: The Bankers Who Broke the World



Liaquat Ahamed, author of Lords of Finance, The Bankers Who Broke the World, discusses the parallels between the Great Depression and the Financial Crisis of today at The American Academy of Berlin.

I concur heartily with Mr. Ahamed on the primary causes of the bubble and collapse, especially with regard to the enormous policy errors of the Greenspan Fed.

But I always find it annoying that the conscious, widespread fraud that was promoted by Wall Street, both in 1929 and in the most recent crisis, is rarely discussed as the major corrupting influence that distorted both economic and monetary policy and the real economy.

I cannot speak to the 1920s, but there is little doubt in my mind that there was a concerted effort to game and corrupt the financial system that gained a major momentum in the 1990s, and that culminated in the financial collapse and economic malaise and instability that is plaguing the world today.

One needs look at the actions of Messrs. Greenspan, Rubin, and Weil, and the political administrations during Clinton and Bush and Obama, to begin to penetrate the veil of secrecy.

The only mania and madness of the people was in trusting the words of demagogues and conmen, and their associated supporters and enablers. And even today people continue to mouth their false slogans and fatal prescriptions.

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained growth and recovery.





29 June 2012

Weekend Reading: You Are Called To a Great Undertaking


“Evil has no substance of its own, but is only the defect, excess, perversion, or corruption of that which has substance.”

J. H. Newman

“We are slow to master the great truth that even now Christ is, as it were, walking among us, and by His hand, or eye, or voice, bidding us to follow Him. We do not understand that His call is a thing that takes place now. We think it took place in the Apostles' days, but we do not believe in it; we do not look for it in our own case.

There is an inward world, which none see but those who belong to it.

God beholds you. He calls you by your name. He sees you and understands you as He made you. He knows what is in you, all your peculiar feelings and thoughts, your dispositions and likings, your strengths and your weaknesses. He views you in your day of rejoicing and in your day of sorrow. He sympathizes in your hopes and your temptations. He interests Himself in all your anxieties and remembrances, all the risings and fallings of your spirit.

He encompasses you round and bears you in His arms. He notes your very countenance, whether smiling or in tears. He looks tenderly upon you. He hears your voice, the beating of your heart, and your very breathing. You do not love yourself better than He loves you.

You cannot shrink from pain more than He dislikes your bearing it; and if He puts it on you, it is as you would put it on yourself, if you would be wise, for a greater good afterwards.

God has created me to do Him some definite service; He has committed some work to me which He has not committed to another. I have my mission -- I may never know it in this life but I shall be told it in the next.

I am a link in a chain, a bond of connection between persons. He has not created me for naught.

I shall do good, I shall do His work. I shall be an angel of peace, a preacher of truth in my own place while not intending it if I do but keep His commandments.

Therefore I will trust Him. Whatever I am, I can never be thrown away. If I am in sickness, my sickness may serve Him; in perplexity, my perplexity may serve Him. If I am in sorrow, my sorrow may serve Him.

He does nothing in vain. He knows what He is about.

He may take away my friends. He may throw me among strangers. He may make me feel desolate, make my spirits sink, hide my future from me -- still He knows what He is about.

Let us feel what we really are--sinners attempting great things. Let us simply obey God's will, whatever may come. He can turn all things to our eternal good. Easter day is preceded by the forty days of Lent, to show us that they only who sow in tears shall reap in joy.

Fear not that thy life shall come to an end, but rather that it shall never have had a beginning.

May the Lord support us all the day long, till the shades lengthen, and the evening comes, and the busy world is hushed, and the fever of life is over, and our work is done.

Then in His mercy may He give us safe lodging, and a holy rest, and peace at last.”

John Henry Newman



Gold Daily and Silver Weekly Charts - End of Quarter Rally After Steady Price Capping


The metals bears were stuffed today as it was risk on all the way.

Let's see how the next week closes now that the second quarter has been put to bed.