Tag Archives: Crisis

News

Socialist Argentina follows-up runaway inflation with price controls on groceries

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Take a look at this article from the leftist Washington Post, which reports on how the socialists in Argentina have imposed price controls in order to minimize the impact of runaway inflation caused by money printing.

Excerpt:

Argentina announced a two-month price freeze on supermarket products Monday in an effort to stop spiraling inflation.

The price freeze applies to every product in all of the nation’s largest supermarkets — a group including Walmart, Carrefour, Coto, Jumbo, Disco and other large chains. The companies’ trade group, representing 70 percent of the Argentine supermarket sector, reached the accord with Commerce Secretary Guillermo Moreno, the government’s news agency Telam reported.

[…]Economist Soledad Perez Duhalde of the abeceb.com consulting firm predicted on Monday that the price freeze will have only a very short term effect, and noted that similar moves in Argentina had failed to control inflation. Consumers shouldn’t be surprised if the supermarkets are slow to restock their shelves and offer fewer products for sale, she added.

A more effective way to contain inflation would be to “reduce government spending, which is financing an expansion of the money supply, and to have a credible price index.”

Isn’t ironic that the United States is pursuing the exact same policy of printing money and overspending as Argentina has? Excerpt we are a little further along.

So what happens next in Argentina? Zero Hedge explains:

What consumers will certainly do is scramble into local stores to take advantage of artificially-controlled prices knowing very well they have two short months to stock up on perishable goods at today’s prices, before the country’s inflation comes soaring back, only this time many of the local stores will not be around as their profit margins implode and as owners, especially of foreign-based chains, make the prudent decision to get out of Dodge while the getting’s good and before the next steps, including such measures as nationalization, in the escalation into a full out hyperinflationary collapse, are taken by Argentina’s female ruler.

[…]So to summarize: first capital controls, then a currency crisis, then expectations of sovereign default, then a rise in military tensions, and finally – price controls, after which all out chaos usually follows.

Study this sequence well: it is coming to every “developed” country near you in the months and years ahead.

Just to be clear, price controls are a clear signal to suppliers to stop supplying, since they cannot make any money if prices are held low by government decree. Price controls lead to shortages, necessarily.  And that’s what’s in store for Argentina once the private sector food suppliers (and other companies) pull out of there when they can’t make a profit. There are other places they need to be.

Imagine if America elected a charismatic, incompetent fool to run our country like socialist dictators do in Argentina or Venezuela. Imagine if the mainstream media, with their non-quantitative degrees and lack of real-world experience, covered for his every blunder. Where would we be then?

News

Europe is going socialist – what’s the worst that could happen?

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European Debt to GDP and Credit Rating
European Debt to GDP and Credit Rating

From MSN Money.

Excerpt:

European finance officials have discussed as a worst-case scenario limiting the size of withdrawals from ATM machines, imposing border checks and introducing capital controls in at least Greece should Athens decide to leave the euro.

EU officials have told Reuters the ideas are part of a range of contingency plans. They emphasized that the discussions were merely about being prepared for any eventuality rather than planning for something they expect to happen – no one Reuters has spoken to expects Greece to leave the single currency area.

[…]The discussions have taken place in conference calls over the past six weeks, as concerns have grown that a radical-left coalition, SYRIZA, may win the second election, increasing the risk that Greece could renege on its EU/IMF bailout and therefore move closer to abandoning the currency.

No decisions have been taken on the calls, but members of the Eurogroup Working Group, which consists of euro zone deputy finance ministers and heads of treasury departments, have discussed the options in some detail, the sources said.

As well as limiting cash withdrawals and imposing capital controls, they have discussed the possibility of suspending the Schengen agreement, which allows for visa-free travel among 26 countries, including most of the European Union.

[…]Another source confirmed the discussions, including that the suspension of Schengen was among the options raised.

“These are not political discussions, these are discussions among finance experts who need to be prepared for any eventuality,” the second source said. “It is sensible planning, that is all, planning for the worst-case scenario.”

I noticed an article that came out in CNN Money that explained how American households had lost almost 40% of their net worth since 2007 – the exact year that Nancy Pelosi took control of the House and Harry Reid took control of the Senate. The Democrats have been running the European playbook since they took over in 2007. We are just a few steps behind the Europeans thanks to the borrow and spend policies of the Democrats.

News

EPA administrator boasts about crucifying oil and gas firms

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Tom sent me this article from CNS News.

Excerpt:

Sen. James Inhofe (R-OK) took to the Senate floor today to draw attention to a video of a top EPA official saying the EPA’s “philosophy” is to “crucify” and “make examples” of oil and gas companies – just as the Romans crucified random citizens in areas they conquered to ensure obedience.

Inhofe quoted a little-watched video from 2010 of Environmental Protection Agency (EPA) official, Region VI Administrator Al Armendariz, admitting that EPA’s “general philosophy” is to “crucify” and “make examples” of oil and gas companies.

In the video, Administrator Armendariz says:

“I was in a meeting once and I gave an analogy to my staff about my philosophy of enforcement, and I think it was probably a little crude and maybe not appropriate for the meeting, but I’ll go ahead and tell you what I said:

“It was kind of like how the Romans used to, you know, conquer villages in the Mediterranean.  They’d go in to a little Turkish town somewhere, they’d find the first five guys they saw and they’d crucify them.

“Then, you know, that town was really easy to manage for the next few years.”

“It’s a deterrent factor,” Armendariz said, explaining that the EPA is following the Romans’ philosophy for subjugating conquered villages.

Soon after Armendariz touted the EPA’s “philosophy,” the EPA began smear campaigns against natural gas producers, Inhofe’s office noted in advance of today’s Senate speech:

“Not long after Administrator Armendariz made these comments in 2010, EPA targeted US natural gas producers in Pennsylvania, Texas and Wyoming.

“In all three of these cases, EPA initially made headline-grabbing statements either insinuating or proclaiming outright that the use of hydraulic fracturing by American energy producers was the cause of water contamination, but in each case their comments were premature at best – and despite their most valiant efforts, they have been unable to find any sound scientific evidence to make this link.”

We want to be careful with environmental regulations so that we don’t hurt job creators. We need to work to have money, and we shouldn’t have to give up our prosperity in order to make a few bureaucrats feel as if they are “saving the world”.