Archive for the 'Economics' Category
If you follow CNN, you’re almost certainly already aware that, due to a shortage of IP addresses, “the internet might stop working.”
I just wanted to take a moment to make three quick points:
1) The Internet is not going to stop working when we run out of IP addresses. In fact, that whole idea is incomprehensibly dumb.
2) There are PLENTY of IP addresses!!
Okay, get this… There are fewer than 300 million internet users in the world. There are over 4 BILLION IPv4 addresses.
Get it? There are plenty of addresses. The problem is not the number of addresses. The problem is that the crackheads assigning them don’t care whether or not they end up being utilized. What an incredible (and expensive) waste.
3) There is a very simple solution to this that doesn’t involve spending billions of dollars on forcing the world to move to IPv6 before it’s ready:
ARIN should just start reclaiming unused IP blocks.
It’s that simple. It really is.
Ping each IP address, and if there’s no response, check a few ports.
Use that data to create a utilization metric for each IP block.
If the IP block is underutilized, or not used at all, simply recover part or all of the IP block for someone else to use.
That’s it. That’s all that has to be done.
People are idiots.
So here’s the Plain English version of what’s going on, as I understand it.
What You Should Already Know
Everybody knows that the US Government is running a HUGE deficit — like $1.8 trillion so far this year — way more than the average human can fathom. I think it’s also safe to assume that everybody understands that this money is borrowed from other governments, like China, Japan, Brazil, the UK, etc.
So, obviously, the US government has to pay interest on this money that it borrows. It makes these payments by borrowing more money, which results in more interest payments for which even more money must be borrowed, and so on. The cycle continues as the debt increases exponentially.
What You May Already Know
This works fine as long as other countries continue to have an appetite for US debt. However, if they were to decide not to continue buying more and more US debt, the US Treasury would not longer to be able to afford to service its debt and would have to default. Total chaos would ensue, like you can’t imagine. Many banks would be rendered insolvent overnight, mutual funds and ETF’s would be wiped out, corporate and individual savings would be depleted, tons of governments — both foreign and domestic — would instantly go bankrupt, and the $100 trillion T-Bond futures market would be crushed.
But, that will never happen, because this is America, and the rest of the world will always want more and more and more of our debt, no matter how much we create. It’s a risk-free investment, after all!
What Just Happened
So, long story short, it turns out that last week the Treasury started having trouble unloading some of that freshly-created debt. Actually, they couldn’t sell about half of it. But not to worry — Bernanke’s crew quietly stepped in, printed $14 billion out of thin air, and used it to buy up all those bonds nobody else wanted.
That’s an easy quick fix, because most people probably won’t even learn about what happened, but it should send off alarm bells for anyone who has any interaction with the US economy.
See… if nobody wants to buy the US treasury’s debt, they basically have two options: They can default on the debt, which I described above, OR, since the government can print its own money, they can print money like crazy to continue financing their madness.
The latter is what seems to be going on right now. The problem with this is that as they create more new money, the existing money — the cash that’s in your wallet and bank accounts — loses value. Since your money is less valuable, it takes more of it to buy the same stuff. In other words, prices go up. Economists call this “price inflation” for obvious reasons.
All modern governments do this to some degree. This is why prices gradually go up over time. It’s basically a hidden tax.
However, the more the US government inflates the money supply to finance their deficit spending, the faster the US Dollar will lose its value. If this continues, the US economy could enter into a state of hyperinflation, and virtually all of the value of the USD could be wiped out.
This is nothing unprecedented. The US did it back in the 1860′s, Germany did it in the 1920′s, China did it in the 1940′s, Israel did it in the 80′s, and Zimbabwe is doing it today. These are just a few of many, many examples.
I guess the biggest difference is that everyone in the US seems to think it can’t happen here, but apparently it’s starting to slowly unfold.
Stefan Molyneux does a fantastic job of explaining exactly why. It all boils down to the government-enforced monopoly that is the AMA. This is a must watch for anyone who has any interest in the current health care debate.
If you watched Ron Paul’s opening statement and discussion with Bernanke regarding the definition of inflation, I’d encourage you to check out Alan Grayson’s and Bill Posey’s follow-up questions:
Michael Moore has announced that his latest documentary will take on the free market — that is, the freedom to produce, buy, or sell whatever you want, to whomever you want, at whatever prices you want. This is pure evil, of course. Not because it benefits everyone involved, but because it makes some people wealthy. And, according to Michael, that’s a big problem for America.
“The wealthy, at some point, decided they didn’t have enough wealth. They wanted more — a lot more. So they systematically set about to fleece the American people out of their hard-earned money. Now, why would they do this? That is what I seek to discover in this movie.”
This is just dumb. As John Stossel begins to point out, it’s not the private sector that is “fleec[ing] the American people out of their hard-earned money,” it’s the government. Who robs Americans of half of their hard-earned income at gun point every single year? Who counterfeits endlessly to the point of causing massive and widespread malinvestment, job losses, inflation, and depressions? It’s certainly not the private sector. And it certainly has nothing to do with Capitalism.
(Note: This post was authored for the LRC Blog.)
I’m very excited to announce that Dr. Tom Woods, a friend and bestselling author, has finished his new book. Meltdown will explain exactly what really caused the collapse, which economists predicted it and why nobody listened, and why bailouts are the single worst reaction imaginable.
Sometimes I really enjoy watching financial news channels, but it’s not at all because they provide any valuable information. I’m just fascinated by how clueless the talking heads tend to be. If you know better, it’s really amazing to watch. If you don’t know what I’m talking about, just watch this YouTube clip for a perfect example. These guys on TV have no clue at all what’s going to happen in the future, because they have no understanding of what’s going on in the present. People like Tom Woods and Peter Schiff (the guy in the YouTube clip), on the other hand, are students of the Austrian school of economics and therefore have a fundamental understanding of current events that is extremely rare these days. My point is that Tom Woods is uniquely equipped to explain what’s currently going on, and you’re simply not going to find such accurate, insightful analysis anywhere else.
That’s why I’m so thrilled about this book. It’s the one book that has the power to enlighten the masses as to what’s really going on. Don’t be a babbling idiot like the talking heads in the YouTube clip. Pick up a copy of Meltdown and gain a crystal-clear understanding that even most economists don’t have.