Heinz was up late last night
@NSU's Bisha project -- trotsky, 23:06:15 09/22/06 Fri
it is worth one's while to take a look at the Bisha 3-d model at the company's web site and the reserves/resources estimates. it seems nearly impossible for this project not to be noticed by the mining majors. it's not only huge, but one of the highest grade polymetallic deposits found in recent years. amazingly, it is not only extremely high grade gold, copper and zinc, it's also beginning right at the surface. this is the type of deposit that features in geologist wet dreams. its value is by no means reflected in NSU's share price, which is why it appears highly likely that a bid for the entire company will eventually materialize. at the current share price, the Tabakoto mine is reflected, but not much more.
mudturtle@eating the seed corn -- trotsky, 22:53:04 09/22/06 Fri
too true - this is actually what the massive dissaving by US households as well as the US government these days amounts to (i don't want to exclude similar trends in the EU, they are just more pronounced in the US. Germany is e.g. still a country of savers). it guarantees that living standards will eventually fall, at first imperceptibly, but eventually it will become obvious. exempted from this paradigm are only the trough-feeders who are closest to the source of fiat. it is as Mises has said - 'increasing the supply of money does not confer a benefit on society as a whole'. it does however confer a benefit to certain groups, and they are naturally the groups that have an iron grip on maintaining the status quo. meanwhile, the sheeple are held at bay via illusory phantom wealth, 'created' in the form of various asset bubbles.
re. holdem - i'm an avid chess player, and recently got interested in poker because so many professional chess players have taken it up on the side. i figured there must be something to it, and there is. it has an element of luck, but mostly it is a game of remarkable strategic depth with interesting psychological aspects and based on a solid mathematical foundation. i admit though that while it can be quite entertaining, chess still interests me a lot more. funny enough, i'm probably better at playing poker these days than i am at chess. i mostly play chess via e-mail, to have time to analyze the positions in depth. i make about one to two moves per week. poker is a lot faster. -vbg-
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# mozel@time value -- trotsky, 22:04:45 09/22/06 Fri
you should really take the time and read the article i posted the link to - it should then become clear. even if we assume a fixed supply of money, it is necessary to charge interest if borrowing and lending is to occur. naturally, with a fixed supply of ,say, gold money (or more realistically, a very slowly increasing supply of such gold money, so that it can be regarded as nearly fixed), such interest rates would be very small. look at current gold lease rates to get an idea - they properly reflect the fact that the supply of gold is increasing only very slowly over time, and that it is impossible for gold to default. what happens when the supply of money is fixed is that its value increases over time - i.e. its purchasing power keeps rising, as all productivity increases directly lead to falling prices. the interest rate reflects the fact that present goods are differently valued than future goods - their value is obviously higher. note that money only is a stand-in for capital. the wealth created by the investment of the loan is not 'money' , but more future goods. money is not equal to wealth. thus a capital good to be bought with the loan actually sells at a disount to its future earnings stream, provided everything goes well with the investment. a part of this discount is paid by the borrower in the form of interest.
in our present fiat money system the interest is of course comparatively large, since the constant devaluation of the money must be considered as well. this creates uncertainty and a lot of misdirection of capital. it creates all manners of incentives that are inimical to the creation of wealth. however, that is a different subject.
for our debate, the most important point is that the savings which can be invested via the lending mechanism are in fact real goods. money only is a placeholder for such real goods. since the investment will create more future goods than the interest charged (in terms of real goods) on the savings that are lent, the hypothetical 'but there can never be enough money to pay all this interest' is not applicable.
there is an agio on the savings that are lent (interest) and a disagio on the capital good that will produce future goods -i.e. it costs less to purchase the capital good than the sum of its future earnings stream amounts to - including interest.
@the magic of Bush at work -- trotsky, 17:34:23 09/22/06 Fri
"another $70 billion (that's billion, with a 'b') to be wasted on Iraq, Afghanistan"
let's see, the record so far:
the reputation of the US in tatters , thousands of new mortal enemies created, the army dysfunctional, countless people on both sides of the conflict killed or maimed for life, TWO failed states created, an entire vital region destabilized - and all of this for a mere $500 billion! (SO FAR that is, and not counting out-of-sight sub rosa money spent).
one of the worst presidents of all time, no doubt about it. soon we will start yearning for Nixon. that guy at least could talk, even if he was an inept crook otherwise.
seattletimes.nwsource.com
mozel@interest -- trotsky, 16:32:02 09/22/06 Fri
you are completely wrong on this. i recommend looking at this article, where Boehm-Bawerk's approach is explained. your simplistic 'gold coins don't multiply by themselves' ignores the fact that practically no-one keeps his gold coins (or whatever form of money) under the mattress. that is the only case in which they fail to multiply. on the contrary, capital is almost always employed somewhere.
"For Böhm-Bawerk, the task of the interest theorist was to explain why a capitalist could regularly earn a net return on his financial assets, even though (unlike laborers) he apparently did nothing to "earn" this interest income."
explanation here:
Why Do Capitalists Earn Interest Income?
mises.org
luckily our economy isn't run on your fundamentalist creed - we'd still be stuck in medieval times otherwise.
mozel@interest -- trotsky, 15:51:34 09/22/06 Fri
the fact remains that money has a time value. why would anyone lend money at all, lest they get compensated for it? interest facilitates the transfer of capital from those who have saved it to those who can make profitable use of it. entrepreneurs will only borrow if they expect their use of the borrowed funds to result in profits exceeding the interest rate charged for the loan. without a mechanism to establish the time value of money and time preferences, the economy would come to a standstill.
# @the Vet, 14:03 -- trotsky, 15:20:40 09/22/06 Fri
you certainly make a good point. let's not forget though that the autocratic governments of most Islamic countries are essentially puppet regimes, whose adherence to the principles of Islam is only superficial, aimed at their domestic audiences. why do you think the fundamentalist radicals dream of overthrowing them? funny enough, if the neo-conservative idea of exporting democracy to these countries became a reality, the Islamists would likely gain power all over the show. if they would prove to be more principled than their predecessors is an open question of course.
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# smythe@loans -- trotsky, 15:13:47 09/22/06 Fri
"All else being equal the excessive part of the time value equation charged for volatility and inflation. That reflects the instability of the underlying fiat based free-floating monetary structure and the proceeds accrue overwhelmingly to those closest to the creation of the fiat. Strict Islam does not allow fiat."
i certainly agree with that. you're also not far off the mark w.r.t. your petro-imperialism remark, but i still think that the total ban on interest has hampered the economies of Islamic countries quite a bit. still, as i said, they're getting around this to some extent by charging fees that basically amount to interest these days. it's not the same thing as interest rates however - and that still represents a problem, as interest rates convey crucial information about time preferences. it's true though that the administered rates of our fiat central banks are detrimental to the working of this mechanism. it's not entirely disabled though, as they follow rather than lead market-set rates.
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# smythe & mozel@economizing -- trotsky, 12:26:07 09/22/06 Fri
well, i agree with smythe that the economic fruits of a free market do not depend on a specific religion. that poposition is absurd imo. however, i disagree that Islam's creed has adopted a proper economic model with its ban on 'usury' (which in effect, is a ban on charging interest rates for loans). as Menger and Boehm-Bawerk showed in their work, money clearly MUST have a time value. this time value is expressed as the interest rate, whereby the rate varies according to people's time preferences. by banning this basic economic concept, Islam has in fact condemned its practitioners to forever remaining behind us economically and developement-wise. of course, in modern times, Islamic countries get around the interest rate ban by simply charging interest and calling it something else, so they're now obviating this problem to some extent.
i agree with mozel that State Capitalism is an unsound system inhibiting the workings of the free market. we have discussed the failings of e.g. an administered fiat money system often enough here. whenever people argue along the lines of 'well, look at all the progress we have made under the fiat system in the post WW2 period' they do not think of the unseen effects the system has wrought - iow, they fail to consider how much MORE progress would have occurred in a truly free market. what progress HAS occurred in this period has occurred IN SPITE of the system, not because of it. this is testament to human ingenuity overcoming all sorts of problems, even such fundamental problems as being deprived of a sound basis for economic calculation.
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# @South African gold stocks -- trotsky, 11:44:25 09/22/06 Fri
how much longer can the market ignore the exceedingly strong Rand gold price? anyway, i'm placing a few bets on the SA gold mining shares here.
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# frustrated@GSS -- trotsky, 11:33:17 09/22/06 Fri
i didn't get around to posting timely replies yesterday - anyway, you're right, the damaged shaft is not a producing shaft as it turns out. however, it was mentioned in a report by some brokerage house on the day GSS got clocked so badly, so presumably people mistakenly assumed it was important. obviously the power shortage is a completely different, and far more important issue here.
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