http://www.opednews.com/…

Something very serious is now developing in Russia. This is described in Yevgeny Kiselyov’s article “Don’t Talk to Strangers or Foreigners,” published on December 20, 2008–in the English language newspaper The Moscow Times. The author writes:

“Under a new amendment to the law on treason, which was sent to the State Duma on Dec. 12 for approval, I could get 12 to 20 years in prison for the article you are about to read. The changes would give authorities extremely wide latitude to interpret what constitutes treason. This is how the old definition of treason reads: ‘a hostile act directed at damaging the external security of the Russian Federation.’ If the Duma approves the new amendment, the phrase ‘hostile act’ would read simply ‘act,’ and ‘external security’ would be broadened to ‘security.’ In addition, treason would also include the following activities: ‘rendering financial, technical, consultative or other assistance to a foreign state, international or foreign organizations or their representatives in activities directed against the security of the Russian Federation, including its constitutional order, sovereignty and territorial and state integrity.’
. . . Human rights advocates are in shock. The definition of an ‘act’  of treason is so loosely defined that prosecutors and law enforcement agencies can interpret it any way they see fit. Moreover, even inactivity could qualify as an ‘act’ of treason. Imagine that a journalist or political commentator submits to the foreign press an article that criticizes the constitutional amendment to extend the presidential term from four to six years or expresses the same idea to a foreign diplomat during an embassy reception. That could easily qualify under the new law as consulting a foreign organization on a subject directed against Russia’s ‘constitutional order.’ And what if a person, after finding out that his fellow citizen has established a ‘suspicious contact’ with a foreigner or foreign organization, fails to inform the police or Federal Security Service in a timely manner about the suspected traitor? His failure to act would also make him guilty of high treason under the new legislation.”

How can one resist thinking about the Soviet Union under Stalin? In late 1930’s, many innocent people were killed as spies, as mentioned in (1). Referring to that period, Kiselyov  wrote:

“I can’t help but be reminded of Dec. 1, 1934 — the black date in Russia’s history that marked the beginning of Stalin’s Great Terror. That was the day Politburo member Sergei Kirov was murdered under circumstances that even today remain unclear. Kirov was Stalin’s closest associate and the only person who could have become a serious rival for head of state under the right circumstances.

On that same day, a law was passed that made the legal prosecution of ‘enemies of the people’ as simple and powerful as a gunshot to the head: The investigation could last not more than 10 days; the list of charges was given to the defendant not more than one day before the trial; cases were heard in absentia, without the prosecutor or the defendant present; the verdict was final with no opportunity for appeal or clemency; and verdicts requiring execution were carried out immediately.

Of course, today’s Russia is a long way from Stalin’s repression. But it is obvious that the authorities are frightened by the scale of the crisis — the financial losses, the sharp drop in industrial output and oil prices, the impending rise in unemployment, high inflation and the general social unease. It is equally clear that the authorities are considering various possible responses — including harsh repressive measures against opposition speeches and protests by citizens.”

There is a brave attempt to prevent the Duma from approving changes proposed by the government. But will it be successful? That remains to be seen. On a Russian website (2), I am reading an appeal, signed by twenty eight opponents of proposed legislation. They write: “we appeal to politicians and social activists, to civil servants and representatives of ‘ordinary people,’ and to intellectuals,the  to oppose the approval of laws which are, in spirit, Stalinist-Hitlerian. It is our right and obligation to appeal to people of Russian Federation directly, in order to stop another 37th year.”  The 37 is a reference to the height of Stalinist terror in 1937. Interesting observations, on the same subject, can be seen at (3).

Even H.R. 1955 isn’t that vague.

http://www.marketwatch.com/…

Japan’s Nikkei 225 Average sank 9.6% to end at 7,649.08, a closing level it hasn’t seen since April 29, 2003. The benchmark is now valued at less than a fifth of its all-time high of 38,915.87, which it touched in December 1989.

“There is a complete loss of confidence and it was brought on by the decline in Japan,” said Francis Lun, general manager at Fulbright Securities in Hong Kong. “We are going back to the stone ages.”
South Korea’s Kospi index dropped even more, plunging 10.6% to close at 938.75, registering its first fall below the 1,000-point level since June 30, 2005.

India’s Sensitive Index hit the day’s bottom at 8,566.82, a level it hasn’t seen since November 2005, before ending down 11% at 8,701.07.

During the tumultuous week, the Nikkei lost 12% and the Sensex shed nearly 13%, while the Kospi sank more than 20%.

Hong Kong’s Hang Seng Index, which ended below the 14,000-point level a day earlier, fell past even the 13,000 milestone during the session for the first time since October 2004. The index ended down 8.3% at 12,618.38.

“I don’t think the turmoil will be finished any time soon. I think it’ll continue this quarter and the next. It’s very difficult to see the bottom in the near-term,” said Hirokazu Yuihama, head of regional strategy at Daiwa Institute of Research in Shanghai.

http://money.cnn.com/…

U.S. stock futures tanked early Friday as fears of recession deepened a global market rout.

Dow Jones industrial average futures were down more than 500 points at 5:30 a.m. ET. S&P 500 and Nasdaq 100 futures were also down sharply.

Oil. Also, the Organization of Petroleum Producing Countries, which controls 40% of the world’s oil supply, announced on Friday that it would cut production by 1.5 million barrels a day, from its current level of 29 million.

OPEC had intended to raise prices by reducing production. But after the announcement, oil prices dropped $3.24 a barrel to $64.60 in electronic trading.

And the likely next president wants to increase spending, increase taxes, create makework projects and his party is talking about getting rid of 401k’s. Not that the other asshat is much better… but…

Just read America’s Great Depression [PDF]… I say it a lot but it is really important information to know.

I’ve gotten 2 people at where I work to read The Case Against the Fed. One of them told me it was likely the most depressing book he’s ever read. Implying his agreement with the books prime argument he said that the reason for his negative feeling was due to the fact Rothbard’s solution will never be implemented or even considered. Just yesterday I traded info on books with another coworker who may now be checking out The Case Against the Fed and/or America’s Great Depression. This is the opportune time to speak about this topic to people. Take advantage of it if you can.

http://ap.google.com/…

President Raul Castro warned Cubans on Friday to prepare for a “realistic” brand of communism that is economically viable and does away with excessive state subsidies designed to promote equality on the island.

Addressing Cuba’s parliament in its first session since lawmakers selected him to succeed his older brother Fidel in February, Raul Castro announced no major reforms, but suggested that global economic turbulence could lead to further belt-tightening on the island.

“Socialism means social justice and equality, but equality of rights, of opportunities, not of income,” the 77-year-old president said in a speech that was taped and later aired on national television. “Equality is not egalitarianism.”

That sentiment marks a break with his brother, who spent decades saying Cuba was building an egalitarian society. But the new president nevertheless ended by proclaiming he had “learned everything” from Fidel, drawing a standing ovation.

Since succeeding his brother, Raul Castro has authorized Cubans to legally purchase computers, stay in luxury hotels and obtain cell phones in their own names. His government has raised some salaries and done away with wage limits, allowing state workers to earn more for better performance.

Cuba’s rubber-stamp parliament convenes for only for a few hours twice a year and rumors were rampant that Friday’s session would see an easing of restrictions on travel abroad or a strengthening of wages by increasing the value of the peso, worth about 21-1 against the U.S. dollar.

The government controls well over 90 percent of the economy and the average salary is just 408 pesos per month, US$19.50, though most Cubans get free housing, health care, education and ration cards that cover basic food needs.

Castro said that in “the matter of salaries, we’d all like to go faster, but it’s necessary for us to act with realism.”

“The situation could even get worse,” he said of the global economy. “We will continue to do what’s within our reach so that a series of adversities have less effect on our people, but some impact is inevitable in certain products and sectors.”

Economy Minister Jose Luis Rodriguez said this week that skyrocketing global food and oil prices would cause “inevitable adjustments and restrictions” for Cuba’s economy.

Castro said he supported a proposal to gradually push back the retirement age five years, to 65 for men and 60 for women. The move, which parliament plans to vote on in December, is part of an effort to soften the blow of a disproportionately elderly work force.

Castro acknowledged shortages that plague Cubans, but said “we have to be conscious that each increase in salary that is approved or price that is subsidized adhere to economic reality.”

He also shot back at U.S. officials who have dismissed the small changes he has overseen in Cuba as meaningless.

“Faced with the measures adopted lately in our country, some official in the United States comes out immediately, from a spokesman to the president, to brand them ‘insufficient’ or ‘cosmetic,’” Castro said. “Although no one here asked their opinion, I reiterate that we will never make any decision, not even the smallest one, as a result of pressure or blackmail.”

For the fourth straight parliamentary session, Raul Castro sat next to an empty chair set aside for his ailing brother.

The elder Castro, who turns 82 next month, has not been seen in public since undergoing emergency intestinal surgery in July 2006.

Interesting indeed.

http://www.fortbendnow.com/…

In the face of $4 per gallon gasoline and predictions the price will rise to $7 by the end of summer, Congressman Ron Paul (R-Lake Jackson) is calling on Congress to explore how the weakened value of the dollar may be contributing to the rise in oil prices.

Paul, whose 14th Congressional District of Texas includes part of the Katy area and much of Cinco Ranch, said he wants Congress to hold hearings on the relationship between the falling value of the dollar and the recent rise of oil prices.

As ranking member of the House Subcommittee on Domestic and International Monetary Policy, Paul sent a letter earlier this week to Rep. Barney Frank (D-Mass.), chairman of the House Financial Services committee, asking for the hearings.

“The price of oil is currently among the most pressing issues to American workers,” Paul said. “Congress should be examining all factors contributing to the high cost of oil, and monetary policy is one of the key factors in the run-up in price.”

Paul’s letter pointed out that the price of oil in dollars has risen 39 percent this year. Oil in Euros has only risen 30 percent, resulting in degraded purchasing power of the dollar of at least 80 cents of the increased price of a gallon of gas.

“Neither the Federal Reserve nor the Treasury Department have been willing to take responsibility for the dollar’s slide over the past several years, while American consumers have been forced to pay continually higher prices for gasoline, heating oil and numerous other imported products upon which Americans depend,” Paul noted in his letter. “American consumers cannot afford to allow continued lax Congressional oversight of the Federal Reserve and the Treasury Department’s duties as stewards of the dollar, especially since the dollar is a major factor in the skyrocketing price of oil.”

Besides himself, 16 other Members of Congress signed on to the letter, including ranking member of the House Committee on Financial Services Spencer Bachus, and Chairman of the Republican Study Committee, Rep. Jeb Hensarling.

Hopefully DownsizeDC will get something going on this. If anything this could be an educational tool for those who would be participating. The more congress critters who understand economics, even a little bit, the better.

http://www.cato-at-liberty.org/…

Politicians who blame “speculators” in futures markets for the run up in oil prices — such as Sen. Byron Dorgan (D-N.D.) writing in this morning’s USAToday — should consider a lesson from the lowly onion.

Onions are one of the few commodities in the United States for which there are no futures markets, according to an item published Friday in Fortune magazine. (Futures markets allow the sale of commodities for set prices at future dates.) It seems that in the late 1950s domestic onion producers blamed those same speculators in futures markets for driving onion prices DOWN. They successfully lobbied Congress to ban all futures trading in onions, a ban that is still in place a half century later.

So has the absence of futures-market speculation kept onion prices low and stable? Quite the contrary. According to Fortune:

And yet even with no traders to blame, the volatility in onion prices makes the swings in oil and corn look tame, reinforcing academics’ belief that futures trading diminishes extreme price swings. Since 2006, oil prices have risen 100%, and corn is up 300%. But onion prices soared 400% between October 2006 and April 2007, when weather reduced crops, according to the U.S. Department of Agriculture, only to crash 96% by March 2008 on overproduction and then rebound 300% by this past April.

Sen. Dorgan and his allies will need to find someone else to blame for volitale and rising oil prices.

Isn’t this what serious economists, especially the Austrians, have been saying for perhaps 100+ years yet the politicians continue to use speculators as the scapegoat for many of the problems they instigated.

Record prices have prompted a slew of bills to curtail the role of investors, but traders say they could backfire:

NEW YORK (CNNMoney.com) — Fed up with soaring oil prices and a chorus of people blaming Wall Street speculators, Congress is considering a host of rules aimed at limiting the inflow of investor money into oil contracts.

But oil traders urge caution. While more disclosure is a good thing, they say making it harder for speculators to invest in oil futures could have the opposite effect intended, and send prices higher.

In light of oil’s phenomenal climb from under $50 a barrel to nearly $140 in less than 18 months – and the public belief that Wall Street traders were behind the rise – Congress is awash in bills that attempt to limit the role of speculators. Several have bipartisan support and could soon become law.

“In two days, the price of oil rose $16,” said Sen. Richard Durbin, D-Ill., at a joint hearing of two Senate panels on oil speculation Tuesday. “Did I miss something, was there some war in the Middle East?”

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