Rabu, 11 Januari 2012

Why Bernanke Has Failed (And Will Continue to Fail) ???... >> Recall that the root of "capitalism" is capital. Capitalism requires two fundamentals--capital to invest and open markets for goods and services that openly price risk, assets, hedges and goods.......>>> Note that debt is not listed. Debt is not essential to capitalism. Indeed, if we explore the roots of modern capitalism in the 14th and 15th centuries, we find that commercial credit and hedges were the key ingredients, not debt. Lacking sufficient coinage to handle the rising volume of trade, merchants settled accounts at the great trading fairs in Europe....???

Why Bernanke Has Failed (And Will Continue to Fail) ???



To understand why Federal Reserve Chairman Ben Bernanke's efforts to restart economic "growth" have failed so completely and miserably, we need to compare the present with the end of the Great Depression. There is a wealth of irony in the Chairman's supposed expertise on the Great Depression, as his policies have backfired on "fixing" the Great Recession.
Rather than "fix" the economic malaise by re-inflating the credit-boom bubble, he has only increased the systemic vulnerability to a much greater crash. 
This is akin to an "expert" on World War I recommending a bigger, stronger more costly Maginot Line as the "solution" to military vulnerability.
In the Great Depression, excessive speculation built on systemic fraud and embezzlement led to the implosion of a vast credit bubble.
The "solution" touted then and now by saviors of the Status Quo was to "save" the financial sector and debtors by substituting Federal spending (with the money being borrowed via the full faith and credit of the U.S.A.) for collapsing private borrowing and spending.
This "solution" failed because it refused to address the real problem, which was over-indebtedness in service of mal-investment. People lost faith in the system for good reason--it was fraudulent and opaque, and thus mispriced risk. If you can't price risk or assets, then it's insane to either borrow or invest.
The "solution" to the Great Depression was massive Federal debt and spending on World War II--but the "solution" had a key characteristic that is almost universally ignored.
Depression-era calls to bulldoze homes to be rebuilt and destroy grain so it could be regrown were rightly dismissed as mal-investment on a vast scale. But war is more or less an equivalent "consumer" via destruction. Hundreds of ships were built and then sunk, thousands of aircraft were built and then shot down or lost, and monumental mountains of provisions and supplies were manufactured and then either consumed or lost to enemy submarines, bad weather, rot and a host of other causes. 
At the end of the war, most of the leftover goods manufactured--ships, tanks, aircraft, munitions, etc.--were mothballed or scrapped.
Despite this staggering waste, the war spending launched a long boom. How did it work this magic? One, it constructed new plant; unlike the Keynesian calls to bulldoze houses so they could be rebuilt, the war investment created factories that could then be converted to produce consumer goods. 
More importantly, the war spending created a vast pool of private capital--what we call savings. As resources were diverted to the war effort, rationing limited both the manufacture and availability of consumer goods. Meanwhile, tens of millions of people were put to work, either in the Armed Forces or in the war manufacturing sector, and most had few opportunities to spend money. Industrialists also piled up war profits.
Though extend-and-pretend policies did not write off the overhang of debt that had depressed the economy and destroyed the market's ability to properly price risk and assets, this gargantuan pool of private capital simply overwhelmed the remaining debt overhang. 
Third, trust in the system was restored: the Federal government had effectively "won the war" by printing money and drawing upon the nation's vast surplus of energy and labor, and the manufacturing and financial sectors had been brought to heel by the extraordinary demands of the war and by legislation that had responded to financial fraud and over-reach. 
Recall that the root of "capitalism" is capital. Capitalism requires two fundamentals--capital to invest and open markets for goods and services that openly price risk, assets, hedges and goods.
Note that debt is not listed. Debt is not essential to capitalism. Indeed, if we explore the roots of modern capitalism in the 14th and 15th centuries, we find that commercial credit and hedges were the key ingredients, not debt. Lacking sufficient coinage to handle the rising volume of trade, merchants settled accounts at the great trading fairs in Europe.
Long, risky trade voyages were hedged with the equivalent of options and limited stock companies that distributed risk for a price. Leverage was limited by the transparency and appetite for risk.
Compare that with Bernanke's policies, all of which severely punish savers (i.e. the accumulation of capital) and reward leverage and debt. By lowering interest rates to zero, Bernanke has imposed the opposite of the World War II experience of forced savings--he has made cash into trash and pushed everyone into risk assets.
By making credit dirt-cheap and backstopping financial-sector losses (i.e. institutionalizing moral hazard), Bernanke has destroyed the market's ability to discipline mal-investment and openly price risk and assets.
World War II launched a boom precisely because private capital accumulation/savings were enforced; when the war ended, there was a vast pool of capital available for investment and consumption.
Bernanke's policy is to punish capital accumulation and reward leveraged debt expansion. Rather than enforce the market's discipline and transparent pricing of risk, debt and assets, Bernanke has explicitly set out to re-inflate a destructive, massively unproductive credit bubble.
This is why Bernanke has failed so completely, and why he will continue to fail. He is not engaged in capitalism, he is engaged in the destruction of capital, investment discipline and the open pricing of risk, debt and assets. When the next "credit event" sweeps round the Fed's Maginot Line of encouraging mal-investment and masking fraud and rolls up the entire financial sector's defenses against mispriced risk and credit, Bernanke will be inside the over-run HQ, wondering how his "brilliant" policies could have failed so spectacularly.
*Post courtesy of Charles Hugh Smith at Of Two Minds.
We can understand the systemic flaws in the U.S. "healthcare"/sickcare system by examining how doctors choose to die, which is quite different from the experience of their patients.

Explaining how the U.S. "healthcare" complex is actually a sickcare system is a major theme of this site. Promoting health via lifestyle, diet and fitness is essentially profitless (the equivalent of selling raw carrots) while treating illness, especially chronic illness, is immensely profitable (the equivalent of selling burgers, fries and soda).
The U.S. sickcare system is a partnership of private-sector cartels and the Central State, which diverts 18% of the national income to the cartels.
Sickcare has a wealth of perverse consequences, including "defensive medicine" practiced to avoid malpractice lawsuits, unneeded care provided to increase profit margins, unnecessary procedures and tests, dangerous medications of limited efficacy, massive systemic fraud in the government sickcare programs, and on and on.
But perhaps the most perverse consequence is the needless suffering the system imposes on its patients under the guiding principle of "doing everything we can to prolong your life."
If I had to describe the core beliefs that power oftwominds.com, one would be that health is ultimately the only true wealth, and that roughly 2/3 of our health is in our hands-- the other third being heredity and environmental factors outside our influence. Any situation in which we control 2/3 of the outcome is significant, as many situations in life only allow a limited response to events outside our influence.
Despite this extremely meaningful level of influence, few people actively seek to improve their health until they experience a "wake-up call" such as cancer or a near-death encounter via a heart attack. Waiting until one's health is already severely compromised before taking action invites a negative outcome, but even this "obvious" reality does not persuade people to start consistently doing all the things we're constantly hectored to do: lose weight, start exercising, etc.
It is remarkable how vulnerable we are to faddish "easy fixes" (drinking coconut water being one of the latest incarnations of the fad fix) and how resistant we are to the one proven "miracle cure": exercise.
Given my focus on health and the perverse sickcare system, I read the following article with deep interest. I am indebted to longtime correspondent Joel M. for forwarding it to me: How Doctors Die by Ken Murray M.D.
"Years ago, Charlie, a highly respected orthopedist and a mentor of mine, found a lump in his stomach. He had a surgeon explore the area, and the diagnosis was pancreatic cancer. This surgeon was one of the best in the country. He had even invented a new procedure for this exact cancer that could triple a patient’s five-year-survival odds—from 5 percent to 15 percent—albeit with a poor quality of life. Charlie was uninterested. He went home the next day, closed his practice, and never set foot in a hospital again. He focused on spending time with family and feeling as good as possible. Several months later, he died at home. He got no chemotherapy, radiation, or surgical treatment. Medicare didn’t spend much on him.
It’s not a frequent topic of discussion, but doctors die, too. And they don’t die like the rest of us. What’s unusual about them is not how much treatment they get compared to most Americans, but how little. For all the time they spend fending off the deaths of others, they tend to be fairly serene when faced with death themselves. They know exactly what is going to happen, they know the choices, and they generally have access to any sort of medical care they could want. But they go gently."
I sent this to longtime correspondent Dr. "Ishabaka" (a U.S. physician with decades of experience) and his response is revealing:
"That is the best article I have read in a long time, and I AGREE WITH EVERY SINGLE WORD. I have a living will and an advanced health care directive. There's a bright red card in my wallet with this on it (if you come in the ER unconscious or confused your wallet gets checked). I've told my wife that if I'm badly injured in a car crash but can be fixed up, to have me admitted to the ICU and tortured (the ICU is really a torture chamber). If I have terminal cancer, I would refuse chemotherapy for all but a few types that respond well to it (most don't). I want to stay a home, with a hospice nurse if necessary, and die in my bed.
By the way, the Feds passed a law saying doctors HAVE to do everything if the patient is mentally incapable of deciding for themselves, unless the patient has a living will, advanced health care directive - or a family member or other adult appointed as legal guardian (which will NOT be the case in the example the author gave - sudden unconsciousness due to massive stroke). This was done during my career. I used to be able to have a sit-down with the family and decide whether or not to "do everything" when, say, someone with documented terminal cancer came in with some near-death condition and was "out of it".
Now, that's illegal, and I could get into enormous trouble - it's insane! Here is exactly what could have been done to me: a $50,000 fine and loss of the ability to bill Medicare for five years. As an emergency physician that would have put me out of business, as Medicare is one of the main sources of income for emergency physicians."
I think these accounts make it clear that each of us has a responsibility to our families to get a living will or advanced health care directive, and make sure those close to us know about it and where to find it. We also need to make sure our elderly loved ones have stipulated their wishes, and that we know where these documents are located. Otherwise, what happens to them in a medical emergency is out of our hands.
Amongst the thousands of emails I receive annually, a handful mention that the site provided some inspiration and/or information on improving diet and fitness and on sustainably losing weight. For example, a longtime reader recently mentioned losing 30 pounds after reading these articles I posted in 2010 (via correspondent Ken R.) by a physicist on gluttony and weight loss:
Basically, it comes down to eating less, eating better food, building/maintaining muscle mass and doing some aerobic exercise that gets your respiratory rate up. That's it. Nothing fancy.
Humans are famously inept at long-term planning, as that skill offers limited selective advantages in a hunter-gatherer lifestyle where food is gathered daily and the group often traveled daily. Thus is is "natural" to continue living at 50 the same way we lived at 25, when our bodies could tolerate excess and poor fitness.
It is also tempting to focus on the 1/3 of our health we don't directly control and become passive about what happens to us.
I view eating real food and daily stretching and exercise as "paying myself first," the idea that one saves money/accumulates capital by paying oneself first and then paying the rest of one's obligations. The typical American household pays all their bills and fulfills their gratifications and intends to save what's left. Alas, there is rarely much left when you "pay yourself last." In the same way, people pay themselves last in fitness and eating better, too, with the same results--nothing changes sustainably.
This is not an abstract topic in my view, as I anticipate the sickcare system devolving in the decade ahead. Since this site has many correspondents who are doctors and nurses, I know how close many care providers are to walking away from this sick system. The average patient has no idea of the burdens and risks carried by many care providers; they only hear about the big salaries. But the system is dangerously close to breaking the will and spirit of those tasked with operating within it. If you think this is far-fetched, you don't know many practicing doctors and nurses.
I think it highly likely we will need cash to get care, and various elements of care may be scarce at any price. Cash (or equivalents) may well be king, but no amount of money can restore health once it has been lost or squandered. In pondering the end of life, hopefully we can draw inspiration to change our lives, diet and fitness in the here and now to preserve and improve what health we currently possess. 



If this recession strikes you as different from previous downturns, you might be interested in my new book An Unconventional Guide to Investing in Troubled Times (print edition) or Kindle ebook format. You can read the ebook on any computer, smart phone, iPad, etc.Click here for links to Kindle apps and Chapter One. The solution in one word: Localism. 


My Big Island Girl(fun, free MP3 song)




The Maginot Line (FrenchLigne MaginotIPA: [liɲ maʒino]), named after the French Minister of War André Maginot, was a line of concrete fortifications, tank obstacles, artillery casemates, machine gun posts, and other defences, whichFrance constructed along its borders with Germany and Italy, in light of its experience in World War I, and in the run-up to World War II. Generally the term describes only the defences facing Germany, while the term Alpine Line is used for the Franco-Italian defences.
The French established the fortification to provide time for their army to mobilise in the event of attack, allowing French forces to move into Belgium for a decisive confrontation with German forces. The success of static, defensive combat in World War I was a key influence on French thinking. Military experts extolled the Maginot Line as a work of genius, believing it would prevent any further invasions from the east (notably, from Germany). It was also a product of a historical inferiority in population and birthrate, exacerbated by the losses in World War One, which had been developing for three generations.[1] The fortification system successfully dissuaded a direct attack. It was strategically ineffective, as the Germans indeed invaded Belgium, defeated the French army, flanked the Maginot Line, through the Ardennes forest and via the Low countries, completely sweeping by the line and conquering France in days.[2] As such, the Maginot Line has come to mean a strategy or object that people put hope into but fails miserably. It is also the best known symbol of the adage that "generals always fight the last war, especially if they have won it".[3]
The Maginot Line was impervious to most forms of attack, and had state-of-the-art living conditions for garrisoned troops, including air conditioning, comfortable eating areas and underground railways. However, it proved costly to keep, consumed a vast amount of money and subsequently led to other parts of theFrench Armed Forces being underfunded.

Contents

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Planning and construction


The Maginot Line.
The defences were first proposed by Marshal Joffre. He was opposed by modernists such asPaul Reynaud and Charles de Gaulle who favoured investment in armour and aircraft. Joffre had support from Henri Philippe Pétain, and there were a number of reports and commissions organised by the government. It was André Maginot who finally convinced the government to invest in the scheme. Maginot was another veteran of World War I, who became the French Minister of Veteran Affairs and then Minister of War (1928–1931).
Part of the rationale for the Maginot Line stemmed from the severe French losses during the First World War, and their effects on French demographics. The drop in the national birth rate during and after the war, resulting from a national shortage of young men created an "echo" effect in the generation that provided the French conscript army in the mid-1930s. Faced with inadequate personnel resources, French planners had to rely more on older and less fit reservists, who would take longer to mobilise, and would diminish French industry because they would leave their jobs. Static defensive positions were therefore intended not only to buy time, but also to defend an area with fewer and less mobile forces. In practice, France deployed about twice as many men, 36 divisions (roughly one third of its force), for defence of the Maginot Line in Alsace and Lorraine, whereas the opposing German Heeresgruppe C only contained 19 divisions, or less than one seventh of the total force committed in Fall Gelb.[4]
The line was built in several phases from 1930 by the STG (Service Technique du Génie) overseen by CORF (Commission d'Organisation des Régions Fortifiées). The main construction was largely completed by 1939, at a cost of around 3 billion French francs.[clarification needed]
The line stretched from Switzerland to Luxembourg, and a much lighter extension was extended to the Strait of Dover after 1934. The original line construction did not cover the area chosen by the Germans for their first challenge, which was through the Ardennes in 1940, a plan known as Fall Gelb. The location of this attack, probably because of the Maginot Line, was through the Belgian Ardennes forest (sector 4) which is off the map to the left of Maginot Line sector 6 (as marked).

Map of the principal fortified section of the Maginot Line

[edit]Purposes

The Maginot Line was built to fulfil several purposes:
  • To avoid a surprise attack and to give alarm.
  • To cover the mobilisation of the French Army (which took between 2 and 3 weeks).
  • To save manpower (France counted 39,000,000 inhabitants, Germany 70,000,000).
  • To protect Alsace and Lorraine (returned to France in 1918) and their industrial basin.
  • To be used as a basis for a counter-offensive.
  • To push the enemy to circumvent it while passing by Switzerland or Belgium.
  • To hold the enemy while the main army could be brought up to reinforce the line.
  • To show non aggressive posture, and compel the British to help France if Belgium is invaded

[edit]Organisation


Block 14 at Ouvrage Hochwald in 1940
Although the name "Maginot Line" suggests a rather thin linear fortification, the line was quite deep, varying in depth (i.e., from the border to the rear area) from between 20 to 25 kilometres(12 to 16 miles). It was composed of an intricate system of strong points, fortifications, and military facilities such as border guard posts, communications centres, infantry shelters, barricades, artillery, machine gun, and anti-tank gun emplacements, supply depots, infrastructure facilities, observation posts, etc. These various structures reinforced a principal line of resistance, made up of the most heavily armed "ouvrages", which can be roughly translated as fortresses or major defensive works.
From the front and proceeding to the rear, the line was composed of:
  • Border Post line (1): This consisted of blockhouses and strong houses which were often camouflaged as inoffensive residential homes, built within a few metres of the border, and manned by troops so as to give alarm in the event of sneak or surprise attack as well as delay enemy tanks with prepared explosives and barricades.
  • Outpost and Support Point line (2): Approximately 5 kilometres (3 miles) behind the border, a line of anti-tank blockhouses were intended to provide resistance to armoured assault sufficient to delay the enemy so as to allow the crews of the "C.O.R.F. ouvrages" to be ready at their battle stations. These outposts covered major passages within the principal line.
  • Principal line of resistance (3): This line began 10 kilometres (6 miles) behind the border. It was preceded by anti-tank obstacles which were metal rails planted vertically in 6 rows with heights varying from 0.70 to 1.40 metres (2 ft 4 in to 4 ft 7 in) and buried to a depth of 2 metres (6 ft 7 in). These anti-tank obstacles extended from end to end in front of the major works across hundreds of kilometres (miles), interrupted only by extremely dense forests, rivers, or other nearly impassable terrain.
The anti-tank obstacle system was immediately followed by an anti-personnel obstacle system made primarily of very dense barbed wire. Anti-tank road barriers also made it possible to block roads at necessary points of passage through the tank obstacles.

Casemate de Dambach Nord - The frontage
  • Infantry Casemates (4): These bunkers were armed with twin machine-guns (abbreviated as JM in French) and anti-tank guns of 37 or 47 mm (1.5 or 1.9 in). They could be single (with only one firing room in only one direction) or double (two firing rooms, in 2 opposite directions). These generally had 2 floors, with a firing level and a support/infrastructure level that provided the troops with rest and services (power generating units, reserves of water, fuel, food, ventilation equipment, etc.). The infantry casemates often had 1 or 2 "cloches" or turrets located on top of them. These GFM cloches sometimes were used to emplace machine guns or observation periscopes. Their crew was 20 to 30 men.
  • Petits ouvrages (5): These small fortresses reinforced the line of infantry bunkers. Thepetits ouvrages were generally made up of several infantry bunkers connected by an underground tunnel network to which were attached various buried facilities, such as barracks, electric generators, ventilation systems, mess halls, infirmaries, and supply caches. Their crew consisted of between 100 and 200 men.
  • Ouvrages (6): These fortresses were the most important fortifications on the Maginot Line, having the sturdiest construction and also the heaviest artillery. These were composed of at least six "forward bunker systems" or "combat blocks", as well as two entrances, and were interconnected via a network of underground tunnels that often featured narrow gauge electric railways for transport between bunker systems. The various blocks contained necessary infrastructure such as power stations with generating units, independent ventilating systems, barracks and mess halls, kitchens, water storage and distribution systems, hoists, ammunition stores, workshops, and stores of spare parts, food, etc. Their crews ranged from 500 to more than 1000 men.
Blockhouse MOM (Main d'Oeuvre Militaire) de Richtolsheim - Secteur Fortifié de Colmar - Sous secteur de Hilsenheim
  • Observation Posts (7) were located on hills that provided a good view of the surrounding area. Their purpose was to locate the enemy and direct and correct the indirect fire of artillery from the artillery fortifications as well as to report on the progress and position of key enemy units. These are large reinforced buried concrete bunkers, equipped with armoured turrets containing high-precision optics that were connected with the other fortifications by field telephone and wireless transmitters (known in French by the acronym T.S.F.).
  • Telephone Network (8): This system connected every fortification in the Maginot Line, including bunkers, infantry and artillery fortresses, observation posts, and shelters. Two telephone wires were placed parallel to the line of fortifications, providing redundancy in the event of a wire getting cut. There were places along the cable where dismounted soldiers could connect to the network.
  • Infantry Reserve Shelters (9): These were found between 500 and 1,000 metres (1,600 and 3,300 feet) behind of the principal line of resistance. These were buried concrete bunkers designed to house and shelter up to a company of infantry (200 to 250 men), and had such features as electric generators, ventilation systems, water supplies, kitchens and heating, which allowed their occupants to hold out in the event of an attack. They could also be used as a local headquarters and as a base from which to carry out counter-attacks.
  • Flood Zones (10) were natural basins or rivers that could be flooded on demand and thus constitute an additional obstacle in the event of an enemy offensive.

Anti-tanks rails around the casemate 9 of Hochwald ditch
  • Safety Quarters (11) were built near the major fortifications in order to make it possible for fortress ("ouvrage") crews to reach their battle stations within the shortest possible time in the event of a surprise or sneak attack during peacetime.
  • Supply depots (12).
  • Ammunition dumps (13).
  • Narrow Gauge Railway System (14): A network of 600 mm (1 ft 11 58 in)  narrow-gaugerailways was built so as to rearm and resupply the major fortresses ("ouvrages") from supply depots up to 50 kilometres (31 miles) away. Petrol-engined armoured locomotives pulled supply trains along these narrow-gauge lines. (A similar system was developed with armoured steam engines back in 1914-1918.)
  • High-voltage Transmission Lines (15), initially above-ground but then buried, and connected to the civil power grid, provided electric power to the many fortifications and fortresses.
  • Heavy rail artillery (16) was hauled in by locomotives to predesignated locations so as to support the pre-emplaced artillery located in the fortresses, which was intentionally limited in range to 10–12 kilometres (6–7 miles).

Maginotline organization.gif

There are several kinds of armoured cloches. The word cloche is a French term meaning 
bell due to its shape. All cloches were made in an alloy steel. Cloches are 
non-retractable turrets.
§                    The most widespread are the GFM cloches, where  GFM  means  Guetteur fusil-mitrailleur  (machine-gun sentry).  They are composed of 3 to 4 openings, called crenels or embrasures. These crenels may be equipped as follows: Rifle machine-gun, direct vision block, binoculars block or 50 mm (2.0 in) mortar. Sometimes, the cloche is topped by a periscope. There are 1,118 GFM cloches on the line. Almost every block, casemate and shelter is topped by one or two GFM cloches.
§                    The  JM cloches are the same as the GFM cloches except that they have one opening equipped with a pair of machine-guns. There are 174 JM cloches on the line.
§                    There are 72 AM cloches (armes mixtes or "mixed weapons") on the line, equipped with a pair of machine guns and a 25 mm (1.0 in) anti-tank gun. Some GFM cloches were transformed into AM cloches in 1934. (The aforementioned total does not include these modified cloches.)
§                    There are 75  LG cloches  (lance-grenade – grenade launcher) on the line. Those cloches are almost completely covered by concrete, with only a small hole through which grenades were launched for local defence.
§                    There are 20 VP cloches (periscopic vision) on the line. These cloches could be equipped with several different periscopes. Like the LG cloches, they were almost completely covered by concrete.
§                    The VDP cloches (direct and periscopic vision) are similar to the VP cloches, but have two or three openings to provide a direct view. Consequently, they were not covered by concrete.

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