Monday, January 12, 2015

2015: Triumph of the principles of Liberty

Oil has not yet hit the $200 as was once predicted by some Goldman Sachs analyst some time ago. In fact that particular bank has changed its view dramatically, the Chairman, Lloyd Blankfien in a positive mood recently said that the "lower price of oil one should think of like a tax cut." This is from a practical man quick to accept new trends in the financial market forgetting the old trends.
Oil hangs close to the $50 mark without OPEC having taken any action, how some credit or blame this out of date cartel is difficult to comprehend. Oil has come down swiftly because either non OPEC countries are producing more or global demand is down or a mixture of both factors this would be a correct view. There is another factor that some might miss, the factor of speculation. When the Federal Reserve ended its quantitative easing at end of October a lot of speculative money was taken out of the global financial markets, with less money to prop up prices the market has returned to where it would have been without large central banks printing money.
With the end of what the Fed would consider extraordinary methhods, and market slowly returning to position it would have taken without extraordinary measures, in the case of oil those who had been bothered by these policies can rightly say we told you saw, but gloating about peoples life's is distasteful, the whole world is negatively affected by delays in the call for structural reforms towards more free policies. Nobody has the right to demand from government laws to protect themselves from competition or a government to print money for their benefit. The system as we know it was not saved by quantitative easing.
2015 one can say with confidence will be the year more and more around the world will demand greater rights and respect for the individual, contrary to common belief free individuals willingly create the strongest societies, they are loyal beyond the bonds of money for they have the right and acceptance to make money, they can see as a society beyond what anybody is accepted to do. People will finally realize that government action mostly benefits an elite, that is serfdom, corporations being another form of fiefdoms. Those who believe in true freedom are merely saying look with greater realization freedom creates most sustainable societies, why are those that clearly are benefitting from being allowed wanting to slow down society by getting the government to protect them.
Of course when Goldman Sachs predicted a price of $200 a barrel for oil it was just months before Lehman brothers filed for bankruptcy. The trillions globally spent on bank bailouts have not changed the reality that at the core of this global economic malaise is the need not so much for austerity but for freeing the individual. Society is made up of individuals, a free society has no need to discourage those who can do better, that is always done for ideological reasons and money is at the root of this ideology, keep the other group poor always by foul means. That zero sum mentality will be challenged. Freeing up the individual will mean each and every society will contribute to the advancement of human society, what is advancement but letting the mind focus on a task.
Once again, the global economy is not in good shape. The likes of China must understand that, possible catastrophe could be triggered if individuals are not given more rights to participate in the economy, it is not the printing of money that will pull us from the edge of the abyss but freeing up of the individual. The bad choices Russia has made have led to the present crises with the Ruble being heart of that crises, why is Russia treating itself like Saudi Arabia. Russia today would be far stronger with a more free market, like everyone else Russia's elite at anytime have always feared relinquishing power to the ordinary citizen, surely now they begin to see their folly.
Africa will continue to be mocked if they refuse to give freedom a chance. Being powerless in many instances African countries domestic policy is determined by the donors. They must comply or risk shrinking budgets, or agitation to place some government that will comply to donors. Only freeing the individual will free Africa from being overly influenced by social engineers demanding this and that yet plight of the common African remain the same. The stronger the common man is, the stronger the elite, that's what Africa fails to see in most instances because the leaders are too selfish creating weak societies, economically and militarily, blind to reality as they reside in luxury palaces they have not earned, if they had earned them African people would not be so poor.
Oil price at below $50 surely we must admit the government monetary stimulation is a failure, as many economists said. Bank bailouts and quantitative easing just promoted a trickle down theory that has no place in economics, at least with fiscally policy money starts of with working people, and then enters the banking system. Honestly why would someone print trillions of dollars going directly to less than 100 people to control, there are not very many too big to fail institutions.
This kind of weakness is more proof of end of export driven development. It was always a shaky model, fine when it was the West and Japan, tricky when including over 1 billion Chinese and Indians. Classical economic thoughts on trade, that one trades a surplus will return. 6 billion people can not export to 800 million North Americans and Western Europe, always an unsustainable model. Freeing up individuals around the world will mean world can export and import products with higher knowledge content to each other, not a world to be feared but embraced. Principles of freedom have won, it is time for statists to get out of the way.

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Bhekuzulu Khumalo

I write about knowledge economics, information, liberty, and freedom