It appears your editor owes an apology to Lord Monckton of Brenchley following last Friday’s Money Morning.

As you know, we’re more than happy to admit when we get something wrong, and on this occasion we have. What did we stuff up? Well, for that you’ll have to wait until tomorrow.

Until then…

Your editor laughed heartily this morning on reading the following paragraph from News Ltd:

“ASIA-Pacific powers, including the United States and China, have vowed to overhaul the crisis-stricken world economy, rejecting protectionism and touting plans for a gargantuan free market.”

Our laughter only increased further when we reached the following paragraph:

“Leaders of the Asia-Pacific Economic Cooperation (APEC) forum, who together steer more than half the global economy, have also said they will maintain hefty stimulus spending ‘until a durable economic recovery has clearly taken hold’.”

We wonder if these journalists ever actually read what they’ve written. If we’ve got this right, governments have “plans” for a “gargantuan” free market that will be supported by “hefty” government stimulus spending.

How on earth can that be described as a free market?

It can’t.

In fact their comments are no different to any other comment you’ve heard from politicians over the last twenty, thirty or fifty years.

They all claim they support free markets while simultaneously introducing more and more rules and regulations to ensure markets are under more government control than ever before.

For a start you can’t “plan” any free market let alone a gargantuan free market.

Free markets aren’t planned they just, well, they just are.

And that’s why politicians hate the free market. A free market works without interference and meddling from governments.

In a free market there would be no need for a bunch of megalomaniacal pen pushers (politicians and bureaucrats) to swan off to Singapore for meetings on how to plan a free market.

There would be no need because under a free market they would have no influence on markets. Their meetings would be redundant. There would be nothing to discuss.

In fact, dare we say it, they would be redundant.

But central planners can rest at ease. And free marketers like your editor and cry into their beer.

Because there will be no gargantuan free market. Instead there will be the same old gargantuan state interference, corruption and incompetence. If you skip past the waffle about free trade in Leaders’ Declaration:

“But our common goal remains the same – to support growth and prosperity in the Asia-Pacific region, through free and open trade and investment…”

You’ll see that encouraging free markets and free trade is the last thing on their mind:

“We will leverage APEC’s traditional strengths of voluntary cooperation, capacity building, sharing of best practices, and working with the private sector, to implement necessary reforms in infrastructure development, agriculture/food management, social security, education and workforce training, and regulatory frameworks. We will work with the International Financial Institutions and Multilateral Development Banks to facilitate these efforts. Given APEC’s diversity, these reforms must take into account individual economies’ stage of development, demographic trends, factor and institutional endowments, and comparative advantages.”

A free market isn’t a free market when you have government telling you they will become even more involved in an economy.

It just isn’t possible.

And as for the statement that:

“We firmly reject all forms of protectionism and reaffirm our commitment to keep markets open and refrain from raising new barriers to investment or to trade in goods and services…”

Well, we don’t think we’ve come across a bigger lie since the Australian banks claimed they hadn’t received a single dollar of bail out money.

You only have to compare that statement with the previous one I’ve quoted above. On the one hand they claim to reject protectionism, and on the other hand they claim they’ll support reforms in infrastructure development, agriculture/food, social security, education and regulations.

And you can bet the “reforms” won’t involve less red tape and regulation it will mean more red tape and regulation.

When you look at each one of those topics again you’ll realize each one is the antithesis of free markets.

A free market in infrastructure development? I wouldn’t have thought so. When was the last time any infrastructure project happened on the basis of free market competition or supply and demand? Never.

Agriculture and food is one of the most manipulated and corrupt markets there is. Domestic producers receive numerous ‘free-kicks’ thanks to import regulations, or because of state approved monopolies.

Social security. A free market in social security? Are you kidding me? Social security is one of the biggest drains on the taxpayer wallet. Billions of dollars is stolen from taxpayers each year, swilled around in Canberra and then redistributed to the politicians favourite causes.

We’d love to see a free market in social welfare, but we know it ain’t gonna happen.

And as for education, again, where is the free market there? Nowhere. State schools get complete government funding and even private schools get handouts. How is that a free market when every school gets cash regardless of performance?

It’s clear the politicians either have no idea what free markets are, or more likely, they know exactly what a free market is and are afraid of it.

Because in a truly free market their powers to influence, bribe, threaten and meddle disappear. That’s why they need to maintain as much control over the economy as possible.

But the outcome of the APEC summit makes us realize one thing. It makes all the talk from Lord Monckton of Brenchley about a ‘world government’ all the more plausible.

Have we turned all conspiracy theorist? No. But as I mentioned at the beginning, we’ll have more on that tomorrow.

Cheers.
Kris.

60-Second Market Round Up
by Kris Sayce

Shae has taken a long weekend, which included dressing up as an Oompa-Loompa. We believe it was for a fancy dress party but that is yet to be confirmed!

So we’ll step into the breach for today until she returns tomorrow.

The S&P/ASX200 closed at 4,706.40 down by 41 points.

The Dow Jones Industrial Average closed at 10,270.47, a 73 point gain. In Europe the FTSE finished higher by 19 points to 5,296.38.

The Nikkei was down 34 points to 9,770.31.

In Australian dollars gold is trading at $1,198.79, while in US Dollars it is trading at $1,118.90. And the price of silver in Aussie dollars is $18.68 and in US Dollars it is $17.43.

The Aussie dollar against the US dollar, currently trading at USD $0.9340. The Aussie dollar against the Japanese Yen is trading at JPY 83.60.

Crude oil closed at USD$76.35.

For the biggest movers on the market yesterday click here…