May 17

“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
– John Maynard Keynes

From the article:

“If that’s “success“, we would hate to see what Keynesian failure looks like.”


japan part time workersJapan real wages

This Is What Keynesian “Success” Looks Like: Soaring Part-Time Jobs, Record Low Real Wages (ZeroHedge, May 17, 2015):

Though we noted the plight of the Japanese worker in a previous post, a plight which arrived in the US some five years ago yet which the mainstream still refuses to acknowledge, the punchline may have been somewhat diluted. So here it is again, without much additional commentary.

When it comes to the consequences of Japan’s QE, now in its third year, the head of the BOJ has been very clear: Continue reading »

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Jan 26

Get Ready For Negative Interest Rates In The US (ZeroHedge, Jan 24, 2015):

With Fed mouthpiece Jon Hilsenrath warning – in no lesser status-quo narrative-deliverer than The Wall Street Journal – that The ECB’s actions (and pre-emptive collapse in the EUR) means the U.S. economy must deal with a rapidly strengthening dollar that will make American goods more expensive abroad, potentially slowing both U.S. growth and inflation; and Treasury Secretary Lew coming out his crypt to mention “unfair FX moves,” it appears The Fed (and powers that be) are worrying about King Dollar. This suggests, as Mises Canada’s Patrick Barron predicts, the Fed will start charging negative interest rates on bank reserve accounts as the final tool in the war on savings and wealth in order to spur the Keynesian goal of increasing “aggregate demand”. If savers won’t spend their money, the government will take it from them.

As The Wall Street Journal explains,

The European Central Bank’s launch of an aggressive program this week to buy more than €1 trillion in bonds poses important tests for the U.S. economy and the Federal Reserve.

Europe’s new program of money printing—and the resulting fall in the euro—means the U.S. economy must deal with a rapidly strengthening dollar that will make American goods more expensive abroad. Continue reading »

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Jan 26

If you’ve read this book, then you know that nothing happens by ‘mistake’ ..

The Secrets of the Federal Reserve

@Amazon.com: The Secrets of the Federal Reserve Price: $14.13

@Amazon.co.uk: The Secrets of the Federal Reserve Price: £15.49

These elitists, who were behind the creation of the Fed, control the BoE and were behind the French revolution, the Russian revolution, WW1 and WW2 leave nothing to coincidence, …

… especially if they can manipulate and influence the outcome in their favor … by hook or by crook.


woodrow-wilson

The Epochal Consequences Of Woodrow Wilson’s War (David Stockman’s Contra Corner, Jan 21, 2015):

The Epochal Consequences Of Woodrow Wilson’s War

Remarks by David Stockman

Committee for the Republic

Washington DC January 20, 2015

My humble thesis tonight is that the entire 20th Century was a giant mistake.

And that you can put the blame for this monumental error squarely on Thomas Woodrow Wilson——-a megalomaniacal madman who was the very worst President in American history……..well, except for the last two.

His unforgiveable error was to put the United States into the Great War for utterly no good reason of national interest. The European war posed not an iota of threat to the safety and security of the citizens of Lincoln NE, or Worcester MA or Sacramento CA. In that respect, Wilson’s putative defense of “freedom of the seas” and the rights of neutrals was an empty shibboleth; his call to make the world safe for democracy, a preposterous pipe dream. Continue reading »

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Jan 18

The SNB’s Wake-Up Call: Keynesian Central Banking Is Destroying Money And Markets (David Stockman’s Contra Corner, Jan 17, 2015):

It seems everyone was short the franc (CHF) as a matter of taking monetarism at face value. In other words, it amounted to believing the central party line about the economy and normalcy despite the fact that markets have been increasingly pessimistic about it all and actively and aggressively betting against it. Goldman Sachs is just one of many: Continue reading »

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Dec 26

“After two years of economic torture and financial destruction, Abenomics has finally claimed the Keynesian prize: real wages crash 4.3%, the most in the 21st century, and Japan’s legendary savings rate, which peaked at 23% in 1975, just turned negative for the first time ever. Game over Japan.”

Seppuku Japan

–  Game Over Japan: Real Wages Crash Most In 21st Century, Savings Rate Turns Negative (Zerohedge, Dec 26, 2014):

When about a month ago it was revealed that Japan’s shadow economic advisor is none other than Paul Krugman, we said it was only a matter of time before the Japanese economy implodes. Terminally. We didn’t have long to wait and last night the barrage of Japanese economic data pretty much assured Japan’s transition into failed Keynesian state status. Continue reading »

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Oct 19

Christine-Lagarde-IMF

The IMF And Austrian Theory ( Mises Canada,Oct 17, 2014):

Back in the early 1960s, financial journalist Henry Hazlitt warned against efforts to create an international system to help facilitate the smooth transfer of currencies. Representatives from the world’s leading governments were attempting to increase liquidity in global markets. They wanted to make sure the banking system and sovereign governments would never had a lack of funds. Hazlitt was not fooled. “In plain English” he wrote, “they are pushing for more world inflation.” His words, though accurate, went unheeded. The International Monetary Fund, which was established decades earlier, was to play a role in facilitating endless inflation.

Half a century later, the IMF has overseen a tumultuous business cycle that came to a screeching halt in 2008. Big, overleveraged banks were on the verge of collapsing; millions of people lost their jobs and their homes; governments spent billions of dollars to maintain their welfare safety nets. The end result, which is still ongoing, is stagnant economic growth with dim prospects for recovery. Continue reading »

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Oct 19

Kudos To Herr Weidmann For Uttering Three Truths In One Speech (David Stockman’s Contra Corner, Oct 17, 2014):

Once in a blue moon officials commit truth in public, but the intrepid leader of Germany’s central bank has delivered a speech which let’s loose of three of them in a single go. Speaking at a conference in Riga, Latvia, Jens Weidmann put the kibosh on QE, low-flation and central bank interference in pricing of risky assets.

These days the Keynesian chorus in favor of policy activism is so boisterous that a succinct statement to the contrary rarely gets through – especially at Rupert Murdoch’s Wall Street yarn factory. But here’s what penetrated even Brian Blackstone’s filters:

“The biggest bottleneck for growth in the euro area is not monetary policy, nor is it the lack of fiscal stimulus: it is the structural barriers that impede competition, innovation and productivity,” he said.

Continue reading »

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Oct 19

Related info:

FBI Files On Famous Physicist Richard Feynman Released


Richard Feynman

The Farce That Is Economics: Richard Feynman On The Social Sciences ( Sinclair & Co., Oct 18, 2014):

Richard Feynman on the Social Sciences

What do real scientists have to say about sciences that are not so real?

Born in 1918, Richard Feynman was an American theoretical physicist known for his work in a variety of fields where he made an immeasurable contribution, including quantum mechanics, quantum electrodynamics and particle physics. He was also credited with introducing the concept of nanotechnology, a breakthrough that holds so much promise today. Continue reading »

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Sep 23

The Illustrated Guide To Keynesian Vs Austrian Economics (Zerohedge, Sep 22, 2014):

There has been an unsettled debate among economists for a century now of whether government intervention is beneficial to an economy. The heart of this debate lies between Keynesian and Austrian economists (though there are other schools as well). In order to get a full understanding of the two schools of economic thought, the following infographic should help…

Economics-Infographic
Source: The Austrian Insider

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Sep 15

–  The Trials and Tribulations of “Abenomics” (Acting-Man, Sep 14, 2014):

We have frequently discussed the nonsensical attempt by Japanese prime minister Shinzo Abe and BoJ governor Haruhiko Kuroda to print and spend Japan back to prosperity. By now it is well known that devaluing the yen has not achieved the desired effect, but rather the opposite. Not only have exports not really received the expected boost, but Japan’s trade and current account surplus have decreased markedly, even posting negative numbers for the first time in decades. Of course, currency debasement never works: it cannot work. This is Keynesian logic and brilliance in all it splendor.

 

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Aug 27

From the article:

“Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly…. Central banks, including the U.S. Federal Reserve, have taken aggressive action, consistently lowering interest rates such that today they hover near zero. They have also pumped trillions of dollars’ worth of new money into the financial system. Yet such policies have only fed a damaging cycle of booms and busts, warping incentives and distorting asset prices, and now economic growth is stagnating while inequality gets worse. It’s well past time, then, for U.S. policymakers — as well as their counterparts in other developed countries — to consider a version of Friedman’s helicopter drops. In the short term, such cash transfers could jump-start the economy…  The transfers wouldn’t cause damaging inflation, and few doubt that they would work. The only real question is why no government has tried them”…


It Begins: Council On Foreign Relations Proposes That “Central Banks Should Hand Consumers Cash Directly”  (ZeroHedge, Aug 26, 2014):

… A broad-based tax cut, for example, accommodated by a program of open-market purchases to alleviate any tendency for interest rates to increase, would almost certainly be an effective stimulant to consumption and hence to prices. Even if households decided not to increase consumption but instead re-balanced their portfolios by using their extra cash to acquire real and financial assets, the resulting increase in asset values would lower the cost of capital and improve the balance sheet positions of potential borrowers. A money-financed tax cut is essentially equivalent to Milton Friedman’s famous “helicopter drop” of money

Ben Bernanke, Deflation: Making Sure “It” Doesn’t Happen Here, November 21, 2002

time-man-of-the-year-helicopter-ben-bernanke

A year ago, when it became abundantly clear that all of the Fed’s attempts to boost the economy have failed, leading instead to a record divergence between the “1%” who were benefiting from the Fed’s aritficial inflation of financial assets, and everyone else (a topic that would become one of the most discussed issues of 2014) and with no help coming from a hopelessly broken Congress (who can forget the infamous plea by a desperate Wall Street lobby-funding recipient “Get to work Mr. Chariman”), we wrote that “Bernanke’s Helicopter Is Warming Up.” Continue reading »

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Aug 17

Japan’s Keynesian Demise: A Cautionary Tale For Our Times (David Stockman’s Contra Corner, Aug 15, 2014):

The ragged Keynesian excuse that all will be well in Japan once the jump in the consumption tax from 5% to 8% is fully digested is false. Here’s the problem: this is just the beginning of an endless march upwards of Japan’s tax burden to close the yawning fiscal gap left after the current round of tax increases, and to finance its growing retirement colony. There is no possibility that Abenomics will result in “escape velocity” Japan style and that Japan can grow its way out of it enormous fiscal trap. Instead, nominal and real growth will remain pinned to the flatline owing to peak debt, soaring retirements, a shrinking tax base and a tax burden which will rise as far as the eye can see. Call that a Keynesian dystopia. It is a cautionary tale for our times. And Japan, unfortunately, is just patient zero.

 

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Aug 01

Six Current Economic Myths and Realities (Mises Canada, July 29, 2014):

The following are six of the most prevalent economic myths that appear time and again in the mainstream media.  I will give a brief description of each and a brief description of the economic reality, as seen from an Austrian perspective.

Myth #1: Increased money leads to economic prosperity. Continue reading »

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Jun 27

Why Financial Reporters Are Clueless: They Copy And Paste Keynesian/Wall Street Propaganda (David Stockman’s Contra Corner, June 25, 2014):

By David Stockman, former director of the Office of Management and Budget (1981–1985)

This morning’s Q1 GDP revision might have been a wake-up call. After all, clocking in a -2.9%—-cold winter or no—it was the worst number posted since the dark days of Q1 2009. Well, actually, it was the fourth worst quarterly GDP shrinkage since Ronald Reagan declared it was morning again in American 30 years ago.

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May 07

David Einhorn “I Asked Bernanke Questions, And The Answers Were Frightening” (ZeroHedge, May 6, 2014):

Ben Bernanke may be gone from the helm of the world’s most centrally planned economy, but his ample cluelessness remains. David Einhorn, president of Greenlight Capital, better known for comparing QE to jelly donuts and who recently confirmed what we have been saying for a long time that the second dotcom bubble is here, spoke with Bloomberg TV covering a wide range of topics, but what caught our attention was his synopsis of a private dinner he had with Chairsatan-emeritus Ben Bernanke, on March 26.

What he found, in his own words, is disturbing. Continue reading »

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Apr 26

2,500 Years Of Financial Crises :”Augustus Was The First Keynesian” (ZeroHedge, April 26, 2014):

“Augustus was the original Keynesian…” is how Bob Swarup, author of ‘Money Mania’, begins to explainto John Authers the constant threads of similarity between financial crises dating back to the 4th century BC; and why, it seems, we are entirely incapable of learning our lessons from them. Crucially, innovation and crises are related; and both have their roots in growing complexity, interaction and in human nature. Of course, as we noted recently, not one of our current slew of ‘great thinkers’ believes we will have another economic contraction, let alone another crisis

As Authers concludes, crises are the negatives we have to put up with for the innovations we create… just don’t tell the central banks…

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Apr 21

Keynesian Knightmare: US Savers Outnumber Spenders By Record Numbers (ZeroHedge, April 21, 2014):

“Janet, we have a problem,” is the resoundingly loud message from the latest Gallup poll of Americans preference (and relative enjoyment) of “saving” vs. “spending”. It seems, despite all the hoop-la and exuberance about an ‘economic recovery’ that is pent-up due to weather but about to break out to escape velocity, the majority of Americans continue to enjoy saving money more than spending it, by 62% to 34%. The 2014 saving-spending gap is the one of the widest since Gallup began tracking Americans’ preferences in 2001. How long before a discussion of negative rates re-appears as the rich and powerful Oz-ians contemplate the latest effort to ‘change’ people’s mass psychology… Continue reading »

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Dec 01

Ron “Austrian” Paul Vs. Paul “Keynesian” Krugman – You Decide (ZeroHedge, Dec 1, 2013):

The concept of the business cycle and its un-natural intervention-inspired boom-bust process is at the core of the following three minutes of dueling quotes from two of the most infamous public proponents of change (Ron Paul) and the status quo (Paul Krugman).

  • “Cut interest rates a couple of percentage points, provide plenty of liquidity, and call me in the morning.” – Krugman
  • “Printing money is not an answer… Like all artificially-created bubbles, the boom… cannot last forever.” – Paul

You decide who “was” right, and who “will be” right again…

(h/t Jim Quinn’s Burning Platform)

Of course, we’ve seen them head-to-head before…

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Oct 15


The U.S. Capitol looms in the background of a sign on the National Mall reminding visitors of the closures to all national parks due to the federal government shutdown in Washington October 3, 2013. (Reuters/Kevin Lamarque)

Michel Chossudovsky is an award-winning author, professor of economics, founder and director of the Centre for Research on Globalization, Montreal and editor of the globalresearch.ca website.

Shutdown of US govt & ‘debt default’: Dress rehearsal for privatization of federal state system? (RT, Oct 15, 2013):

By Michel Chossudovsky

The ‘shutdown’ of the US government and the financial climax associated with a deadline date, leading to a possible ‘debt default’ by the federal government, is a money-making undertaking for Wall Street.

Several overlapping political and economic agendas are unfolding. Is the shutdown – implying the furloughing of tens of thousands of public employees – a dress rehearsal for the eventual privatization of important components of the federal state system?

A staged default, bankruptcy and privatization is occurring in Detroit (with the active support of the Obama administration), whereby large corporations become the owners of municipal assets and infrastructure.

The important question: could a process of ‘state bankruptcy’, which is currently afflicting local level governments across the land, realistically occur in the case of the central government of the United States of America?

This is not a hypothetical question. A large number of developing countries under the brunt of  IMF ‘economic medicine’ were ordered by their external creditors to dismantle the state apparatus,  fire millions of public sector workers as well as privatize state assets. The IMF’s Structural Adjustment Program (SAP) has also been applied in several European countries.

Continue reading »

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Oct 12

Marc Faber Blasts “A Corrupt System That Rewards Stupidity” (ZeroHedge, Oct 11, 2013):

 

Authored by Marc Faber, originally posted at The Daily Reckoning blog,

For the greater part of human history, leaders who were in a position to exercise power were accountable for their actions. If they waged wars or had to defend their territories from invading hostile forces, they frequently lost their lives, territories, armies, power and crowns. I don’t deny that some leaders were irresponsible, but in general, they were fully aware that they were responsible for their acts and, therefore, they acted responsibly.

The problem we are faced with today is that our political and (frequently) business leaders are not being held responsible for their actions. Thomas Sowell sums it up well:

“It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.”

When political leaders or economic policymakers are seen to fail, the worst that will happen to them is that they won’t be re-elected or reappointed. They then become a lobbyist or an adviser or consultant, and give speeches, earning in the process a high income on top of their pension. Continue reading »

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