“The Coming War Will Solve Our Unemployment & Growth Problem”

“The Coming War Will Solve Our Unemployment & Growth Problem”:

Submitted by Carmen Elena Dorobat via The Mises Institute,

On the eve of World War II, Keynes delivered the following chilling address on the BBC, talking about the “grand experiment” of curing unemployment through war expenditure:

Two years later to the day, in a lecture delivered shortly after his arrival in the U.S., Mises described what the great experiment really looked like:

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Keynesian Skeptics Ask “Can Binge Drinking Really Cure Alcoholism?”

Paul-Krugman-Keynesians-Fail

Just like binge drinking destroys the human body, so does Keynesian binge drinking (deliberately) destroy the entire financial system.


 

Keynesian Skeptics Ask “Can Binge Drinking Really Cure Alcoholism?”:

 

Have you ever wondered who these people are? The people who decide how much capital should cost, how much credit and cash should be issued. You know, the twits who dream up QE, ZIRP and NIRP.

Where do they come from? Who pays their wages? Where do they get these hair-brained ideas? Are they on medication?

Sadly we probably know most of the answers…

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This Is What Keynesian “Success” Looks Like: Soaring Part-Time Jobs, Record Low Real Wages

“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:

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Get Ready For Negative Interest Rates In The U.S.

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.

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David Stockman: The Epochal Consequences Of Woodrow Wilson’s War – ‘The Entire 20th Century Was A Giant Mistake’

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.

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The Swiss National Bank’s Wake-Up Call: Keynesian Central Banking Is Destroying Money And Markets

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:

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Game Over Japan: Real Wages Crash Most In 21st Century, Savings Rate Turns Negative

“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.

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The IMF And Austrian Theory

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.

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Kudos To Bundesbank President Jens Weidmann For Uttering Three Truths In One Speech

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.

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The Farce That Is Economics: Richard Feynman On The Social Sciences

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.

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The Illustrated Guide To Keynesian Vs Austrian Economics

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

The Collapse Of Abenomics … Is A Large-Scale Failure Of Keynesian Stimulus In Real Time

–  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.

 

It Begins: Council On Foreign Relations Proposes That ‘Central Banks Should Hand Consumers Cash Directly’

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.”

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Japan’s Keynesian Demise: A Cautionary Tale For Our Times

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.

 

Six Current Economic Myths and Realities

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.

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Why Financial Reporters Are Clueless: They Copy And Paste Keynesian/Wall Street Propaganda

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.

David Einhorn ‘I Asked Bernanke Questions, And The Answers Were Frightening’

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.

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2,500 Years Of Financial Crises : ‘Augustus Was The First Keynesian’

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…