– “The Simplest Way To Describe Keynesianism” In One Photo (ZeroHedge, June 6, 2015):
This is the simplest way to describe Keynesianism:
– “The Simplest Way To Describe Keynesianism” In One Photo (ZeroHedge, June 6, 2015):
This is the simplest way to describe Keynesianism:
“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.”
– 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 »
– 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.
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 »
If you’ve read this book, then you know that nothing happens by ‘mistake’ ..
@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.
– 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 »
– 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 »
“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.”
– 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 »
– 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 »
– 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.
– 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 »
– 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…
– 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.
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
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 »
– 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 (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 »
– 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” (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 »
– 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…
– 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 »
– 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…
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.
Tags: Bailout, Banking, Barack Obama, Ben Bernanke, Bonds, Bush administration, Debt, DHS, Dictatorship, Economy, EU, Europe, Fascism, Fed, Federal Reserve, Financial Crisis, Food stamps, GDP, George Bush, Global News, Government, Homeland Security, IMF, Keynesianism, Michel Chossudovsky, Military, military-industrial complex, New World Order, Obama administration, Pentagon, Politics, Quantitative Easing, TARP, U.S., Wall Street
– 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 »
– Peter Schiff Warns Yellen’s Nomination Means Any QE Taper Expectations Are “Delusional” (ZeroHedge, Oct 9, 2013):
Submitted by Peter Schiff via Euro Pacific Capital,
Now that Janet Yellen has been named to lead the Federal Reserve the global financial markets should factor out any possibility that the Fed will diminish their Quantitative easing program anytime during her tenure. In fact, financial forecasts should assume that not only is a taper off the table, but that the QE program is now more likely to be perpetuated and expanded.
Unlike her predecessors, Janet Yellen has never had a youthful dalliance with hawkish monetary ideas. Before taking charge of the Fed both Alan Greenspan, and to a lesser extent Ben Bernanke, had advocated for the benefits of a strong currency and low inflation and had warned of the dangers of overly accommodative policy and unnecessary stimulus. (Both largely abandoned these ideals once they took the reins of power, but their urge to stimulate may have been restrained by a vestigial bias against the excesses of Keynesianism). Janet Yellen, who has been on the liberal/dovish end of the monetary spectrum for her entire professional career, has no such baggage. As a result, we can expect her to never waver in her belief that stimulus is the answer to every economic question. Continue reading »
Tags: Alan Greenspan, Barack Obama, Ben Bernanke, Bonds, Debt, Dollar, Fed, Federal Reserve, Global News, Government, Janet Yellen, Keynesianism, Obama administration, Peter Schiff, Politics, Quantitative Easing, U.S.
– David Stockman: The Entire Economy Is A Ponzi Scheme!
– David Stockman Explains The Keynesian State-Wreck Ahead – Sundown In America (ZeroHedge, Oct 5, 2013):
David Stockman, author of The Great Deformation, summarizes the last quarter century thus: What has been growing is the wealth of the rich, the remit of the state, the girth of Wall Street, the debt burden of the people, the prosperity of the beltway and the sway of the three great branches of government – that is, the warfare state, the welfare state and the central bank… What is flailing is the vast expanse of the Main Street economy where the great majority have experienced stagnant living standards, rising job insecurity, failure to accumulate material savings, rapidly approach old age and the certainty of a Hobbesian future where, inexorably, taxes will rise and social benefits will be cut… He calls this condition “Sundown in America”.
SUNDOWN IN AMERICA: THE KEYNESIAN STATE-WRECK AHEAD
Remarks of David A. Stockman at the Edmond J. Safra Center for Ethics, Harvard University, September 26, 2013
The median U.S. household income in 2012 was $51,000, but that’s nothing to crow about. That same figure was first reached way back in 1989— meaning that the living standard of Main Street America has gone nowhere for the last quarter century. Since there was no prior span in U.S. history when real household incomes remained dead-in-the-water for 25 years, it cannot be gainsaid that the great American prosperity machine has stalled out.
Even worse, the bottom of the socio-economic ladder has actually slipped lower and, by some measures, significantly so. The current poverty rate of 15 percent was only 12.8 percent back in 1989; there are now 48 million people on food stamps compared to 18 million then; and more than 16 million children lived poverty households last year or one-third more than a quarter century back.
Likewise, last year the bottom quintile of households struggled to make ends meet on $11,500 annually —-a level 20 percent lower than the $14,000 of constant dollar income the bottom 20 million households had available on average twenty-five years ago.
– Paul Krugman the Marxist (Ludwig von Mises Insitute, June 24, 2013):
Someone once wrote that criticizing economist and New York Times columnist Paul Krugman is the internet’s favorite pastime. I, too, have engaged in the sport – with no success of changing what Robert Higgs calls the “vulgar Keynesianism” that dirties the Grey Lady’s editorial page. To the betterment of my pride, nobody else has had much luck in the arena of ideas either. Krugman continues to carry the torch of excuses for the Democratic Party while lampooning the bigoted, racist, old, white, and rich GOP.All along, the Princeton prof has stayed true to the cause of aggressive government action to forestall the downtrodden economy. Large fiscal expenditures, aggressive monetary stimulus, increased legal privileges for organized labor, and boosting the degree of state pillaging – Krugman is the caricature of a tyrannical apologizer who will defend the cause of rampant statism at any cost. He has been accused of being a communist, socialist, a Democratic shill, and every other leftist insult that might exist. Much of this is done in a tongue-and-cheek style. Still, the underlying charge of Krugman being a vehement statist willing to justify any and all government action remains accurate. Basically, there is little activity Uncle Sam could do that he wouldn’t approve of.
But now, it appears Krugman has gone overboard with his progressive moaning. In a recent column, he laments, once again, over the fact that some people make more money than others. The wealth inequality canard – which is favored by every leftist under the sun – has become a tiresome ploy at this point. I think Krugman knows this, so he proceeds to justify his indignation by bringing some new evidence into the mix. Now things start getting interesting.
– Ron Paul: It’s Going to Get Much, Much Worse (Peak Prosperity, June 10,2013):
Dr. Ron Paul has long been a leading voice for limited constitutional government, low taxes, free markets, sound money, civil liberty, and non-interventionist foreign policies.
His last term in the U.S. House of Representatives ended earlier this year, so we caught up with the former Congressman to get his latest perspective on how successfully our national leadership is dealing with America’s economic challenges.
In Dr. Paul’s assessment, Washington is too committed to deficit spending and the debt-based economy – both operationally and philosophically – to expect it to embrace a more fiscally-responsible model without a forcing crisis (which he believes is coming): Continue reading »
Tags: Ben Bernanke, Bonds, Bubble, Collapse, Debt, Dollar, Economy, Fed, Federal Reserve, Global News, Gold, Government, Keynesianism, Paul Krugman, Politics, Quantitative Easing, Ron Paul, Silver, Society, U.S.
From the article:
“Since Mr. Krugman tells us all this spending and debt issuance/guarantees are not only good and necessary but in the long run, painless, why are we bothering with personal income taxes?
The US government will collect approximately $2.0bn this year in Personal Income and Payroll taxes. But why? Why are we even bothering with this when today’s leading economists and politicians are telling us that debts/deficits don’t matter and running up astronomical debts is a long-term painless process? It’s practically patriotic. So why shouldn’t we just add our tax burden to the list of items the Fed should be monetizing? Seriously. Why not relieve the burden on every tax paying citizen in the United States (about 53% of us according to Mitt Romney)? You want an economic recovery? Reduce my taxes to zero and see how fast I go out and start spending some of that extra income.”
Submitted by Lucas Jackson
Thought Experiment: Why Do We Bother Paying Personal Taxes?
“Stupidity combined with arrogance and a huge ego will get you a long way.”
– Chris Lowe
I will admit right up front, I am not a fan of the views of Paul Krugman. If Paul Krugman was to be given his way – and by and large he is being given his way – my children and grandchildren will be burdened in the future with paying back untold amounts of public debt just so his life and the lives of countless other Boomers can remain comfortable and embarrassment free today.
This is the essence of his grand plan for a US recovery – MOAR and MOAR debt.
Wow. Genius. Why I didn’t I think of that? Just keep borrowing and printing, borrowing and printing. Got it. Now that I understand it, do I get a PhD?
Who’s going to pay the money back? How will it effect future generations? How will it effect the markets? What will this do to civil society?
You can’t make this stuff up!
– Paul Krugman: “We Should Kick The Can Down The Road. It’s The Responsible Thing To Do” (ZeroHedge, Feb 9, 2013):
The below article, recreated in its grotesque entirety, is a real, serious Op-Ed written by a supposedly real, non page-view trolling, Nobel-prize winning economist, in a serious paper, the New York Times. It can be classified with one word: jaw-dropping.We can only hope that some time in the next five years, when the global economy is in ashes following the implosion of the final central bank bubble, that the US department of injustice will prosecute authors of such drivel (and all those sell-side analysts who have had Buy recommendations in the 2009-2013 period) with the same ferocity it has demonstrated toward those US-downgrading rating agencies, which are now supposed to be solely accountable for the Second Great Depression and the $30 trillion or so in misallocated capital in the past five years.
Kick That Can
By Paul Krugman
John Boehner, the speaker of the House, claims to be exasperated. “At some point, Washington has to deal with its spending problem,” he said Wednesday. “I’ve watched them kick this can down the road for 22 years since I’ve been here. I’ve had enough of it. It’s time to act.”
From the article:
“The US annual budget deficit has almost tripled under Obama, from $450bn in 2008 to $1,200bn this year.”
“America’s national debt is now around $16,000bn, two-thirds higher than when Obama was first elected. In 2008, US government debt was 70pc of GDP. Now it is 102pc.”
“Debt growth at that pace simply cannot go on.”
“If fiscal and monetary stimulus worked, Japan wouldn’t have spent the past 20 years in and out of recession and now be shouldering a debt to GDP ratio of 250pc.”
“If printing money worked, Zimbabwe would be in the G7.”
– The US ‘cliff’ – one small part of a huge debt crisis (Telegraph, Dec 29, 2012):
So here we are, at the turn of the year, with the global economy tottering on the edge of America’s fiscal cliff.
What’s kept springing to my mind over the holiday season is the final scene of The Italian Job – the iconic 1969 original, not the tacky 2003 remake.
“Hang on a minute, lads,” says heistmaster-in-chief, Charlie Croker, as he and his merry band of crooks balance precariously in a bus on the edge of an Alpine cliff. “I’ve got a great idea.”
The Italian Job’s cliff-hanger finale is all make-believe. A brilliant film ends, we marvel at Michael Caine’s acting genius, the credits roll and then we get up and make some tea.
Real-world predicaments aren’t so easy.
– Top Ten Reasons Why Fiat Currency Is Superior To Gold (Or Silver) Money (The Daily Capitalist, Dec 27, 2012):
By John Butler, on December 27th, 2012
In the spirit of the holidays and hope for a more prosperous 2013, I thought my readers might appreciate a little humour to partially offset the relentless doom and gloom associated with the Amphora Report. So please, don’t take this edition too seriously. But if you happen to stumble across a ‘paperbug’ or two over the holidays, perhaps you could share some of the points made here. Humour sometimes helps people realise just how hopelessly misguided they are. Cheers!
Number 10: There Is Not Enough Gold (Or Silver) In The World To Serve As Money
Let’s begin with the obvious. We know that central banks the world over have printed money at exponentially growing rates for years. There is now so much paper and electronic money floating around the world that gold (or silver) can not possibly be expected to keep up. You can’t print gold, after all, you need to find it, dig it out of the ground, refine it, etc, a hugely expensive and time-consuming process which practically ensures a stable rather than exponentially growing supply of the stuff. Continue reading »
Tags: Bonds, Central Bank, Debt, EU, Europe, Fed, Federal Reserve, Funny, Germany, Global News, Gold, Government, Great Depression, Greece, Keynesianism, Milton Friedman, money supply, Paul Krugman, Politics, Quantitative Easing, Silver, U.S.
Japan is doomed on all levels:
The more they “fixed” it, the more it broke. 17 years later, the only thing Japan has proved is that smart Japanese economists are about as real as Godzilla. Time and time again, the country has chosen collapse over admitting failure. On November 19, 2012, Bloomberg reported, “The Japanese government will spend 1 trillion yen ($12.3B) on a second round of fiscal stimulus as it tries to revive an economy at risk of sliding into recession.” It would be funny if it wasn’t so tragic.
Prepare for collapse.
– Japan unveils $11bn stimulus package (CNN/Financial Times , Nov 30, 2012):
Japan’s government has approved its second round of stimulus in a little more than a month, as prime minister Yoshihiko Noda tries to pep up a flagging economy in the run-up to December’s elections.
On Friday the cabinet announced that it would tap reserve funds to spend Y880bn ($10.7bn) on a variety of measures, including rebuilding areas hit by the March 2011 earthquake, employment support and aid to cash-strapped small businesses. The plan is roughly double the size of a package announced in late October, which was also drawn mostly from reserves and aimed at reconstruction efforts.
The stimulus comes as Japan hovers on the brink of a technical recession, its fifth of the past 15 years, as manufacturers cut production amid a steady worsening in their sales and profit outlook. Falling exports were the main contributor to a 0.9 per cent contraction in gross domestic product between July and September, and economists are braced for another in the three months to December. Last week the government slashed its quarterly assessment of business sentiment in all 11 regions of the country — the first clean sweep since February 2009 — blaming sluggish output and consumption.