Inflation is the cruelest hoax of all. Ben Bernanke and the Fed argue we need more of it, yet they never provide reasons why. So why do we have inflation and the desire to increase it? The Great Inflationist himself, John Maynard Keynes, explained it rather succinctly: By a continuing process of inflation, government can confiscate, secretly and unobserved, an [...]
Inflation
Bubble Mythology
John Rubino explains how bubbles are (temporarily) rationalized and sustained: Late in the life of every financial bubble, when things have gotten so out of hand that the old ways of judging value or ethics or whatever can no longer be honestly applied, a new idea emerges that, if true, would let the bubble keep inflating forever. During the tech [...]
Goldman Sachs Is A Small Fish; The Fed Is The Vampire Squid
The gap between the reputation of the Federal Reserve and its actual value to the economy is perhaps greater than any other institution extant. It is a myth that the Fed is necessary and an even greater myth that it is beneficial to society. As Charles Hugh Smith observed: In a system that depends on lies and the credulity of [...]
The Interest Rate Canary
In the early days of mining, miners brought canaries down into mines. The purpose, according to Wikipedia was to signal danger: If dangerous gases such as methane or carbon monoxide leaked into the mine, the gases would kill the canary before killing the miners, thus providing a warning to exit the tunnels immediately. Interest rates can be looked at as [...]
How Does It End?
The days of reasonable economic forecasting are over. Today, an economic forecast is more like the analysis of a criminal mind than the evaluation of economic data. The dominating role of government overpowers markets intentionally. In the short-term that will continue. Reactions to Federal Reserve minutes referencing continuation, alteration or cessation of quantitative easing cause stock markets to move by [...]
Some Commentary On Inflation
An often asked question goes something like this: “How is it possible for the Fed to expand the money supply without inflation showing up?” There are two answers to this question. One pertains to the real rate of inflation versus the reported rate of inflation. Government continues to manipulate and change CPI calculations in ways to diminish the reported amount [...]
Smoke And Mirrors Running Out — Depression to Follow
Those who believe the economy is recovering are ignorant of the facts. Other than the Great Depression no US recovery (and I don’t believe we are in a recovery) taken longer. Eventually it may take more than a decade like the 1930s. Or perhaps it will be like Japan which is in its third decade of “recovery.” Politics and Economics [...]
Government’s War On Savers and Investors
Caution is the watchword for markets. May ended with some serious volatility and we now enter the summer months. According to Wall Street wisdom, you are supposed to have “sold in May and gone away.” If there is upside left in markets, and for the life of me I cannot understand why there would be, it is likely to show up [...]
Is Inflation A Cause Or An Effect Of A Dying Country
I recently posted “The Country Is Dying.” If you read the post you should understand that this slow death need not happen. Countries and civilizations do not have biological clocks. Unlike humans, there should be no constraints on their lifespans. A corporation is a similar construct. It is assumed under the law to have an infinite lifespan. Obviously corporations don’t [...]
Fiat Currency Going To Its Intrinsic Value
Those invested in gold or other precious metals were slaughtered in the last two trading days. Although the pain of their losses is likely not to be eased by the chart that follows, it does show the validity of gold as a long-term strategy. As Voltaire once said: “All fiat currency returns to its intrinsic value — zero!” This chart [...]
Cyprus and The Risk of Bank Runs
The events in Cyprus regarding the intended confiscation of private citizen’s bank accounts to pay for the abuses and excesses of government raise enormous issues. The very concept of private property is under attack. Just what do you own? The fact that government feels free to raid your assets to extend temporarily its unsustainable and profligate ways reflects a complete [...]
Gold Is Not In A Bull Market
People talk about the bull market in gold being over. Can something that never began and never was, actually end? That is not a philosophical question meant to deceive. The question is critical to understanding gold and its valuation. The Nature of Gold There is no bull market in gold! There never has been and never will be. Gold is an [...]