You feel poorer because you are poorer. In the last fourteen years, has your income increased over 50%? If you think it has, has it done so after taxes? Even if it has, you likely have not kept up in terms of inflation. If you are a retiree, living on fixed income, a pension or bonds, you certainly have become poorer. If [...]
Inflation
Price Inflation Begins
The notion that inflation is not something to worry about is beginning to be questioned. Actually, anyone that understands monetary economics or the true definition of inflation knows that it has already occurred. Now it is beginning to show up in prices of food, energy and other commodities. Here are two headlines from Zerohedge: Gold Spikes To 3-Month Highs Copper Surges To [...]
Inflation Coming?
The issue of inflation versus deflation should not be a discussion of debate. The proper definition of inflation is an increase in the money supply. By that definition, there has been massive inflation since 2008. The bastardized definition of inflation, the one that is most commonly used by layman (and increasingly by economists) deals with the rate of price changes, typically as [...]
The Dirty Secret(s) of Inflation
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 [...]
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 [...]