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Dr. Stephen Leeb  

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  • Paul Volcker's Inflation Warning [View article]
    Very good question. I wish I could give an compelling answer. I don't think Greece and Germany can ever share on a long-term basis a currency or similar fiscal policy. The cultures are too different. Indeed the unification of East and West Germany presented massive problems that still persist today. Some way or other Greece will have to seperated from the EU. Whether that means the end of the Euro or not I don't know. I do know that if the Euro completely breaks up for at least a while it will be a mess for everyone - including Germany whose export driven economy will have a much richer currency.
    Sep 23, 2011. 12:10 AM | 1 Like Like |Link to Comment
  • Paul Volcker's Inflation Warning [View article]
    You probably meant that sarcastically. Despite yourself you make a good point in that there are no experts in this field. Ideas from high school seniors can be as good as ideas from Ph.D's. Why don't you put your mind to finding solutions to problems than how to insult people. I think you would feel better about yourself. And for the record everyone from the doorman in my building to all my employees call me Steve except for my super who being Serb calls me Stevie.
    Sep 23, 2011. 12:03 AM | Likes Like |Link to Comment
  • Paul Volcker's Inflation Warning [View article]
    I agree and that is why I am so fearful of the Chinese - who tend to think in 5, 10, or even 20 year periods. Still I think if we involve the right U.S. firms we might get long-term thinking, Incentivizing new firms in the solar energy field for example with government loans and huge tax incentives would really kill two birds ... in that new businesses and small businesses are the best job creators. I am sure there are lots of ideas we just have to put my mind to it.
    Sep 23, 2011. 12:00 AM | 1 Like Like |Link to Comment
  • Paul Volcker's Inflation Warning [View article]
    I could not agree more. I guess my point is that you cannot achieve those aims without tolerating more inflation in the short term. If you can do it without so muich the better, and I will happily say I was wrong.
    Sep 21, 2011. 10:23 PM | 1 Like Like |Link to Comment
  • Paul Volcker's Inflation Warning [View article]
    Thank you so much for the thoughtful reply. I agree with almost everything you said. I think small businesses are utterly key. You may be right about dollar devaluation but I think as do the Chinese that a cheap currency boosts exports. This is the way China has come to dominate the solar industry. I also think if we had a president that would lay out the issues - i.e., in terms of a quasi war that will define the current century, industry would play ball. The speech could start with a statement that without massive investments in rare earths our military and energy efforts will be crippled. In truth I probably put too much emphasis on inflation,. Like you I don't like inflation - I lived through the 70's and abhor it. I simply think it will be a necessary consequence of following the right policies. Maybe I am wrong and we can accomplish what we need to do without inflation. I guess, then, what I am saying is that we simply cannot let inflation be a priority that trumps everything else. Again many thanks for your thoughtful comment.
    Sep 21, 2011. 07:25 PM | 1 Like Like |Link to Comment
  • Paul Volcker's Inflation Warning [View article]
    Again I want to emphasize I appreciate the deep concerns about inflation and in fact share them. The core of my position is not a defense of inflation per se, but rather a fear of the Chinese and that we lack the willingness to tackle the problem. I hope I am paranoid, but I have written a book on the topic called Red Alert, which so far has been pretty well reviewed so you can judge for yourself. I am sure it will be in most libraries. And again with no guile I say I hope the book turns out to be wrong.
    Sep 21, 2011. 09:14 AM | 1 Like Like |Link to Comment
  • Paul Volcker's Inflation Warning [View article]
    Many thanks for all your comments. One regret about the article is that I did not make clear that I thought inflation is a necessary consequence of the quasi-war we are having with China. I don't see how we can develop the industry and tools we need in this century without a lot of spending, the consequence of which will be inflation. If I became convinced that China was not such a threat I would agree with all of you who say inflation is an economic scourge. Maybe I sound less extreme if I say inflation is a short term necessity but a long term killer.
    Sep 20, 2011. 09:57 PM | 2 Likes Like |Link to Comment
  • Paul Volcker's Inflation Warning [View article]
    There is very little you said that I disagree with. But one point I made above and admittedly should have stressed more in the article but do stress in my book is that we are already in quasi-war with China. We can't win without spending and developing new industries. That spending as was the case in WWII will lead to more inflation. I believe it is a necessary short term evil which if managed correctly could set the stage for another great American century.
    Sep 20, 2011. 09:50 PM | 1 Like Like |Link to Comment
  • Paul Volcker's Inflation Warning [View article]
    I don't disagree but instead want you to consider that governments do have a role during wars. And rightly or not I do believe we are in a war of sorts with China. Private enterprise helped win the Second World War but did so in conjuction with the government.
    Sep 20, 2011. 09:44 PM | 1 Like Like |Link to Comment
  • Paul Volcker's Inflation Warning [View article]
    Very interesting. Thanks for bringing the paper to our attention. Much appreciated.
    Sep 20, 2011. 09:42 PM | Likes Like |Link to Comment
  • Paul Volcker's Inflation Warning [View article]
    I am not advocating more of the same - far from it. Rather I think that rather than simply spend the govt in conjunction with industry needs desperately to invest in the future. China when it comes to new energies is eating our lunch. This is my greatest fear. I don't see an easy way out.
    Sep 20, 2011. 09:40 PM | Likes Like |Link to Comment
  • Paul Volcker's Inflation Warning [View article]
    I agree that retirees would be hurt. But look at the 70's compared to the past decade. Real income even adjusted for the high inflation rose during the inflationary 70's. Those most hurt were the very rich as financial assets underperformed. The exceptions, of course, were commodity related stocks.
    Sep 20, 2011. 09:37 PM | 1 Like Like |Link to Comment
  • Paul Volcker's Inflation Warning [View article]
    Inflation would be a consequence of the necessary investment we need to do. Also inflation is a remedy against high debt.
    Sep 20, 2011. 09:35 PM | 1 Like Like |Link to Comment
  • Paul Volcker's Inflation Warning [View article]
    Agreed that inflation is bad. But look at your second graph. To develop rare earths - and I am not saying we cannot - we will need to spend a lot of money and a lot of money will mean more inflation.
    Sep 20, 2011. 09:34 PM | Likes Like |Link to Comment
  • Paul Volcker's Inflation Warning [View article]
    You may be right. But we are not doing too well with low inflation, whose symptoms include an imputed 10 percent decline in median incomes over the past 5 years or so. I tried to make clear in the article that I don't want inflation but rather view it as the lesser of two evils. Examples from Brazil to Japan show that countries can recover from very high inflation. I don't think we have much chance against the Chinese unless we buy ourselves a bit more time.
    Sep 20, 2011. 09:32 PM | 2 Likes Like |Link to Comment
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