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  • Case-Shiller Down 5.1%: What Will Stop It? [View article]
    S. Maturin, you are right on point. BTW are you the famous 19thC explorer, zoologist, and spy?
    Jun 3 07:40 PM | Likes Like |Link to Comment
  • Case-Shiller Down 5.1%: What Will Stop It? [View article]
    Berkeley Guy, you make a good point, but what I think is the better statistic is the percent of homeownership in the total population. That number is adjusted by population data. At the peak of the boom, the rate reached almost 70%, an historic high. Now it is settling down to more historic norms, about 66% to 67%. Before the big housing push starting in the mid-90s, it was 64%. So, one could argue that two series of Fed money pumping led to massive overbuilding. BTW, about 94% of the mortgage market is guaranteed by the Feds. Which may answer the question as to why the hell any bank would lend to a borrower with a 500 credit score, almost zero down, and liar loan docs. But, if Fannie-Freddie-FHA guaranteed the loan ...
    Jun 3 07:38 PM | 1 Like Like |Link to Comment
  • Why Bernanke Will Be Forced to Do QE3 [View article]
    Then we have nothing to talk about.
    Jun 1 04:08 PM | Likes Like |Link to Comment
  • Why Bernanke Will Be Forced to Do QE3 [View article]
    "The Austrians stole most of their work from Chicago."

    Since, as I said, the Austrian theories were developed pre-Chicago, then the Austrians couldn't have "stolen" it from the Chicago School. We are talking about mostly neo-Classical economists who ignored the marginal revolution and were mired down in national aggregate ideas of econometrics. Since Mises wrote "Theory of Money and Credit" in 1912, I get the feeling that you don't understand nor have you studied Austrian theory. Sorry if I misunderstand you, but from your comments I think it is quite obvious (Mvt=PT). And you know who I mean by Minsky.
    May 31 01:43 AM | Likes Like |Link to Comment
  • Why Bernanke Will Be Forced to Do QE3 [View article]
    Thanks again. But Austrian theory was around long before Friedman and even Minsky. Before you completely dismiss the theory, I would recommend you understand it. You can find many good books and articles on The Daily Capitalist "Reading List." dailycapitalist.com/re.../
    May 28 06:46 PM | Likes Like |Link to Comment
  • Why Bernanke Will Be Forced to Do QE3 [View article]
    Thank you for the comment but we are pretty far apart on this issue.
    May 28 02:53 AM | Likes Like |Link to Comment
  • The Economy Is Sliding Into a Stagflationary Spiral [View article]
    My goal as a blogger has been to explain current economic trends. I don't give investment advice.

    Also, globalization has been a big plus for Americans and countries we trade with. The popular notion that "we don't make anything here" is a myth since we are still the world's biggest manufacturer and our share of the global market has been rather steady for the last 30 years or so. What has happened is that manufacturing jobs have declined because technology and capital has made our workers more productive. Plus the fact that many unions have priced their workers out of the market. Those lost jobs have been made up in the services sector and if you look at average wages per capita in manufacturing and in services they are the same (about $44,000).

    Thanks for the comment.
    May 19 03:34 PM | Likes Like |Link to Comment
  • The Economy Is Sliding Into a Stagflationary Spiral [View article]
    The quick answer is that other currencies are worse than ours. The decision hot money has to make is where to best preserve liquidity in an uncertain world. Historically that has been Treasurys. Not saying that couldn't change but the eurozone is having substantial problems right now.
    May 19 03:28 PM | Likes Like |Link to Comment
  • The Economy Is Sliding Into a Stagflationary Spiral [View article]
    I think I have a different view of the Great Depression. Yours would be the conventional wisdom, kind of Monetarist view. Hoover and FDR caused the depression. Please study and compare the 1920-1921 recession: bigger initial crash, more initial unemployment, etc, yet it was over in 18 months because of Harding-Coolidge hands-off policy. I get my info from Rothbard's America's Great Depression, and Amity Shlaes's The Forgotten Man and several others. Stim never works.
    May 18 02:55 PM | 4 Likes Like |Link to Comment
  • The Economy Is Sliding Into a Stagflationary Spiral [View article]
    So angry, Robert. I guess I resent the right wing accusation, but whatever. Can you explain why all of a sudden we had massive demand? Other than Keynesian magic?
    May 18 02:51 PM | Likes Like |Link to Comment
  • The Economy Is Sliding Into a Stagflationary Spiral [View article]
    EB:

    You've been smoking too much pacalolo, dude. Or drinking a lot of good agave juice. Please re-read the piece more carefully and I think you may recant most of what you said.

    Jeff
    May 18 02:47 PM | Likes Like |Link to Comment
  • The Economy Is Sliding Into a Stagflationary Spiral [View article]
    The problem with stimulus as you both mention is that it doesn't work. All it does is suck money out of the private economy to use on government favored projects. And those are determined by policical decisions. Only market-based decisions can create wealth and jobs. The government only spends. I am not arguing about the need for roads and bridges for the purpose of this argument, only that what is needed right now, and the purpose of my article, is more real capital to increase production. Only that will create real jobs. Thanks.
    May 18 02:38 PM | 2 Likes Like |Link to Comment
  • The Economy Is Sliding Into a Stagflationary Spiral [View article]
    Good points.
    May 18 02:34 PM | 1 Like Like |Link to Comment
  • The Economy Is Sliding Into a Stagflationary Spiral [View article]
    While I appreciate your commentary, there is no evidence that the bailouts and flood of new money and credit from the Fed actually saved anything. Yes, they propped up some big institutions but the bogeyman of economic collapse is not based on any fact or theory except the junk research put out by the Fed to justify their actions. Instead of having a recession/depression of a much shorter duration, this one is dragging out, and will continue to drag out, for years. How much more suffering have we had as a result. Just assume for a moment that Citi and BAC went down. Are you saying that no banks were around to step into their shoes? I don't mean to pick on you, but this "conventional wisdom" is what got us into trouble in the first place. The expert in this history is David Stockman who writes for my blog, The Daily Capitalist. He is writing a book on the topic and shreds the arguments you have made. The problem is that we keep doing the same things over and over and now we've reached a point, a cliff if you will, where the jump off is massive inflation. And that will cause more harm than any depression.
    May 18 02:32 PM | 5 Likes Like |Link to Comment
  • The Economy Is Sliding Into a Stagflationary Spiral [View article]
    Tony, thank you for the comment. You raise good points and my answer is: tell me what the Fed will do and I can answer your question.

    My guess is that the Fed and the Treasury would welcome high price inflation for a while. While nominal debt stays the same, dollars get more plentiful and it makes paying down debt cheaper. I agree that it couldn't last for any significant length of time.

    Remember the Misery Index? We won't see employment and production spike because of the points I raised. Which means that you can have price inflation and stagnating production at the same time.

    BTW I was building a project in 1979 and my construction interest rate went to 21.5%! Inflation got as high as 15%.
    May 17 06:27 PM | 2 Likes Like |Link to Comment
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