Jakester

Pathology of the U.S. Debt Bubble

Keep in mind those Federal debt numbers do not include unfunded liabilities like Social Security and Medicare!!

Inflation: It's a Crowded Trade

Tony, a strong treasury market is not indicative of asset inflation. It is indicative of deflation.

Ron Paul on the Economy

We desperately need a younger Ron Paul. I supported him in his 2008 candidacy, but he will be too old in 2012 to go through a brutal campaign and convince voters that a guy in his mid 70s should be elected regardless of his positions.

Analyzing Murphy on Mish's Deflationism

Jonah,

Good article. I had the same misgivings about Murphy's arguments when I read his rebuttal. In fact, if credit is not inflationary, it sort of nullifies the whole Austrian argument as far as I can see.

Some Geithner Resignation Talk

If he resigns, can we get someone who is not from Goldman Sachs? The fact that the tax payer is bailing out Goldman Sachs through AIG while the partners continue to reap huge bonuses is the most despicable aspect of the current crisis. This was to be expected when GS acts as a farm system for the Treasury Secretary position.

Stage Being Set for Hyperinflation

Teutonic..it's easy to sound compassionate when you are handing out fruit drinks (money) that isn't yours. Also, you mention greedy CEOs. What about people that bought a home (never mind two or three) with no money down and no way to make their payments? Were they not also greedy or does greed only apply if you're in the top tax bracket?. When will liberals stop falling for this "compassion" racket?? Didn't the failed war on poverty teach you folks anything?


On Feb 10 12:00 AM Teutonic Knight wrote:

> Georgen,
>
> I believe that every human being, be it his/her background, upbringing,
> social strata, color of the skin, wealth or poverty, educated or
> non-educated, genteel or ill-mannered, they all have the same basic
> desire for dignity, respect, happiness and well-being. I respect
> your opinion. I hope that you would respect mine as well.
>
> I would like to take a slightly different view of your analogy.<br/>
>
> I think in our present crisis situation, the small bunch of greedy
> banking CEO's (I call them the Bad Apples) who invented and pushed
> all those derivatives and sub-prime mortgages while raking hundreds
> of millions of bonuses into their pockets would actually resemble
> your son who stole your volka.
>
> Sure, it is clear like hell -- what Obama is doing with our tax dollars
> in that Stimulus Bill is pure charity. I, like yourself, do not
> particularly like others mucking around with my money. But think
> about the 4 million of folks who had just been laid off. Obama
> is like taking soda and fruit drinks from my fridge to handout to
> the needy.
>
> After listening to Obama on TV moments ago, I feel that I have more
> respect for him as he seems to show compassion for his fellow human
> being.
>
> I hope you will too.
>
> On Feb 09 10:23 PM Georgen wrote:

An Alternative to Schiff's Doomsday Scenario

There was no drought. There were decades of malinvestment created by too easy money. Not a single Keynesian that I know of predicted this correctly. Austrians did and they don't agree with your analysis.

An Alternative to Schiff's Doomsday Scenario

A drought didn't come along, the malinvestment of capital after years (decades) of Fed stimulation did. That's where your analogy breaks down. Who are all the other economic forecasters that got this right and are anything of them Keynesians? Please provide a link to one of these forecasts instead of telling us others predicted this mess. The only ones I know of that got it right were of the Austrian school and they don't buy your argument one bit.

Proposal: Debt Indexing During Deflation

Doctor Dave: There is nothing "natural" about inflation. It is caused by the issuance of credit and too much printing of fiat money. I'm not prohibiting the borrower or the lender from making money, I just want to remove inflation and deflation (which are exogenous from profit) from the equation. You can make a calculation of profit when you enter a transaction, but how do you know what the government will be doing with the currency ten years down the road. It may be printing money like crazy. How do you accurately factor that into your thinking? Is it done everyday? Certainly, but just as the Treasury sells Inflation-Protected securities (which I guess should be illegal in your scheme of things) why not allow the borrower and lender to in essence buy and sell inflation/deflation protected loans?

The 'Great Slump' of 2008 (Part 1)

What does "Fair Share" of taxes mean? We already have a 'progressive' income tax but apparently not progressive enough for Bosun who wants an 80% tax rate for high earners! The wealthy already pay their "fair share" so let's not pretend they are getting a free ride. Then Bosun states that personal income shouldn't be taxed, only corporate income? So corporations will pay out all their earnings as salaries (or move to Switzeland). It's a bad idea and it won't work. Nuff said....


On Dec 21 10:01 PM bosun.j wrote:

> Thought provoking article with both good points and a bad suggestion
> based on a fundamentally flawed idea. First the good:
>
> Bring all our troops home. Enough said.
>
> "releasing government and central banker control of money, by enabling
> gold and silver to compete as currencies against the governmental
> fiat paper." Enough said.
>
> Restoring faith in the financial system. Very hard to do and very
> important. Short of dragging the Banksters and their Congressional
> lapdogs out in the street and executing them (after a fair trial,
> of course!) how do we do that?
>
> As for your tax holiday:
>
> First, income taxes go to paying a percentage of the interest on
> the debt not for services. So, were there to be a tax holiday it
> would only extend out and compound the amount that had to be paid
> to the Banksters. Possibly doing more damage than a stimulus. <br/>
>
> Second, this idea that taxation is theft. As the wealthy benefit
> much more from the services of government through their greater use
> of the commons the wealthy should be required to pay their fair share.
> Just one example of this is the court system. Wealthy people use
> the court system to great advantage in order to skew the outcome
> in their favor. No knee jerk reactions here, everyone knows this
> is true. Unfortunately this isn't the only area where advantage is
> taken. Don't get me started on the trillions of tax dollars being
> thrown at the wealthy since September.
>
> The wealthy who benefit more from the commons should have to pay
> their FAIR share.
>
> Rather than suspend the federal income tax across the board it should
> be suspended for those making less than $200k a year. Say 10% tax
> on the first 100k above 200k, 15% tax on 300k-400k and topping out
> at 80% on anything above $2 million. No tricky IRS rules deducting
> this and that.
>
> Fairness. The American way. So, lets live it. Make it mean something!

Negative Real Rates Will Drive Gold Prices Up

Have to agree with logicalthought. The price of virtually everything is now dropping so real rates are very high. Published CPI figures may well understate this going forward as they don't want to spook the public and admit we are in deflation.

Profiting From Iceland's Woes

Any mutual funds or ETFs that concentrate on Iceland??

Famous Thoughts for a Bear Market

Although I agree with much in "Invest-in-a-Farm" The new system, that "will replace the paradigm of demand for superfluous and debt-driven consumer goods, it will be a moral, civilian and political paradigm that organizes demand on collective investments done for the common good: not for the present but for the future, and not debt-driven but made on a solid, ground-laying perspective. It will no longer be the market but individual and collective consciousness to judge power, not the other way around" has been tried in the USSR and Cuba most notably and failed miserably.


On Nov 20 05:21 PM Invest-In-A-Farm ! wrote:

> Italian Economics Minister Giulio Tremonti was the first member of
> an acting government to ever open the academic year at the Catholic
> University in Milan. Tremonti developed the theme of his speech,
> "social market economy," by calling for a new economic system that
> allows the long-term survival of society, and described the current
> crisis as due to globalization. He repeated his call for dealing
> with the derivative bubble in the only way possible: cancel it.
>
>
> "If I can use an image, it is like living in a video-game, with a
> key difference: In a video-game you can turn it off and the game
> is over. This is a video-game that will not be over. And just like
> in a video-game, you face a monster, you beat him and you start to
> relax, but another one comes, bigger than the first one; thus, the
> first monster was the sub-prime and somehow it was managed; the second
> monster was the collapse of credit and it was somehow managed; the
> third monster is the bankruptcy of the main financial institutions
> and it was somehow managed; the fourth one is the collapse of the
> stock markets, but behind the corner there are more monsters: the
> credit cards, the expected corporate bankruptcies due to troubled
> classification of corporate bonds, and then the monster of monsters,
> the derivative one, where the folly of incalculable risk appears,
> of non-intentional but collateral effects, definable not ex ante
> and not manageable without procedures that could evoke in the economic
> realm, the old wisdom of sabbatical year."
>
> Tremonti quoted Cardinal Ratzinger in a 1985 paper, in which Ratzinger
> forecasted the collapse of a system based on market rules in the
> absence of "a discipline based on a strong ethical and religious
> order.. "We are in a terra incognita", Tremonti said. "In the current
> moment we are inside a situation characterized by big critical complexities.
> I said in a conference that this is not a recession cycle but a discontinuity...
> of a crisis that nevertheless leads to a solution, but you must go
> through it. I think that we must have scientific ignorance, knowing
> of not knowing. I think we should be diffident towards those who
> do not know that they do not know, those who, not having forecast
> the breakout of the crisis, want to explain to you how it will develop."
>
>
> Tremonti listed a series of key changes introduced by globalization,
> that caused the crisis. Among these, he mentioned the rejection of
> Luca Pacioli's system of "double-entry bookkeeping". Calling it a
> "tribute we owe to an ancient Franciscan," Tremonti said that this
> shift was not a simple accounting change, but "a fundamental political
> and moral shift." "The real account is the world of values and the
> economic account is the world of prices. The real account is the
> world of values where you see the structure, the history, the origin,
> the present and the future of a society, as well as its industrial
> and moral mission." "The crisis we are living in is the crisis of
> a paradigm, which in the last 10-15 years has been dominated by the
> ideology of demand for consumer goods, often superfluous ones, better
> if purchased through debt... and eventually, the crisis of positivism
> that, at the same time, like in an insane oblivion of natural law,
> has deceived us into thinking that everything could be dominated
> by other than what is in our tradition, in the idea of a fair order,
> in the view of a fair social order which inspires the magistracy
> of the Church. The separation of moral law and economy, the effect
> of positivism has produced a view of man and of society in which
> morality is nothing but a subjective choice, and irreducibly so.
> Law [has become] nothing but the exercise of command by those who
> detain power, justum quia jussum, and the economy is nothing but
> an anonymous mechanism of satisfaction of individual and irrational
> whims, de gustibus non disputandum est... Moral law and economy have
> been separated, and globalization has accelerated this process, sublimated
> it, and favored the illusion that the individual person can always
> and increasingly distinguish between good and evil without the help
> of moral, of tradition, [but] on the basis of pseudo-scientific abstractions
> rather than on the basis of historic reason, as if one could crush
> man, values, time, space and history".
>
> The solution to the crisis goes through a new system, that "will
> replace the paradigm of demand for superfluous and debt-driven consumer
> goods, it will be a moral, civilian and political paradigm that organizes
> demand on collective investments done for the common good: not for
> the present but for the future, and not debt-driven but made on a
> solid, ground-laying perspective. It will no longer be the market
> but individual and collective consciousness to judge power, not the
> other way around. One thought can inspire us on this road, an old
> and wise thought by Plato: `The only good currency to be changed
> with all others is phronesis: a practical intelligence.' Above all
> if it is guided by God."

A Smart Electricity Solution for Transportation

It's not clear to me how the problems you've outlined in this article contradict the Pickens Plan or obsolete it. One issue you raise is for better grid management and applying technology to that problem. That may enhance the Plan, but it certainly doesn't contradict the need for less dependence on foreign oil and more use of domestic sources such as natural gas and wind which are at the heart of the Plan.

Five Financial Crisis 'Aftershocks' as Investment Opportunities

This story is sort of a laundry list of fairly obvious side-effects of the credit crisis, but short on current actionable advice