User 146128

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    • ON: Wed Feb 6th 16:56 PM
      Commented on:
      Is Overindebtedness Pushing Us Into a Deflationary Spriral?
      Classical Keynesian "pump priming" alone won't "fill the breach".
      Stagflation won't go away without corrrecting the current account deficit.
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    • ON: Thu Jan 31st 21:02 PM
      Commented on:
      The Dollar Crisis and Coming Gold Boom
      Alfred Marshall, the Cambridge economists, is responsible for developing the cash-balances approach to money. For example, if individuals collectively desire expanding their cash balances (increasing the period over whose transactions purchasing power in the form of money is held), they will initiate a chain of events which will lead to a net reduction in their aggregate holdings of cash. That is, an over-all increase in the demand for money leads to falling prices, a decline in profit expectations, reduced borrowing from the banks -- and therefore a smaller volume of cash balances. Money thus is truly a paradox - by wanting more, the public ends up with less, and by wanting less, it ends up with more. All motives which induce the holding of a larger volume of money will tend to increase the demand for money - and reduce its velocity. Therefore, if there is a flight from the dollar, there will be hyperinflation in terms of dollar denominated assets.
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    • ON: Thu Jan 31st 17:34 PM
      Commented on:
      The Dollar Crisis and Coming Gold Boom
      Yes, gold's more attractive now than almost any previous time. Why? because the current account balance is destined to get wider, not smaller.
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    • ON: Thu Jan 31st 17:24 PM
      Commented on:
      Fiscal Stimulus Package Won't Avert the Recession
      Everybody flunked accounting:

      Commercial Banks as a system don’t loan out anything. They create money when they make loans

      Money creation is not self-regulating

      You can’t take money out of the banking system (only the FED can)

      Savings transferred through the intermediaries never leaves the CB system. The intermediaries are the customers of the CBs.

      Savings held within the commercial banking system are lost to investment or to any other type of expenditure.

      From the standpoint of the economy the banks shouldn’t pay for something they already have. Payments on CB savings raise all interest rates, induce disintermediation among the financial intermediaries, shrink real-gdp, & decrease CB profits.

      The short-term & long-term solution to our non-bank problem is to get the money creating depository institutions out of the savings business. This would vastly increase real-gdp & vastly increase commercial banking profits.
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    • ON: Thu Jan 31st 17:21 PM
      Commented on:
      Fed's Latest Move an Indication of Economic Weakness
      Everything bottoms in June as the Fed has ascertained.
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    • ON: Thu Jan 31st 14:09 PM
      Commented on:
      The Dollar Crisis and Coming Gold Boom
      There will come a time ( unpredictable ) when it will be impossible for the government ( federal ) to collect enough in taxes to pay all of its expenses, including interest on the national debt. The Gov't can of course borrow an indefinite amount through the Fed. ( concealed greenbacking ) given a few changes in existing law. But that would lead to hyper inflation - i.e., a collapse in the credit of the Gov't. So the easy way, is the way the French did it in 1960. Simply say that beginning Jan 1 ( or any other date ), new dollars will be issued, and that each new dollar is worth 100 old dollars. Then follow that up with a largely state controlled economy.

      In 1960, the French economist / mathmetician Jacques Rueff, during Charles de Gaulle's presidency, converted the old franc, to a nouveau franc, equal to 100 of the old franc. However, even with this substitution, inflation continued to erode the currency's value, though at lower rates of change, in comparison to other countries. And this new franc equaled 20 cents to a U.S. dollar. The old rate was 5.00 to a dollar.

      In 1960, the French franc, which was one of the weakest currencies, overnight, became one of the strongest. Correcting policies included plans to 1) balance the budget, 2) stablize the currency, and 3) eliminate currency controls.

      The gold content of the franc increased 100%, & 1) foreign exchange rates, and 2) France was on a managed paper standard; externally, on a modified gold bullion standard. With the new policies, France's economy strengthened, and the franc became fully convertible @ approximately its gold par, into gold for foreign exchange and into foreign currencies.

      With the introduction of the euro, the franc in Jan. 1, 1999, was worth less than 1/8 of its Jan. 1, 1960 value

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    • ON: Thu Jan 31st 13:56 PM
      Commented on:
      The Dollar Crisis and Coming Gold Boom
      Double check your history. Every currency crisis since 1980 has been due to an overly restrictive U.S. monetary policy (a downswing in the world's largest economy has previously had a disproportionate impact on the export dependent countries).

      In all of these events, the Fed forced the proxy for Real-GDP's rate of change to crash triggering a change in international trade flows.

      The Bureau of Economic Analysis compiles Gross Domestic Product on a quarterly basis. But the operations at the "trading desk" have an immediate impact on the financial markets. Thus Real-GDP could be declining in both Sept & Oct overlapping the BEA's 3rd & 4th quarters in any year.

      The combination of Sept & Oct's moves will be averaged, smoothed, or disguised by overlapping the BEA's 2 fixed reporting periods. This in turn masks the true extent and impact of the change in the proxy for Real-GDP.

      So incontradistinction to Willaim Poole, there are currency moves that are predictable.
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