Glen L.

U.S. Empire In Decline, Makes Way for China

Mad Hedge: " As for me, I think I’ll move to Tahiti and live off of coconuts and freshly speared fish, wearing only a loin cloth. "

That's a little too much information.

"Anything is better than becoming French."

Now, here we go again, insulting the whole race just because the Left has pretty much taken over there. They've been in power now for about 220 years. Stability!

How Will the U.S. Recover from the Debt Crisis?

I agree with the view that the US will "recover" from the debt crisis by defaulting on the entitlement programs, primarily Social Security and Medicare which will see gradual, piecemeal reductions in benefits. Congress will attempt to negate the "third rail" by targeting minority sectors within the geezer population for reduced benefits, never enough to seriously threaten their incumbency in the next election.

I also think the US will take extraordinary measures to save the dollar and continue to pay the interest on the foreign debt. This means rising interest rates, much higher taxes, and a true depression in the not distant future. The alternative -- printing money to pay -- is the road to Zimbabwe. I don't believe the Fed will allow that to happen.

The longer range forecast is for the collapse of the fiat dollar anyway, a return to the gold standard, the abolition of the Fed, and the end of the American empire. We can only hope.

Roubini Hates Gold: Is He Wrong Again?

Someone made a comment about GLD controlling more physical gold than all the central banks combined. More likely is that GLD is playing the fractional reserve game with gold. It would be very interesting if a large number of GLD players demanded physical gold. (I'm not sure if that's an option, however, someone could enlighten me). Perhaps the same thing is happening with the bullion banks. I've heard rumors that the level of trade in gold far exceeds known physical reserves.

Roubini Hates Gold: Is He Wrong Again?

@thotdoc: "If you want to use statistics to predict what people will do, use the statistics that mirror how the mind works. "

There are no such statistics. The human mind is much too unpredictable, otherwise there would be a lot of statisticians cleaning up in every conceivable market.

Mises, not Beyes or Fisher.

Cramer's Mad Money - When the Facts Change...(10/23/09)

Cramer? You mean that guy who lives across the hall from Jerry Seinfeld? His market sense is spot on! Love that coffee table book that converts into a mini coffee table.

Is Capitalism in Its Death Throes?

Capitalism is the natural economic order that arises from free enterprise. It has existed, at least in rudimentary form, since the first humans saved seeds from wild plants and planted their own crops. Without capitalism the human race itself can perhaps exist, but never thrive; we come into the world totally unequipped to survive without clothing and shelter, the most efficient production of which requires capitalism.

All forms of socialism employ at least a modicum of capitalism, or they couldn't exist either. The Soviet Union survived for 70 years because it had enough raw materials to sell to foreign capitalists, and because it had a two-tier system wherein the party aparatchiks secretly enjoyed the illicit fruits of the freest of all enterprise, i.e. the black market.

So, if capitalism really is in its death throes, so is the human race.

The author is completely correct in his points about crony capitalism, which is a hallmark of the fascist version of socialism. There is some confusion, however, about the banks controlling capital; the banks, via the Fed, control the money supply. This is a socialistic institution, and if not abolished it will eventually destroy every fiat currency and wreak havoc worldwide. There cannot be true, free market capitalism until money is treated as a free market good, with competing brands, private production, distribution, etc. Until then, capitalism will never be allowed to flourish and shower its benefits on all humanity, as it should be allowed to do.

Replace Ben Bernanke with Paul Volcker

@Dave Wrixon: "Wouldn't you just be replacing the Lies of the Present with the Lies of the Past that most intelligent thinkers can already see past?"

Which lies of the past?

Extending the author's baseball analogy....

So Obama (the manager) pulls Bernanke (pitcher) because, well, he sucks. Brings in Volcker, the old vet, who serves up the same pitch he used back in the 80's: the high hard one. High interest rates, hard times, that is. Back then he saved Manager Reagan's job, but in order to keep the winning streak going Reagan prevailed on the team owners to spend, spend, spend and eventually the major opposition, the Moscow Reds, went bankrupt trying to compete. But the Washington Pinks were slowly going bankrupt themselves, eventually spending more than all the other teams combined, far outstripping their revenue stream and borrowing from successful teams in the minor leagues. Everyone with a lick of sense knew this would lead to Washington suffering the same fate as Moscow.

Well, now the most successful minor league team, the Beijing Capitals, has been promoted to the big leagues and is challenging the Washington team for the championship. And they own Washington's stadium, the bats and balls, and most of the ushers and hot dog hawkers speak Chinese. When Obama brings in Volcker and his high hard one, throwing at their players' heads and threatening their investment, they'll turn the lights off and send Washington down to the minors.

Gimme the ball, Obama.

The Facts Indicate We're Not in a Depression or Bubble

<<I am predicting 1800 on the S&P 500 by 2013 and I am fully invested and am enjoying the ride.>>

I hope you like downhill runs on the rollercoaster, too. Just remember they happen remarkably fast.

By the way, if the falling dollar is causing the stock market rise, should we not root for the dollar to fall to zero, which implies the S&P rises to infinity? If not, why not? Think things all the way through? Never!

Two More Indicators of a V-Shaped Recovery

I'd like to see a definition of recovery from that author. If recovery means the Fed and the government have managed to inflate 2 more bubbles, we're indeed recovering. It's like the recovery experienced by a dying cancer patient who shoots up with heroin. If recovery means more jobs created by productive private markets, and slow, sustainable growth of the economy without inflation, recovery is obviously a long, long way away, and a bone marrow transplant will have to be suffered through first.

Celente Flashback: Great Recession Will Maintain Grip for a Generation

Celente is familiar with Austrian school economics, so it was relatively easy for him to perceive that the US economy was being driven by Fed-blown bubbles which must deflate eventually. All the Austrian schoolers predicted much the same (Peter Schiff, for one), but almost all are dismissed and ignored by the mainstream. America will prosper once again when the Austrian school's business cycle theory, which is an improved version of classical economics and stands in total opposition to the Keynesian nonsense that drives economic policy today, is learned and promoted by a critical mass of economists.

We are still a long way from that great day, but it is coming.

California's New Budget Already $1B in the Hole

I agree with the thrust of this arcticle, but not the anti-rich class warfare rhetoric. They will pay a magitude or two more than their per-capita share of the national debt, and they weren't responsible for it in the first place, in most cases.

The phenomenon of wealth in this country is perfectly consistent with Pareto's law, wherein 20% of the people PRODUCE 80% of the wealth, by doing 80% of the savings, entrepreneurship, and capital investment. The Obamas of this world, who want the rich to pay for everything and subsidize the non-producers, are the villains in this story, and the author needs to re-examine his characterization of wealth belonging to the producers as "obscene".

Gold Not Faring Well Against Inflation

The 1980 spike was a massive speculative bubble fueled by the high inflation rates of the 70s. We are almost certainly going to have mass inflation again (the alternative being a protracted depression, much worse than the 30s), and when we do there will be another speculative bubble. Gold is therefore the ultimate protection against high inflation -- as long as the paper money isn't completely worthless. Gold is no protection against hyperinflation, which would destroy the dollar and put the economy into barter mode. Then the necessities of life would be all that anyone would care about owning, and gold would be almost as useless as paper money.

Almost - but not quite. At some point after a dollar collapse, sensible people will demand a return to the gold standard, and everyone still holding gold will be sitting pretty. Silver will be great to have, too.

How Can We Get the Economy Back on Track?

Prof. Krugman would be proud of you, Mr. Corson. He'd give you an A on your essay advocating Keynesianism of steroids. Of course, you're almost as big a blockhead as he is.

You guys just can't see the big picture because you're blinded by socialist pseudo-economics and policy wonk thinking. Aggregate demand, my pretty pink derriere! There will be no recovery until the free market is allowed to function and all the phony pooh-bahs who try to micro- and macro-manage the economy are driven from office, and their sycophants in the mainstream media and the academy finally are forced to resign in disgrace.

Dig it: savings and debt reduction are GOOD FOR THE ECONOMY! Individuals and governments spending beyond their means are BAD FOR THE ECONOMY! What you are advocating will destroy the US dollar... but maybe that's a good thing, after all.

On second thought, keep up the good work!

Welcome to the New Normal

I live close (too close) to Mordor, aka Washington, DC. The bars, restaurants, and shopping malls are all still pretty full. It's still hard to find a parking space at the grocery store. Housing prices have a dropped a mere 4%, on average.

Life is good in the realm of Obama, the Sun King. (sigh)

Unemployment: The Gathering Storm

The thing I like most about this article is that it disabuses the notion that tech is likely to pull us out of the quicksand. Anything's possible, of course, but technology advances tend to destroy as many jobs as they create, at least in the early years.

The thing I like least is the proposal for expanding the food stamp program. Give the free market a chance to actually work, and within a generation we will see the end of the entire welfare system - it is simply not needed, a collosal waste of resources that is going to make the depression so much deeper and longer than it needs to be. Government must shrink radically, and very quickly, or there's no hope at all for recovery in any year with a 1 as the 3rd digit.