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  • The Real 'Deficit' Is The Money Supply [View article]
    Jun 7, 2012. 12:27 PM | Likes Like |Link to Comment
  • The Real 'Deficit' Is The Money Supply [View article]
    I don't think Romney quite understands what he will be up against. He will be demagogued to no end, Congress will be fighting, and he will still have to contend with a bureaucracy that will constantly be fighting for its existence.

    I would stay positioned for malaise regardless of November.
    Jun 7, 2012. 12:22 PM | Likes Like |Link to Comment
  • The Real 'Deficit' Is The Money Supply [View article]
    Bastiat opposed France spending public treasury money on art. The people receiving the public dole, then claimed Bastiat wanted to do away with all art.

    Straw men have been around since there has been straw I guess. It makes as much sense as suggesting that gov should build infrastructure, and then complaining about the terrible job that gov does at managing that infrastructure as a reason why they should build even more of it.

    It reminds me of the bridge over the river Kwai. The Japanese army (gov) couldn't do it, so the Brit (gov) army prisoners did it for them, so the US/Brit (gov) army could blow it up. Yet another great example of gov management of human labor/investment.

    Gov builds roads. Roads are a subsidy for cars. Railroads and city centers go away. We get lots and lots of cars, that use lots and lots of gas. So we complain about all the gas we use, and the military we have because we think we have to protect that gas, and then we want subsidies for trains and downtowns, which the subsidies for cars destroyed.

    Good job guys.
    Jun 7, 2012. 12:20 PM | Likes Like |Link to Comment
  • The Real 'Deficit' Is The Money Supply [View article]
    Jun 7, 2012. 11:50 AM | Likes Like |Link to Comment
  • Spain And The Banking Union [View article]
    Jun 7, 2012. 10:49 AM | Likes Like |Link to Comment
  • The Real 'Deficit' Is The Money Supply [View article]
    "These investments would certainly boost economic growth and help improve productivity."

    Well that's the problem here. The assumption that all net financial assets depreciate at the same rate. The problem with gov investing is that it is price blind. As such, the assets it produces tend to depreciate much faster than assets created by price sensitive investors. This is why when gov builds roads they are built in the wrong places, cost 3x what they should, are poorly maintained, and require people to be punished with jail and fines for breaking the "rules".

    If gov went on a 5 trillion "infrastructure" program, the same thing that happened with the housing bubble would happen again. You would get a run up in equity markets, treasury yields would increase, unemployment would go down, and inflation would stop to creep up. Then what would happen is the Fed would raise rates to deal the inflation at about the same time the spending program ended, and the bubble in equities that had been created would collapse because the infrastructure that had been over spent on would not spin off the returns to generate the income to keep the equity prices and treasury yields up.

    This always happens when the investment is made by price blind gov, and not price sensitive, voluntary interests. If you can let go of ideology and learn to recognize this pattern, you can benefit from it. A central bank that is coerced into existence by a gov, is just a taxing mechanism. It is not part of the price sensitive, capital creation portion of the economy.
    Jun 7, 2012. 10:20 AM | Likes Like |Link to Comment
  • Money Printing Killed The S&P [View article]
    Its like the other flawed argument that a gold mine going into deficit to put money mediums into the economy is the same thing as a gov going into deficit to put money mediums into the economy. When an economy is growing (based on gains in productive knowledge which is how demand is increased) the demand for the money mediums grow. The miners have a signal from the market to produce more, these signals are known as prices.

    Thus, capital creation leads to money creation which in turn spurs the demand for money mediums. Gov doesn't respond to market forces because gov has guns. Money mediums are created for political reasons, and usually those reasons are for legal plunder.

    Still, the problem with gold is that it is a limited medium. This does indeed provide a natural check on gov, but it also provides a natural check on money contracts. This is another problem with gov dictating what should be money mediums and what should not. The ultimate solution, and the only source of unlimited money mediums that have value, is private money mediums.

    Gov is gov because it is given a grant of force from the populace. The only thing a gov can do is serve as a mechanism to repel illegitimate force while people are engaged in capital creation via learning brought about by private, voluntary cooperation. When gov force starts to pollute voluntary transactions with coercion, the only outcome is consumption subsidies. This dimishes voluntary price discovery, and the result is the bidding up of certain asset classes (bubbles). Gov monopolized money mediums (ie Fed Res notes) become a product that gov price blindness winds up over producing or under producing, and the result is the economy is sent into wild swings between asset inflation and asset deflation (like the housing bubble caused by gov price blind intervention).

    If private, voluntary price discovery were used for the creation of money mediums, they would be created in a very tight clustering around the trajectory of capital creation. When gov coercion is used for the production of money mediums, the result is a massive swerving back and forth over this trajectory line, like a drunk driver swerving over the center line of a road (of course if roads were private there would be no drunk driving).
    Jun 7, 2012. 08:26 AM | 3 Likes Like |Link to Comment
  • Count Draghi: 10 Points [View article]
    One of nature's immutable laws is that debt is always paid by someone, somewhere, somehow.
    Jun 6, 2012. 06:57 PM | Likes Like |Link to Comment
  • Money Printing Killed The S&P [View article]
    The costs aren't production costs, the costs are distortions that come from consuming when capital creation does not justify it. These sorts of costs can be exponentially higher than mining costs. These costs will include trillions in lost wealth and millions of lost jobs.
    Jun 6, 2012. 04:37 PM | 2 Likes Like |Link to Comment
  • Europe: The Rats Are Abandoning The Ship [View article]
    Code du Travail
    By French law, once a company has at least 50 employees working inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the council if the company decides to fire workers for economic reasons. As a result, France has 2.4 times as many companies with 49 employees as with 50. In fact, to circumvent the onerous labor laws and costs associated with compliance, many French companies that wish to expand their business and employee base beyond 49 employees have simply sent production to surrounding countries including Tunisia or Romania. With near 10% unemployment in France, labor laws that were designed 102 years ago, mind you to aid workers appear to be exacerbating unemployment woes
    by sending jobs across the border. In the current Affordable care act, businesses with fewer than 50
    employees are exempt from having to provide health insurance. Will we become a nation of 49 employee firms?
    Jun 6, 2012. 04:18 PM | 1 Like Like |Link to Comment
  • Europe: The Rats Are Abandoning The Ship [View article]
    It doesn't matter what you call it. The model of Europe has always been concerned with coerced transactions. An elite few with a monopoly of force, telling everyone else how to live. Europe today is still based on that coercion model. Coercion is a theft model, and increases in productivity only come from individuals engaging in voluntary cooperation. Coercion has never, ever led to increases in productivity, which is the only thing that can lead to a higher standard of living. Regulating religion is really about regulating an economy, and regulating for the elite few who get richer while everyone else gets poorer.

    Free markets are markets that are free coercion. I can see why the European tyrants (and the US tyrants) wouldn't want markets free from force. If they were they couldn't engage in legal plunder. Europe and the US are trying to steal their way to prosperity, and this is why nature is forcing them into austerity.

    A little history lesson will do you well.
    Jun 6, 2012. 04:10 PM | 2 Likes Like |Link to Comment
  • Wednesday: Rumors Of QE Gather Steam [View article]
    "For the ECB to bail out banks directly (solvency),"

    Does this mean the ECB is going to start debit "investment in banks" and crediting deposits, and the banks are going to start debiting overnight and crediting capital?
    Jun 6, 2012. 02:00 PM | Likes Like |Link to Comment
  • Europe: The Rats Are Abandoning The Ship [View article]
    Is this the future of the Euro or the Dollar?
    Jun 6, 2012. 11:25 AM | 1 Like Like |Link to Comment
  • Europe: The Rats Are Abandoning The Ship [View article]
    I never said the US was smart. How can we be when we are following Europe over the cliff as well. The only difference is you guys are doing it a 100 Euros an hour an we are doing it at 95 dollars an hour.

    The US has finally capitulated to the European model that the orignial founders of the US fled here to escape. We are both being dragged down by stupidity, and arguing that your stupidity is better than ours, or us arguing that our stupidity is better than yours is the really stupid thing.

    Both the US and Europe need to abandon the stupidity of gov price blind intervention in economic matters, and return gov back to the only things that the populace can give it the ability to do. Until that happens, who reaches the cliff first doesn't really matter, because both are going over the edge.
    Jun 6, 2012. 10:20 AM | 4 Likes Like |Link to Comment
  • Michelle Obama backs the proposed ban in NYC on large-sized soda drinks before issuing a statement later on detailing that she didn't quite mean to enter the debate. At this point the uproar in the Big Apple has taken much of the steam out of any move to adopt any federal framework to limit soda sales, helping analysts keep forecasts in place for a beverage industry powered by the American consumer who drinks a whopping 43.5 gallons of soda a year on average. [View news story]
    Its a tax designed to transfer wealth to drink mfgs. Bloomberg probably has an interest here that will benefit him or someone that funds his campaigns.
    Jun 6, 2012. 09:51 AM | Likes Like |Link to Comment