johngonole

Oil Futures: It's Not Manipulation, It's Stupidity

Paper markets suck

Decline of the U.S. Dollar: Asian Initiative to Create Commodity Based Currency?

Asia is getting what they deserve! Why do they continue to loan us our dollars back. What have they been thinking. Those dollars may end up worthless but we got the GOODS. Us smart...Asia stupid.

We give them paper they give us all kinds of stuff. Of course we wouldn't need a growing Keynesian funded governments if we didn't need to use deficit spending to maintain full employment. Now there are plenty of arguments to be made about the Federal Reserve, socialism, etc...for our demise. But how about considering the simple fact that foreigners have been hoarding dollars for 30-50 years now. If they'd just buy stuff back from us with those dollars:

1) We'd have smaller governments and more productivity.
2) They would have to be worring now about currency debasement.

We including them will all get exactly what we deserve as a group. Economics is simply the study of the reality of the exchange of goods and services. There is no free lunch and that law can't be changed. There is always a cost to all actions.

My guess is that they will hoard until we turn the printing presses on overdrive. Then all the sudden not only will our government be printing but they will begin to spend those dollars and everything dollar denominated will see their prices rise. Hyperinflation is the only outcome if we continue on this course.

Our behavior needs to change but so do those who continue to fund our debt. If they would actually buy something other than oil with those dollars things would balance out better.

The Deflation/Inflation/Stagnation Debate

I have an idea that might actually work. We can stop the energy and food prices, other goods and services price increases by supporting the dollar. The Federal Government must balance the budget and the FED must go neutral and let the interest rate freely float. These actions will obviously have a deflationary effect. However there is one inflationary force that could balance this. As our goods get cheaper this country could once again become an exporter of goods. Ohio, Michigan, and Indiana could once again flourish. As our prices come down all those dollars that have been sitting over seas could come back into America as the chinese, middle east, and many others decide to actually spend those dollars they've earned on our goods.

We just can't keep inflating our currancy and expect people to want our currency. Its time to get back to work. Let prices move freely. Short pain yes but prices will find a bottom. Unlike the great depression we have trillions of dollars waiting over seas to be spent into the economy.

The Reverse Wealth Effect

Eagle Chief - the low hanging fruit has been picked in many areas of the world. The north sea is declining. Russia is declining. Many countries that used to produce oil no longer can. Many believe the world has reached peal oil production and production will decline slowly at first and then drop exponentially. Of course prices will slow the decline of reserves.

Icandoitdon - Agree speculation is way up. The printing of money forces people to speculate to preserve their purchasing power.

I believe that we are seeing stagflation. The global economy is holding labor prices in check in terms of real income adjusted for inflation. Meanwhile the government and the federal reserve are printing money to force interest rates lower. This is causing the inflation in just about everything but housing which is pretty much tapped out. Too many houses. In sum I believe the politicians and the bankers abuse the monetary system and its power to line their pockets. Low interest rates are caused by the expansion of the money supply. The expansion of the money supply is essentially the same as saying the expansion of obligations or debt (since it is debt that backs our paper money). The politicians gain a smoother economy in the short term and money to fund their social spending schemes and ear marks. The bankers take their cut of an ever enlarging pie of debt making them rich. Think about it we as citizens give the banks our purchasing power. They lend it out like 30 time over all the while taking a cut of it in term of interest. Depositers in essence bear the risk and are compensated nothing. If we don't deposit the dollars are still wiped out by the expansion of the money supply and th ensuing inflation. Alternatively we can invest in stocks, bonds, etc... Again however the same bankers/finacial firms take their cut. They bear no risk because the government is ready to use the power of taxation to bail them out.

This is ultimately the problem with Fascism and Socialism. Unfortunately the monetary policy failures continue to breed more and more people who are willing to entrust more power to the same persons holding them down.

The grip of power that the government and the Federal Reserve have over the purchasing power of the people (as well as being a monopoly) is so vast and lock tight it is scary. Spend your money or we'll spend it for you. Then we'll tax your assets. We'll tax your income. Perhaps this is the price we pay for living in the type of society we have but clearly their were times when we didn't have all this regulation and things worked out pretty much the same or better. They have the power to bankrupt everyone at will. The only checks on this system are pitch forks and shot guns. This could very well happen if they drive our economic system into the ground. Our economic realities are less and less dependent on free market allocation of resources and more and more on how the government decides to allocate resources. The public needs to be more mindful of this and DEMAND and end to corruption, a balanced budget, and less tinkering with the economy.

A Warning for U.S. Dollar Bears and Commodity Bulls

Mark bites indeed. Post from the Mises institute was fantastic

Thursday Outlook: The Inflation Con Game

FDJ10595 - Sorry I was a bit hard on you. Read your last two post again. I agree with pretty much everything you said except the blame on Christians. The faith base values initiative of Bush was absolutely nuts. Again an attempt for the government (in my opinion) to take over control of even charitiable giving. I do not know of any Christian organization that asked for that. I think Bush and the Neocons think everybody wants money and thats it. Screw policy, screw the right long term plans, screw vision, screw the future, lets dole out the money now that we are in power.

At this point I really don't like any of the presidential candidates. I'll be voting for gridlock.

Thats what was missing from the back and forth above guys. Spending is only somewhat abated when the power is split between the parties. They bicker and nothing gets done which is usally a good thing relatively speaking.

Thursday Outlook: The Inflation Con Game

To fjd10595: The veto power was used sparingly until around the turn of the 20th century. Before that it was used only as (as I recall) veto on unconstitutional legislation.

The problem with facism and socialism is that they lead to lower standards of living because of the systematic destruction of free markets by monopolies. With socialism you get government monopoly and fascism government endorsed monopolies. Furthermore governments in both economic systems control production through spending decisions. Supply is also centrally controlled manly through spending decisions. This leads leads to misappropriation of resources and hence lower standards of living. If price is set to high to much of something is produce. If price set to low than their is a shortage. When people start standing in lines for government issued toilet paper they get upset. Than the Fascist or Socialist (both have done this throughout history) identify a scapegoat for the people to distract them. Than they throw the innocent into furnaces.

FDJ10595 your on the right track...but Christians are as upset about the very things you cite as everyone else. In fact more so because they tend to think more than the avg American. In polls Christians are split up favoring all kinds of Candidates. I for one support Ron Paul.

Careful because your comments about extremist Christians (you fail to cite any extremism...unless disagreeing with your ideas qualifies) makes you sound like a soon to be Nazi. If and when our economy falls apart our Facist and Socialist leaders will blame each other. Once one party controls will you be so easily lead.

I suppose the democrats pandering to the Christian left is OK. More welfare, government forced morality, etc... The point is that Christian influence is as diverse as the rest of the Americans. You sound foolish