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Lunatics At Institute For International Economics Endorse $6 Trillion More In QE, Cite Fred "Iceman" Mishkin For Corroboration
The latest lunacy out of the Institute for International Economics notes that the dollar can and should go to negative territory courtesy of another roughly $6 trillion in Quantitative Easing. Enter Joseph Gagnon, who is obviously daring to boldly go where the Fed Chairman can only dream of going, and is set on ruining whatever is left of America's (and the world's) middle class.
- The Federal Reserve should purchase an additional $2 trillion of longer-term debt securities, with an average maturity of around 7 years.
- The European Central Bank should lower its main refinancing rate to 50 basis points, continue to extend unlimited 12-month credit to the banking system at this rate, and purchase €1 trillion of longer-term debt securities.
- The Bank of Japan should state more clearly its intention to return inflation to at least 1 percent over the next two years, purchase an additional ¥100 trillion of longer-term debt securities with an average maturity of around 7 years, and commit to a further ¥100 trillion in such purchases in 2011 if core inflation over the next 12 months remains negative.
- The Bank of England should purchase an additional £200 billion of longerterm sterling bonds or an equivalent amount of longer-term foreign-currency bonds with the interest and principal hedged using currency swaps.
And just in case those still capable of rational thought feel like dryheaving upon reading more than one or two sentences of this pamphlet, Gagnon attempts to preempt the anger and loathing of all those who know full well that this action would merely create the most insane bubble in the history of the world. In order to do so, Gagnon cites none other than Iceland bankruptcy specialist extraordinaire, and the man who knows all about blowing not only bubbles but smoke up the collective rectum of Fed sycophants, Fred Mishkin:
Concern about asset price bubbles in the main developed economies is not warranted in the near term. As Mishkin (2009) reminds us, the harm caused by bursting bubbles arises almost entirely from excessive leverage used to finance asset purchases. At present, leverage is falling as banks continue to tighten credit standards and terms. Should unsafe lending practices return, financial supervisors need to aggressively shut them down. (Posen (2009) discusses systematic policies to counter lending booms and busts.) Equity prices have risen, but from excessively low levels, and price?earnings ratios remain within historical ranges. It is important to recognize that current and expected future low interest rates are a fundamental element of asset valuation that supports high asset prices. A bubble occurs only when asset prices significantly exceed their fundamental value. In the emerging markets, there is also little evidence of asset price bubbles[...]
Let us take a quick look at the claims citation-worthy Mishkin made on Iceland shortly before the country went bankrupt:
- Fiscal imbalances are not a problem in Iceland: quite the
opposite, with Iceland having an excellent fiscal position with low
government net debt (less that 10% of GDP) and a fully funded pension
system (with assets amounting to more than 120% of GDP). - Monetary
policy has also been successful in keeping inflation low and near the
inflation target, particularly when housing prices are excluded from
the inflation measure, as is the case in the United States and the
eurozone. - Research on multiple equilibria suggests that
self-fulfilling prophecies are unlikely to occur when fundamentals are
strong, as they are in Iceland. - The analysis in our study
suggests that although Iceland's economy does have some imbalances that
will eventually be reversed, financial fragility is currently not a
problem, and the likelihood of a financial meltdown is low. - Iceland
is an advanced country with high-quality institutions. GDP per capita
(adjusted for PPP) ranks fifth highest in the world; longevity is the
highest for females and second highest for males; unemployment is
almost non-existent and way below the natural rate; net government debt
is almost nil, labor force participation among older workers the
highest in the world, and of women the highest in the OECD (almost 80%,
compared with 56% on average in the OECD). - Noteworthy among
Iceland's country rankings for quality of institutions is that Iceland
ranks fifth in economic freedom, firs in terms of the lowest
corruption, seventh in terms of competitiveness, first in the
percentage of population connected to the Internet (ADSL or ISDN), and
the first in terms of
freedom of the press, compared with number 113 for Turkey and 59 for Thailand [and 666th for America]. - These
rankings are of course sometimes arbitrary, but they clearly illustrate
that Iceland is a well run, advanced Nordic country that has little in
common with emerging market countries, a fact important to recognize
when we start discussing financial stability in the next section.
Can someone please stop feeding booze to these animals? In the words of Raoul Duke, it truly won't be long before they tear us to shreds if something doesn't snap.
After reading the report below please crumple up and dispose of properly in your nearest bathroom.
h/t FTAlphaville
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This guys is an economic idiot!
Welcome to the Weimar USA bitches, GOLD BABY GOLD
Yes, deflationlists, buy Treasuries, and when they mature, buy a pack of gum.
As Mishkin (2009) reminds us, the harm caused by bursting bubbles arises almost entirely from excessive leverage used to finance asset purchases"
All bubbles burst and if there wasn't excessive leverage there wouldn't be a bubble. Mishkins' circular logic went down the drain.
The problem with that thought (and the next sentence in the article states its greatest inaccuracy) is that leverage is NOT going down in the aggregate-- it is going up.
Banks are restricting the use of credit because they are getting paid by the Federal Reserve to hoard it. The private sector is deleveraging precisely because (a) they realize they need to; and (b) credit wouldn't be available to them if they did need it (ironic, if your looking for small business-based employment gains).
So, why would there be deleveraging if aggregate debt is rising? Because government is levering up bigtime to take the place of the private sector. The proponent here thinks a additonal $2 trilion in levering the goverment sector is a solution to all our ills-- without bothering to inform us the downsides to unprecedented deficit spending. We are only transferring the problems of debt servicing to the public sector (increasing sovereign debt risk), rather than allowing capitalism to work in the private sector.
The bottom line is that aggregate debt needs to be reduced as a prerequisite to achieving an equilibrium. Any policies that impede progress on that places a band-aid on a patient that is bleeding to death.
This article misses-- and misses badly.
Brilliant points, all, Assetman!
And as to these guys being idiots...nope, they are far too disingenuous and lying bastards, and after all, they are with Davy Rockefeller's fav place, the Peterson Institute (still called the IIE by some), the number one disinformation specialist joint in North America!
And as to that "unsafe lending" (sorry, couldn't help by add my two trillion to the dialog) -- obviously, it is speculation layer upon speculation layers based on layers upon layers upon layers of securitized financial instruments, be they CPDOs, synthetic CDOs, CMOs, CFOs, CLOs, CBOs, credit default swaps, hybrid ABS CDSes, mortality swaps, worthless securitized notes as payback from A.I.G. (Petey Peterson's fav bud, Maurice Greenberg's joint), or CLNs and ETNs, etc., etc., etc.
Recall that the Peterson Institute clowns, or IIE cretins, were against those automotive industry bailouts, conveniently citing the WTO's Financial Services Agreement, but even more conveniently supporting all those bankster bailouts, which definitely goes against the bylaws of the WTO's seedy FSA.
IIE's main agenda: the offshoring of jobs, the privatization of social security (monies to their Street buds), and most of all, Universal Serfdom!
Agreed. These people do things for specific reasons. I won't go into all of them here and now but it's clear that one man's lunitic and another's man genius. Who's being bailed out? Who's being made whole? Whose dime is backing up these very public thefts?
They win, we lose, bend over and take it unless you're ready to fight. That statement may be tough to take but it's clear the adults have either been scared off or co-opted. Either we rise up or we continue to take it where the sun don't shine.
That doesn't mean do nothing. If nothing else, make them sweat this out. Don't let them get comfortable for a minute. Scream bloody murder. I have visited my local Reps office once and sometimes twice a week for the past year. The lady at the front desk and the office manager know me by name. I try and bring someone different with me every time I show up. I visit my Senator once a month because it's a longer drive for me.
This does two things. It shows the people in the office I can bring others (and thus I am more than one) and it shows the other people I bring with me that being active doesn't hurt. Try it. All politics are local. Get active locally.
Is it fair to lump these guys in
with Lunatics? I mean we've always
had Lunatics yes and we've lived
with them etc. These guys are
getting hard to live with.
AS if on queue, Gold is up about $12 in the last 30-minutes. Gonna be a bumpy ride.
that's because Zimbabwe Ben is speaking. There mere sight of him on TV would make gold rise.
Heh - of course. That was the "queue" - which I suppose I should have spelt "cue", right?
Cheers -
Some people lost their minds this morning, and forgot who was in charge - REITs were mostly red for hours at a time, as was gold. The sight of Head Beard in Charge was enough to slap some reality into that trade.
I'm hearing some really bad music in the background when he's talking now... something about... "It's raining Ben, hallelujah"...
The beard opens his cake-hole and like a bad reflex, the dollar drops. Uncanny how that happens.
WTF is this speech. We have done everything right, everything is under control, no inflation, no deflation, just the sweet spot? Nothing to see here!
Clearly didn't get any of his FAQ's from ZH.
yup, just like the goldilocks economy of Greenspan.
ever increasing (in frequency and severity) cycle of booms and busts, higher highs, lower lows, next cycle will see unemployment swing from 2% to 30%, with interest rates never climbing about 1%, it is called a fiat currency death spiral.
If there are any remaining doubts as to whether the lunatics are now running the asylum, this should put them to rest.
Could we possibly be more F**KED???
I am sorry,they are not lunatic. They are bought and paid for. There are still trillions of toxic assets on banx balance sheet,who is going to buy them at full face value?
QE will continue, at least in the MBS world. Some statistics:
Agency Fixed Rate MBS Issuance YTD (rough numbers):
Jan 60B
Feb 100B
Mar 175B
Apr 135B
May 200B
June 220B
July 160B
Aug 140B
Sep 120B
Oct 90B
Nov 90B
Meanwhile, the Fed back in October mentioned they would be slowing MBS purchases and extended through March 2010. Prior to the announcement they were buying up to 25B a week (100B a month) net, now they are buying about 16B a week (64B a month) net.
So, whereas before they were buying about 100/170 (the average from Mar - Aug, their peak buying window) = 58% of issuance, today they are buying 64/90 = 71% of issuance.
On a dollar basis, the amount of agency MBS being absorbed by the market besides the Fed is way down.
There is no market for Fannie/Freddie MBS at these prices.
There is no way the Fed will stop buying in March or at $1.25T, whichever comes first.
Agreed. The March MBS buying suspension is just that.....a couple daybreaks of suspension. The Fed ship will likely be under the Command of the same Captain. Full speed ahead.
It's the horror of chasing money gone bad .
Reading anything from those guys makes me think of the drug-addict who is trying to persuade everyone around that giving him a bigger dose would be a good idea. Putting those guys in charge of monetary policy is as sane as allowing an alcoholic to guard a liquor store.
What is plain the see here folks is that even the intrepid folks at The Institute for International Economics understand that there is and will be negative real growth in final end demand. This is their all to predictable response to this expectation. Just as monetary policy is supposedly anchored upon the premise of expectations we are now confronted with the expectation bias that permeates not only the monetary policy of central bankers, but with the acknowledgment of the DNI that the "GFC" poses the greatest threat to our very national security, the intelligence & defense apparatuses as well.
Now the fears that have been expressed by DB, GS and PIMCO over recent days and weeks comes into sharper focus. The only way to "grow" out of a solvency crisis where end demand cannot be generated is through the most inefficient means available, the imaginary demand created through taxpayer funded subsidy and central planning of all economic activity. Central planning that has been privatized by the "public" institutions of what purport to be responsible self governance to the very same private institutions that created the structures and policy that made the GFC all but inevitable.
The neo-Keynesian term is "functional finance". It was expostulated by Lerner to counter-act arguments put forth by naive free market thinkers who thought there really was a debate. Rather, it was just pleasant wrapping used to extract maxium returns from helplessly clueless 'Mericans.
As the wheels continue to come off, the PTB are simply becoming more honest in their prescriptions. Health care, cap 'n trade, nationalized fraud, etc, are all means whereby the public sector controls employment, output, debt sevice & tax receipts.
In a "democracy", "leaders" have the legal mandate via rule of law and popular support to fully excercise their monopoly power. Super-smart predators understand this dynamic and don't waste any time dancing around pretending otherwise. They go right to the source with their corrupting siren song of wealth & power.
As I've metioned to SW, Deadhead and others, there isn't any intent or belief that we can "grow" our way out of a solvency crisis. Those are just palliatives offered up to the masses; no different from a hospice worker assuring that you will be "all right" as she swaps out the morphine drip.
There's only one way out of this mess, 'course, it can't be said here @ ZH for obvious reasons. But here's a word to the wise: study history.
As Tommy J famously said "Experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security."
Your perceptions are not isolated or misunderstood and I suspect that much of what you have observed in the writing of others can be construed with a bit of subtlety. My consistent theme is that without a clear vision as to the final destination, what aspects will be found there and how to chart that course then the process of recognition and identification of the characterizations of foundational precepts remains the menu of the day. Especially in a situation where many have found themselves in need of overcoming the highly evolved process of fragmentation and dissociation prevalent in our society.
What is especially important for America going forward is this: we don't need to reinvent anything, we already have a workable framework written by men who had studied centuries of human activity and attempts at governments. It's not a 'living' document, either, it's a dead one. As soon as we breathe 'life' into it it completely loses meaning. We don't need to go forward, or backward; we only need to re-implement a system that is supposed to serve us, and protect us, and which has the distinct advantage that all Americans are at least partly familiar with it.
Much of the existing system will need to be dismantled, though, and doing so over the time period required to do it without severe disruption would be impossible. I suspect this is why some libertarians say the system has to collapse before anything will really change.
The transition period will be fraught with danger. It's gonna happen.
SWR, I agree with much of what you are saying. I have been spending some time attempting to discern how it is we as a society are to deal with the issue of "legal precedence" since it appears to me that this is the mechanism that has provided the greatest ease for those who have usurped the foundational aspects of our republic. And may well provide the tools whereby the process of dismantlement and reintroduction may well occur. That and through it the widening of the interpretation of what exactly constitutes an individual before the bar of justice. How to balance the issues that arise over time while preserving the foundation has proved to be a miserable failure thus far and a way must be found to address this shortcoming while most especially provide the true ability for redress. I suspect that if this effort fails then the drive to re-institute the founders efforts will once more, end in abject failure.
Small steps, print out the declaration of independence and the bill of rights. Pass a copy of each to the people you know to hang on their refrigerator. During tough times, people turn to their roots for a level of comfort, and it will remind them of the ideal of America.
While I appreciate the comments of B9K9, I also know that if we could tap into the collective consciousness of Americans we would completely gain our country back. You see, the elites have a propaganda machine that attempts to weaken the strong, pit groups against each other, and promotes APATHY. If all is lost and there is no hope, why bother posting comments? You should be engaged because they want you apathetic.
This site provides excellent social interaction and a two way debate - more productive than yelling back at the TV. It feels like being a part of "Cheers" or "Friends". Our conversations are more rewarding than the people buying products just to interact with another human being, like the short conversation with the register clerk at Starbucks, just to reaffirm that they exist and have public worth because another human acknowledged them.
If they can get you to be apathetic, you are a willing slave and will go along with whatever direction they want. Please understand that the last Presidential election was decided by roughly 15% of the population (the minority) - what if we could tap into that other ~80% (guessing some can not vote due to felonies)?
We outnumber the elites, we need to be as organized as the elites, and we are Atlantis.
yeah, noticed gold did a $20 vertical shot...volatility like this is never a good sign.
I still maintain they will stomp on any deflation with printing. Future QE has to be a given.
If China didn't like it, they wouldn't be pegged.
Some of the continued QE will have nothing to do with growth, either, see my post above on the MBS market, the Fed's share of MBS is increasing, not decreasing, there are structural problems with that market (i.e. Fannie/Freddie counterparty risk) that will prevent the Fed from exiting anytime before 2011.
Frankly, I think Gagnon is right. More discussion in and around the following
http://economistsview.typepad.com/economistsview/2009/12/the-case-for-6-...(Economist%27s+View+(EconomistsView))
Get the money flowing correctly. However, I have very little faith that Congress won't pervert an attempt back into more porkulus, and push the money not to where it will do the most good (for the economy) but where it will do the most good (for their reelection chances).
How could $8 billion for high speed rail in a economy of $14.5 trillion be pork barrel politics.
Come on I would be willing to bet that you guys over there spend more money on dog food - the only substantial fiscal spending since the 60s has been in defence.
It is your monetary policey that is out of control not your fiscal.
Minsky believed that when this moment has arrived you spend money on high technology capital projects but alas fiscal spending for the most part is going towards consumption.
I can remember when Americans reached for the Moon now you can not lay down railway tracks
Please don't humor that douche brain, Pat Hand, by assuming that individual, who will never "get it" -- is actually making an adult comment.
Besides, that item for high speed rail is probably fantasy.....Japan has had bullet trains forever, and France for quite some time. They are too advanced for us......
They are too advanced for us......
So you are saying that the US in the 20th century was a anomaly
Will it go back to the 19th century practise of producing low value added raw materials for the rest of the Planet -forgive me but I taught that Americans had ambition and drive , if the view expressed by the Mr Doom is a majority one........ well then expect the worst.
Well, some Americans still have ambition and drive, but they are growing fewer and fewer, as this 100% corrupt system motivates against them.
Today, one only survives by embracing the three precepts of Junker Corporate America:
Peddle junk paper, do leveraged buyout "pump and dumps" and offshore everyone's jobs.
Yes I agree but any society that is exposed to the corrupting influence of a unbacked paper reserve currency will decay over time - they just might be a chance to reverse this train wreck but I guess I am trying to remain postive.
It is a pity that USA did not go back to a gold standard in 1980 when it had a fighting chance.
(Sorry this got posted at the wrong spot... reposted below.)
Thanks for the energy discussion! I know little about the intricacies of the energy debate so I'll ask the question: Where does geothermal fit into the argument? I see it mentioned little. What are the downsides? I see the initial investment as not much larger than any other plant producing nearly the same amount of power. And it sure couldn't rile up the environmentalists all that much. What am I missing?
"I see debt people."
PS. Someone on Ben's Blog wrote this a few years back.
Damn dirty apes.
One would NEVER get this set of policy prescriptions from Asian economists. Not to overgeneralize 3 billion people but I do believe there is more an understanding of the link between actual productive enterprise and wealth creation as distinct from Paper Printing Prosperity.
These pronouncements from the IIE and their sympathizers are relly purely Anglo creations. Only looked at through the lens of profound cultural and intellectual isolation can one recreate the chain of thoughts that leads to recommending developed westernized countries print trillions more dollars and dismiss out of hand the possibility for global asset bubbles.
cannot agree there...Japan hit the wall of supply-side economics. There is only so much that can be accomplished via predatory export-driven ponzi mercantilism.
We have achieved a point now for which there CANNOT be demand for the production capacity that exists.
EVERY unit of production capacity requires energy to actualize it...included on top of that is the energy needed to consume the production. For example, a plant to build cars requires power to construct them and the consumption of those cars requires power to drive them.
There simply isn't the energy for the demand to realize the latent capacity.
This is something TOTALLY UNFORESEEN by ANY economist. Their models ALWAYS assume that demand is elastic, subject to stimulation whereupon, eventually, the ship of growth begins to churn forward anew.
Life functions differently, in fact the entire set of economics assumptions collapses, if you include an assumption that for some reason, demand cannot grow infinitely. There was no discussion of finite systems headroom in economics schools.
The economists deferred that to "human ingenuity" being able to ALWAYS provide a method by which demand could continue to rise. If, for example, EROI hit unity, "demand" or ingenuity would somehow provide a means by which this could be circumvented, iow, by the development of fusion power, for example.
They never considered ANY real input to REAL production of REAL things...only interest rates and monetary regimes. Find for me an example of where during a discussion of monetary velocity or anywhere in Keynesianism or monetarism or anywhere, they posit during the analysis of widget makers where they conduct the outcome disposition if a critical material input to widgets achieves a peak supply condition, therefore the number of widgets produced cannot grow and reaches an all-time maximum.
No, they assume some magic substitution will occur, some material for another. Well, there IS NO SUBSTITUTE FOR ENERGY
I would suggest a number of REAL economists foresaw this, beginning with Prof. Michael Hudson, Prof. R. T. Naylor (Canada), and a host of others. Also, Prof. Joseph A. Tainer (Collapse of Complex Societies, Ecological Economics, etc.) easily foresaw the present.
Of course, if you are thinking of looney toons like Milton Friedman, his spiritual spawn, newsy scum and $3.2 billion-dollar-man, Thomas Friedman ("My Wife is Flat"), then you should alter your reading routine....
I generally agree with the above points with the caveat that if Japan invested more of its export income in nuclear fission plants rather then roads and bridges to nowhere it would have a much more balanced economy since it would not have to import large amounts of Australian coal - indeed the recession of the 1990s was the perfect time to engage in this endevour but alas it embarked on a failed monetarist course which the USA wishes to repeat
This is the definition of madness.
The time for investment in solar panels on every roof, windmills everywhere, a grid of decentralized power production, etc., PBMR even, in the US was also in the 90s, when times were good.
Instead we squandered it. Against the backdrop now of global energy supply maximum, diminishing EROI, capital insolvency, etc., is there the money or even energy available for this buildout?
I submit that the answer is no. Because EVERY nation wants to do it or will have to to have a viable future.
And, who would invest in an economy KNOWING that there is no real future of growth? I mean, at this point, solar panels and alt.energy is to keep the freaking LIGHTS ON and get us to a sustainable future. There's no fucking investment value in that.
There is only investment value in GROWTH. We needed to plan for a transition to sustainability 10 years ago. We'd be getting there now or there and could deal from a position of power in a transition by the world away from growth economics. IOW, secure another American Century.
Instead we got SUVs and a fucking housing and .com bubble and "Ah did nawt hayuv sayux with that woman." And a couple wars from the next guy in order to preserve oil supplies into this future of scarcity. WTF.
I have to admit that I am a sceptic of diffuse renewable energy sources - they simply do not give enough power for a given capital spend - splitting the atom or in the future nuclear fussion is the only way we can get out of this mess , but spending money on these will reduce personel consumption rates even further but they simply have to be done to avoid anarchy/chaos.
Maybe that is the true reason the elites want to wipe out the middle class.
See, they really do know what's best for us.
Well doesn't matter what we think. People are designing building converting to renewable resrources whether we like it or not or think it's possible or not.
http://www.altestore.com/store/
Is EROI declining? Absolutely. The notion that we're going to "run out" of viable energy any time soon is nevertheless almost as daft as the notion that construction of solar and/or wind systems in the 90s would have been a good idea. Wind is flat out no good and never will be. Solar today is still major technological progress away from decent EROI, never mind economic viability, so what do you suppose it was like in the 90s? The absolute worst case scenario is that we have to rely on increased use of coal and natural gas to fill in increasingly for oil while a major nuclear fission construction programme takes place, which would have room (in an EROI sense) for expansion over a timescale long enough for pretty much any projection we can now make to be meaningless - hundreds of years at the least. More likely, we will have a technological breakthrough in solar, fusion or some other field. Could the price of energy rise significantly short-medium term? Absolutely. Would that be bad for the global economy? You bet. Is a 5th Century style civilizational regression over a somewhat sustained period imminent? I can't completely rule it out, but if it happens it won't be because we "ran out" of energy, or anything else.
Modern corporate capitalism comes in large part from the development of the oil majors in the 20th century - this required a large capital expenditure to exploit the even larger capital resource underground
Nuclear corporates require a even larger capital base to take advantage of the atom.
Banking and or the state will have to undergo a further Revolution to be able to deal with this new reality.
If libertarians believe they can create wealth with a declining fossil fuel resource and expanding population they will be sorely mistaken
Also if you factor in even modest exponential growth the coal mines of America,China and Australia will start to decline withen less then 100 years especially if oil starts to become expensive.
Thank you for sharing those thoughts. Dismantling Keynesianism in a long-term pet project of mine and you are correct that one of the many real world elements unincorporated into those theories include supply/energy constraints.
One fundamental assumption of Keynesianism is that there is a price for everything, they would say there is enough energy available just not at an economically viable price. But tell that "price for everything" bunk to the hundreds of failed house auctions in Detroit with minimum bids of only a couple hundred dollars.
You have it.
Killing Keynes is hard. He's a vampire-werewolf, so you need a silver bullet and a steak.
Your silver bullet is thermodynamics.
Your steak is the concept of EROEI: Energy Return on Energy Invested.
Be aware though... some go quietly, and some go loudly, but all of them will try to take you with them when they go!
Thanks for the energy discussion! I know little about the intricacies of the energy debate so I'll ask the question: Where does geothermal fit into the argument? I see it mentioned little. What are the downsides? I see the initial investment as not much larger than any other plant producing nearly the same amount of power. And it sure couldn't rile up the environmentalists all that much. What am I missing?
You need specific geography for geothermal. So it works in Yellowstone, works in Iceland, but not really anywhere else that doesn't have lava a little below the surface. Its useful where it can be set up, but very limited in where.
Insane. He should have lunch with Paul Krugman....
Friends, what’s a tad more of that QE amongst us, realists?
...then we can stress test. Again.
Tyler, I enjoyed your Thompson quote. It's really funny because I only read a few lines when I thought of putting in my own FNL quote. You beat me to it.
I was just thinking of the bit when Duke sneaks out of the Mint hotel. It's also kind of relevant to the IIE:
"The decision to flee came suddenly. Or maybe not. Maybe I'd planned it all along - subconsciously waiting for the right moment. The bill was a factor, I think. Because I had no money to pay it...
How would Horatio Alger handle this situation?"
- HST
This Pete Peterson Foundation is the same group that tried to hijack David Walker’s street cred with the IOUSA Movie about the national debt figures. My take on the movie was that it was a shill piece blaming the US Congress for all of the problems in America and take a wild guess who the only one with the power to save the world…yep…The Fed….I knew then and there that movie was a farce and the Pete Person Foundation was another globalist propaganda arm..Walker quickly and smartly got the hell out of there and this little recommendation validates my suspicion…
I read the piece by Gagnon. He is reflective of the self-fulfilling economists ... "I believe it, so it must be true."
I can't imagine being as dilluded as he is! The generation of economists that have no understanding of personal responsibility are charging the governments credit cards to the maximum!
He actually asserts that government spending will lead to prosperity even when the money is borrowed. What's more, he concludes that severe deficit spending is essential in periods of contracted economic activity to make up for the fall in demand.
Where do tax dollars come from? What happens when he is wrong? If demand contracts further, and real GDP shrinks ... tax receipts go with it. Soon, the country is left with a hefty credit card bill and no income!