• Monetary Metals
    05/02/2016 - 01:28
    The price of gold shot up this week, and silver moved proportionally. Headlines are screaming for gold to hit $10,000 or $50,000. Does this alleged new bull market have legs?

Econophile's blog

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The Cargo Problem

Why are we so rich and the poor so poor? Econophile takes a look at Kenya as a laboratory of bad ideas and how to fix it.

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The Year That Was 2012

Econophile's take on the 7 most important economic events of 2012 and why they will impact 2013 and beyond. This is not what the MSM will tell you.

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It’s Potlatch Season—The Celebration Of All Things Material

Is gift giving during Christmas and Hanukkah a wasteful practice by which we just crave status from friends and family? Is it a harmless, even joyful, practice to bestow goodwill and joy on the ones we love? Is it a giant commercial venture by which retailers encourage us to part with dollars in an orgy of gift giving by folks who ought to be guarding their earnings rather than spending? Is it a necessary part of our economy that drives production and wealth? Is it a religious act? Or is it a joyous celebration of the material, which, when you think about it, is a celebration of life.

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Arm Teachers To Save Our Children, Now

While pundits argue about the whys and motives of the Sandy Hook shooter, our children are vulnerable to more attacks. Studies show that these mass murders are becoming more common. It seems now that one event inspires (if that is the right word) others to commit heinous acts of violence. Ignore the arguments about gun control, mental health intervention, and the need for the safety of our schools because the powers that be will debate them to no practical end. Here are two suggestions to protect our children NOW.

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Game of Thrones: The Debate of Liars

Polticians lie. Obama and Romney are politicians. They talk. Therefore they lie. They lied big time during the debate. Are our choices between evil and lesser evil?

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The Fed Panicked

The Fed panicked. It is extraordinary that the Fed would announce an open-ended "we'll print as much as it takes, as long as it takes" policy. Chairman Bernanke is sending a signal to the markets and to government that the economy is bad and getting worse and that the Fed will do its part as everyone expects them to do. This is a clear signal to the markets and the world that the Fed stands for monetary inflation. They don't know what else to do. Here is the fallout.

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Draghi Acts: Is It Inflationary?

Draghi floods the Eurozone with new money. The Bundesbank says it's like printing banknotes and won't solve the problem. Who is getting sterilized?

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No Jobs: The Result of Wizard of Oz Economics

Recent economic data, and especially today's unemployment numbers reveal the powerlessness of the Fed in the face of underlying economic problems that they fail to understand. The Fed has tried every trick in the book for the past 4 years to revive the economy only to see it continue to weaken. Unfortunately they only know how to do one thing—print. The ultimate effect of this will be more economic stagnation, not real economic growth. Here is why.

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The Constitution Is What They Make It

“You are free to not eat broccoli, but if you don’t the government will impose a penalty on you. This penalty is really just a tax and since the government has the power to tax for all sorts of reasons, they can tax you if you don’t eat broccoli.”

This is the logic of Justice Roberts argument in the Obamacare case that was handed down today.

This should not surprise us because the Constitution is whatever the Justices wish it to be. According to today’s ruling, there is nothing in the Constitution preventing them from doing this.


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Unnatural Disasters: Jobs, Wages, And Savings

The employment numbers that came out Friday were very bad and caught most economists and analysts by surprise. Nothing the Fed has done has worked. Once again the ranks of the unemployed grow, wages flatten out, manufacturing weakens, GDP declines, and savings are spent to maintain lifestyles. The U.S. and much of the rest of the world is heading toward stagnation, if not recession. Yet, despite the failures of central bank policies, they will persist in doing the same wrong thing again. Here we review the data and explain why things are heading south.

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Fed Policy: Bernanke Is Warming Up His Helicopter

The Fed is clearly worried about the economy. Ben Bernanke's latest speeches aren't exactly inspiring. It is as if he thinks the rosy(ier) numbers are some prank being played upon him by the gods; that soon this will all be taken away. He is right. He admits he doesn't understand why the economy is the way it is. Reality doesn't fit his theory. ("It's supposed to work, dammit!") So, what do you do when you are the head of the world's biggest printing press, and don't know what else to do? Why QE3 of course.

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The Fluff and Puff of Arianna Huffington

There is a good reason why we need not encourage Arianna Huffington to believe she is an important thinker of our time. I believe ridicule is a good way to inform her of that.

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There Is No Such Thing As Harmless Price Inflation

A "little" inflation will destroy capital, rob you of your savings, disrupt all of your long-term financial planning, create market instability, and leave you unprepared for retirement. You can protect yourself and you must. Here's how.

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Ugly = Beautiful; Beautiful = Ugly: Ray Dalio On Deleveraging

Ray Dalio released a study he did on deleveraging. The piece was featured prominently here at ZH. I am a fan of Dalio, but his analysis was surprising. His interpretation of the economy is, remarkably, based on a very conventional ideas and is shockingly wrong. For a guy who is known for thinking out of the box and has who has led Bridgewater to become the biggest hedge fund in the world, he has got the deleveraging process all wrong. 

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The ‘High Oil Prices = Recession’ Fallacy

Every time we see oil prices go up we hear that it will cause inflation and/or the economy will go into the tank. The premise is wrong because that has never happened.

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