Econophile's blog

Nouriel Roubini, my favorite playboy economist, recently trashed gold. He's wrong for a lot of reasons. His arguments weren't that coherent. Spam, indeed. Instead of refuting him point by point, since others have already done that, I will just make my case for what I think will happen to gold. We'll see if my guess is better than his.

Paul Samuelson may have been a brilliant man, but he was the problem, not the solution. We can trace many of our current problems to his "scientific" econometric technocracy.

Something to think about this weekend if you are freezing your ass off, or getting soaked. Is it global warming or global cooling? What have we done to change climate? What happens if we do nothing? What happens if we do something as outlined in Copenhagen? Here's a great summary of the science from Cato. Illarionov was Putin's chief economic advisor.

When is a stock exchange a criminal syndicate? Here's one in Somalia that takes a unique financing approach to a dynamic growth industry: piracy.

At a jobs summit with President Obama, Democratic and Republican leadership gathered at the White House to discuss the Administration's job bills. Apparently it got a bit testy. Republicans pushed Mr. Obama to freeze federal spending, a plea the president answered by repeatedly challenging them to produce an economist who believed that cutting spending now would be a good idea. His query was met with silence. So, in order to rescue the inept Republicans, I have a list of 200 respected economists who would gladly support a freeze on federal spending.

Christina Romer is one of Obama's chief economic advisors. But she has absolutely no clue what to do about this crisis. Her recent letter defending the Administration's policies is just the usual hack political stuff one would expect from them. She is typical of the problems in Washington. She means well, but she is fabricating the truth in order to justify their actions. Their approach to using government power is one we should all be afraid of. She spells it out quite clearly.

Japan has been the poster child of what not to do. They are a textbook case for the failure of Keynesian stimulus. After 20 years of repeating the same mistakes with the same results, you would think they would learn. They haven't. Now they may enact a policy that will lead to depression level unemployment. Remember the definition of insanity: do the same thing over and over and expect a different result?

On the surface, the decrease in unemployment and the increase in factory orders seem encouraging. But if we dig a little deeper, the numbers tell a different story. Much of these "gains" relate to stimulus and aren't real and will dissipate once stimulus wears off.

It appears that all the improvements in the housing market have not been due to market corrections, but are from government stimulus, and the numbers are fake. Such actions will only delay a recovery and housing prices will continue to fall.

Foreign Policy magazine has just come out with its list, “The FP Top 100 Global Thinkers." They rate the intellectual giants, the Big Thinkers, the Big Brains of our current world. It is the most pompous fluff piece that I have seen in, well, quite a while. It just brims with a lack of intellectual rigor, reason, and good scholarship. It is a kind of Parade magazine feel-good fluff that we see in many of these types of lists. And it is grist for my vitriolic mill. You will be sadly disappointed.

I've been meaning to write a piece on Ludwig von Mises, the greatest economist who ever lived, and, if you will, a hero of mine. This is a piece on Mises from the Op-Ed page of the Wall Street Journal by Mark Spitznagel. Spitznagel is the head of Universa Investments and is a protege and partner of Nassim Taleb of Black Swan fame. Those of you who have been following my blog know of my admiration of Mr. Taleb. He and Mr. Spitznagel were also "right," and Universa made a lot of money for their investors from our economic crisis.

In order to understand the present state of the U.S. economy you have to understand that there are two things happening at once. For the most part they are in conflict with each other, in that one track can negatively impact the other. Lest I be accused of putting out conflicting information, there is evidence that the economy is recovering in some fashion, but not because of the reasons most economists and politicians think. There are still substantial prevailing winds blowing against the kind of recovery most commentators are hailing as fact. But economies have a tendency to repair themselves unless the feds derail the process.

The Obama Administration knows it didn't "create or save" 640,000 jobs but they use the Big Lie to justify the huge waste of taxpayer dollars through the $787 billion American Reinvestment and Recovery Act of 2009. They are desperate to justify the huge expenditure of taxpayer money. A day before they announced the 640,000 report, two AP reporters looked into the data of a previous report and found massive errors in reporting "created or saved" jobs.

Check out this report on the Obama Administration's latest gift: free golf cart! This is from the Wall Street Journal. I really can't add much to this. Other than: Get one!

The GDP results for Q3 are a triumph of government stimulus, which is to say they are a mirage, destined to vanish when the money runs out. There is really very little good news from the BEA report when you consider most of the economic activity was the result of Cash for Clunkers, the $8,000 housing tax credit, and federal spending. But like everything else in life, it's a bit more complicated than that.