Deficit Spending

When The Supreme Court Stopped Economic Fascism In America

In spite of the landmark decision 80 years ago against the imposition of economic fascism in America, the U.S. government has continued to grow in power over the American people. But it should be remembered that men of courage, integrity, and principle can stand up to Big Brother and resist the headlong march into economic tyranny. That unanimous Supreme Court decision in 1935 was one bright example of it.

The Science-Fictional Foundation Under Paul Krugman - Part 2

In his recidivist attacks on the gold standard Prof. Krugman tediously resurrects and refutes straw man arguments drawn from marginal thinkers. Prof. Krugman sets his phaser on stun and points it at the ghost of Ayn Rand rather than tangling with his peers. But boiled to its essence, Krugman's sciencefictiononomics is a tug of war between believers in mathematical modeling and believers in common sense. One also can cast this as a war between elitists (i.e believers in the ability of an elite to manage society’s affairs better than can the society itself) and populists (i.e. believers in the ability of society to manage its own affairs better than an elite can do so for it).

"Monetary Policy Is Bankrupt" Dr. Lacy Hunt Warns "Bonds, Not Stocks, Are A Good Economic Indicator"

"While the wealth effect is a theoretical possibility, it is not supported by economic fact. The stock market is not a good guide to the economy, but...the bond market is a very good economic indicator. When bond yields are very low and declining it’s an indication that the same is happening to inflation and that economic activity is weak. The bond yields are not here for any fluke of reason. They are here because business conditions in the US and abroad are quite poor."

Forget The $1 Trillion Platinum Coin - Here's The $10 Trillion Stone Coin

If creating money is such a good idea, why not let all of us do so? Why not let everyone print as much as they need to get what they want? The answer is of course runaway inflation, as money that can be issued by everyone in unlimited quantities is instantly rendered worthless. The point we're making with the $10 trillion stone coin is that if money is a social contrivance, then it should be distributed to those creating goods and services, not those with influence over easily-bought politicos.
Sprott Money's picture

The Jefferson Airplane sang about truth and lies nearly 50 years ago.

“When the truth is found to be lies

And all the joy within you dies…”

Restating their insight to make it relevant to our global delusions about real money – gold and silver – and the much less real money we call dollars, euros, pounds, yen and so forth:

When the truths we want to believe are clearly lies,

Then CONFIDENCE in our currency dies…


The Top 0.1% Loves A Guaranteed Minimum Income: With One Caveat

The last thing the top 1/10th of 1% wants is a desperate, politically charged underclass with no money to buy the goods and services that generate the income of the top 1/10th of 1%. The best way to keep the underclasses passive and powerless while insuring they have enough money to continue consuming is to arrange for the central bank to issue them money in the form of a popularly acclaimed guaranteed minimum income. Helicopter money here we come.

 

China’s Monumental Debt Trap - Why It Will Rock The Global Economy

Needless to say, Greece is only the poster child. The McKinsey numbers above suggest that “peak debt” is becoming a universal condition, and that today’s Keynesian central bankers and policy apparatchiks are only pushing on a giant and dangerous global string. So now we get to ground zero of the global Ponzi. That is the monumental pile of construction and debt that is otherwise known on Wall Street as the miracle of “red capitalism”. In truth, however, China is not an economic miracle at all; its just a case of the above abandoned Athens stadium writ large.

"We Just Need To Print More Money" Bank Of Japan's New Board Member Clarifies Endgame

The Abe administration nominated a major proponent of reflationary monetary policy to the central bank’s board, buttressing Governor Haruhiko Kuroda’s efforts to save the nation from the dread of deflation. As Bloomberg reports, economist Yutaka Harada, who will replace Ryuzo Miyao, has said Japan can beat deflation by printing money in a 2013 book "Reflationary Policy Revives Japan’s Economy." So far that is not working so try harder... “The nomination is a good news for Kuroda... he will keep a majority on the board and win what he wants." Why such good news? As deputy director at the finance ministry’s Policy Research Institute, Harada exclaimed, "we just need to print money."

The Euro Tragedy & Its Consequences For Gold

Until now, central banks have restricted monetary policy to domestic economic management; this is now evolving into the more dangerous stage of internationalisation through competitive devaluations. The gold price is an early warning of future monetary and currency troubles, and it is now becoming apparent how they may transpire. The ECB move to give easy money to profligate Eurozone politicians is likely to have important ramifications well beyond Europe, and together with parallel actions by the Bank of Japan, can now be expected to increase demand for physical gold in the advanced economies once more.

We Ignore Unintended Consequences At Our Peril

The grand central banking experiment being conducted around the globe right now will not end well. With little more than a lever to ham-fistedly move interest rates, the central planners are trying to keep the world's debt-addiction well-fed while simultaneously kick-starting economic growth and managing the price levels of everything from stocks to housing to fine art. The complexity of the system, the questionable credentials of the decision-makers, and the universe's proclivity towards unintended consequences all combine to give great confidence that things will not play out in the way the Fed and its brethren are counting on.

The Lunatics Are Running the Asylum: Draghi’s Money Printing Bazooka

There is no reason to assume that this time will be different. These boom-bust sequences will continue until the economy is structurally undermined to such an extent that monetary intervention cannot even create the illusory prosperity of a capital-consuming boom anymore. The bankers applauding Draghi’s actions today will come to rue them tomorrow.

Who Benefits When Bubbles Burst?

An astute reader recently posed an insightful question: we all know who benefits from asset bubbles in stocks, bonds and real estate--owners of assets, banks, the government (all those luscious capital gains and rising property taxes), pension funds, brokers and so on. But who benefits from the inevitable collapse of these asset bubbles? If asset bubbles end badly for virtually every participant, then why does the system go to extremes to inflate them? This is an excellent question, as it goes right to the heart of our dysfunctional Status Quo.