Krugman

Economic Crisis Goes Mainstream - What Happens Next?

Last year, when alternative economic analysts were warning that the commodities crush and oil crash just after the taper of QE3 were blaring signals for a downshift in all other financial indicators, the general response in the mainstream was that we were overreacting and paranoid and that the commodities jolt was temporary. Perhaps the fact needs repeating that it’s not paranoia if they are really out to get you. Only a short time later, it is truly amazing how the rhetoric from the mainstream economic yes-men is changing. So now that the mainstream is willing to report on clear economic dangers, what happens next?

10 Things Every Economist Should Know About The Gold Standard

At the risk of sounding like a broken record we'd like to say a bit more about economists' tendency to get their monetary history wrong; in particular, the common myths about the gold standard. If there's one monetary history topic that tends to get handled especially sloppily by monetary economists, not to mention other sorts, this is it. Sure, the gold standard was hardly perfect, and gold bugs themselves sometimes make silly claims about their favorite former monetary standard. But these things don't excuse the errors many economists commit in their eagerness to find fault with that "barbarous relic." The point, in other words, isn't to make a pitch for gold.  It's to make a pitch for something - anything - that's better than our present, lousy money.

"They'll Blame Physical Gold Holders For The Failure Of Monetary Policies" Marc Faber Explains Everything

"The future is unknown and we are not dealing with markets that are free markets anymore...now we have government interventions everywhere. [But] in the last say twelve months, I have observed an increasing number of academics who are questioning monetary policies. That's why I think they will take the gold away and go back to some gold standard by revaluing the gold say from now $1000/oz to say $10,000 dollars. An individual should definitely own some physical gold. The bigger question is where should he store it? because... the failure of monetary policies will not be admitted by the professors that are at central banks, they will then go and blame someone else for it and then an easy target would be to blame it on people that own physical gold because - they can argue - well these are the ones that do take money out of circulation and then the velocity of money goes down - we have to take it away from them... That has happened in 1933 in the US."

Japan's Real Wages Just Plunged The Most In Six Years

Japan's all important real wages, even those including bonuses and special payments, once again failed to keep up with inflation, and in June crashed by a whopping 2.9% reflecting a 0.5% yoy increase in the CPI excluding imputed rent. As the chart below shows, there has now been 24 consecutive months without a single Y/Y monthly increase in real wages. What's worse is that when one adjusts the inflationary surge from the consumption tax hike last April, which has now been fully anniversaried and is no longer part of the base effect, this was the largest decline in Japan's real wages since December 2009, or the biggest monthly plunge in 6 years!

Amoeba, Fish, Lizard, Ape, Human, Investor... Meet Evolutionary Economics

We’re always interested in alternative economic frameworks that can help address the sizable gaps left open by classical approaches. Behavioral economics can fill part of that void, of course, as it describes some basic shortfalls in the assumption that we’re all superhuman welfare maximizing individuals. One step beyond that is evolutionary economics, which borrows from biology rather than psychology to form models about economic behavior.

4 Mainstream Media Articles Mocking Gold That Should Make You Think

Religious imagery... peak condescension... everyone proclaiming "gold is dead"... In a nutshell, sentiment has plunged to negative levels not seen in years, if not more than a decade. Here are four mainstream media articles that provide some evidence we may be approaching a sentiment low. Some of them we're sure you’ve seen, others perhaps not. What amazes us is how they’ve all come out within the last two weeks.

 

Putin Trolls Obama, Says FIFA's Blatter Deserves A Nobel Prize

Earlier today, it was Putin's turn to troll not only the DOJ, but also Barack Obama who is currently in Ethiopia as part of his African tour when in an interview aired by Swiss broadcaster RTS on Monday Putin said that Sepp Blatter deserves a Nobel Prize for his stewardship of soccer’s governing body. “I think people like Mr Blatter or the heads of big international sporting federations, or the Olympic Games, deserve special recognition. If there is anyone who deserves the Nobel Prize, it’s those people.”

The Curse Of The Euro: Money Corrupted, Democracy Busted

The preposterous Gong Show in Brussels over the weekend was the financial “Ben Tre” moment for the Euro and ECB. That is, it was the moment when the Germans - imitating the American military on that ghastly morning in February 1968 - set fire to the Eurozone in order to save it. In short, Greece will become an outright debtors’ colony and its government will function as page-boy legislators for the Troika occupiers. Needless to say, political and social upheaval will erupt when the full extent of the Tsipras surrender becomes evident, and the resulting political contagion will spread throughout the length and breadth of Europe as Greece implodes. In due course, the euro will collapse and the baleful Keynesian money printers’ regime in Frankfurt will be repudiated and dismantled. But not before European democracy has a brush with death, and European prosperity is extinguished for a generation.

Debt Is The Barbarous Relic! Not Gold

Owning gold is saving, which by definition is civilized, i.e. NOT barbarous. Debt, on the other hand, is the exact opposite. It is a lack of savings that shows a complete disregard for the future. It is the modern equivalent of gorging on some wild beast with no thought to tomorrow’s meal… or in this case, no thought of tomorrow’s generation. Debt is the barbarous relic. Not gold. And governments are up to their eyeballs in it, continuing to engage in this primitive, uncivilized behavior with wanton abandon.