Group items tagged

Not What They Had in Mind: A History of Policies that Produced the Financial Crisis of 2008. GMU economist and popular blogger Arnold Kling has released a new paper titled: "NOT WHAT THEY HAD IN MIND: A History of Policies that Produced the Financial Crisis of 2008." Kling is very much of the view that if you had to choose between blaming private sector greed and public policy, the fault lies in the latter: As this paper will illustrate, the seeds for much of the current crisis were sown in the policy "solutions" to previous financial and economic crises. Any attempt to dissect and understand the current crisis that does not account for the complex history, evolution, and integrated nature of financial regulations will not yield meaningful lessons for today's policy makers. Among the topics he addresses: housing policy, bank capital regulations, monetary policy, and bank capital regulations.   Incredible

a new global monetary regime to reduce currency turmoil and spur growth: "This new system is likely to need to involve the dollar, the euro, the yen, the pound and a renminbi that moves toward internalization and then an open capital account," he wrote, in an echo of what we've been saying for some time. And here's Mr. Zoellick's sound-money kicker: "The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today." Mr. Zoellick's last observation will not be news to investors, who have traded gold up to $1,400 an ounce, its highest level in real terms since the 1970s, as a hedge against the risk of future inflation. However, his point will shock many of the world's financial policy makers, who still think of gold as a barbarous relic rather than as an important price signal. Lest they faint in the halls of the International Monetary Fund, we don't think Mr. Zoellick is calling for a return to a full-fledged gold standard. His nonetheless useful point is that a system of global monetary cooperation needs a North Star to judge when it is running off course. The Bretton Woods accord used gold as such a reference until the U.S. failed to heed its discipline in the late 1960s and in 1971 revoked the pledge to sell other central banks gold at $35 an ounce.

"Since the close of World War II, America has sought an integrated policy as the militarization of capitalism. In the intervening years, this was not always easy to achieve, as, depending on circumstances, one or the other, the corporate-financial order, and the military itself, asserted itself and made strong demands on government. The result was never an intracompetitive mold because each needed and recognized the value of the other, but still there were periods of imbalance in their respective surges of governmental policy-emphasis. American capitalism had become a functional duopoly (C. Wright Mills' Power Elite was a good popular discussion of this general structure at an earlier point in our capitalist-development trajectory after the war), the Cold War itself providing a cover for the US globalization of power via market penetration, international financial and monetary architecture under US supervision, and the steady build-up of an Armaments State. There is nothing actually new here about the American historical pattern, except of course the more explicit and pronounced role to be assigned the military in the stabilization and expansion of American capitalism. The military was never at any point following the Civil War a negligible input in synthesizing the materials for an operational ruling class, but essentially, as in the late-19th century policy of the Open Door, business was sufficiently confident of its own power (the "imperialism of free trade") to carry forward the process of expansion largely on its own. Yet, the dynamism of early modern capitalism, realized in part through grinding methods of labor suppression, notably, the privatization of force, helped on by a compliant government, meant that within capitalism itself there was tremendous jockeying for power requiring the imposition of Order if major railroads and industrial firms were to enjoy their secure monopoly status."

Incredible.  A simple explanation that explains everything.  Rchard Ebeling's "Unified Theory of Everything" is something every American can understand.  If only they would take a break from "Dancing with the Stars" and pay attention to the future of their country and the world.  It's a future where either "individual freedom", as defined by our Constitution and Declaration of Independence, will win out; or, the forces of fascist socialism / marxism will continue to roll and rule.  Incredible read!!!!

I'm struck again by the poltical brilliance of Russia's decision to drop the South Stream Pipeline in favor of a new pipeline through Turkey to the border with Greece. Russia has gained an ally in Greece in terms of fighting economic sanctions on Russia and reinstating trade between Russia and the EU. Greece has veto power in the EU on any new sanctions or renewal of existing sanctions, at least most of which have sunset provisions. Russia also made allies of two NATO members, Greece and Turkey. And Greece is positioned by its threat of refusal to repay debt to the troika banksters to break the absolute hold the banksters have on monetary policy in the Eurozone. Russia magnifies that threat by saying that it is open to a proposal to bail out the Greek government. Not yet known is whether a condition would be abandoning the Euro as Greece's own currency. Greece might conceivably reinstate the drachma with its value pegged to a basket of foreign currencies, including the ruble and yuan. In other words, Greece leaving the EU and NATO and joining BRICS is conceivable.

Monetary policy of, by, and for banksters continues in the U.S. One irony is that banksters press for transition to an all digital currency so that savers can be penalized, a blatant "trickle-up"economic policy, whilst also pressing for more bank bailouts, wielding the thoroughly-discredited "trickle down" economic theory. But "trickle down" theory, in the context of bank bailouts, has not successfully trickled down and the only beneficiaries have been the few Americans who can still invest in the stock market, paying the highest dividends to the wealthiest among us. Has their ever been a time when the stock market's behavior has been so divorced from the well-being of the middle and lower economic classes? I doubt there has been at least in the last 50 years. Where would we be if the bank bail-out trillions had instead been mailed as checks to the middle and lower economic classes? "Trickle up" works and that is what built the American economy to its peak in inflation-adjusted dollars -- an affluent middle class. But do not expect leadership from Washington, D.C. in correcting income inquequality; only political rhetoric and a fight over extension of unemployment benefits, now lapsed. "According to the World Bank, the GINI coefficient "measures the extent to which the distribution of income or consumption expenditure among individuals households within an economy deviates from a perfectly equal distribution." Therefore it is used as an indication of income inequality within countries. ... In the late 2000s, Chile had the highest GINI coefficient, after taxes and transfers, among OECD member countries. The United States, Turkey and Mexico came right before it. At the other end of the scale, Slovenia, Denmark and Norway led the ranking with the lowest levels of income inequality." http://www.gfmag.com/tools/global-database/economic-data/11944-wealth-distribution-income-inequality.html#ixzz2pGpv4xGZ Higher minimum wages? How about instead abolishing the Feder

In closely related news, a Pentagon spokesman announced that soldiers of the U.S. Army's 101st Airborne Brigade and 22nd and 26th Marine Expeditionary Units were in the "mopping up stage" of routing terrorists who had captured the city of Reykjavík, Iceland in an April 7, 2015 surpise attack. According to knowledgeable sources in the White House, the terrorist invasion was reported by an unidentified official of the Federal Reserve Bank of New York, who had received urgent telephone calls from counterparts in Iceland's central bank. "We're still assessing the situation, but it looks like all members of the Icelandic government were brutally executed by the terrorists just before they retreated," Rear Adm. John Kirby said. Asked for the name of the terrorist organization that carried out the attack, Adm. Kirby said that the name had not yet been declassified, but said that he hoped to be able to announce that information soon.     

In my view, the Fed is beyond salvage. It needs abolition, not a new role. The Constitution grants Congress the power to mint and coin money, not a group of rent-seeking banksters. 

The two presidents have a lot in common. Both inherited an American economy in collapse. And both applied daring, expensive remedies. Mr. Reagan passed the biggest tax cut ever, combined with an agenda of deregulation, monetary restraint and spending controls. Mr. Obama, of course, has given us a $1 trillion spending stimulus. By the end of the summer of Reagan's third year in office, the economy was soaring. The GDP growth rate was 5% and racing toward 7%, even 8% growth. In 1983 and '84 output was growing so fast the biggest worry was that the economy would "overheat." In the summer of 2011 we have an economy limping along at barely 1% growth and by some indications headed toward a "double-dip" recession. By the end of Reagan's first term, it was Morning in America. Today there is gloomy talk of America in its twilight. My purpose here is not more Reagan idolatry, but to point out an incontrovertible truth: One program for recovery worked, and the other hasn't. The Reagan philosophy was to incentivize production-i.e., the "supply side" of the economy-by lowering restraints on business expansion and investment. This was done by slashing marginal income tax rates, eliminating regulatory high hurdles, and reining in inflation with a tighter monetary policy.

Is this a trend? This is the second article I've read in MSM during the last two days that sounds the alarm that the petrodollar system is collapsing and that de-dollarization is in motion, along with noticing that U.S. fiscal and foreign policy is helping to accelerate de-dollarization. Perhaps the propagandameisters have decided that they can't squelch this information any longer because the alternative press has publicized it too widely?

Catherine is a frequent guest on CoastToCoastAM.com, so I've come to know her well.  Although this interview doesn't discuss her ability to see into the future, I know from experience that she is a real visionary hitting the mark at an astounding clip.  Chalk this interview up as a must read.

Mr. Mundell has a knack for boiling things down to simple terms. He grew up on a four-acre farm in Ontario, went on to earn a Ph.D. from the Massachusetts Institute of Technology, and would ultimately challenge the renowned Milton Friedman at the University of Chicago during the late 1960s. Both economists were strong proponents of free markets, but Mr. Mundell disagreed with Mr. Friedman's advocacy of floating exchange rates. The sound of a buzzer indicates lunch has arrived. Mr. Mundell suggests that we continue our discussion at the table and politely invites his assistant Ivy Ng, who has been taking careful notes, to join us. "We've been talking about the possibility of global monetary reform," I continue, deciding to switch gears. "Let's talk a bit about domestic monetary policy. What do you think the Federal Reserve should be doing right now?" It's a seamless transition for Mr. Mundell. "The Fed is making a big mistake by ignoring movements in the price of the dollar, movements in the price of gold, in favor of inflation-targeting, which is a bad idea. The Fed has always had the wrong view about the dollar exchange rate; they think the exchange rate doesn't matter. They don't say that publicly, but that is their view." "Well," I counter, not particularly savoring the role of devil's advocate, "I suppose Fed officials would argue that their mandate is to try to achieve stable prices and maximum levels of employment." Mr. Mundell looks annoyed. "Well, it's stupid. It's just stupid." He tries to walk it back somewhat. "I don't mean Fed officials are stupid; it's just this idea they have that exchange-rate effects will eventually be taken into account through the inflation-targeting approach. In the long run, it's not incorrect-it takes about a year. But why ignore the instant barometer that something is happening? The exchange rate is the immediate reaction to pending inflation. Look what happened a couple weeks ago: The Fed started to say, we've got to pr

synopsis: Tuesday May 8th, 2012 - Dr. Ron Paul Chaired the Congressional subcommittee holding the first hearings on the Federal Reserve Bankster Cartel.  Dr. Paul has become famous around the world for his tireless efforts to audit, expose, and abolish the central bank. Even making that effort the centerpiece of his "Restore the Constitution - Take Back America" run for the presidency.  He published a best-selling book in 2009 entitled "End the Fed", a title that has become a rallying cry for millions of Americans angry about the institution's multi-trillion-dollar bailouts, market manipulations, corruption, and debasement of the currency. The subcommittee hearing, entitled "The Federal Reserve System: Mend It or End It?", examined a range of different proposals to reform the nation's monetary system - it was supposed to look at six different options emanating from both parties. One of the measures on the agenda was Congressman Paul's own "Federal Reserve Board Abolition Act," legislation to dismantle the central bank and restore sound money based on market principles. "More and more people are beginning to understand just how destructive the Federal Reserve's monetary policy has been. I hope that this hearing will kick start a serious discussion on the need to rein in the Fed," Chairman Paul said in a statement about the event. "A hundred years is far too long for Congress to have taken a hands-off approach. The Fed continues to reward Wall Street banks while destroying the dollar's purchasing power and driving up the cost of living for average Americans. This reckless behavior must come to an end."

Everything you know about FDR, The New Deal and the Great Depression Banking Crisis is wrong!!!! "From David Stockman's Contra Corner. Remarks to the Committee For The Republic, Washington DC, February 2014 (Part 4 in a 6-Part Series) Go to Part 1. The Great Depression thus did not represent the failure of capitalism or some inherent suicidal tendency of the free market to plunge into cyclical depression-absent the constant ministrations of the state through monetary, fiscal, tax and regulatory interventions.  Instead, the Great Depression was a unique historical occurrence-the delayed consequence of the monumental folly of the Great War, abetted by the financial deformations spawned by modern central banking. But ironically, the "failure of capitalism" explanation of the Great Depression is exactly what enabled the Warfare State to thrive and dominate the rest of the 20th century because it gave birth to what have become its twin handmaidens--Keynesian economics and monetary central planning. Together, these two doctrines eroded and eventually destroyed the great policy barrier--that is, the old-time religion of balanced budgets- that had kept America a relatively peaceful Republic until 1914. To be sure, under Mellon's tutelage, Harding, Coolidge and Hoover strove mightily, and on paper successfully, to restore the pre-1914 status quo ante on the fiscal front.  But it was a pyrrhic victory-since Mellon's surpluses rested on an artificially booming, bubbling economy that was destined to hit the wall. The Hoover Recovery of 1932 Worse still, Hoover's bitter-end fidelity to fiscal orthodoxy, as embodied in his infamous balanced budget of June 1932, got blamed for prolonging the depression.  Yet, as I have demonstrated in the chapter of my book called "New Deal Myths of Recovery", the Great Depression was already over by early summer 1932."