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Those arguing that inflation is not a problem are either disingenuous, blind or cheerleading for Washington. Inflation is not happening in wages, nor is it happening in many products where the misallocation of capital has caused oversupply (real estate being just one example). It is happening in financial...
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Stocks are off about 80% from their peak, at least as measured in ounces of gold. This chart shows the Dow priced in ounces of gold. Currently, it takes just under 10 ounces of gold to “buy” the Dow. Over time, this ratio has ranged from 1 to over 40. Some investors use this relationship...
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There is little doubt in my mind that we are heading for a train wreck. The timing and catalyst that trigger this reaction are much more difficult to determine. The potential catalysts are many, any one of which would trigger the wreck. A dollar crisis or a Treasury fund-raising crisis (likely to appear...
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The fact that investors around the world are turning to gold is remarkable. Unlike a bond, stored gold offers no yield and, unlike a stock, gold provides no leverage to the performance of an enterprise. Buying gold is not an investment per se, compared, for example, to buying a gold mining stock, where...
Posted to
Hera
by
Ron Hera
on
Fri, Nov 13 2009
Filed under:
Filed under: Federal reserve, US dollar, inflation, Asia, USDX, Gold, IMF, Bretton Woods, ETF, USGS, US economy, gold lease, SDR, GFMS, central bank, CBGA, LBMA
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The US economy has been in crisis since 2008 and despite optimistic statements by officials and commentators there are no fundamental signs that the crisis will end in the foreseeable future. Current economic data suggests a number of diverging and unsustainable trends. The US economy has suffered a...
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Bob Murphy asks what we should call the upcoming severe recession and inflation : I think we are in store for a very severe recession (i.e. depression) and very big price increases. It will be stagflation but worse. So we need a catchy term. The two contenders I've come up with are infression and...
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In my previous post I spoke about the role of interest rates in balancing the supply of real savings (from depositors) and demand for those savings on the part of borrowers (investors): What's difficult to grasp here is that savings are not just abstract dollar notes. When I save, I am implicitly...
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Economics is not a complicated science. This may not seem obvious to you if you've following the news from Washington, where a cabal of politicians, financiers and lobbyists have been spent the last several weeks desperately making a series of increasingly complicated, expensive, and ultimately unsuccessful...
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There's much to be said about the current financial crisis. At the heart of this, as every Austrian knows, is the fault the US government holds for creating the current situation through its central bank and its inflationary policy. This fundamental economic truth cannot be stated enough. Ignorance...
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The term "Demand Destruction" strikes me as a bit absurd. For example, let's say Bob & Joe are going to make a simple trade. Bob produces apples and Joe gives haircuts. The terms of the trade are 10 apples for 1 haircut. Bob's supply of 10 apples are also his demand . Without the...
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What if the Fed set a goal for themselves to contain inflation at 3%? Let's assume (and this is a huge assumption) that government can control its spending to the point where 3% inflation is maintained. Is this the ticket to success? Well let's see: Artificial booms would still exist. Businessmen...
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Many people perhaps dream of an executive position in a wealthy, well-to-do business. To manage and direct people! to be the boss. But few people are. The reason should be obvious: it takes a certain kind of skill and talent to successfully direct the fortunes of a business that captures a certain sector...
Posted to
Apropos Austrian Aphorisms
by
thedo
on
Thu, May 22 2008
Filed under:
Filed under: ron paul, government intervention, oil execs, airlines, excessive profits, Kathie Lee Gifford, skyway robbery, energy, inflation, The Today Show, foreign policy
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The Fed is being urged to be more aggressive in controlling future asset bubbles. Fed governor, Frederic Mishkin, gave a speech May 15th suggesting the Fed should use its regulatory powers "aggressively and pro-actively to limit the threat from future asset price bubbles." The Fed could eliminate...
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For spring break, I decided to go to Mexico again (and mind you, not to Cancun or any beach place like that), but since it was cheaper, I had to go through NYC. Anyways, I visited the Museum of American Finance in NYC (as recommended by Dr. Tucker ) and the Museo Interactico de Economica in Mexico City...
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The New York Times has an article titled For Bernanke, a Question of Toughness . Here is an excerpt: Is the Federal Reserve’s chairman, Ben S. Bernanke, too nice for the job? That’s the view of many on Wall Street, who argue that with the stock market falling, unemployment rising and the economy flirting...