I have recently written that there are certain key indexes and ratios derived from Austrian business cycle theory that help us discern the development of bubbles in various sectors. As Mises wrote: “Only theory, business cycle theory, permits us to detect the wavy outline of a cycle in the tangled confusion of events.”
Robert Higgs advises us Don’t Rely on a Quack Doctor as a parable about government intervention in the economy.
Rothbard in AGD documents the effects of a visits with Dr. Hoover on the economy. This week‘s quote is from the conclusion of AGD (pp. 336-37):
Dear Murray: I need a copy of your book, The Panic of 1819 to send to my son so he can understand panics and similar phenomena. Sincerely yours, Howard Buffett
Letter of Howard Buffett to Murray Rothbard
I guess the book must have got lost in the mail.
HT: AH & RW @ EPB
Here is the link to a Bloomberg story that contains a link to the “60 Minutes” story. We have been following the story of this bubble for a while but nothing makes something “real” as when it turns up on “60 Minutes.” Economist Stephen Roach says that the ghost cities will someday be “thriving metropolitan areas.”
He may well be right, but the key question is what will happen between now and then.
Euros secretly airlifted to keep Greek banks afloat
We are told that the worst is over in Greece. They have even achieved a balance in their primary budget. Not bad considering the US federal budget deficit is almost $7 trillion when you consider the value of entitlement obligations accrued in 2012 (over $1 trillion based on current spending and revenue).
In Congressional testimony last week, Fed Chairman Ben Bernanke slipped several things in that no one much noticed. He said that the Fed might eventually choose to exit from its current monetary expansion binge, not by selling US government securities, but by letting them mature. He also said that the Fed might possibly keep interest or principal payments for itself.
