Booms and Busts

The concerns about a bubble implies those shopping for a new home are wondering if they are walking into a trap. Home prices have soared and no one wants to buy at the top. 

Because of past easy-money binges, the pool of wealth may be declining just as prices are increasing. And we're likely to see upward pressure on interest rates. This is bad news, and shows the limits of the Fed's power. 

It's already clear that after an initial sugar high caused by stimulus funds, there's now hardly any "bang for the buck" from stimulus funds. In fact, governments are spending millions for each job "created" by stimulus.

Interventionism does not work because it misallocates resources in the economy. More importantly, it disturbs, distorts, and destroys the corrective process whereby market actors reallocate resources back into a sustainable framework.

The specific institutional conditions in 1936 Britain caused inflation to work as intended once, and not well. Stimulus policy today completely ignores these origins and has become a universal solvent to heal all economic ills.

Many have long speculated that there is a correlation between economic prosperity and the length of women's hemlines. But perhaps it's now "mom jeans," with their high waists and ample fit, that indicate the true state of the economy.

Two things should concern us. First, the weakness of the recovery in the middle of the largest fiscal and monetary stimulus seen in decades, and second, the short and diminishing effect of these programs.

We've seen pictures of empty shelves in Venezuela. Meantime, the one-year return on the Caracas stock exchange is 1,804.92 percent. If you're already rich in assets, inflation is a big nothing burger. But it's a problem if you're poor.

Two things should concern us. First, the weakness of the recovery in the middle of the largest fiscal and monetary stimulus seen in decades, and second, the short and diminishing effect of these programs.

Many have long speculated that there is a correlation between economic prosperity and the length of women's hemlines. But perhaps it's now "mom jeans," with their high waists and ample fit, that indicate the true state of the economy.