John Stephenson’s Predictions for Avoiding an Economic Crash

While the markets have been on edge for the past year or so and have left most investors bewildered as to what to do next, portfolio manager and author John Stephenson thinks that the course is set for higher gold prices. In this exclusive interview with The Gold Report, Stephenson explains why he . . . → Read More: John Stephenson’s Predictions for Avoiding an Economic Crash

Here Comes QE3!

Satan’s retarded cousin (“Ben Bernanke,” as he’s known to many in the public) has apparently decided that the dollar just is not yet close enough to worthless:

The Federal Reserve’s announcement today that is launching a third round of quantitative easing validated widely held expectations that the central bank would provide more monetary stimulus . . . → Read More: Here Comes QE3!

Harry Dent’s Formula for Surviving the Great Bust Ahead

With a perfect storm brewing on the horizon, investors should be building their cash cache and running for cover, warns Harry Dent, author of The Great Crash Ahead. In this exclusive interview with The Gold Report, Dent explains how central bank stimulus programs are fighting a futile battle because a huge army of . . . → Read More: Harry Dent’s Formula for Surviving the Great Bust Ahead

The Curious Case of Liquidity Traps and Missing Collateral - Part 1

The debate is on! Are we in a liquidity trap and if so what should we do? Why is the financial system depleted of collateral and what does this mean? Should policy makers and central banks be even more “irresponsible” [1] and conduct more monetized deficit spending? What does a lack of triple A . . . → Read More: The Curious Case of Liquidity Traps and Missing Collateral – Part 1

When Metaphors Fail

Consider this nonsense:

What if borrowing money made you so much richer over the long-term that it paid for itself? It’s not crazy. Millions of families make such a decision every year when they take on debt to pay for school. Indeed, investing in yourself is a bet that often pays off. But can . . . → Read More: When Metaphors Fail

Austerity and Reality

Paul Krugman still doesn’t get it:

Watching Europe sink into recession – and Greece plunge into the abyss – I found myself wondering what it would take to convince the chattering classes that austerity in the face of an already depressed economy is a terrible idea.

After all, all it took was the predictable . . . → Read More: Austerity and Reality

Yes Florida, The Economy *IS* On The Mend

I happened across this article today and wish I could claim that I wrote it. Here is the opening…

Sen. Marco Rubio (R) of Florida delivered his party’s weekly address on Saturday morning, and made a provocative claim about President Obama.

“The bottom line is this president inherited a country with serious problems,” Rubio . . . → Read More: Yes Florida, The Economy *IS* On The Mend

Household behaviour that counteracts fiscal expansion

Suppose a government tries to boost demand in the economy by boosting the deficit.

A fascinating feature of the situation is: Households are not wood, households are not stones, but men. And being men, they will look forward, they will optimise. Households know that all government expenditure requires taxation: all that is achieved by . . . → Read More: Household behaviour that counteracts fiscal expansion

The Fallacy of Stimulus Plans

I’d like to revisit and expound upon a thought I had in yesterday’s post on forgiving student loans:

Can we get rid of this whole nonsensical stimulus thinking? All money circulates. Ceteris parabis, the money will be spent at some point.

I wanted to explain this more thoroughly yesterday, but I was pressed for . . . → Read More: The Fallacy of Stimulus Plans

Jubilee?

Freakonomics asked if forgiving student loans en masse was a good idea. Here was their conclusion:

1. Distribution: If we are going to give money away, why on earth would we give it to college grads? This is the one group who we know typically have high incomes, and who have enjoyed income growth . . . → Read More: Jubilee?