What happened to all of the doom and gloom economic threads?

[unregistered]

 

[Frisco_Slug_Esq]

You contribute to the politician who is in the position to give you a contract large enough to keep the contributions going...




Big government is so sweet.
__________________
You loot the private sector, strip every dollar of 40¢ for overhead, and then give the other 60¢ to your political base in order to revitalize the looted.

What's not to like about that plan?
A_J, the Stupid

An economy works best trickle-down. A Republic works best trickle-up. A Socialist believes just the opposite.
A_J, the Stupid

 

[Frisco_Slug_Esq]

One year ago, I argued in Reason that Milton Friedman’s writings on the Great Depression inspired the Federal Reserve’s response to the current economic crisis. Friedman held that artificially induced inflation would have prevented the ordeal of the 1930s, so I inferred that Fed Chairman Ben Bernanke’s implicit goal is likewise to ramp up inflation as a cure to our present ills.

A year later, the Fed is beginning to make that goal explicit. Over the past few weeks, Bernanke and other Fed bigwigs have been dropping conspicuous hints that they plan to boost inflation and pump another round of conjured-up cash into the economy. One proposal is to inject $100 billion per month. It’s being called Quantitative Easing 2 (QE2).

But why should the sequel be any more compelling than the original, which cost over $1 trillion and failed to move the unemployment rate or decisively revive the American economy?

This time, the Fed evidently believes that low interest rates and printed money no longer suffice, because—as the Chicago Fed president recently announced, and as John Maynard Keynes predicted would happen in an environment of zero interest rates—the U.S. is stuck in a liquidity trap. To get us out, the Fed is deploying its wonder-weapon: placebo inflation. Bernanke wants to start people thinking that prices will rise so that prices will rise. The Fed is planting a self-fulfilling prophecy in our heads. It’s kind of trippy.

Penn Bullock
Reason.com

You want proof of inflation U_D? Some sky-is-falling?
http://reason.com/archives/2010/10/28/are-we-all-friedmanites-now

merc?

 

[Ulaven_Demorte]

Penn Bullock
Reason.com

You want proof of inflation U_D? Some sky-is-falling?
http://reason.com/archives/2010/10/28/are-we-all-friedmanites-now

merc?

And yet, despite the dire warnings over the past year+, inflation has not gone up dramatically as has been predicted by those on the "right"... Even the author of the opinion piece you cited says so.

 

[pete]

oh well i guess that means everything's ok then.

alright people, get back to work!! oh, wait... nevermind

 

[hogjack]

his team "rescued" us from the evil Bush years and general Republican philosophy.

The George W. Bush and Republicans SUCKED fiscally for 6 years in total power and the latter two years of Bush II term as well. The Democrats come in and SUCK worse.

The "general" Republican philosophy seems to be suck just a little less than the Democrats.

Nice strategy.

 

[trysail]

The fiscal and monetary irresponsibility of the U.S. will have consequences. I don't know exactly what they will be but the behavior cannot go on forever. The currency markets are telling us that. The U.S. has become the financial equivalent of a crack addict.



________________________

http://noir.bloomberg.com/apps/news?pid=20601010&sid=aLigPpbxbK24


Gold Will Outlive Dollar Once Slaughter Comes
by John Hathaway

Oct. 29 (Bloomberg) -- The world’s monetary system is in the process of melting down. We have entered the endgame for the dollar as the dominant reserve currency, but most investors and policy makers are unaware of the implications.

The only questions are how long the denouement of the dollar reserve system will last, and how much more damage will be inflicted by new rounds of quantitative easing or more radical monetary measures to prop up the system.

Whether prolonged or sudden, the transition to a stable monetary system will become possible only when the shortcomings of the status quo become unbearable. Such a transition is, by definition, nonlinear. So central-bank soothsaying based on the extrapolation of historical data and the repetition of conventional wisdom offers no guidance on what lies ahead.

It’s amazing that there is no intelligent discourse among policy leaders on the subject of monetary rot and its implications for the future economic and political landscape. Until there is fundamental monetary reform on an international scale, most economic forecasts aren’t worth the paper on which they are written.

Telltale signs of future trouble aren’t hard to spot. Only a few months ago, Federal Reserve Chairman Ben Bernanke and a chorus of other high-ranking Fed officials were talking about exit strategies from the U.S. central bank’s bloated balance sheet and the financial system’s unprecedented excess liquidity. Now, those same officials are talking about pumping more money into the system to stimulate growth.

Risky Targets
And they’re not alone: Six months ago, the chief economist of the International Monetary Fund, Olivier Blanchard, suggested that raising inflation targets to 4 percent from 2 percent wouldn’t be too risky.

This sort of talk must grate on the nerves of our trading partners, China, India, Russia and others, who have accumulated pyramids of non-yielding Treasury debt. No haven there. Return- free risk may be a better way to put it. And bickering among central bankers over currency manipulation and rising trade tensions doesn’t exactly reinforce one’s confidence in a scenario of sustained economic growth and a return to prosperity.

The prospects for an orderly unwinding of the extreme posture of global monetary policy are zero. Bernanke, Jean- Claude Trichet and Mervyn King, his counterparts in Europe and the U.K. respectively, are huddling en masse upon the most precarious perch in the history of monetary affairs. These alleged guardians of monetary stability, in their attempts to shore up the system, have simply created the incinerator for paper money. We are past the point of no return. Quantitative easing may well become a way of life.

No Freak Occurrence
The consensus investment view seems to be that the credit crisis of 2008 was a freak occurrence, unlikely to repeat. That is wishful thinking. Monetary policy has painted itself into a corner. Based on our present course, there will be more bubbles and more meltdowns.

Financial markets and institutions sense trouble, as reflected in the flight to supposedly safe assets such as Treasuries and corporate-debt instruments with paltry yields, as well as the reluctance to lend by commercial banks. We are stuck in an epic liquidity trap. The irony is, if global central banks succeed in creating inflation, the value of these safe assets will be destroyed. It is a slaughter waiting to happen.

In the pedantic mentality of central bankers, their playbook creates just the right amount of inflation. As inflation accelerates, consumers will spend to get rid of their dollars of diminishing value and spur the economy. Once consumers start spending, it will be time to raise interest rates because a solid foundation for prosperity will have been established, they say.

Slender Thread
But whatever the playbook promises, the capacity of financial markets to overshoot can’t be overestimated. The belief among policy makers and financial markets in the possibility of this sort of fine-tuning is preposterous, but it is the slender thread on which remaining investment and business confidence rests.

The breakdown of the monetary system will be chaotic. When inflation commences, it will be highly disruptive. The damage to fixed-income assets will seem instantaneous. Foreign-exchange markets will become dysfunctional. The economy will become even more fragile and unpredictable.

Gold is an imperfect, but comparatively reliable, market gauge for the extent of current and future monetary destruction. The recent acceleration in the dollar price of the metal to $1,381, a record high in nominal terms, coincided with talk of a new round of quantitative easing and highly visible discord among major nations on trade and currency-valuation issues.

Naysayers’ Bubble
Naysayers point to gold’s price and see a bubble, without understanding that the only acceleration that is taking place is in the rate of decline of paper currency. The Fed is organizing an attack on the dollar’s value, believing that this is the most expedient way to defuse deflationary market forces. The man in the street is unaware, a perfect setup. Inflation can only be successful when the public doesn’t see it coming.

The sudden torrent of commentary on gold isn’t the sign of a bubble. Anti-gold pundits provide a great service to those who grasp this historical moment: They facilitate the advantageous positioning of the one asset most likely to be left standing when the dust settles.

 

[unregistered]

 

[mercury14]

The rising price of gold, which is quoted in Dollars, is a measure of the Dollar's shrinking value, but people refuse to see what's in front of their face. They want to rely on phony government data. The price of everything is going up, due to inflation. All one needs is an inflation calculator, available on the net, to see for themselves.

You should put all your money in gold then, just like Glenn Beck tells you. Meanwhile I'll keep making a killing on the market, k?

 

[koalabear]

You should put all your money in gold then, just like Glenn Beck tells you. Meanwhile I'll keep making a killing on the market, k?

Put all your money in the market, dinglberry, it can go no where but up.

 

[mercury14]

Put all your money in the market, dinglberry, it can go no where but up.

Well, that's what you righties who want to privitize social security say, right?

 

[koalabear]

Well, that's what you righties who want to privitize social security say, right?

I give my SS away to charity. I rely on my own money.

 

[mercury14]

I give my SS away to charity. I rely on my own money.

It is your own money.

 

[koalabear]

It is your own money.

Just a worthless check with no backing, well not even a check, direct deposit.

 

[mercury14]

Just a worthless check with no backing, well not even a check, direct deposit.

Wow...

 

[mercury14]

This is what conservatives are saying:


1) The market is not a safe place to put your money. Buy gold.

2) The market is such a safe place to put your money that we should privitize social security.

 

[Wok]

This is what conservatives are saying:


1) The market is not a safe place to put your money. Buy gold.

2) The market is such a safe place to put your money that we should privitize social security.

Maybe the privatized social security can invest in gold...

 

[koalabear]

This is what conservatives are saying:


1) The market is not a safe place to put your money. Buy gold.

2) The market is such a safe place to put your money that we should privitize social security.

Yep, you have to watch those conservatives.

George Soros buys gold despite dubbing it 'ultimate bubble'


http://www.telegraph.co.uk/finance/...-gold-despite-dubbing-it-ultimate-bubble.html

 

[mercury14]

Yep, you have to watch those conservatives.

George Soros buys gold despite dubbing it 'ultimate bubble'


http://www.telegraph.co.uk/finance/...-gold-despite-dubbing-it-ultimate-bubble.html

You mean George Soros bought gold in 2009?

Btw, people with 15 billion dollars in assets do things differently than you and I. A multi-billionarie might buy up some currency from Thailand. That doesn't mean it's a good idea for you and I to buy up a bunch of Bhat.

 

[jeninflorida]

u have some real issues.....please call dr phil, he can help you

This is what conservatives are saying:


1) The market is not a safe place to put your money. Buy gold.

2) The market is such a safe place to put your money that we should privitize social security.

 

[koalabear]

This is what conservatives are saying:


1) The market is not a safe place to put your money. Buy gold.

2) The market is such a safe place to put your money that we should privitize social security.

You mean George Soros bought gold in 2009?

Btw, people with 15 billion dollars in assets do things differently than you and I. A multi-billionarie might buy up some currency from Thailand. That doesn't mean it's a good idea for you and I to buy up a bunch of Bhat.

Soros is hardly a conservative, but you once again proved you are an idiot.

 

[firespin]

This is what conservatives are saying:


1) The market is not a safe place to put your money. Buy gold.

2) The market is such a safe place to put your money that we should privitize social security.

Maybe the privatized social security can invest in gold...

Ding ding ding!

Can you say early retirement?

 

[trysail]

This is what conservatives are saying:


1) The market is not a safe place to put your money. Buy gold.

2) The market is such a safe place to put your money that we should privitize social security.

If you were any smarter, you'd be a plant. What is your bizarre obsession with labeling everybody? Investment opinions have nothing ( as in zero, nil, nada ) to do with labels.

One size does not fit all. Have you ever heard of diversification? Nobody said anything about putting all your eggs in one basket. Nobody said anything about time horizons. For somebody who's 20-30 years old, there are many years to go before retirement. Historically, over long periods of time, equities have provided the highest returns but you are an idiot if you go into them and are not willing to hold them and do nothing for at least 10, if not 20 years.

If you want a "one size fits all" solution to all the world's problems, there's a bureaucrat just waiting to fit your square peg into a round hole.

"For every complex human problem, there's a plausible solution— one that's neat, simple... and wrong."
-H. L. Mencken

 

[Frisco_Slug_Esq]

And yet, despite the dire warnings over the past year+, inflation has not gone up dramatically as has been predicted by those on the "right"... Even the author of the opinion piece you cited says so.

OCTOBER 29, 2010 5:00 P.M.
Final Nail in the Democrats’ Coffin
Government planners have created a stagflationary growth recession.

On the eve of the midterm elections, a third-quarter GDP report showing a meager 2 percent growth rate is the final nail in the Obama Democrats’ political coffin.

The economic nails slowly have been hammered into that coffin all summer and fall. A spate of subpar economic statistics has shown the failure of the fiscal-stimulus spending program. And myriad tax and regulatory threats produced by new government policies have created a massive uncertainty overhang and a dismal jobs outlook. American businesses have gone on an investment-capital and hiring strike.

For a White House that bet the ranch on a massive government pump-priming plan, it has all turned out to be a complete failure. The scheduled economic recovery has simply not occurred.

And that’s why a Republican Tea Party tsunami lies just over the horizon. That tidal wave could be even greater than current polling suggests.

It should have been recovery summer, according to the president and his followers. But it is now officially a recovery slump. The entire command-and-control economic philosophy of the Obama Democrats has proven to be a big bust. And they’ll pay a very big price for this.

In fact, the last two GDP reports have averaged less than 2 percent growth, something that qualifies as a growth recession, not a recovery.

Even worse, the GDP deflator — the broadest inflation measure — came in at 2.2 percent in the third quarter, following a 2 percent reading in the second quarter. That means inflation is rising faster than real output. Stagflation.

The Bernanke Fed should take notice of this on the eve of its quantitative-easing pump-priming exercise, expected to be announced the day after the election. We are actually experiencing a mini version of stagflationary growth recession.

The spending, taxing, and regulating policies of the Democratic Congress and administration have blocked growth, putting the Fed in a position to provide even more money to chase fewer goods. But in classic Milton Friedman terms, even though the economy is mired in stagnation, that’s still an inflationary prescription.

On top of all that, the depreciating-dollar policies of the Fed have led to a boom in commodity prices, including food and energy — things ordinary Americans pay for in the course of their typical week.

The dire warnings were pretty much on target.

When the economy came in at 5 percent in the last quarter of 2009, and at 3.7 percent in early 2001, it looked like a recovery scenario. This, of course, followed the Fed’s massive $2 trillion stimulus plan and the more than $1 trillion fiscal stimulus. But those sugar highs quickly evaporated as growth slowed to 2.7 percent in the spring and 2 percent in the summer.

Meanwhile, a stubbornly high unemployment rate of 9.6 percent was supposed to have dropped to 8 percent last year and 7 percent by the end of this year, according to the president’s Council of Economic Advisers. But it didn’t. The so-called stimulus failed to stimulate.

Actually, unemployment is much worse for regular workaday folks. Counting marginal part-time workers and discouraged workers, unemployment is 17.3 percent. And this year, while the president promised 1.5 million new jobs, nonfarm payrolls have grown by only 613,000, and actually have fallen over the past four months.

The trouble with the whole Obama mindset is the notion that government can run the economy. That idea has failed. It is business that runs the economy, including entrepreneurs and risk-takers. Yet the animal spirits have been stifled, while the producers have been laughed at, mocked, and insulted.

The Obama class-warfare campaign against business and investment has created a wall of worry and a refusal to invest in the future. The incentive model of growth, where it must pay more after tax and regulatory costs to work, produce, and invest, has been discarded by Obama’s extreme left-liberal Keynesianism. Predictably, higher costs — including the cost of Obamacare, probably the single-greatest barrier to growth and jobs — have forced the most productive factors in the economy to hole up and virtually shut down.

Larry Kudlow
NRO

What's next? Nixonian price controls?

Of course, a Democrat budget, no matter how onerous would have provided the stability going into the future that business need to go forward; instead, they put government first and decided to leave the mess for Republicans (wonder if the left the mop? the broom? the car keys...) in order to play the blame game.
__________________
The want of confidence in the public councils damps every useful undertaking, the success and profit of which may depend on a continuance of existing arrangements. What prudent merchant will hazard his fortunes in any new branch of commerce when he knows not but that his plans may be rendered unlawful before they can be executed? What farmer or manufacturer will lay himself out for the encouragement given to any particular cultivation or establishment, when he can have no assurance that his preparatory labors and advances will not render him a victim to an inconstant government?
Madison, Federalist 62.

 

[Frisco_Slug_Esq]

This is what conservatives are saying:


1) The market is not a safe place to put your money. Buy gold.

2) The market is such a safe place to put your money that we should privitize social security.

#1 is patently false.

#2 forgets that the market, even with the downturn has yielded a higher rate of return than Social Security.