Speaking Truth to Monetary Power

[JAMESBJOHNSON]

Its useful to think of Dollars as beads the Potomac Perfumed Princes pay you for your assets.

 

[4est_4est_Gump]

In a way it is a triumph for those of us who have patiently explained that the economy is not a set of inputs that can create a desired output.

The Obama Presidency has proved that for everyone with an open and curious mind.

They got the academics in charge that they have been thirsting for.

(See the thread I just posted, or go here:
http://www.weeklystandard.com/articles/they-had-dream_793497.html?nopager=1)

It did not go according to plan.

It never stood a chance.

 

[Ishmael]

In a way it is a triumph for those of us who have patiently explained that the economy is not a set of inputs that can create a desired output.

The Obama Presidency has proved that for everyone with an open and curious mind.

They got the academics in charge that they have been thirsting for.

(See the thread I just posted, or go here:
http://www.weeklystandard.com/articles/they-had-dream_793497.html?nopager=1)

It did not go according to plan.

It never stood a chance.

Of course it didn't.

Ishmael

 

[4est_4est_Gump]

They all got behind the pendulum and pushed as hard as they could, but only built up the opposing momentum and for all their brains and education, they never saw it coming...

 

[Ishmael]

They all got behind the pendulum and pushed as hard as they could, but only built up the opposing momentum and for all their brains and education, they never saw it coming...

It's all about the notion that they are 'in control.' The reality is that they were never 'in control' because they never fully understood the complexity of the mechanism they were trying to control in the first place.

Ishmael

 

[4est_4est_Gump]

We see that conceit in most of the compelling issues of the day where they ignore real Science and like Canute impose common-sense straight-line math to complex and chaotic systems and force climate, people and economies to behave the way that they have always dreamed they should have...

 

[Saint Peter]

Science?

Get fucking real.

 

[4est_4est_Gump]

Several of us here have real Science degrees...




Now, why don't you tell everyone again why education is so bad.

 

[4est_4est_Gump]

Former Bundesbank Vice-President Recommends Gold, Says Current Economic System is "Pure Fiction"

Anyone who is thinking clearly knows the economic system fostered by central banks is totally and completely out of control.

Repetitive rounds of QE, competitive currency debasement, interest rates at zero, and sponsorship of the internet bubble followed by the housing bubble, followed by the current stock market bubble is proof enough.

So, what I am about to report is really nothing but common sense, except for the fact that it comes from an unusual place, where one does not normally hear such discussions.

Jürgen Stark, former vice president of the Bundesbank, and also former chief economist of the ECB (unofficial title) says "The System is Out of Control". Via translation from Libre Mercado, here are a few snips.

Stark, until recently one of the big hawks central bank of Germany for his fierce defense of monetary orthodoxy, resigned in late 2011 for his outright rejection to the purchase of government bonds by the ECB launched the president of the institution Jean Claude Trichet. Since then, Stark has used his rare, but valuable public appearances to warn of the risks associated with the current policy of central banks to the crisis.

In a conference organized by the Ludwig von Mises Institute in Germany, recommended to protect the attendees directly against a probable collapse of the global monetary system. Stark spoke openly.

Stark noted that central banks, including the ECB, "have completely lost all ability to control and perspective on the economic situation."

The monetary system was saved in 2011 through concerted action by major central banks worldwide. But, according to Stark, the whole system is "pure fiction". The monetary authorities have been groping since 2008 to avoid a second Lehman Brothers, but if happen, "the system will not survive," he warned.

The problem is the monetary model itself. That is, the printing of paper currency without real backing and the multiplier by which the commercial banks can expand credit-uncontrolled without prior savings. Stark recommended allocating part of this fictional savings to investment in traditional "safe havens" such as gold or silver.

Also, in another lecture delivered last week in Paris, Stark noted that the fragile recovery in Europe is not due to the absence of monetary and fiscal stimuli (low rates, debt purchase, etc..) and (more government spending) but the slow deleveraging and lack of structural reforms.

Far from helping, the loose monetary policy of the ECB is hampering the recovery, as advanced free market on multiple occasions. The key to growth, create jobs and end the crisis on solid foundations, as Stark, is to increase competitiveness. And to do so, "we must continue gaining flexibility. Progress has been made, but still not enough. The situation has improved, but the crisis is not over."

"the probability of default, as is reflected in the markets are too low," he added. The expert was critical of the downside risks caused by the fall in spreads and insurance against default (CDS), as attributes, especially the artificial ECB action.

"Capital appreciation has grown stronger euro. But the crisis markets are distorted. We should not be too happy with what happened," he mused.

Read more at http://globaleconomicanalysis.blogspot.com/#QxuwwigOtp2XxKHE.99