Showing posts with label paper money collapse. Show all posts
Showing posts with label paper money collapse. Show all posts
Wednesday, May 22, 2013
Why I'm Praying for Government Incompetence
by Bill Bonner
"You Americans don't understand anything. You have to come to Argentina and live here for a few years. Then you'll understand America."
We had to ask, "Huh?"
"When you're here, you can see more clearly how things really work... and don't work. You see the real nature of things... especially government. Believe me, you Americans have all sorts of delusions.
"A government 'by, for and of the people'? Or, as Hillary Clinton put it, 'The government is all of us.' Not quite. And when you've been here for a while, you'll see your own institutions more clearly."
Our Man in Argentina
The speaker was a friend of ours. An American from Alabama who has lived in Argentina for 30 years. He lived through the hyperinflation of the 1980s... the boom of the 1990s... and the crash of the 2000s.
"You Americans don't understand anything. You have to come to Argentina and live here for a few years. Then you'll understand America."
We had to ask, "Huh?"
"When you're here, you can see more clearly how things really work... and don't work. You see the real nature of things... especially government. Believe me, you Americans have all sorts of delusions.
"A government 'by, for and of the people'? Or, as Hillary Clinton put it, 'The government is all of us.' Not quite. And when you've been here for a while, you'll see your own institutions more clearly."
Our Man in Argentina
The speaker was a friend of ours. An American from Alabama who has lived in Argentina for 30 years. He lived through the hyperinflation of the 1980s... the boom of the 1990s... and the crash of the 2000s.
Saturday, May 11, 2013
It’s official: Global economic policy now firmly in the hands of money cranks
By
The lesson from the events of 2007-2008 should have been clear: Boosting GDP with loose money – as the Greenspan Fed did repeatedly between 1987 and 2005 and most damagingly between 2001 and 2005 when in order to shorten a minor recession it inflated a massive housing bubble – can only lead to short term booms followed by severe busts. A policy of artificially cheapened credit cannot but cause mispricing of risk, misallocation of capital and a deeply dislocated financial infrastructure, all of which will ultimately conspire to bring the fake boom to a screeching halt. The ‘good times’ of the cheap money expansion, largely characterized by windfall profits for the financial industry and the faux prosperity of propped-up financial assets and real estate (largely to be enjoyed by the ‘1 percent’), necessarily end in an almighty hangover.
The crisis that commenced in 2007 was therefore a massive opportunity: An opportunity to allow the market to liquidate the accumulated dislocations and to bring the economy back into balance; an opportunity to reflect on the inherent instability that central bank activism and manipulation of interest rates must generate;
The lesson from the events of 2007-2008 should have been clear: Boosting GDP with loose money – as the Greenspan Fed did repeatedly between 1987 and 2005 and most damagingly between 2001 and 2005 when in order to shorten a minor recession it inflated a massive housing bubble – can only lead to short term booms followed by severe busts. A policy of artificially cheapened credit cannot but cause mispricing of risk, misallocation of capital and a deeply dislocated financial infrastructure, all of which will ultimately conspire to bring the fake boom to a screeching halt. The ‘good times’ of the cheap money expansion, largely characterized by windfall profits for the financial industry and the faux prosperity of propped-up financial assets and real estate (largely to be enjoyed by the ‘1 percent’), necessarily end in an almighty hangover.
The crisis that commenced in 2007 was therefore a massive opportunity: An opportunity to allow the market to liquidate the accumulated dislocations and to bring the economy back into balance; an opportunity to reflect on the inherent instability that central bank activism and manipulation of interest rates must generate;
Wednesday, May 1, 2013
It’s official: Global economic policy now firmly in the hands of money cranks
by DETLEV SCHLICHTER
The lesson from the events of 2007-2008 should have been clear: Boosting GDP with loose money – as the Greenspan Fed did repeatedly between 1987 and 2005 and most damagingly between 2001 and 2005 when in order to shorten a minor recession it inflated a massive housing bubble – can only lead to short term booms followed by severe busts. A policy of artificially cheapened credit cannot but cause mispricing of risk, misallocation of capital and a deeply dislocated financial infrastructure, all of which will ultimately conspire to bring the fake boom to a screeching halt. The ‘good times’ of the cheap money expansion, largely characterized by windfall profits for the financial industry and the faux prosperity of propped-up financial assets and real estate (largely to be enjoyed by the ‘1 percent’), necessarily end in an almighty hangover.
The crisis that commenced in 2007 was therefore a massive opportunity: An opportunity to allow the market to liquidate the accumulated dislocations and to bring the economy back into balance; an opportunity to reflect on the inherent instability that central bank activism and manipulation of interest rates must generate; an opportunity to cut off a bloated financial industry from the subsidy of cheap money;
The lesson from the events of 2007-2008 should have been clear: Boosting GDP with loose money – as the Greenspan Fed did repeatedly between 1987 and 2005 and most damagingly between 2001 and 2005 when in order to shorten a minor recession it inflated a massive housing bubble – can only lead to short term booms followed by severe busts. A policy of artificially cheapened credit cannot but cause mispricing of risk, misallocation of capital and a deeply dislocated financial infrastructure, all of which will ultimately conspire to bring the fake boom to a screeching halt. The ‘good times’ of the cheap money expansion, largely characterized by windfall profits for the financial industry and the faux prosperity of propped-up financial assets and real estate (largely to be enjoyed by the ‘1 percent’), necessarily end in an almighty hangover.
The crisis that commenced in 2007 was therefore a massive opportunity: An opportunity to allow the market to liquidate the accumulated dislocations and to bring the economy back into balance; an opportunity to reflect on the inherent instability that central bank activism and manipulation of interest rates must generate; an opportunity to cut off a bloated financial industry from the subsidy of cheap money;
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