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Showing posts from April, 2011

Will Krugman be the next pilot?

In yesterday's column, "The Intimidated Fed," Paul Krugman bemoans the continuing plight of the unemployed and underemployed.  Krugman is upset that Bernanke will not be flying his helicopter as much after June, bringing to a temporary end his massive monthly increases of the monetary base.  At the Fed's first-ever press conference the day before, Bernanke, Krugman says, had argued that the program of monetary inflation called QE 2 "has been effective."  Why not do more?, Krugman wants to know.

Perhaps because QE 2 has not been effective. Along with unemployment, business loans have been rising very slowly since QE 2 kicked in, and consumer loans have continued to fall.  Might there be a causal connection among those facts?  As Ron Paul has written,
The only success the Fed has had in maintaining full employment has been on Wall Street, where it props up crony banks and investment houses to protect them from going bankrupt as they should. Instead they surviv…

Gas Prices are Lower

At the first-ever Fed press conference yesterday (thanks Ron Paul), Ben Bernanke referred to inflation only in the context of the managed Consumer Price Index.  Never once did he utter the word "gold."  Investors noticed the omission and expressed their concern acccordingly. 

From the NY Sun, April 27, 2011:

Even as the chairman was speaking, the economist David Malpass pointed out in a telegram this afternoon, the dollar lost value, dropping to a 1,529th of an ounce of gold. Yet not a word about gold at the press conference. Call it the dog that didn’t bark. The chairman spoke of the high cost of gas without once acknowledging that the price of gasoline is lower in value — meaning it takes less gold or silver to buy it — than it did at, say, the start of President Obama’s term. The president seemed oblivious to this irony when he spoke in his radio address over the weekend of how there is no “silver bullet” that will deal with the soaring gas prices.

What the silve…

The Case Against Gold

What do critics say about gold as money?  Here are a few of their claims, along with replies.

1.  There’s not enough of it.
The total supply of money is not critical; changes in the supply are.  In a growing economy with a constant money supply prices will tend to decline, as the same dollars bid against a rising level of productivity.  The U.S. experienced this in the latter half of the 19th century, one of the most prosperous periods in history.  Lower prices brings the benefits of prosperity to more people, especially those in low-income brackets.2.  It’s expensive to produce, and after it’s mined and minted it mostly sits idle in vaults.  What's the point?
It makes it difficult and expensive for government to inflate the money supply.3.  It limits the spending proclivities of governments.What the government doesn’t spend, we can. Or better, we can save and invest.  The less government spends, the less it grows, and the more liberty we have.4.  Most economists - the “experts” - d…

Capes for the Unemployed

Government has all kinds of wonderful ways for fighting unemployment, don't you know?  With over one million Floridians currently out of work, Workforce Central Florida has launched a $73,000 tax-funded campaign called "Cape-A-Bility Challenge" that includes spending $14,200 to hand out roughly 6,000 red superhero capes to the unemployed and another $2,300 on foam cutouts of "Dr. Evil Unemployment."  Executive Director of Workforce Central Florida, Gary Earl, defended the campaign with these words:
The plight of the unemployed is why we exist, and to help them, we have to engage them, introduce them to our services and connect them with job opportunities.And Ayn Rand was accused of exaggerating the depravity of her villains.

Hoppe on Central Banking

On Sunday March 27, 2011 The Daily Bell published an exclusive interview with Hans-Hermann Hoppe, professor emeritus of economics at UNLV.  During the interview he addressed many topics.  Here are some of his comments on central banking:
More paper money cannot make a society richer, of course — it is just more printed paper. Otherwise, why is it that there are still poor countries and poor people around? But more money makes its monopolistic producer (the central bank) and its earliest recipients (the government and big, government-connected banks and their major clients) richer at the expense of making the money's late and latest receivers poorer.

Thanks to the central banks' unlimited money-printing power, governments can run ever-higher budget deficits and pile up ever more debt to finance otherwise impossible wars, hot and cold, abroad and at home, and engage in an endless stream of otherwise unthinkable boondoggles and adventures. Thanks to the central bank, most "mo…