Archive for the ‘Zero Interest Rate Policy (ZIRP)’ Category

Japan, the U.S., and Quantitative Easing

Japan, The U.S., and Quantitative Easing“When future historians look back on our way of curing inflation, they’ll probably compare it to bloodletting in the Middle Ages.” – Lee Iacocca

Japan, the U.S., and Quantiative Easing…

For those of you who aren’t familiar with quantitative easing: it is the important-sounding way central banks manage the economy through monetary policy. The most common way is by manipulating the rate at which they loan to other banks; when the economy is running too hot, the central bank will raise the rate at which it loans money — thereby discouraging borrowing and capital investment. Likewise, if the economy is in the tank a central bank can lower the rate at which it lends to other banks, thereby encouraging borrowing and capital investment in the economy. Read On…

Fighting the Recession: An Ill Wind Indeed

Fighting the Recession: An Ill Wind Indeed“[It is an] ill wind which blows no man good.” – William Shakespeare

Fighting the recession: an ill wind indeed!

I don’t know what I did before YouTube. With just a few mouse clicks, I can pull up literally hundreds of interviews, editorials, and broadcasts about anything that suits my fancy. And lately, my fancy consists of interviews with some of the most vocal and compelling philosophical, and financial minds daring to speak out against the atrocious fiscal policies the U.S. is employing to battle this economic crisis. Read On…

The Death of the Dollar

The Death of the Dollar“We have experienced asset bubbles, and we now have an economy that is more highly leveraged than it ever has been in the post-World-War II period. Greenspan has been instrumental in bringing about this high leverage.” – Paul Kasriel

“A dollar saved is a quarter earned.” – John Ciardi

I have been an analyst, a portfolio manager, and a financial writer for more than 18 years, and until early last year my focus was almost exclusively on individual stocks and value investing. In my book Discipline, however — which I completed in 2001 and published in 2007 – I took a more macro stance, predicting an economic collapse resulting in the death of the dollar and a Soviet-style break up of the country. Read On…

Inflation is an Unsustainable Lie

Inflation is an Unsustainable Lie“I continue to believe that the American people have a love-hate relationship with inflation. They hate inflation but love everything that causes it.” -William E. Simon

“If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.” – Joseph Goebbels

“By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.” – John Maynard Keynes

Inflation is an unsustainable lie. Of course, the veracity of this statement relies on the span of time to which the observer attributes “sustainability,” because it is a lie that has persisted for almost a century. Read On…

The Intrinsic Value of Nothing, Part Two

Intrinsic Value of Nothing“There is no such thing as prices outside the market. Prices cannot be constructed synthetically, as it were…

It is ultimately always the subjective value judgments of individuals that determine the formation of prices…”

— Ludwig von Mises, Human Action

“During thousands of years, in all parts of the inhabited earth, innumerable sacrifices have been made to the chimera of just and reasonable prices.” – Ludwig von Mises, The Theory of Money and Credit

In my previous article (Part One of this two-part series), I discussed the fallacy of intrinsic value – especially as it relates to the U.S. dollar, and the shell game the federal government has been playing for the last hundred years or so. In the tornado of debate, castigation, and general mayhem that ensued, some good points emerged – not the least significant of which was the observation that there is a difference between exchange value and use (or utilitarian) value. Read On…

Outpacing Inflation

Outpacing Inflation“Excess capacity is temporarily suppressing global prices. But I see inflation as the greater future challenge.” – Alan Greenspan, June 25, 2009

“The US economy may witness double-digit inflation in a few years unless the central bank tightens up its monetary policy… Unless we roll in this whole degree of expansion, we will be in trouble… I am not talking 3-5 per cent inflation, I am talking double-digit inflation in the US.” – Alan Greenspan, September 9, 2009

Alan Greenspan was, in his prime, an economist nonpareil. Recently, however, he shocked many of us by submitting to a political machine that needed to find a scapegoat for the recent economic nightmare. Read On…