GURU-GURU (De har alltid något att säga ”no worries”)
As long as there is still room for pushing the market interest rate down even further, the chances are reasonably good that the boom continues, and that the bust will be postponed into the future.
This immense cooperative system is known as a free-market economy. It was not consciously planned by anybody. It evolved.
There is no more stopping the Mises School. And when the truth finally wins out, because only what is true can also work smoothly in the long run, then the hour of the Austrian School of Economics will have come.
The true lesson from Japan is that central planners prefer to gradually nationalize the economy before even considering a moderate reduction in government size and control.
British politics could potentially be very different next year, but a recent shortlist of candidates to replace Mark Carney doesn't provide much hope for Austrians.
JULPRIS på Finanskrönikan, klicka här!
So long as we insist the federal government can force one law, one culture, and one sort of politics on all of America, the US is headed down the road of civil war. Only decentralization and separation can partly defuse the situation.
China is not on track to catch up with the wealthy West. The Chinese state's commitment to highly interventionist mercantilist policies is leading to debt, malinvestment, and stagnation.
The Austrian-School approach, with its realist, real-world approach, is actually more inclined toward empiricism than the neo-classical economists who tend toward very abstract theories and models.
But of all potential economic outcomes, the one least anticipated and least priced in, is an uptick in inflation.
America’s business model over the last 70 years was based on running a deficit with foreign exporters, like Japan, South Korea, Germany, and most recently, China... thereby exporting dollars (and industrial base) to the rest of the world... and then bringing those dollars (but not the factories) back home in the form of cheap loans to the U.S. Treasury.
This “business model” broke in 2013/’14 when China and other sovereign creditors reduced the flow of cheap loans they were supplying to the Treasury.
The federal government is now in the early stages of insolvency.
The Federal Reserve is about to “bail out” the Treasury. So there won’t be a “hard” default or a credit crunch, or anything like that.
We can watch the bailout in real time by watching the Federal Reserve’s balance sheet increase. (The bailout started in September 2019.)
The expansion of the Fed’s balance sheet to finance the Treasury will lead (sooner or later – the timing is not predictable) to a major devaluation of the dollar, inflation, and what we might call a “slow-motion” or “soft” default.
Recessions – of which several must be coming soon – will escalate the size and scope of the bailout.
Absolutely NO ONE in mainstream finance/economics expects this. This is a very “fringe” view. (This is always the case before big shifts in the prevailing world order.)
But that’s exactly why it’s such an exciting idea to me as a stock market speculator. Because when the masses figure this out, it’s going to cause a historic rise in the price of gold and silver.
Political and economic salvation for Venezuela can come only from the Venezuelan people themselves. They cannot be “forced to be free.”
Far from being the saviors of society, the new breed of anti-market conservatives are merely the newest iteration of the long line of anti-social apologists for state domination.
Rahim Taghizadegan from the independent Viennese Scholarium offers a European perspective on the anti-economics of negative interest rates.
Elizabeth Warren’s proposed wealth taxes will have devastating consequences on capital formation, and will encourage investors to hold riskier assets than they otherwise would have.
The world doesn't follow predictable patterns based on averages of long-term probability. Ordinary people apparently know this better than statisticians do.
When governments devalue the currency to push more exports, the country is getting rich in terms of foreign currency, but it is getting poor in terms of real wealth.
When any one of the plethora of bubbles burst – pick your poison – and the next financial crisis impacts Wall Street and Main Street, how will the central banks and federal governments react?
The boom produces impoverishment. But still more disastrous are its moral ravages. It makes people despondent and dispirited. The more optimistic they were under the illusory prosperity of the boom, the greater is their despair and their feeling of frustration.
The 50-year US war on drugs has been a total failure, with hundreds of billions of dollars flushed down the drain and our civil liberties whittled away fighting a war that cannot be won.
A TALL ORDER
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|2020-01-23||Största bubblan någonsin|
|2020-01-22||Starka och svaga marknader|
|2020-01-21||Farligt låga räntor!|
|2020-01-21||Placeringsråd från Venedig|
|2020-01-21||Köp, sälj, cash?|
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|2020-01-16||Folk är som grodor!|
|2020-01-12||Guru uttalanden från Mises Institute|
|2019-12-17||Tänk efter lite grann|
|2019-12-17||Gurusarna i veckan|
|2019-12-12||Riksbanken avslutar sitt experiment|
|2019-12-12||Annorlunda den här gången?|