We have had massive monetary creation for decades now which we have finally come to the day of reckoning. We do not know if the top will be next month, next year or even later but we certainly are getting to the top where we cannot buy our way out of the problem through a new stimulus injection… The truth is that a terrible, deflationary depression is probably starting in the coming months. Words: 1581
Our leaders in Washington are so detached from reality it begs the question, “What are they smoking?” I’m not talking about the insane amounts of spending that’s going on in our capital, or even about the patently unpayable debts and promises they’re making to all of us and our foreign creditors. Although I think these things, too, result from whatever drugs they’re on inside the beltway I am referring the way Washington manipulates its official statistics. Words: 1107
The crucial factor in the crash of 2008 is that it was not due to some exogenous event or extraneous shock but by the system itself. That means that the prevailing paradigm, the efficient market hypothesis basically has been proven wrong. As such, the task ahead is not to restart the economy and the financial system but to create a new system because the old system has broken down. Words: 1285
A weaker dollar poses tremendous complications for Americans. For one, it makes imports more expensive, which is effectively inflation. Ultimately, this means a standard of living lower than what we have come to expect. If confidence in the dollar totally erodes, then things will really get ugly. Words: 1011
the US Government is on a trajectory to default on their obligations, and the same can realistically be said for the UK and Japan. The answer put forward by the US, UK and Japanese governments? Quantitative Easing and 0% interest rates. Have they learned nothing from the past decade?! Words: 2355
Hank Paulson, the Goldman Sachs bankster/US Treasury Secretary, who deregulated the financial system, caused a world crisis that wrecked the world financial system is writing in the New York Times urging that the mess he caused be fixed by taking away from working Americans the Social Security and Medicare for which they have paid in earmarked taxes all their working lives. Wall Street’s approach to the poor has always been to drive them deeper into the ground. Words: 777
A recovery based on stimulus is nothing but an illusion. In reality, the entire inflationary mini-boomlet-within-the-depression we are enjoying at the present time is simply an illusion. ‘GDP growth’ that is bought with monetary pumping and feckless fiscal spending only misdirects and ultimately consumes even more scarce capital. Fiscal stimulus may temporarily give the impression of a recovery, but it is not a genuine recovery. It makes things worse. The moment the pumping is abandoned, the true state of affairs is simply unmasked. Words: 1227
Wessel has put together a defining and vivid look at policymakers’ unprecedented response to the crisis. Wessel’s disconcerting conclusion: Out of necessity Bernanke is playing most of this by ear, loosely interpreting and appropriating arcane laws and creating new powers just to keep the system on its hinges. In Fed We Trust is persuasively told and richly reported. It is an absorbing read and will win awards and inspire copycats. Words: 665
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