Why was Paul Krugman given a Noble Price for Economics? He is clueless about it. His Keynesian theories of spending money to get out of recession are going to drown the United States into a prolonged depression. Paul Krugman is clueless on Capitalism…
Paul Krugman is clueless on Capitalism…
It all began in 1945, after the end of World War II, when American soldiers returned home after a long and hard campaign. This was a generation that grew up in the shadows of Economic Depression of the 30’s. They had to be rewarded for their war effort
The United States saw an opportunity, and the US Dollar was made World Reserve Currency. The Breton-Woods system was formed, in which the United States demanded that all Oil transactions be done in US Dollars. The US Dollar was partly backed by gold. Atleast foreign Central Banks could redeem their Dollar holdings in gold. At that time, gold was maintained at 35$ an ounce. Hence, Dollar was as good as gold to foreign countries and banks.
But US had to fund continuous wars. First, the Korean War, then the Vietnam war. And add to it growing deficits by the US government. Foreign governments threatened to redeem all their dollars in Gold. Then, in 1971, Richard Nixon completely removed all Gold backing to US Dollars, and the resulting years witnessed massive Stagflation, meaning there was Monetary Inflation with increasing amounts of unemployment. The Keynesian theory was exposed to be full of shit.
The main culprit is the Fractional Reserve System.
The main culprit is the Fractional Reserve System. This system is designed is such a way that money has to be continuously inflated in order to achieve a boom, and then it has to be contracted, which results in bust. Friedrich Hayek spoke about this same corrupt system in 1975. Please check out this podcast — F.A. Hayek in 1975 on Meet the Press.
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Bankruptcy and Boom & Bust Cycles are inherently designed into this system.
Now, the world faces renewed threat of a financial meltdown, since thee bubble created by Alan Greenspan and Ben Bernanke has burst. The Federal Reserve is the most despicable and corrupt institution that controls the issue of fiat currency.
No one should be allowed to issue fiat currency. Doing so only results in the destruction in the value of money. Savers become losers. Now is the time for people to really reform this system, and slowly move towards a Full Reserve System backed by a basket of commodities.
After presenting the basics of money and banking theory, he traces the decline of the dollar from the 18th century to the present, and provides lucid critiques of central banking, New Deal monetary policy, Nixonian fiat money, and fixed exchange rates. He also provides a blueprint for a return to a 100 percent reserve gold standard.
The book made huge theoretical advances. He was the first to prove that the government, and only the government, can destroy money on a mass scale, and he showed exactly how they go about this dirty deed. But just as importantly, it is beautifully written. He tells a thrilling story because he loves the subject so much.
Rothbard shows precisely how banks create money out of thin air and how the central bank, backed by government power, allows them to get away with it. He shows how exchange rates and interest rates would work in a true free market. When it comes to describing the end of the gold standard, he is not content to describe the big trends. He names names and ferrets out all the interest groups involved.
In his Book “The Case Against the FED“, Rothbard shows us the nature of this beast we call the Federal Reserve, and how this Central Bank is destroying America…
The most powerful case against the American central bank ever written. This work begins with a mini-treatment of money and banking theory, and then plunges right in with the real history of the Federal Reserve System. Rothbard covers the struggle between competing elites and how they converged with the Fed.
Rothbard calls for the abolition of the central bank and a restoration of the gold standard. His popular treatment incorporates the best and most up-to-date scholarship on the Fed’s origins and effects.
This Creature from Jekyll Island, the Federal Reserve, must be shut down before it causes any more damage to the economy. The United States of America is facing serious hyper-inflation due to trillions of dollars worth of new money created out of thin air in the last few months… This is going to be terrible…
Here is some info about the current state of affairs in the US economy…
1. America’s debt load. The U.S. government has now $12 trillion in debt. Consumers and businesses are drowning in debt. America’s gross domestic product (GDP) is about $13 trillion yet its total debt is over $44 trillion.
2. Derivatives. Derivatives are complicated, arcane and risky securities that now total about $500 trillion. That makes this market ten times greater than the dollar value of the world economy which is just under $50 trillion.
3. Unfunded Liabilities. The current future tally of the unfunded liabilities of Social Security, Medicare and Medicaid is nearly $99 trillion.
1. You will see an inflationary depression that will be evident by 2010.
The government, in an attempt to revive consumption and job creation will increase the money supply by an order of magnitude never seen before in this country. Seeing the inflation rate soar to 20% and beyond during 2010 (or 2011) is a solid bet.
2. Unemployment in the private sector will soar into double-digits by 2010.
Right now you should re-assess your job, your company and your industry to see if you are at risk.
3. More state and municipal governments will be federal bailout candidates.
California and New York State are already seeking taxpayer money from the Federal government. However, we will see much more of this. During 1995-2008, many state and local governments over-extended themselves. Because they thought that good times (and housing booms) would last indefinitely, they took on more spending and more borrowing.
4. Commodities will be in the next leg of their long-term bull market starting in 2009.
Conditions are ripe for commodities to resume their bull market and reach new highs during 2009-2010. As an offshoot of this, you will also see conflicts across the globe tied to natural resources as countries with growing populations need more food, water, etc.
5. We will see oil hit $200 as Peak oil becomes obvious to all during 2009-2012. Don’t be fooled by the recent drop in oil from $147 in the summer of 2008 to $50 during November 2008. the recent data from the world energy market indicates that oil depletion is far more severe than the recent headlines blaring the misleading condition of “demand destruction”. The most severe energy crisis in history is in my mind an unavoidable certainty during the next few years. America needs to go full-bore toward energy independence since we will have no choice. This energy crisis will be very difficult to get through and will cause tremendous social and economic difficulty.
6. International conflicts over natural resources will hit the headlines during 2009-12. As governments across the globe seek to address the wants needs of their growing populations, there will be aggressive competition for the world’s limited resources.
This is going to be historic… the collapse of the American Empire…
The United States of America has been hit pretty hard by this economic mess created by the elitist bankers and politicians in order to control all the remaining wealth in America. Now that the stock market is down to unbelievable levels, these elitists are ready to gobble up entire companies at pennies to a dollar. This has always happened throughout history…
The video above is from some old movie, but it sounds so darn true…
Also check out Naomi Wolf’s Ten Steps to Facism. It is a sort of a checklist, and the same things happen in ever country that goes from freedom to facism. She was on Colbert Report.
1. Invoke a terrifying internal and external enemy
Max Keiser’s Death of the Dollar which aired on Aljazeera English in December 2006.
Successive US Administrations have had a policiy of borrow and spend. Producing countries, liek China, India and Japan, ahve amased Trillions of Dollars worth of IOUs from the US Treasury. But can these loans be paid back? Today, US National Debt stands at
How is this debt going to be paid back, if ever? The only way to service this growing debt is to print ever more currency. And when these dollars come back to the US chasing goods, then there is going to be a Hyper-inflation, with too many dollars chasing too few goods…
This is a possibility now… For the first time ever, it is feared that US govt may default on its interest payments. Once that happens, no one in the world would buy U Treasury Bonds…
As was stated in American COnservative Magazine,
There are two ways for a nation to have a strong currency: export goods or export debt. Naturally, both kinds of exports require willing foreign buyers. Few countries have strong currencies.
For the past six years, America’s great export has been not goods but debt. Foreigners sell us oil, cars, computer components, and other goods. In return, we sell them debt and other financial instruments—government bonds, corporate bonds, and securities backed by the mortgages of American homeowners—for which foreigners have seemed to have an almost insatiable appetite. From 1997 to 2002, imports of goods and services increased by a third, while exports of goods and services were flat.
Americans are living beyond their means and Asia is currently financing that. But eventually the Asians/Europeans will stop financing the USA and then the bubble will burst.
While the attention of the public was focused on the bailout hearings the House approved a $25 Billion “loan” to rescue General Motors and Ford from fiscal doom today after weeks of aggressive lobbying by automakers for their own piece of the taxpayer pie.
This is certainly an interesting development. Already, the US economy was in the tanks with the massive bailout. And now add this to the total… Welcome to the United States Socialist Republic…
Here is the breakdown of existing bailouts…
Following are details of actions, proposals and amounts:
—Up to $700 billion to buy assets from struggling institutions. The plan is aimed at sopping up residential and commercial mortgages from financial institutions but gives Treasury broad latitude.
—Up to $50 billion from the Great Depression-era Exchange Stabilization Fund to guarantee principal in money market mutual funds to provide the same confidence that consumers have in federally insured bank deposits.
—The Fed committed to make unspecified discount window loans to financial institutions to finance the purchase of assets from money market funds to aid redemptions.
—At least $10 billion in Treasury direct purchases of mortgage-backed securities in September. In doubling the program on Friday, the Treasury said it may purchase even more in the months ahead.
—Up to $144 billion in additional MBS purchases by Fannie Mae and Freddie Mac.The Treasury announced they would increase purchases up to the newly expanded investment portfolio limits of $850 billion each. On July 30, the Fannie portfolio stood at $758.1 billion with Freddie’s at $798.2 billion.
—$85 billion loan for AIG, which would give the Federal government a 79.9 percent stake and avoid a bankruptcy filing for the embattled insurer. AIG management will be dismissed.
—At least $87 billion in repayments to JPMorgan Chase for providing financing to underpin trades with units of bankrupt investment bank Lehman Brothers Paulson said over the weekend he was adamant that public funds not be used to rescue the firm.
—$200 billion for Fannie Mae and Freddie Mac. The Treasury will inject up to $100 billion into each institution by purchasing preferred stock to shore up their capital as needed. The deal puts the two housing finance firms under government control.
—$300 billion for the Federal Housing Administration to refinance failing mortgage into new, reduced-principal loans with a federal guarantee, passed as part of a broad housing rescue bill.
—$4 billion in grants to local communities to help them buy and repair homes abandoned due to mortgage foreclosures.
—$29 billion in financing for JPMorgan Chase’s government-brokered buyout of Bear Stearns in March. The Fed agreed to take $30 billion in questionable Bear assets as collateral, making JPMorgan liable for the first $1 billion in losses, while agreeing to shoulder any further losses.
—At least $200 billion of currently outstanding loans to banks issued through the Fed’s Term Auction Facility, which was recently expanded to allow for longer loans of 84 days alongside the previous 28-day credits.
President Bush has warned Americans and lawmakers reluctant to pass a historic $700 billion financial rescue plan that failing to act fast risks wiping out retirement savings, rising foreclosures, lost jobs, closed business and “a long and painful recession.”
He’s just bluffing, trying to scare the lawmakers into submission. But the US lawmakers should hold their ground. We will not budge under threat or fear.
Such wide ranging, unchallenged powers cannot and should not be given to the same cabal that have wrecked the economy. We cannot trust them anymore. They should not get a blank check.
The bailout is not $700 Billion. Its just a beginning, upto $700 billion at a time. This bailout may cost upward of $3.3 Trillion to the US taxpayers. We cannot let this happen.
It is time the Neocons are taught a lesson. All Americans must rise up and say “No, we will no longer be fooled by you. We will not tolerate this rip-off any more”
This is the biggest socialist bailout in history. The United States of America is now “The United States Socialist Republic” or USSR. The only difference between the communist Hugo Chavez and George Bush is that Hugo Chavez of Venezuela does not Nationalize companies using Tax dollars.
This is the limit. If people don’t rise up now, all will be lost. People should read more about Ludwig Von Mises, Murray Rothbard and Lew Rockwell. This is a Revolution…
John McCain canceled a scheduled appearance on CBS’s “Late Show with David Letterman” mere hours before he was slated to tape the show Wednesday as part of the suspension of his campaign
And boy was David Letterman pissed off. You can watch the clip below…
“In the middle of the taping Dave got word that McCain was, in fact just down the street being interviewed by Katie Couric. Dave even cut over to the live video of the interview, and said, “Hey Senator, can I give you a ride home?”
Earlier in the show, Dave kept saying, “You don’t suspend your campaign. This doesn’t smell right. This isn’t the way a tested hero behaves.” And he joked: “I think someone’s putting something in his metamucil.”
“He can’t run the campaign because the economy is cratering? Fine, put in your second string quarterback, Sarah Palin. Where is she?”
“What are you going to do if you’re elected and things get tough? Suspend being president? We’ve got a guy like that now!”
Solve the worst financial crisis since the Great Depression in the next 48 hours, or I ain’t showing up. That’s John McCain’s “leadership”. Do what I say, or I’ll hold my breath and turn blue. (Or hold my breath and turn the whole country blue?)
McCain is an idiot who understands nothing about the economy, and has a skewed view of the world in therms of foreign policy. I can’t comprehend the fact that such an idiot is a Republican nominee. Republican party is no linger the party of Conservatives… it has been transformed into a war-mongering party, and includes stupid people who like to shout “Drill, Baby, Drill” without even trying to understand the outcome of such a measure.
If McCain wins, then that would mean America deserves a Palin presidency in such a time of crisis. These are the same Americans who re-elected Bush. Now that McCain is backing off from the debates, under the guise of “serving the country” with another photo-op.
Iran President Mahmoud Ahmadinejad had a candid interview with the Los Angeles Times on Sept. 23. His views on war, peace, economics and relations with the U.S. and Israel differ wildly from the perspectives of President Bush. Well, you decide who is telling the truth: George or Mahmoud?
Iran’s president Mahmoud Ahmadinejad arrived in New York on Sept. 23 to speak to the leaders of the world at the United Nations. He was greeted by Jewish and Christian protesters who fervently believe that Ahmadinejad ought not be allowed to speak nor provided a stage for dialogue over issues impacting the Middle East and the world. Many of America’s leading Christian evangelicals adamantly oppose the idea that the U.S. should sit down and talk with Iran under any conditions. Despite the Christian belief in the teachings of Jesus Christ, many Christians still hold fast to the altered verse: For God so loved America, He gave His only Son … .
Ahmadinejad actually had a lot of considerably poignant points to make (See his letter to U.S. citizens) — and he didn’t obfuscate or seek to hide behind language that could be re-defined at a later time. Such is the typical approach of America’s leaders, to which we have grown accustomed.
Ahmadinejad sat down with the Los Angeles Times for an extensive 40-minute no-holds-barred interview. read more | digg story
Berkshire Hathaway, the company owned by US investment guru Warren Buffett, has bought $5bn (£2.7bn) worth of Goldman Sachs shares. Mr Buffett, the world’s most famous investor, said Goldman was an “exceptional institution”.
Even though the government has now formally agreed to guarantee the debt of Fannie and Freddie, the White House says it doesn’t see the necessity
—shock me!—to include the cost of doing so in the budget. But have you heard anyone in authority asking about the $700 billion bailout: how do you propose to pay for it?
