Congressional Republicans and Democrats are engaged in a heated debate over which Americans deserve not to have their taxes raised, with both claiming that some form of tax cut will stimulate the economy. The primary point of divergence is what type of cuts will be most likely to get Americans spending, and whether the wealthy will wastefully save their extra cash or use it to create jobs. This debate is academic. If a stronger economy (rather than pre-election posturing) is really the goal, th... (more)
The U.S. Federal Reserve is getting ready to conduct another gigantic bailout of the big banks, but this time virtually nobody in the mainstream media will use the term "bailout" and the American people are going to get a lot less upset about it. You see, one lesson that was learned during the last round of bank bailouts was that the American people really, really do not like it when the U.S. Congress votes to give money to the big banks. So this time, the financial "powers that be" have figur... (more)
One of the more devious consequences of QE2, is that it carries the seeds of its own destruction with it. Namely, if after flooding bank basements with another $2 trillion in excess reserves, and if bank lending picks up, suddenly the amount of currency in circulation will explode by over 300% from under $1 trillion to around $4 trillion. And while a comparable increase in wages is certainly not guaranteed to occur concurrently, what this explosion in the free money will do is lead to a very rap... (more)
Last July, lewrockwell.com published an article by Ambrose Evans-Pritchard called, “The Death of Paper Money.” The article mentioned a book entitled, Dying of Money. The article stated that the book cost $699 on Ebay. LRC reader Larry Nieves has been kind enough to send this pdf copy of the entire book that he found online.
Eric Sprott: All of history says we shouldn’t trust government, so why do we trust the money that the government says is worth something when the history of governments is one broken promise after another? The only thing they’ve done, over the last 90 years or so, is to keep gouging the taxpayer, while at the same time racking up increasing debt. There’s very little responsibility at the government level for the financial well being of a country in the long run. Fiat money will all go back to it... (more)
It’s here. Frustrated that “nominal interest rates cannot be reduced below zero,” he makes the case that “unconventional” approaches are needed (direct purchases of securities with freshly created, high-powered money). This is not a problem, he says, because the Fed “will take account of the potential costs and risks of nonconventional policies…”
If inflation goes wild, it is your fault for not tru... (more)
Peter Schiff, president and chief global strategist of Euro Pacific Capital, hardly needs an introduction. He’s king of the dollar bears and a fierce critic of the Federal Reserve's loose monetary policy. All the recent talk about the Fed buying more Treasury as part of its so-called quantitative easing program aimed at keeping borrowing costs low has him more convinced than ever that the U.S. is on a clear path to inflation, possibly hyperinflation. He made clear to IndexUniverse.com... (more)
The price of gold has nothing to do with gold's value, but rather the nature of the currency you are using to price it.
Currency is a thought, nothing more. An abstraction. It produces no output, but functions to lubricate the real things that do. Gold just is. A physical, tangible, real thing, with a long history of use as money. It is real.
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Over the past twelve months, the U.S. economy has continued to come apart like a 20 dollar suit. During that time it seems like more bad economic news has been coming out nearly every single day. Instead of getting better, the problems facing the U.S. economy only seem to be multiplying. The U.S. government and the U.S. financial system continue to absolutely drown in debt. Factories, jobs and massive amounts of wealth continue to fly out of the United States every month at an astounding pac... (more)
The remarks from China’s ministry of commerce came hours before the US was due to release a report on whether it considers China a “currency manipulator” as fears grow that tensions over the currency could lead to a protectionist trade war.
The report has been repeatedly delayed despite a growing chorus of demands from US legislators and union bosses for the Obama administration to take tougher action against China’s alleged trade distortions.
Federal Reserve Chairman Ben S. Bernanke said additional monetary stimulus may be warranted because inflation is too low and unemployment is too high.
“There would appear -- all else being equal -- to be a case for further action,” Bernanke said today in the text of remarks given at a Boston Fed conference. He said the central bank could expand asset purchases or change the language in its statement, while saying “nonconventional policies have costs and limitations that must be ta... (more)
...Faber also said there could be a significant correction in gold and other commodities as the dollar changes course. However any large decline would represent a buying opportunity, he argues.
The governments of every developed economy, including the US, the UK and Western Europe, will eventually default on their sovereign debts, so the one thing he will never do in his life is 'sell my gold,' Faber said in a typically outspoken observation earlier this year.
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