The Financial Times has published an anonymous article which calls for the abolition of cash in order to give central banks and governments more power.
Entitled The case for retiring another 'barbarous relic', the article laments the fact that people are stockpiling cash in anticipation of another economic collapse, a factor which is causing, “a lot of distortion to the economic system.... (more)
On Wednesday we witnessed the third largest single day point gain for the Dow Jones Industrial Average ever. That sounds like great news until you realize that the two largest were in October 2008 – right in the middle of the last financial crisis. This is a perfect example of what I wrote about yesterday. Every time the market crashes, there are huge up days, huge down days and g... (more)
“Confoundingly to me, people have come to be quite accepting of the value attached by fiat to these pieces of paper we call currency,” says Jim Grant, who’s the editor of Grant’s Interest Rate Observer and the author of The Forgotten Depression: The Crash That Cured Itself.
“Are prices meant to be imposed from on high, or discovered by individua... (more)
For most people, the stock market is an mysterious force that they will never understand. It might as well be a glittering slot machine as far as they’re concerned. They don’t know how it really works on the inside, all they understand is that the machine is known to pay out big from time to time. Of course, that doesn’t discourage them from trying their hand at the casino anyway. When the average person wants to place their bets on the stock market, they turn to the experts. They go to the hedg... (more)
Fasten your seat belts, this ride is getting interesting. Last week the Dow Jones Industrial Average was down more than 1,000 points, notching its worst weekly performance in four years. The sell-off took the Dow Jones down more than 10% from its peak valuations, thereby constituting the first official correction in four years. One third of all S&P 500 companies are already in bear market territory, having declined more than 20% from their peaks. Scarier still, the selling intensified as the wee... (more)
Investors were rattled as the China Securities Regulatory Commission made no attempt to reassure markets after Monday's crash, as they did a month ago after an 8.5 percent drop.
"It's panic selling and an issue of confidence," Wei Wei, an analyst at Huaxi Securities in Shanghai, told Bloomberg News.“The government won't step in to rescue the market again, as it's a global selloff and it's spreading everywhere now. It... (more)
Famed investor and author of the Gloom, Doom, Boom Report, Marc Faber, returns to the podcast this week to discuss the slowdown in the global economy, signs of which he claims are multiplying fast all around the world.
He predicts the next year is going to be an especially bruising one for investors, and recommends a combination of diversification and defense for those with financial capital to protect:
I do not believe that the global economy is healing. I
In April it was announced that Greece was imposing a surcharge for all cash withdrawals from bank accounts to deter citizens from clearing out their accounts. So now the Greeks will have to pay one euro per 1,000 euros that they withdraw, which is one-tenth of a percent. It doesn’t seem very big, but the principle at work is extremely big because what they’re in effect doing is breaking the exchange rate between a unit of bank deposits and a unit of currency.
What we have seen over the course of the last eighty years is a systematic dismantling of the contribution of economics to our understanding of the social world. Whatever the cause, modern economics is now not much more than formal modeling using mathematics dressed up in economics-sounding lingo. In this sense, economics is dead as a science, assuming it was ever alive. Economics in mathematical form cannot fulfill its promises and nei... (more)
More than 2,000 years before America's bailouts and entitlement programs, the ancient Romans experimented with similar schemes. The Roman government rescued failing institutions, canceled personal debts, and spent huge sums on welfare programs. The result wasn't pretty.
Roman politicians picked winners and losers, generally favoring the politically well connected -- a practice that's central to the welfare state of modern times, too. As numerous writers have noted, these expensiv... (more)
China’s recent move to devalue the yuan has sent shock waves through the global financial markets and has convinced most observers that a new front in the global currency wars has begun. The move has caused many observes to envision a new round of competitive devaluations around the globe in which the race to the bottom will intensify. In this scenario they envision that the U.S. dollar will solidify its standing as the only strong currency. This misses the point entirely.
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