Posted tagged ‘Counterfeit money’

Incremental Steps To The New Normal

July 1, 2013

A bubble.BERNANKE SPEAKS, THE STOCK MARKET REACTS

The sell off in the stock and bond market, the week of June 20th, at a hint by Ben Bernanke that he might ease out of Quantitative Easing in the not too distant or distant future, is evidence that the financial markets are a bubble activity blown up by the Fed’s double edge sword of printing counterfeit money and artificially lowering interest rates. We witnessed more evidence the following week when first Quarter GDP numbers were revised down. This started a rally in the stock market because investors know that if there are bad aggregate numbers, the Fed will keep electronically printing money. Money going into the market is what drives the overall market upward. Understanding how these two sides of the Fed’s interventionist coin creates the artificial prosperity that eventually has to be liquidated, is very difficult because of the abstract nature of what is involved. We have been trying to explain these abstract concepts, in a variety of ways in order (more…)

Government Plunder Sows The Seeds Of It’s Own Destruction.

June 17, 2013
Pirates

Pirates (Photo credit: Gilmoth)

GOVERNMENT IS TOO BIG

Have we finally reached the point that we can all agree that Government is too big? The latest scandals, concerning Government overreach, should be driving this point home for everyone to see no matter how politically partisan a person may be. But the republicans and the democrats have done a great job of making this a game between two teams, each having a loyal following who will defend their favorite team no matter what the members of the team do. As long as the banner of their favorite team is flying high they let corruption, power grabs, and abuses of individuals rights slide.¬† The normal solution for any corruption or illegality in Government is to put a new angel in the position that was previously occupied by a fallen angel [aka devil]. This will not cure the problem, it will only temporarily take care of the symptom, but the underlying problem is still there. The underlying problem is (more…)

The Fed’s Policies Are Counterproductive.

February 4, 2013

Host Lauren Lyster interviews Jim Grant on The Daily Ticker in this video from economicpolicyjurnal.com.

Here is a quote from the article, “…the Fed intends to buy 85 billion, with a B, in securities every month. What you might ask is where does it get that money. It creates it, it didn’t exist before the Fed materialized it through the very humble action of a keyboard and a computer, that’s the way it does it. But notice that this money is coming into the system without any commensurate increase in production. This is money in search of mischief, and it is likely to find it. The Feds actions are counterproductive.”

If the Feds injecting 85 billion counterfeit dollars a month into the economy (QE3,4), since September, is considered counter productive, how much more counter productive was QE1 and QE2’s injection of 2.3 trillion total dollars since 2008. An even better question is (more…)

Capital Consumption, aka, Eating Our Seed Corn.

January 30, 2013
Corn Seeds

Corn Seeds (Photo credit: Stevie Rocco)

This article on ZeroHedge.com, R.I.P. Retirement: 28% Of Americans Are Raiding Their 401k Plans, talks about how people are withdrawing a portion of their retirement savings and spending it on present consumption. A large part of these savings will be used¬† to produce capital goods (tools, buildings, vehicles, machines, etc.), which will be used to produce future goods more efficiently. When we start to use money saved for capital formation and use it for present consumption, we are eating our seed corn. If we start to eat a portion of the corn we’ve set aside for use as seed, we won’t produce as much corn for next years consumption. This has been happening for the last four years. Individuals have been using savings earmarked for the future, in order survive in the present.

CAPITAL FORMATION

The money an individual gets paid for the good or service he produces (more…)