Appenzell
Switzerland |
A Daily Compendium
of Free-Market Thinking
|
|
|
|
News & Analysis
Jobless Spending Fights Recession
Friday, July 23, 2010 – by
Staff Report
For jobless Americans struggling to pay their bills and keep their homes, the restoration of unemployment benefits could keep their crisis from getting worse. The same might be said of the broader economy. The Senate is expected to vote Wednesday to keep providing unemployment benefits for up to 99 weeks to more than 5 million long-term unemployed. The injection of an estimated $33 billion into a $14.6 trillion economy over the next five months won't be enough to energize the recovery. But economists say it could at least help sustain it. ... "It reduces the likelihood of a double-dip recession," said Gus Faucher, an economist at Moody's Analytics. – AP
Dominant Social Theme: The more the government spends, the more helpful it is.
Free-Market Analysis: This article by AP makes the point that government spending via unemployment aid may help avert a "double dip" recession. The dominant social theme as mentioned above, is that government can spend its way out of a recession. While this is not true in our opinion, the consistent reiteration of these false analyses in the mainstream media makes it hard for most to figure out how economics works and how money functions.
In this article we will debunk once more the idea that government can spend its way out of a recession. It is our modest contribution to the 21st century, which we can truthfully label an "Age of Misinformation," fortunately alleviated by the advent of the Internet itself which is intermittently a force for enlightenment, truth and logical thinking.
Here is an excerpt from a recent article in the UK Telegraph: "Dow soars as US bellwethers Caterpillar, 3M and UPS deliver double-digit growth ... Profits at some of America's biggest and best known companies soared in the second quarter in the latest sign the global economy is continuing to rebound from recession lows, lifting the Dow Jones 1.9pc ... Corporate titans including UPS, Caterpillar and 3M all recorded double-digit profit increases in the three months to June as business spending returned, particularly in international markets. The results helped push the Dow Jones – of which 3M and Caterpillar are constituent members – sharply higher. The index closed up 156.88 – or 1.9pc – to 10,003.18, more than offsetting Wednesday's 109 point fall on the back of economic woes. ..."
Sounds hopeful doesn't it? One could begin to maintain that the incredible amounts of money that central banks have been shoving into the economy have finally begun to produce a turnaround. But is this so? Is the cause responsible for the effect? And is the effect actually a valid one?
Yesterday the world ran on honest money – gold and silver. Today, the Western world functions on dishonest money – fiat currency. It would be our contention that inevitably fiat money (money backed by nothing but the faith and credit of the government itself) loses value over time and has other destructive tendencies. This is an important point to make as the Great Recession moves through its various cycles and various "wise men" (with the help of the mainstream media) proclaim at various points that the bad times have been vanquished.
One can argue about what money is in a fiat-market environment but a more useful approach we would suggest would be focus on what money has been throughout history absent government interference. Money, historically, has been gold and silver, circulating freely in a ratio to one another. Gold was always the money of high finance and wealthy individuals while silver was the money of the people, those less wealthy. The free circulation of gold and silver in a ratio was preferable to the circulation of, say, gold alone because the ratio could reveal tampering. If the ratio changed suddenly, it might mean that one metal or the other was being manipulated.
There is no one ratio for gold and silver. In modern times, the ratio has hovered around 16-to-1 but in ancient times, the ratio has been far higher (silver being worth less than gold). Today, of course, the ratio is out of whack as well, with silver bugs maintaining that silver has a great deal of price appreciation to catch up to the modern 16-to-1 ratio. Silver, in this day and age, some would maintain, is a better buy (at this moment) than gold.
Silver and gold are the ideal money (or as close to the ideal as one can get) because they are free-market money, dug out of the ground. Because anyone can mine these precious metals, the market itself sets the supply-and-demand. Too much gold and silver circulating and people begin to hoard gold and silver and mines shut down. When the money supply shrinks, and gold and silver become more expensive, people begin to dishoard and mines open back up.
This is the ineluctable advantage of gold-and-silver as money. It is responsive to a market environment. Within this context, the question needs to be asked (and cannot be sufficiently answered) how do central bankers know how much a given economy needs? Certainly there are all sorts of fancy theories about how much money an individual central bank should generate to ensure the "right" amount of money is available in an economy. But even if one were to admit for argument's sake that such theories were correct, one would still be left with the problem of implementing them over time.
Thus we face the central issue: Central bankers probably do not know the optimal size of the money supply at any given time, and even if they did, the odds of the bank surmounting industry and political challenges to provide that optimal supply over time are ridiculously small. In fact, we would argue they are non-existent.
Additionally, there are no forward looking indicators that allow central bankers to know whether they ought to be "adding" to the money supply or not. Central bankers, while driving forward, are always looking in the rearview mirror.
This is why here at the Bell we refer to what central banks do as "price-fixing." Central bankers arbitrarily fix the price of money by raising or lowering short-term interest rates and by printing quantities of money without real-life justification. Price fixing, as free-market economics tells us, does not work. It always, eventually, results in a queue, or a scarcity or glut that becomes a scarcity. It distorts the marketplace rather than supports it. We can see all these elements at work in central-banking economies issuing fiat money.
The idea that a group of wise men can issue money into the market, backed by nothing but thin air and that economies will not eventually suffer from this practice is certainly a dominant social theme, perhaps the most pernicious of all. The power elite that has helped implement this system around the world has set up a monetary economy that is not based on any justifiable rationale.
HELP US SPREAD
FREE-MARKET THINKING!
When truth is discovered it is difficult not to want to tell others and help to spread awareness.
ARBP has assembled an international team of leading free-market thinkers to provide you with a reliable and efficient conduit through which you can help make a positive change today and for future generations.
Thank you in advance for your support. We look forward to working together with you to make "real" change a reality.
DONATE NOW
One could say that the elite has not only poisoned economies with central-banking fiat money, it has also poisoned the dialogue surrounding money. Everywhere throughout the West – and increasingly throughout the world – government, academia and the popular press treat the current system as if it were pre-ordained and a development of the marketplace. It is not.
Fiat money, thrown into the economy in digital or paper form inevitably creates a boom because it fools people into thinking the economy is better than it really is. It distorts people's reality and causes them to fantasize about business and personal options. People buy more things on credit and expand businesses, again on credit, based on the availability of this over-abundance of money.
Eventually, as bills become due, the larger marketplace realizes that creditors and debtors are over-extended and that many projects are unrealistic. Usually, this realization takes place all at once and markets crash and money, trapped in failed projects and unusable consumer goods is seen to be wasted. The goods are junked, the monetary value residing within them devalued. A "recession" sets in. Businesses fail and people lose their jobs and eventually their savings.
The process begins again. Central bankers struggle to reinflate the economy. Sometimes they are successful. But success is a double-edged sword. In a central banking economy, businesses likely never fully unwind their losses. Certainly the banking system does not. So a successful reflation merely reinforces economic imbalances. Over 30-50 years these imbalances become so great that sooner or later a "recession" turns into a Great Recession, one that emerges because the poor, tortured monetary system simply can take no more and snaps.
We are in such a phase now, we would argue. The economy has snapped. Money is printed but banks remain reluctant to spend. Money, in fact, is increasingly seen as valueless, which is why there is so much talk of new "money." Here at the Bell, we have maintained that this economic shake out is the result of a general currency failure much different than has come before.
Within this context we find it hard to believe that US Congressional authorization of additional money for jobless benefit will have much of an effect on the economy, let alone avoid a double-dip recession. But even if it were to do the trick, we need to ask if this would be a good thing. The result of monetary stimulation, we have seen clearly, is simply to kick the ball down the field. The same distortions remain in the economy, the same unwinding needs to take place and the reflated economy is simply an economy that is waiting to be punctured once again. There is no victory to be achieved in such circumstances. There is no redemption. Each reflation promises only more misery to come.
The solution to this grim reality does not lie in the false hope that a group of wise men printing money with grim authority can alleviate misery. They cannot. It is a dominant social theme, a promotion. The only money that promises long-term relief from the roller-coaster of the business cycle is gold and silver, free-market money.
In a free-market-money economy there would still be business cycles, but they likely would be fairly gentle or at least quickly over. Interest rates and business busts would be local or regional rather than national or international. Too much money and the marketplace itself would react quickly to reduce the money supply. Too little and the reverse would occur.
The idea that governments and mercantilist central banks can spend their way out of recessions is a false one. The problems will remain and grow bigger and bigger. Not only that but every recession and subsequent reflation sheds jobs and centralizes wealth and power. Central banking, seen from this perspective, is a great authoritarian trap.
Conclusion: It is human nature to want to alleviate pain and suffering. Economic downturns are grim. But the rejoicing that accompanies "recoveries" within fiat-money, mercantilist economies should be seen within a larger context. A true victory would involve a return to some form of free-market money and the reduction or elimination of private/public mercantilist central banks. Something like this may start to happen anyway if the distortions grow too great and sovereign debt overhangs too onerous to manage.
Post Feedback
We look forward to reading your feedback. All comments are automatically posted. However, please note that any posts containing harassment, vulgarity, personal attacks or those which are deemed to be of a violent nature are not welcomed and will either not appear or be removed.
View Feedback
Posted by Bionic Mosquito on 7/23/2010 5:45:23 AM
DB: "Usually, this realization takes place all at once and markets crash and money, trapped in failed projects and unusable consumer goods is seen to be wasted."
Yes, it would have to be more or less all at once. Those 10 farmers, thinking they each had access to a bushel of wheat as stores while they each started off building a barn, all found out about the same time that there was only one bushel amongst all of them. They probably each got to work for a week on a ten week project...having each received 1/10th of a bushel.
About the same time, work on ten barns stopped. Hence, a recession / depression -- instead of one business failure out of ten (or more likely, one successful barn-raising), all businesses have failed.
It is silly to think that a broad (national/international) recession / depression can occur in a free market. All actors are receiving signals from society and taking action on the signals. Is it really believable that they all processed the signals incorrectly -- at the same time and in the same direction -- or is it more believable that the signals being received were faulty...because they were not from the market?
Reply from the Daily Bell:
"It is silly to think that a broad (national/international) recession."
We agree. In a free-market, downturns are likely limited in duration and geography.
Posted by Martin Sobek on 7/23/2010 6:05:14 AM
The communist party had a great medicine for unemployment. They just declare unemployment illegal. So unemployed person was a subverter and belonged to jail.
Shall we see this rhetoric in US soon? The course is good and stable! The problem fo unemployment benefits is unmotivation of workers. In long term workers will start prefer to not to work then seeking for job. Human psychology needs security and unemployed person will finally find unemployment benefits more secure then instable job.
The Empire is collapsing, but it doing so in small steps. These steps are consecutive and unstoppable. These steps are invisible for ordinary people. You must step out first and whole big picture will appear. All small steps as dots will draw whole scene of disaster.
The world is following the mega-trend described by J.Naisbitt. Free market will finally win but the process will be paintful.
Posted by Mark on 7/23/2010 6:05:46 AM
Given the choice between austerity and continued stimulus, is there really any doubt as to the government's continued response to the current economic contraction? Further extension of jobless benefits will likely continue indefinitely...after all, we're talking about voters here.
It seems the U.S. isn't that far off from becoming the next Argentina...once those on the govt payroll (bureaucrats, private contractors ala the Washington Post story, and welfare recipients) become the majority then where will restraint come from? This is exactly the situation here in Argentina (but at least here the govt is so hopelessly disorganized that enterprising individuals are pretty much left alone.)
Posted by Pat Fields on 7/23/2010 6:16:41 AM
DB Cite: "(T)hat government can spend its way out of a recession ... is not true in our opinion ..."
Serious, learned reflection is elevated in its esteem where empirical proof exists to verify its deductions. I'm not aware of similar statements from elsewhere in the world; though I'm sure they exist, however one famous moment of forthrightness stands as proof of the Bell's hypothesis that had come out of the US highest government levels. Viz ...
"We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and now if I am wrong somebody else can have my job. I want to see this country prosper. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. I say after eight years of this administration, we have just as much unemployment as when we started. And enormous debt to boot." --Henry Morgenthau, Treasury Secretary of the US, 1938
Among the most celebrated, Smith had illustrated these conclusions in the 18th century, Bastiat had again in the 19th and von Mises in the 20th ... placing our DB in quite lofty acquaintance.
As you know, I view monetary 'reflations' as necessary accommodations to compounding interest service pressures intrinsic to virtual 'money', quite unconnected with the economy itself, but rather a general reluctance of the population to assume enough further indebtedness required to bring interest service 'money' into existence. This is why these 'reflations' grow more and more voluminous over time.
I suspect that silver and gold as trade media will almost certainly be intensively suppressed until no other alternative remains but to revert back to specie mediated exchange. If no other path is considered among The Peoples, they will encounter unnecessary deprivations in the interim. This is why I so adamantly recommend using copper for the purpose initially. There is simply too much copper available at hand to prevent its restoration as money and once the critical re-orientation of mind occurs in the 'commonality' the next step to silver, gold and other metals will be seamless in its conceptualization.
Posted by DRUNK AND DISORDERLY on 7/23/2010 6:40:43 AM
I certainly appreciate the DB efforts to reveal the roots of our financial trauma. This becomes a quest like the Russian doll that contains a smaller, identical doll within each one. Where is the final solution; the root of the problem? Lack of a gold/silver standard? Abolish the Fed? Surely these are fruit of the poisonous tree but not the whole problem.
I would surmise that the heart of the problem lies with a representative democracy. As has been said many times, I paraphrase, when a government realizes in can simply ordain wealth it is doomed. This unwillingness to balance spending with income while using the facades of credit or the printing press , will eventually dilute and destroy a currency.
Until we see a responsible, accountable and much smaller government, I think we may expect the economy to worsen.
Posted by Victor Barney on 7/23/2010 6:49:38 AM
Dominant Social Theme: "The more the government spends, the more helpful it is." My Conclusion: In any Marxist(anti-messiah by definition) takeover there has to be a flood of spending, a financial collapse, then blaming the previous capitalists as causing it! Although "Intellectualism"(The first sin, by the way) pretends to be functional on paper, it really represents ignorance, stupidity, and/or anti-messiah thought(how about all three)!
Posted by JOHN on 7/23/2010 7:08:46 AM
THIS CONTINUATION OF UNEMPLOYMENT BENEFITS DOES NOTHING BUT DESTROY PEOPLE, I HAVE A GRANDSON WHO IS STRONG AND CAPABLE, BUT HAS BEEN RECEIVING THESE BENEFITS FOR TWO YEARS AND IS NOW ON DRUGS WAITING FOR MORE "GOVERNMENT AID", AND NOW HE WILL BE ABLE TO STAY OUT OF WORK LONGER, THE GOVERNMENT HAS NO RIGHT GIVING MONEY TO ANYONE, A WAR IS COMING TO AMERICA, GET READY.
Reply from the Daily Bell:
Caps off, please.
Posted by Bill Ross on 7/23/2010 7:09:04 AM
In this thread:
Click to View Link
It was PROVEN (my comments, in a tedious philosophical argument) that there is no such thing as "something from nothing" which includes "causeless effects", "production with no inputs" or, in general, a "free lunch".
The argument concluded with:
BR: "The "something from nothing" false belief is resulting in "nothing from something", the complete and utter destruction of the civilization (the rules by which we cooperate for MUTUAL self-interest) bequeathed by our far wiser ancestors. Events and near future history are / will not be very kind to us."
In particular, false economics, false crisis, theft by putting future generations in debt (which they must reject for legal reasons of "Odious Debt), currency manipulations and redistribution in general are all fraudulent attempts to falsely rationalize why "something" REAL should be stolen from "we, the people" in exchange for "nothing" REAL.
Since we live in an action precedes consequence reality, these assaults on civilization (the rules by which we cooperate for MUTUAL self-interest) cannot be without consequence. In particular, steal from the productive to benefit the unproductive and, the carrots and sticks discourage productivity (upon which the survival of ALL of us depends) and encourage laziness, sloth, forceful theft, fraud and unproductivity in general. The motivational economics become altered so it is more profitable (for those who wield the carrots and sticks) to destroy civilization than to build it.
"Mathematics of Rule" proves that, on present course, the social / economic prognosis is grim, for all of us, including the idiots who falsely believe they are in control:
Click to View Link
No matter how we may feel about it, there is only one physical reality (proven relationship between action and consequence) and, we need to be very careful with our choices. Make incorrect ones and, REALITY WILL SMITE US. It is happening now and, our collective choices (especially what we tolerate from our rulers) are getting more and more insane.
Charles Darwin and evolution PROVED: Survival EQUALS adaption to environment (reality) EQUALS ability to choose correctly EQUALS freedom:
Click to View Link
The tipping point rapidly approaches where the survival of the majority will be so harmed that it becomes more threatening to obey our predators than to defy and engage in civil disobedience:
Click to View Link
THINK about it:
Click to View Link />
For the unemployed:
Which is better?
a) Handouts, whatever they CHOOSE to give you, dependency. Pissing off your fellow citizens (and children) by the costs you impose.
b) Freedom to contract on your terms, with remuneration on your terms, free of your parasites who currently insist that they deserve "something for nothing" within the forceful slavers paradigm of "obey or else".
VERY SOON, we will be collectively discussing the exact meaning of "or else"
Posted by Bill Ross on 7/23/2010 8:05:53 AM
It should be pointed out that, historically, once consensus is achieved by the majority and they decide to take a firm stand, the REAL, EXACT meaning of "or else" has turned out to be a BLUFF.
This is why the perceptive can see the terror of elites and why they are wildly flailing about with ill thought out memes / fake crisis, making DB's job far easier and the fraudulent nature of their power (which is really OURS) increasingly obvious.
IN FACT, this is WHY "consent of the governed" is required for any REAL social contract:
Click to View Link
Posted by Michael Hodgkiss on 7/23/2010 8:19:55 AM
BR: Charles Darwin and evolution PROVED: Survival EQUALS adaption to environment
This statement is Sophistic. Charles Darwin proved no such thing!
We are not animals as Lyndon LaRouche has correctly emphasized in almost every speech he gas given in the last twenty years. It seems so many baby boomers of which I admit to being believe the opposite.
In the first chapter of the Bible the point is made that man is made in the image of the creator. So then would that make God an animal as well? Or is it more to the point that man is a creator? After all,aren't we the only creatures God gave the capacity for willful creative mentation? Were there a few more of us that would take up the use of that facility, we wouldn't be in this jam now.
But be that as it may, we have the capability to think our way out. The fact is "money" has no intrinsic value. Nuclear plants have value! High speed transit systems have value. A skillful farmer or welder has value. The ability to reproduce the society at an ever increasing standard of liveing is the task, and that is physical. So the answers will be found with the teachings of the physical economists. Starting with Lyndon LaRouche and going back through history. Click the link to get the story.
Click to View Link
Posted by Bill Ross on 7/23/2010 8:38:05 AM
@Michael Hodgkiss
BR: "Survival EQUALS adaption to environment..."
MH: "This statement is Sophistic... proved no such thing"
OK, say you make an incorrect choice such as failing to adapt to traffic and turning into an ongoing vehicle, overextending yourself by consuming more than you produce (getting into debt), being unproductive at work, etc.
Think there are no survival threatening consequences? Will god intervene and save you, despite ZERO evidence, in all of known reality / history of divine intervention?
Are not (within your religious paradigm) the laws of action leading to consequence god's laws of this created realm? Is it not blasphemy to deny them and, thus god?
I will bounce the allegation of sophistry right back and raise you with hypocrisy.
And, to cite the opinion of a man (Lyndon LaRouche, a false god) as authority makes you an irrelevant follower, not a leader. Reality, not opinion rules.
This is why we once had the "rule of law" as opposed to current "rule of man". Man is too ignorant and corrupt to determine who lives and dies, a choice that belongs to each of us who own only our own lives and not the lives of others.
Click to View Link />
I am under zero illusion that I have affected your dogmatic opinion, in any way.
I do agree that understanding the rules of physical reality is the way out, but, we will have to "agree to disagree" whether or not mankind is solely a creature of physical reality or, has divine components.
Posted by Doug on 7/23/2010 9:52:09 AM
Unfortunately I don't see things changing until some sort of MAJOR economic calamity occurs (one FAR greater than 2008). I suspect it will be when creditors realize the "Full Faith and Credit of the United States" is worth not a little but a LOT less.
At some point creditors will realize that the U.S. NEVER intends to pay back gov debt. EVER. When that occurs..well...it will not be pretty.
Posted by Bill Ross on 7/23/2010 11:15:09 AM
"NEVER intends to pay back gov debt"
Yes, if you also include outstanding fiat currency and derivatives (promise to pay, by definition a debt instrument)
Its not just creditors who will be "annoyed". It will be all holders of $US currency, $US denominated financial instruments and ALL trading partners who have traded REAL goods and services for useless script.
It was not an accident of history that gold was the currency to settle trade imbalances between countries. This was the solution to the problem of centuries of currency debasement by dishonest trading partners which devastated vast segments of productive economies, just as it is now.
There are two ways of looking at history:
Defensive: Avoid past mistakes and traps
Offensive: A vast repository of knowledge of past methods of how to prey on people
So, whose interests are served by making educational history teaching a rote, mind numbingly boring litany of facts, dates, character analysis as opposed to the chronicle of the building of civilization, in defense of peace in the eternal war between predator (those who consume more than they produce) and prey (those who produce more than the consume).
I give you two guesses regarding which side is currently winning. Far too many people will guess wrong.
Posted by Pat Fields on 7/23/2010 11:28:36 AM
Doug Cite: "At some point creditors will realize that the U.S. NEVER intends to pay back gov debt."
Funny thing about inflation. It reflects the corollary of an asset's original value. What it declares about an asset is its real residual value.
My current mantra is that we can immediately step out of our economic (and financial) quagmire, by converting all banknotes to their real residual expressions in specie form.
In America that's realizable with a 10 gram copper piece. There being untold tons of 'scrap' copper throughout society, it's entirely possible, not only to pay off the debts, but of far greater significance, to end the compounding of interest on those debts. THAT liberation ALONE will launch a Capitalist revival in society, since surplus productive capacity can be devoted to trade as opposed to interest service.
Posted by Michael on 7/23/2010 12:33:36 PM
@ The Daily Bell. Other than world war, has the U.S ever spent it's way out of a recession? Also, has there ever been an administration, or FED chair that has had more positive impact other than temporary strength to the dollar. Like a longer lasting strength?
Also, I'm sure you all have seen the AIER charts of the falling purchasing power of the dollar and the rising purchasing power of gold. My question is is there any evidence to show that would reverse the purchasing power of the dollar for the long term? Thank you kindly.
Reply from the Daily Bell:
Paper currencies reversed the trend to gold in the 1980s and 1990s. This time the downward momentum may be more difficult to reverse.
Posted by GWBramhall on 7/23/2010 12:37:30 PM
I still don't get it, why are gold and silver are any better? They
are just elements, why not zinc? You discover a vein of the
stuff in some unexplored mountain range, (lets's say Afganistan)
and all of a sudden it becomes worth less or worthless or worse,
the savages are in control of our monetary system!
I guess this is another example of what a "meme" is, where all
the powers that be from goverment, media and education are all
lined up in support of fiat money and against hard money.
When you get tired of beating your head against this wall, maybe
you can offer a solution that has a chance of being accepted.
Reply from the Daily Bell:
There are a least four good reasons why gold and silver are money metals. You ought to read Murray Rothbard's books. ...
Posted by Harold Larsen on 7/23/2010 1:45:37 PM
THE DOMINANT SOCIAL THEME.
The more government spends the more helpful it is, the milion dollar question is this, TO WHOM IS IT (MOST)???? HELPFULL? HERE IS TIP, FOLLOW THE MONEY, while keeping in the back of mind the declaration of scripture, the LOVE of money is the root of all evil,and as pointed out earler, evil is a consquence or result of breaking GODS laws, since we are talking about money (fiat money) which is suposed to be measure of value, which it most certainly is not, not by oversight, but by design of our new unhappy lords.
Money is not a unit of value,IT IS A PRICING MECHANISIM, much like a ruber tape measure held at both ends by the same dealers,relax the tension on the tape when you are a seller and then stretch the tape when you are the buyer, its called win win, tails you lose heads I win , the black swan event for these poor creatures is this, GOD HAS APOINTED A DAY IN WHICH HE WILL JUDGE THIS WORLD IN RIGHTEOUSNES, GOD has declared that he has set there feet in slippery places and that in due time there feet all slide relax dear reader it is not matter of if but only a matter of when. that price and value are like chalk and cheese, is well demonstrated by the recent property bubble, where the inflated prices were a poor reflection of value.
The biblical declaration that GOD rules in the kingdoms of men , may come as a bit of shock for those pushers of fiat money who in the words of Dr Antal Fekete, have constructed their tower of confusion on a foundation of rotting paper, There is a hint of devine irony, when you compare the pompous declaration of men in Genesis 11/ v4 ( GO TO) they said let us build us a city ,and a tower whose top may reach unto heavan, and let us make us a name lest we be scattterd abroad upon the face of the earth, their tower colapsed into uin ,they got themselves a name CONFUSION***** and as if to put the cherry on the top of their cake pride and stupidity, they were scattered from thence upon the face of all the earth, they are now back for another crack at the ball,these lunatics obviosly dont know that it is the stamp luncy to keep on doing the same things allways exspecting to get a differant result,
Ah!!! whom the gods would first destroy they first make mad. I think GOD has a sence of humor, in fact I am sure, the second pslam says HE THAT SITTETH IN THE HEAVANS SHALL LAUGH ,let me offer a little devine comfort and consolation to those troubled and battered gold and silver bugs out there
Posted by Michael on 7/23/2010 2:13:57 PM
@ The Daily Bell. Has the united states ever spent it's way out of a depression or recession? Thank you kindly.
Reply from the Daily Bell:
Yes. But it has mostly added to the larger economic distortion when doing so.
Posted by Bill on 7/23/2010 2:16:49 PM
In today's demographics with most people residing in cities how do you propose maintaining order if Governments simply cut off benefits for those who cannot find jobs?
Seems to me free market economies are difficult when all of the wealth has been allocated and money always trickles up to the business owners. Credit expansion has created great projects and great innovations in the marketplace. Unregulated derivatives led to the collapse of this last bubble couple by unregulated mortgage brokers giving loans to those who could not afford to pay them back and investors worldwide buying them as if they were better than gold. I suspect you overrate the free market economy. It certainly did not function well in Europe. Perhaps we need to see a permanent depression in private million dollar yachts.
Reply from the Daily Bell:
In today's demographics with most people residing in cities how do you propose maintaining order if Governments simply cut off benefits for those who cannot find jobs?
Exactly. It is not a jobs bill but a social comity bill. We would like to see a change in the fundamental social contract. Instead, people are just bought off.
Posted by John Acord on 7/23/2010 2:48:37 PM
The power elite has struggled to reverse the collapse of the fiat money economy for the past two years with little if any success. They have now created an unsustainable and increasing debt that can only be monetized or repudiated.
A return to a gold standard will occur. First, there will be confiscation of gold and silver holdings. Confiscation, I believe, is all but inevitable now that too many holders of fiat money realize will soon be repudiated or worthless. I expect the confiscation will occur in such a way as to minimize the economic effects and maximize the political gain. Perhaps, the Fed will tie gold to the currency and peg its price at 2000 an ounce to bring it all to the Fed window. The holders of US debt may be invited to exchange it for the new "gold backed" currency that pays no interest but can be converted into gold via international settlements.
Second, the PE and the Fed will finally realize the trillions of dollars of fiat money transferred to the banks and power elite will not jump start the economy. In fact they have transferred all of this money to institutions which are hording it and preventing the economy from gaining momentum.
The problem the Keynesians have is they have not provided the cash to the correct class. They have provided it to those who will most likely horde and not to those who will spend. In other words, our "leaders" are not Keynesians but Kleptocrats. Correctly applied, the economy would have undergone a "miracle recovery." Hussein would have remained a demigod. How to accomplish this correctly, may have been to adopt the ideas of Martin Feldstein who suggested that low-interest government mortgages be provided to buy all debt thereby bailing out the banks and pension funds and at the same time providing the consumer with spendable cash.
Nothing like this has occurred because the entire collapse was engineered to rob the middle class and to permanently handicap the economy while at the same time making the power elite extraordinary profits. Hussein and his band of Bolsheviks are going to fail to revive the economy. They cannot even implement Keynesianism correctly, let alone any form of free market policies.
The Republican are fundamentally know-nothings tied to interests that have little incentive to revive the American middle class. What is required today is a huge dose of Huey Long style Louisiana politics where the fruits of Keynesianism, such as they are, are distributed to the "little people." Hopefully, a popular Populist administration and Congress, having won the support of the electorate and middle class, would then find a way to implement free market economics and a gold standard.
Posted by Harold Larsen on 7/23/2010 3:08:13 PM
RE THE DOMINANT THEME, IN MY EXCITEMENT I PRESSED THE SEND BUTTON TOO SOON ,Re words of comfortfor gold and silver bugs, to apreciate the irony attached to the words in the words exspresed by men in Gen11v3&4 (GO TO)THEY NEED TO BE COMPARED TO THE DEVINE RESPONSE recorded in the same chapter and in verse6&7 GO TO **** WAS THE DEVINE RESPONSE , the comfort part for gold and silver bugs is to found in James chapter 5 and v1 comencing with the words (GO TO) ye ritch men, weep and howl for your miseries that shall come upon you. v2 For YOUR richers are corrupted and YOUR garments are motheaten V.3 (YOUR) GOLD AND (YOUR )SILVER IS CANKERED and the rust of them shall witness against you and shall eat your flesh as it were fire , now my dear reader you dont need me to point out to you that real gold and silver are not troubled by either moth or rust, however the paper variety , well that is another matter, as regards the fire bit,smoke at the comex may exsplain it paper burns pretty easly , and notice the closigg words of v3 YE HAVE HEAPED UP RICHERS FOR THE LAST DAYS ( END GAME) ALAS ALAS , FOR WHOM THE BELL TOLLS ITS ALL GOING UP IN SMOKE, HOW QUICK WILL ALL THIS PAPER BURN??? REV 18V17 IN ONE HOUR SO GREAT WEALTH IS COME TO NOUGHT , AS IN ZERO . Mighty Babylon, who hath power over the kings of the the earth of whose wine all nations have drunk and now stager back and forth in their drunken stupor, the party is over and one mighty hangover cometh
Posted by Pat Fields on 7/23/2010 5:25:00 PM
John Acord Cite: "What is required today is a huge dose of Huey Long style Louisiana politics where the fruits of Keynesianism, such as they are, are distributed to the "little people." Hopefully, a popular Populist administration and Congress, having won the support of the electorate and middle class, would then find a way to implement free market economics and a gold standard."
Sir, I wouldn't buy that plan for a flask of hog bile. As Louisiana is my natal domicil and my paternal family's home since 1823, I for one am relieved that ol' Huey 'caught a fever' when he did. He would have killed Louisiana's oil trade as surely as the Lying Marxie Kenyan Usurper Alien Cockroach has this past few weeks and driven down all nascent manufacturing in Louisiana by deprivation of properly priced energy. No Sir, Huey was bad for Louisiana ... he would have been bad for the country and he belongs right where is ... in the history books.
We've had a 'chicken in every pot' government since 1930 and all it's got us onto is a path toward dictatorship.
Come November, The People will stomp out this fire in the kitchen and get busy with the repairs and ... renovation!
Posted by Rock on 7/23/2010 6:54:11 PM
The crash is comming, so get ready for it June 11 2011, most of the people I talk to here in the USA dont believe it will or can happen, I think they believe the government will wave there magic Dollar printing wand and it will be all better.
Then the best part is Americans voted in a non American to be president ya a flag burner of the country he is president of, and he is over the USA military and has never served in the military, from every action this president has made it looks like he is out to destroy the USA.
It looks like bigger forces are at work than what the average person can see, I think the whole world is in for a rude awakening and the worst is yet to come.
When the crash dose come and it will, food, clothing and water will be in high demand, do you think the goverment will be able to provide for every one after this happens, No they will not you will be left on your own to defend and provide the necessitys to live and survive.
Let me see I am hungrey and starving I have no food but I have some gold and silver and a gun, first I will try to buy some food with the gold and silver after that what do you think people will do to survive, ya its not pretty. So if you think the USA government at the time the US Dollar colapses will be there to bail you out take a look at what happened when Katrina hit New Orleans, the gangs were running the show for the first two weeks.
Now take look at the whole world economy, scarry, War.
Posted by Sally Preston on 7/23/2010 7:16:49 PM
Dear DB,
This comment has nothing to do with your article, except that I love it when you so politely respond "Caps off, please." Seriously, I laugh out loud. Sometimes, when I get a similar e-mail at work, that mantra runs through my head and then I remember I have the DB to look forward to after a day in the insurance mines (your site is blocked for me, I'm not sure why.) I heart DB.
Posted by Pat Fields on 7/23/2010 7:23:53 PM
Rock Cite: "When the crash dose come and it will, food, clothing and water will be in high demand ..." [sic]
A few hundred-weight sacks of oat and wheat will be a great investment for sure. I lean more toward tobacco and good whiskey though. A ready market for hard money should be easily found with those, no doubt, Friend!
While silver and gold are the historically preferred money, copper has an even longer history because it carries all the principal money qualities as well.
No, Friend, I believe there's quite enough volume of alternative to the banknotes, that intrinsic reason and basic sense of justice will ... largely ... win out.
Posted by Mike on 7/23/2010 9:44:41 PM
An extension of ninety nine weeks! That is almost two year! At what point do the unemployment benefits morph into nothing but welfare with a different name? I feel for those who have lost their jobs and cannot find work but personally I feel having no benefits available would force these people ( 5 million strong) to collectively demand real changes in this country. It would be refreshing to see them descend on Washington, DC and demand rollbacks in taxes, regulations and unfair trade bills.To see them demand of our Kongress critters an environment, in this country, that is once again favorable to the investors and entrepreners out there who have the money and vision to create the businesses that will in turn create the jobs.
Personally I am one of the latter. I have my own business and I am very motivated, entreprenurial and have visions for growth yet due to the current anti business climate in this country I find myself refraining from hiring an employee. Instead profits are squirreled away with the ultimate goal of moving abroad to where the business climate is more favorable to those who are productive not parisitical.
Posted by John Buck on 7/23/2010 10:39:30 PM
This is the second time I have posted to a daily bell article and it has not showed up on the blog. I posted mid afternoon today. Any thoughts as to why this is happening. I hit post an it says blog posted.
Reply from the Daily Bell:
Sorry you are having trouble. If the posts are too long, they do not post. Try shortening the post or splitting it into two posts.
Posted by Angus Holliday on 7/24/2010 8:00:44 AM
So what do we do now?
Reply from the Daily Bell:
Take human action.
Posted by Peter Underwood on 7/24/2010 12:11:39 PM
DB "these false analyses in the mainstream media makes it hard for most to figure out how economics works"
Opps " but of course, economic is hard, very hard. Only a Ph.D can figure it out, didn't you know that?
(Anonymous quote)
Reply from the Daily Bell:
Or so the Fed tells us ...
Post Feedback
We look forward to reading your feedback. All comments are automatically posted. However, please note that any posts containing harassment, vulgarity, personal attacks or those which are deemed to be of a violent nature are not welcomed and will either not appear or be removed.
|
News & Analysis
Guest Editorials
Subscribe to the
Daily Bell Newswire
|
Exclusive Interviews
|
|
© Copyright 2008 - 2010 Appenzeller Business Press AG (ARBP). All Rights Reserved. The Daily Bell is an informative compendium of independent economic views and analysis, which is published by ARBP. The information contained in the Daily Bell is for informational purposes only, is impersonal and not tailored to the investment needs of any particular person and should not be construed as financial or investment advice. ARBP does not accept any liability or responsibility for, nor does it verify the accurateness of the information being provided in the Daily Bell. Daily Bell articles and interviews may include the contributions of several Daily Bell editors and may require factual editing after their initial post. Readers of the Daily Bell or any affiliated or linked sources or sites must accept the responsibility for performing their own due diligence before acting on any of the information provided within the report regardless of the source. In addition to proprietary, internally generated content, the Daily Bell publishes guest editorials from a selection of free-market thinkers, which may have been reprinted elsewhere and are not necessarily representative of ARBP's editorial views. Copyright is attributed to the author of any guest editorials featured at the Daily Bell, unless noted otherwise. ARBP often uses images licensed from Getty Images on the Daily Bell website.
|
|
|
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/sp_en_6_207x100.gif)