You need to take 15 minutes and watch this.
Seriously !
http://www.youtube.com/watch?v=zPkTItOXuN0
Tuesday, February 22, 2011
Wednesday, February 16, 2011
Common wisdom ?
Whoever coined the phrase "early to bed and early to rise makes a man healthy and wealthy and wise" must be a complete and utter moron.
Monday, February 14, 2011
Latest 2011 deficit estimate now 1.65 trillion .....
This is an update on my recent "Is the crisis over ?" comment.
Thursday, February 3, 2011
What is the proper way to measure inflation ?
This is how it's done: You make up an average Americans shopping list and compare prices in regular intervals. Then you take out the items that really went up a lot and blame their great volatility for not including them. Then you make up a number and tell the public that there is no inflation at all.
Another way would be to just compare the money supply. Let's make up a very simple economy: Money supply is only 100 bucks and people only buy bread. Bread costs $1 per loaf and someone invents an apparatus to make bread cheaper. He can now sell it for 50 Cents per loaf.
If our initial method of measuring inflation would be applied, we suddenly have 50% deflation.
Wow, that's bad: the Fed to the rescue: They print up some more cash, so that the money supply now equals 200 Dollars (a 100% increase) and bread still costs $1 per loaf.
According to our government statisticians, no inflation at all ! (and no deflation, just perfection)
What has happened here ?
Even though prices have stayed the same, do you believe that there's no inflation ?
Another way would be to just compare the money supply. Let's make up a very simple economy: Money supply is only 100 bucks and people only buy bread. Bread costs $1 per loaf and someone invents an apparatus to make bread cheaper. He can now sell it for 50 Cents per loaf.
If our initial method of measuring inflation would be applied, we suddenly have 50% deflation.
Wow, that's bad: the Fed to the rescue: They print up some more cash, so that the money supply now equals 200 Dollars (a 100% increase) and bread still costs $1 per loaf.
According to our government statisticians, no inflation at all ! (and no deflation, just perfection)
What has happened here ?
Even though prices have stayed the same, do you believe that there's no inflation ?
Is the crisis over ?
The stock market has more than doubled in less than 2 years and is trading close to the highs again. Recent economic statistics show better than expected numbers. Commodity prices are making new historic highs while mortgage rates are still close to historic lows.
We dodged that bullet and everything is fine ?
We, the taxpayers, even made money on the bailout ?
Just one fly in the ointment: unemployment is stubbornly high and new jobs don't seem to pay too much.
Also, there are those pesky deficits. If the problems are really behind us, should those deficits not decline ?
In the first budget of the Obama administration, the 2011 deficit was estimated at 912 billion. One year ago, that guess had risen to 1.267 trillion. The latest number from the Congressional Budget Office is 1.48 trillion.
At the same time, the Fed is creating 2.4 trillion Dollars from nothing.
Ben thinks that he has everything under control, that his money printing program is working, that inflation is too low and unemployment too high. As I agree with him on his last point, I very much disagree on the former.
Well, I didn't call this Bens Fan Club for nothing: As he is laying the groundwork for an even bigger disaster than the one he thinks he has averted, he is doing a much more credible job at abolishing the Fed than Ron Paul does !
We dodged that bullet and everything is fine ?
We, the taxpayers, even made money on the bailout ?
Just one fly in the ointment: unemployment is stubbornly high and new jobs don't seem to pay too much.
Also, there are those pesky deficits. If the problems are really behind us, should those deficits not decline ?
In the first budget of the Obama administration, the 2011 deficit was estimated at 912 billion. One year ago, that guess had risen to 1.267 trillion. The latest number from the Congressional Budget Office is 1.48 trillion.
At the same time, the Fed is creating 2.4 trillion Dollars from nothing.
Ben thinks that he has everything under control, that his money printing program is working, that inflation is too low and unemployment too high. As I agree with him on his last point, I very much disagree on the former.
Well, I didn't call this Bens Fan Club for nothing: As he is laying the groundwork for an even bigger disaster than the one he thinks he has averted, he is doing a much more credible job at abolishing the Fed than Ron Paul does !
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