Why hasn’t the crisis ended as yet? It should have been all over with and forgotten by the first of last February. If so, the whole troubled world would have already issued a huge sigh of relief.
There would be no more impatient dilly-dallying on the part of investors, waiting for the government to decide who are going to be the recipients of the new trillion in handouts, and causing daily upsurges and downfalls in the unsettled Dow.
Assets would have fallen to their normal worth, the present discounted value of their future returns. No need to wrestle with mark-to-market account. No need for Sarbanes and Company to meddle and make newer and stiffer regulations. No need for new super controls. FULL ARTICLE
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Agreed.. Government picks the winners and ignores whom it cannot control. At least until those who are able to hang on are then the target of the wrath of Federal crats !! There is no freedom without free markets.. Thanks for a very good article..
Why the Crisis Hasn’t Ended “This is a wonderful article about Capitalism vs. Government-Run Fascism.”
I sent it to everyone. The “Truth of Economics” is so simple until the Puppets of the Shadow Government pervert it to save the Evil Cabal Swindlers of the Round Table. We the People have been led to believe Bush, Obama will make the right decisions is absolute rubbish. David Rockefeller, Henry Kissinger and their CFR have pulled the strings on their Puppets to commit the largest fraud in World History. I laugh at the accounting fiasco. Who has the monies that can’t be accounted for? The banks who compose the private Federal Reserve System. We Americans are absolute fools, asleep at the wheel as our corrupt politicians guide our country to nothing but ruin.
What the Central Bank/Federal Reserve do to US Presidents who cross them.
President Jackson closed Central Bank Rothschilds missed.
President Lincoln printed Greenbacks the Central Bankers killed him.
President Garfield and McKinley crossed the Central Bankers-ditto.
President Kennedy printed Silver Certificates; the Fed killed him.
Federal Reserve Notes are killing We the People ditto.
Jeckel Island 1907
Where 7 men who represented an 1/4 of the total wealth of the world.
Federal Reserve 1913
Why the Crisis Hasn’t Ended “This is a wonderful article about Capitalism vs. Government-Run Fascism.”
I sent it to everyone. The “Truth of Economics” is so simple until the Puppets of the Shadow Government pervert it to save the Evil Cabal Swindlers of the Round Table. We the People have been led to believe Bush, Obama will make the right decisions is absolute rubbish. David Rockefeller, Henry Kissinger and their CFR have pulled the strings on their Puppets to commit the largest fraud in World History. I laugh at the accounting fiasco. Who has the monies that can’t be accounted for? The banks who compose the private Federal Reserve System. We Americans are absolute fools, asleep at the wheel as our corrupt politicians guide our country to nothing but ruin.
What the Central Bank/Federal Reserve do to US Presidents who cross them.
President Jackson closed Central Bank Rothschilds missed.
President Lincoln printed Greenbacks the Central Bankers killed him.
President Garfield and McKinley crossed the Central Bankers-ditto.
President Kennedy printed Silver Certificates; the Fed killed him.
Federal Reserve Notes are killing We the People ditto.
Jeckel Island 1907
Where 7 men who represented an 1/4 of the total wealth of the world.
Federal Reserve 1913
Why the Crisis Hasn’t Ended “This is a wonderful article about Capitalism vs. Government-Run Fascism.”
I sent it to everyone. The “Truth of Economics” is so simple until the Puppets of the Shadow Government pervert it to save the Evil Cabal Swindlers of the Round Table. We the People have been led to believe Bush, Obama will make the right decisions is absolute rubbish. David Rockefeller, Henry Kissinger and their CFR have pulled the strings on their Puppets to commit the largest fraud in World History. I laugh at the accounting fiasco. Who has the monies that can’t be accounted for? The banks who compose the private Federal Reserve System. We Americans are absolute fools, asleep at the wheel as our corrupt politicians guide our country to nothing but ruin.
What the Central Bank/Federal Reserve do to US Presidents who cross them.
President Jackson closed Central Bank Rothschilds missed.
President Lincoln printed Greenbacks the Central Bankers killed him.
President Garfield and McKinley crossed the Central Bankers-ditto.
President Kennedy printed Silver Certificates; the Fed killed him.
Federal Reserve Notes are killing We the People ditto.
Jeckel Island 1907
Where 7 men who represented an 1/4 of the total wealth of the world.
Federal Reserve 1913
Increases in the money supply is not the only cause of inflation in today’s market. Over the last few years we have experienced an explosion in investments into the future’s markets. The demand is so great that there are more contracts sold than there is actual products to back them. Basically, you could call them fiat contracts. This pushed oil to $147 a barrel!
What goes up, will fall faster, and that is what oil did. Also, because of over selling of put contracts, the product will fall further than the real market price. And then it will recover, which is exactly what oil did.
The market is doing the same thing. It fell to 666 on the S and P which was an over shoot and now trades around 900. Now earnings are coming out and beating the low estimates causing good positive action in the market the last couple days.
Will it continue to go up? I think the recovery is close and if the S and P breaks the 980 level, it will continue to head up. The recovery will be fed by productivity, cost reductions and technological advances. And as in all business cycles in the past, these trump money supply increases every time.
Increases in the money supply is not the only cause of inflation in today’s market. Over the last few years we have experienced an explosion in investments into the future’s markets. The demand is so great that there are more contracts sold than there is actual products to back them. Basically, you could call them fiat contracts. This pushed oil to $147 a barrel!
What goes up, will fall faster, and that is what oil did. Also, because of over selling of put contracts, the product will fall further than the real market price. And then it will recover, which is exactly what oil did.
The market is doing the same thing. It fell to 666 on the S and P which was an over shoot and now trades around 900. Now earnings are coming out and beating the low estimates causing good positive action in the market the last couple days.
Will it continue to go up? I think the recovery is close and if the S and P breaks the 980 level, it will continue to head up. The recovery will be fed by productivity, cost reductions and technological advances. And as in all business cycles in the past, these trump money supply increases every time.
So will we see the first time in history moment where we default on all the loans the US government has given out, mostly to China, and if we can survive the next four years who do you think would be a good candidate to help us get back on track, maybe Ron Paul?
“The demand is so great that there are more contracts sold than there is actual products to back them.”
That’s because a producer (party A) can sell one to party B, who buys one from A and sells one to C, who buys one from B and sells it to D, etc. OMG: if you stop at D, that’s 3 futures contracts but only 1 underlying. But it’s not a problem. In order for a contract to be sold, another one has to be bought at the same time. You can buy and sell the same thing over and over, and you’ve created more transactions than you have underlying.
“This pushed oil to $147 a barrel!”
No it didn’t. Speculators were expecting a shortage in the future, so they bought to encourage more production.
“Now earnings are coming out and beating the low estimates causing good positive action in the market the last couple days.”
Sure, certain businesses love being bailed out by everyone else, so of course it’s “good for the market”. All those “earnings” increases are the result of the newly printed Non-Money.
“The recovery will be fed by productivity, cost reductions and technological advances. And as in all business cycles in the past, these trump money supply increases every time.”
Until people realize that those productivity gains aren’t actually gains, just that they just seem like gains because the newly printed money distorts the market. If you had a printing press and gave me “money” to dig ditches and fill them back, I might think it was a gain in productivity (because of all the extra money flowing in) until I and everyone else realized there was nothing being produced.
“A modern tale
Written by Junksmith
“It is the month of August, on the shores of the Black Sea. It is raining and the little town looks totally deserted. It is tough times, everybody is in debt and everybody lives on credit.
A rich tourist comes to town.
He enters the only hotel, lays a 100 Euro note on the reception counter and goes to inspect the rooms upstairs in order to pick one.
The hotel proprietor takes the 100 Euro note and runs to pay his debt to the butcher.
The butcher takes the 100 Euro note and runs to pay his debt to the pig farmer.
The pig farmer takes the 100 Euro note and runs to pay his debt to the supplier of his feed and fuel.
The supplier of feed and fuel takes the 100 Euro note and runs to pay his debt to the town’s prostitute who in these hard times, gave her “services” on credit.
The hooker runs to the hotel and pays off her debt with the 100 Euro note to the hotel proprietor to pay for the rooms that she rented when she brought her clients there.
The hotel proprietor then lays the 100 Euro note back on the counter so that the rich tourist will not suspect anything.
At that moment, the rich tourist comes down after inspecting the rooms and takes his 100 Euro note, after saying that he did not like any of the rooms and leaves town.
No one earned anything. However, the whole town is now without debt and looks to the future with a lot of optimism..
And that, ladies and gentlemen, is how Europe and North America are doing business today.”
from the Adam Smith Institute blog.
fundamentalist – outstanding!
BTW in the US version of the story, there would be a lobbyist who pays the politician who pays the hooker!
Walt D, It would be funny if it weren’t so true! I love that Brittish sense of humor.
to Greg:
The increase in the money suply is the prime cause of the many bubbles that it has made possible. It is the root of the explosion in (mal) investments, in the multiplication of new financial instruments, in the speculators`sense that the future numbers will be ever higher, in the rise in Wall Street`s relativ e importance in the economy.
Eventually truth will come to light, and the market will reverse itself. This is what Mises` theory tells us, and it does not merely depend on statistics and probabilities. Thanks for your interest. Yours respectfully, Joe Keckeissen
I would disagree that an egg will sell for one hundred US dollars by the end of 2009. The supply of money is roughly three times what it was a year ago, and it takes roughly two years for changes in the money supply to be reflected in prices. If eggs sell for roughly one US dollar per dozen today, they should sell for roughly three US dollars per dozen in two years or so. Please note that this would imply an interest rate of about 100% per year rather than 1%.
I saw a cable news program with experts claiming the Recession is over. They were quoting earnings: If the money is worth less then it is easier to make earnings estimates.
I find it amazing that these jokers believe, maybe they are very good at telling lies, that all of the trillions in inflation just won’t affect anything in the future.
That’s the problem with America today. We expect the government and the president to make decisions and choices in our place.
I blame the American people for letting himself being encroached by government.
This is not the government’s fault, this is stupid joe average’s fault who voted for this bastard and who wants the government to run his lives.
Joe Average, this is all your fault and I hate you with a passion.
We the people have voted for socialism.
We the people all deserve to go to hell !
America isn’t what it used to be, it’s no longer the land of freedom and opportunity.
It’s now a fascist dictatorial socialist military hoplophobic state. America is rotting from inside, it is now a socialist shit hole.
There is no hope for the world, since America turned bad, there is no other place in the world for freedom and opportunity.
America will fall and the rest of the world with it.
Mankind can all go to hell, that’s what we all deserve.
Igor Panarin’s predictions will come true, only it will be much worse.
Look at Kalifornika, look at what the terminator did to it’s economy !!! Kalifornika’s economy is terminated.
Well, Kalifornika is always an indication of the U-ASS-A’s direction.
U-ASS-A you are screwed, you are not worth a continental.
It’s funny to see this once great and proud country going to hell, but it’s sad because the USA was the only country with a sense of individualism, opportunity, individual rights and freedoms.
Now that America has fallen and it is ailing in terminal phase, there is no-one left to represent freedom and opportunity.
Great work America, you have just dragged the entire humanity with you in hell.
Paul: “The supply of money is roughly three times what it was a year ago, and it takes roughly two years for changes in the money supply to be reflected in prices.”
Actually it takes closer to 4.5 years according to econometric estimates.
Hayek wrote that the greatest error in economics is to not take the quantity theory of money seriously; the second greatest is to take it too seriously.
Much of the increase in the stock of money will go into assets, not consumer spending, such as eggs. In addition, productivity increases and excess supply will keep consumer prices down for a while. The connection between the money supply and consumer prices isn’t mechanical, but all other things held constant (and there are a lot of things) an increase in the money supply will increase consumer prices.
To Paul and Fundamentalist:
You got me where it hurts. I wrote the article about four months ago, and presumed that the trillion in new money would be awash in the economy very soon. But the banks seem to be holding their bonanza in reserve, and the new liquidity has been stagnated enroute to the market.
I realized my exaggeration, but let it go.
But remember Bresciani Turroni´s description of the German mark in November 1923, when the mark plunged to zero and decimal points were moved twelve places to the left (southward)
and everyone was wiped out. We have no experience at all with an influx of a trillion in fake money. Let´s see what happens when the floodgates are opened.
Thanks for your interest and keeping me straight. Best, Joe Keckeissen
To Paul and Fundamentalist:
You got me where it hurts. I wrote the article about four months ago, and presumed that the trillion in new money would be awash in the economy very soon. But the banks seem to be holding their bonanza in reserve, and the new liquidity has been stagnated enroute to the market.
I realized my exaggeration, but let it go.
But remember Bresciani Turroni´s description of the German mark in November 1923, when the mark plunged to zero and decimal points were moved twelve places to the left (southward)
and everyone was wiped out. We have no experience at all with an influx of a trillion in fake money. Let´s see what happens when the floodgates are opened.
Thanks for your interest and keeping me straight. Best, Joe Keckeissen
The example given by fundamentalist is an interesting one. It is an example of a business with a zero net worth. At the end of the supply chain cycle the equity was still zero, all that happened was the hotel owner got a cash flow ease, that fed into the supply chain and ultimately used his receivables to clear parables. If his hotel is not profitable that will catch up with him eventually. Businesses with a negative net worth that get a cash flow injection can recover as well as die deeper in debt. However businesses with a positive equity and no cash flow can be forced to liquidate and go bankrupt.
The general rule is negative equity portends bankruptcy and bankruptcy becomes evident when cash flow dries up.
The US will survive this. The democrats have lurched to the far left. The republicans have no leader after their liberal candidate McCain lost. After several years of severe economic pain, Americans will elect someone like Ron Paul.
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