Category Archives: Federal Reserve Bank

Hyperinflation Unavoidable

Barack Obama, Debt, Economy, Federal Reserve Bank, Inflation

Let’s see: When did this column begin to warn of hyperinflation? In 2003, together with other Austrian-Americans, in numerous columns, all dismissed by readers back then. The latter were more enamored of the dime-a-dozen neoconservative war harpies. I was persona non grata. Here are a couple of scattered quotes from assorted columns:

Given its debt, the U.S. government is fast becoming a bad risk as a borrower. To finance the war, then, it’ll have to steal over and above the usual call of duty. … inflation is an increase in the money supply by the government. Having adopted deficit spending as an article of faith, Bush will call on the Federal Reserve and the printing press to print money to pay the costs of the war. The endemic price hikes and economic distortions that’ll follow are but a by-product of this legalized counterfeiting. …
… we’re into Keynesian deficit spending—the government is borrowing and inflating the money supply to fund its profligacy, a practice that will accelerate the depreciation of the dollar, and may even lead to the horror of hyperinflation.”

I want you to listen carefully to the hyperinflation forecasts of two formidable Austrian forces (Peter Schiff, naturally, called it). I depart from Marc Faber who forecasts Zimbabwe-style hyperinflation. As I explained in “Inflation 101 For Women Pundits & Other Tyrants,” “few Zimbabweans are now capable of substantial production, the amount of goods in the Zimbabwean economy keeps decreasing. At the same time, the money supply keeps increasing, hence hyperinflation.”

Conversely, “While America’s $12.98-trillion economy groans under the weight of the federal debt, it is still fabulously robust. The private productive sector is just too driven and ingenious to crush.”

I still stand by that statement, with some reservations given the efficiency of the Obama wrecking ball. Moreover, Americans had better start making things. Fast.

Schiff's Sad, Sound, Song

Debt, Federal Reserve Bank, Inflation, Political Economy

The only thing you want to take away from this condescending Time magazine “piece” about libertarian financial analyst Peter Schiff’s prognostications is this:

“over longer periods, Schiff’s decade-old strategy of steering clients out of U.S. securities and into commodities and overseas stocks has been a big winner. His investment record surely can’t be the reason for his fall from media grace.”

Much to the consternation of the Times “writer,” the reason Schiff “hasn’t changed his tune” on the imperative of escaping the phony US economy is because the tune is in the right key!.

Justin Fox’s column is so pointless, so full of non sequiturs. This guys doesn’t even attempt to make sense, and I imagine he gets a bundle for the epistolary offal he produces.

I mean, on the one hand, Fox concedes that Schiff’s investments have proven prudent. But on the other hand, he insists that Schiff got to bask only briefly “in the glory of his spectacular call,” because he has fallen out of grace with the menagerie of morons on mainstream media.

As though you “bask in the glory of [your] spectacular call” only so long as you’re invited on the Keynesian “Kudlow and Cretins” show. Perhaps saving your clients a bundle and safeguarding your own assets is enough to make an honest man “bask.”

Schiff’s Sad, Sound, Song

Debt, Economy, Federal Reserve Bank, Inflation, Political Economy

The only thing you want to take away from this condescending Time magazine “piece” about libertarian financial analyst Peter Schiff’s prognostications is this:

Much to the consternation of the Times “writer,” the reason Schiff “hasn’t changed his tune” on the imperative of escaping the phony US economy is because the tune is in the right key!.

Justin Fox’s column is so pointless, so full of non sequiturs. This guys doesn’t even attempt to make sense, and I imagine he gets a bundle for the epistolary offal he produces.

Dazed And Confused

Debt, Economy, Federal Reserve Bank, Media, Socialism

Glenn Beck “interviewed” these two Keynesian clowns, without so much as challenging them. Beck wanted to badly, but lacked the intellectual tools to counter their revival of Keynes’s anodyne “Animal Spirits” concept.

Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism, By George A. Akerlof and Robert J. Shiller, is being studied and followed by Obama.

As is my habit, I preempted this issue some time ago in “Voodoo Child Talks Up A Storm”:

“The Economist’s A-Z of Economics quotes Keynes’ convoluted explanation of the concept of ‘animal spirits.’ I won’t; like his theorizing, Keynes’ writing is incoherent. (See for yourself.) So too is ‘Economics A-Z’ perplexed by Keynes’ whimsy: ‘Where these animal spirits come from is something of a mystery. Certainly, attempts by politicians and others to talk up confidence by making optimistic noises about economic prospects have rarely done much good.'”

“Because consumption is its be-all and end-all, consumer confidence is crucial to the Cult of Keynes. If the consumer is not crazy confident—even when he ought not to be—goes the ‘thinking,’ he’ll quit consuming until he drops. In short, our economic animists are hoping that the holy spirit of ‘confidence’ will enter the once bitten, twice shy lender, and make him lend. The same spell is supposed to mysteriously move the unemployed and penniless to spend.

I sincerely hope not.”

Had Glenn read the column, he might have had a bit of an angle. Is it my imagination, or is “Good Guy Glenn” becoming a lot like O’Reilly: guest are welcomed on so that he can talk at them/bounce his “ideas” off them, as they smile, nod and say stuff like, “Good question/you raise an important point.”