This. I believe the current rally will fade and crash hard when it will become clear, probably by the end of the summer, that most of those trillions stimulus packaged went practically down the drain. But what a drain they will be on future tax bills... Politicians and bureaucrats stimulated themselves, at taxpayer expense as usual.
You sir are wrong, if you actually read Austrian literature you would see it is not ad-hoc in the slightest. Read about the Austrian theory of the trade cycle and you'll note it's more like a recipe that has held to a T, not just this crisis, but most if not all before it. And from your response i'm assuming ur #'s guy that needs the fancy equations to form an opinion but honestly you can not quantify human decision making since we clearly are non-linear. History doesn't repeat itself sir but it does ryhme.
Here's a good one, chart sunspot cycles, overlay business cycles, the correlation is striking, undeniable in fact. Currently we are in a solar minimum that is rather unusual, it's a hundred year event at this point... normally the business cycle lags the sunspots by thirty or forty degrees so maybe the world is really waiting for the sun to kick up it's heels and ionize our atmosphere to get us in the mood to get going again.. I've looked at this correlation for years and that's my belief. Overriding that is the credit freeze up. Martin Armstrong predicted an international credit crisis for this decade way back in the nineties.. what school of economics could do that? None did so I have to assume that none could.... Between sunspots, guys like Martin Armstrong and the current realities, I would not be looking to any school of economics for anything. It's pretty obvious to me that the stimulus, which didn't do a thing for the credit freeze much, [it was porkulus designed to solidify Democrats political strength] will be found to be not working eventually. If the sun does not cooperate maybe then nothing will work anyhow. Nonetheless, when they discover that it's not working they will have to print even more money to keep the welfare and government worker class on the Democrat's reservation and inflation will not be of the mild variety... Martin Armstrong predicted the credit freeze up would be followed by hyperinflation so I'm banking on that.. well, banking in the form of hard assets mostly...
Landis, to which extend do you agree with Mr Worsley? It seems to be impossible for historians to agree on the question whether FDR did too little or too much which then turned a recession/mild depression into a great depression and how do we learn from that for this day in age? I'd be gratefull for your insights on this. Cheers.
they could just make a new currency and give pennies on the dollar for the swap,everyone goes back to square 1 and all debt is erased or at least artificially reduced,at this point it seems they can do anything they want
I like it, and i guess i shouldn't have become so defensive toward Landis, agree to disagree over a beer or glass of wine Landis? Exogenous actions by government have really never worked imo and my argument for the Austrian theory is that it is based on the individual entrapreneur who can allocate capital for himself much better than anyone/entity. I like supply side as well and i can see the argument for the new paradigm school of economics. Keynes had some valid contributions but he didn't account for many things which in the end was it's undoing aka stagflation. I like the discussion let's keep it going.
I see revisionist history has managed to eat up quite a bit of truth. Don't any of you have parents or grandparents who were alive during the Depression, or did the bunch of you spring, like Aphrodite, right out of the sea on a shell, or like Athena, from the head of Zeus, and therefore have either no parents and no family at all or only a father, or something? My dad remembered vividly the children who walked around with distended bellies from hunger, and he always got very angry when we fought over food at the dinner table. My mom remembered when she got nothing at all for Christmas, and asked her mom why everyone else got something when she didn't. She still believed in SC, and was born in 1926, so that places this story in the early thirties. Why is the early thirties so important? Because Hoover was President until March, 1933. The crash happened in October, 1929. So Hoover had three and a half years to apply Republican, free-market ideas. Those ideas failed. Modern revisionist rightists have gone at the hard task of explaining that failure with, it seems, some success among those who apparently can't be bothered even to talk to their parents or grandparents.
Maybe if had Hoover followed free market ideals it would have helped things. Instead Hoover became very interventionist. Very similar to the Democrats in congress and sub-prime mortgages with Freddie and Fannie.
Sub-prime would have just been a blip in the world's economic woes if there wasn't a highly leverage derivative behind it. The credit default swap instrument made subprimes toxic effect 100 times worst. The CDS that was brought about by deregulation and 'free market' economy. Any free market can be exploited by greedy men and there will always be plenty of them on Wall street. Greedy men who can change the laws to their liking in the mantra that free market and deregulation is good for the economy, but in fact it is inevitably self serving for a few.