What the government gives with one hand, through increase spending,
it take away with the other, through increase taxation.
Wednesday, November 5, 2008
Cheap and easy money
Cheap and easy money fueled by the FED generated speculation which involves buying for resale rather than use in the case of commodities, and for resale rather than income in the case of financial assets.
Monday, November 3, 2008
Fed gets itself and the economy in trouble
In 2003 the Fed cut the fed funds rate to 1% and kept it there for a full year through June 2004.
Growth in the third quarter of 2003 was 7.5%, yet the Fed kept its foot on the monetary accelerator for many more months.
Fed's main obligation is price stability.
Fed gets itself and the economy in trouble when it attempts to use monetary policy to manage growth.
Growth in the third quarter of 2003 was 7.5%, yet the Fed kept its foot on the monetary accelerator for many more months.
Fed's main obligation is price stability.
Fed gets itself and the economy in trouble when it attempts to use monetary policy to manage growth.
Tuesday, October 28, 2008
When markets are free
When markets are free, asset values are supposed to go up and down, and competition opens up opportunities for profits and losses.
Good decisions should be rewarded and bad decisions should be punished. The market does just that with its profits and losses.
Good decisions should be rewarded and bad decisions should be punished. The market does just that with its profits and losses.
Destroying confidance
The government doesn't create anything; it just redistributes.
Destroying confidance is what the government do best
Destroying confidance is what the government do best
Whenever the government bails someone out of trouble
Whenever the government bails someone out of trouble, they always put someone into trouble, plus of course a toll for the troll.
Every $100 billion in bailout requires at least $130 billion in taxes, where the $30 billion extra is the cost of getting government involved.
Every $100 billion in bailout requires at least $130 billion in taxes, where the $30 billion extra is the cost of getting government involved.
Wednesday, October 15, 2008
A big political event
Last month's $700 billion bailout amounts to more than 5% of U.S.
gross domestic product.
Compare that to Germany's $400 billion to $536 billion rescue package (between 12% and 16% of its GDP),or Britain's $835 billion plan (30%).
The ratio of government debt to GDP in the U.S. runs to
about 62%. For the eurozone, it's 75%; for Japan, 180%.
The U.S. continues to have the world's largest inflows of foreign direct
investment.
Recessions are periodic facts of economic life that tend to last anywhere
between six and 16 months.
Severe recessions or depressions are fundamentally political events that
can last a decade or longer.
Last month's $700 billion bailout was a big political event.
gross domestic product.
Compare that to Germany's $400 billion to $536 billion rescue package (between 12% and 16% of its GDP),or Britain's $835 billion plan (30%).
The ratio of government debt to GDP in the U.S. runs to
about 62%. For the eurozone, it's 75%; for Japan, 180%.
The U.S. continues to have the world's largest inflows of foreign direct
investment.
Recessions are periodic facts of economic life that tend to last anywhere
between six and 16 months.
Severe recessions or depressions are fundamentally political events that
can last a decade or longer.
Last month's $700 billion bailout was a big political event.
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