Archive for November, 2013

The Fear at the Fed

November 25, 2013

Why does the Fed continue to print?  Why does the Fed continue a policy of putting more money into the economy?  Why does the Fed pretend inflation is low and monetary policy requires a “stimulus”?  These questions  don’t get any attention by the administration and most of our Representatives. Doesn’t this seem odd?  It’s not odd if you understand why the Fed and our Representatives are afraid to confront these issues.  The simple answer is a motivation of fear.  Fear of what?  A depression.

Look at the history of the Great Depression and you quickly see the Fed tried to constrict credit and created a disaster.  Regardless of the many “causes” of the Great Depression it was the culmination of too easy credit and the ensuing effort by the Fed to rein it in.  The roaring Twenties didn’t happen because there was some magical increase in speculation.  That speculation was the result of the Fed loosening credit, causing inflation and speculation and ignoring the credit market.  It was the result of a political decision and the ensuing disaster was the result of a political decision.  Nothing else precipitated these unnatural economic phenomena. Panics prior to this era were mild and relatively inconsequential economically.  But this “experiment” in Keynesian manipulation demonstrated the folly of financial manipulation to the degree  it could cause real and permanent harm.  The Fed hasn’t learned from this lesson and the Savings and Loan Debacle and the Housing boom and bust demonstrates their inability to recognize the dangers of financial manipulation by the Fed but they persist in a straight line progression into oblivion.

They know that if they constrict credit the speculation  bubble will pop.  They know what that pop looked like in the thirties. They know this one could be for worse and last far longer and the politicians don’t want the ghost of Hoover to be their legacy. Therefore they simply pretend the issue isn’t before them but deeply fear it will manifest itself in the reality they are pretending isn’t on the horizon.  They have ignored the false reporting of inflation they have instituted and continue to rely on its veracity.  This was the kiss of death they indulged in and rely upon to excuse their ongoing spending and printing of money.  Inflation can be measured accurately by what is happening to the value of the dollar and the ensuing price increases That can be reported falsely but cannot be avoided in realty.  As fuel and food prices escalate eventually all other consumer and producer costs increase. The instances of inflation and hyperinflation of the past are historical facts. They were caused by government decisions.  They were caused by too much money in circulation.  The opposite conditions of depression and recession were likewise the result of government decisions attempting to correct rampant price rises. Each attempt led to further distortions of the economy and in many cases the collapse of the economy.

Politicians and their lackeys know this ,but want everyone who isn’t in or around politics to think they are unaware of what is going on. This pretense that observations and reality are tools of manipulation for politicos only deludes those participating in the acts of deception and pretending they are getting away with it. The obvious results can only lead to two  scenarios.  Either we drift into hyperinflation or we enter a huge depression.  They know this but hope they will not be the ones blamed.  That is their last hope.  Given the policies perpetuated and the history dictating otherwise, this hope is a false hope and a blatant delusion.

The other fear is the fear of hyperinflation.  The manipulation of the way inflation’s reported seems to give them cover from this scenario but again reality and cooking the books are at odds.  They are getting away with it for now and that is the depth of their vision.  It could come crashing down on their heads in the form of the amount of money required to service the national debt.  Printing won’t get them out of this issue without hyperinflation. This is real and visible in the future.  They choose to ignore it as it is in the future.  They choose to ignore the depression alternative because they are printing and containing this with the twin tools of misreporting of inflation and not mentioning what will happen if they constrict credit.  Again the hope emerges they can get away with it. Hope is simply wishful thinking without any recognition of cause and effect.  It is a supernatural miracle that will never happen.  They know this and thus they fear.

Advertisements

The Alternative to Obamacare that Republicans Can’t Grasp.

November 19, 2013

The free market alternative to Obamacare is not being presented from the Republicans. Why? Because they are not for free markets and are too tied up in their political i.e. crony attitudes. Republicans support subsidies which are nothing more that wealth redistribution. Republicans won’t stand up to the Democrats on tax increases using it as a “bargaining” tool to get their preferences. Republicans have supported entitlements, government intervention in the economy, and all of the evils of anti-free market ideology. This is why the country recognizes we do not have a two party system but a one party system that vacillates with the political expedient. Will the Republican party change? Look at the reception of the Tea Party by the old guard Republicans. The Tea Party has never been totally a free market monument but it is further in that direction and it should be the direction the Republicans should recognize and accept. Why don’t they? They are too focused on gaining political power which they have no idea how it should be more limited than exercised. Additionally they are brain dead when they address individual rights. Making abortion an issue that erroneously identifies a fetus as a child is a step that endangers the individual rights of the pregnant woman. This is why the conservative wing of the Republican is a barnacle that creates a division that shouldn’t exist. The belief that all will be okay with what the Republicans do in an election. This is the old guard Republicans mantra. What is in the minds of the Republicans matters. They are the major party that can move in the direction of freedom and prosperity. But where are the Republican thinkers that know why capitalism is the only system that has sustainability. Where are the Republican thinkers that are challenging the mistaken premises of the old guard? The loudest Republican voices are conservatives which shows why they are on life support. Republicans without a clear ideology are second class politicians dodging and darting hopping to slow the direction of the Democrats who have an ideology that is wrong and destructive. The Republicans need to jump to the lead and change the direction of the misguided crowd. They can’t do that with the lack of intellectual ammunition they have in their cache. It isn’t the garnering of political office that will establish a Republican movement toward free market principles. It is a think tank of intellectuals that understand the morality of capitalism and drown out the babble of the same old messages that have only continued to confuse and distract from the truth.