In early July 1944, delegates from 44 countries gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire. A three-week summit took place, at which a new system was agreed to regulate the international monetary and financial order after the Second World War.The U.S. was already the world’s commercial powerhouse, having eclipsed the British […]
In the minds of many people around the world, including in the United States, the term “capitalism” carries the idea of unfairness, exploitation, undeserved privilege and power, and immoral profit making. What is often difficult to get people to understand is that this misplaced conception of “capitalism” has nothing to do with real free markets […]
Some people are saying it is just what the doctor ordered. Others are saying that the cure is worse than the disease.The Affordable Care Act? Reengagement in Iraq? Tea Party bullying in the GOP?Not this time. Just as protracted in the corridors of Congress and the White House is the debate over the proposed reform […]
In 2012, money mandarins running the European Union chose stagnation over restructuring. Here’s a consequence of that choice: expectations for a self-sustaining economic recovery keep getting crushed.Two years ago, European Central Bank (ECB) chief Mario Draghi promised to do “whatever it takes” to hold the eurozone together. He bluffed nervous investors into believing in a […]
People jacked up about income inequality can find a new hobby. The 1% are victims of a doomsday machine, and the countdown is ticking. Machine, thy name is “family.”This came to mind as I was reading a preview of Columbia Professor Andrew Ang’s forthcoming, must-read book on Asset Management. Ang is that oxymoron, an exciting […]
It might sound like the latest new product from Apple, but IPAB is actually the newest major legal challenge to Obamacare.Recently, a three-judge panel in the 9th Circuit Court of Appeals in San Francisco heard arguments about the Independent Payment Advisory Board, or IPAB, a 15-member panel created by the Affordable Care Act and empowered […]
Americans have come to believe that the IRS and the income tax are inevitable parts of our lives. After all, most everyone alive today has lived his entire life under federal income taxation.It wasn’t always that way. For some 125 years, the American people lived without having any tax imposed upon their income.The obvious question […]
Here’s a fun fact: Although we all hate the U.S. dollar, as it continues to hemorrhage wealth, its foothold as the world’s reserve currency isn’t going to disappear overnight.A Russian gas deal with China won’t change that — as we’ll highlight below.But before we get to the nitty-gritty, let’s dive into a story that’s right […]
Franklin Delano Roosevelt famously used the term “forgotten man” in a 1932 speech to describe those at the bottom of the economic pyramid who, he felt, government should aid.But the originator of the phrase “forgotten man” had a whole different meaning in mind. He aimed to expose the seeming good intentions of government to reveal […]
The Keynesian disaster recovery plan has been to lower rates, force people to take more risk in search of yield, and entice others to borrow and spend and, magically, more jobs will be created. If people won’t buy stocks, central banks will.Back in 2011, Ben Bernanke, when asked if QE2 was driving up stock prices, […]
I want to share some insight and give you a front-row seat to America’s next big shale play.Let’s get to it…Over the past 10 years, the U.S. has turned the ship around, quite literally.We’ve gone from a country that was expecting to import massive amounts of oil and gas — to a country that’s sitting […]
Whatever your views on the role of government, one thing is clear: There will be no way to pay for it if the economy doesn’t grow. And I’m not talking by a measly percentage point or two. If we can’t find our way back to 5% annual economic growth or above soon, America’s accumulated federal […]
According to the Bureau of Labor Statistics, consumer prices are rising at a 2.1% annual rate. This suggests to us that the current stock market boom will die with a bang, rather than a whimper.Fed economists say they don’t think inflation rates are rising. They think the most recent reading is a fluke. But why […]
Politicians love raising the minimum wage because they don’t have to ask voters to pay more in taxes. They just dump the costs onto shop owners. But they don’t act like politicians and go into debt to pretend like they have all the money in the world. They face real world situations. And sometimes that means replacing workers with more affordable options...
Regulation is supposed to keep you safe and make the economy function smoothly. At least that’s what they tell you in the news. But there’s another cost to regulation. One that you won’t hear about unless you have to deal with directly. And for the people in the economy who do, they’re the ones who have to pay the final cost.
The experts will tell you the recession is over, but they’re only torturing the data to hide the truth. The economy never recovered from the downturn it experienced. But the downturn happened in 2000, not 2008. The country’s been in the middle of a 14 year recession and hardly anyone knows the truth.
Every time Bitcoin crashes, it winds up at a price greater than it’s previous high. Yet the experts still call it a currency fad that will fade away. But a little over a year since it really took up, the digital currency is still going strong, and is once again seeing its price rise. But is there another reason why people are buying Bitcoins.
All paper currency has a shelf life. It could be 5 years or 500 years, but at some point, the value of any paper currency eventually reaches zero. That's why, for centuries, people have turned to one shiny metal to safeguard their personal store of wealth. And, as Jim Rickards explains, you still have that option. Read on...
According to some estimates, one man - whose name you're probably not familiar with - has saved over a billion lives. Who is he? And how has he influenced the current crop of innovators? Josh Grasmick explains...
It’s a destructive cycle that comes around everytime your politicians ask you to take to the polls. The government’s meddling creates unexpected problems that eventually overshadow the planners’ original intentions. But that only leads the way for even more interventions.
Politicians love inflation. It’s a way to pay for the government’s debts without upsetting the public by raising taxes, or their special interests by cutting government. So they’ll flood the economy with easy money and eat away at your savings. But that’s only part of the story...
You can count the number of people who went to jail over the 2008 financial crisis on one hand. Which is strange considering the U.S. loves to put people away in jail. But as one author discovered in his most recent book, having the right connections and a big enough bank account, can protect you from even the worst crimes.
Obama recently claimed this was the “Decade of the Brain”. But it not the first time the government made that promise. The last time they did it, they wasted millions of your tax dollars. Now they’re back for round two. But this time, their failure could mean more than squandered money. It could mean making Alzheimer’s even worse for those who suffer from it.
“So we have, indeed, had a disappointingly slow recovery, and our consistent expectations for a pickup in growth have been dashed over a number of years… And the labor market is behaving in some perplexing ways and showing patterns that are novel.”–Federal Reserve Chairperson Janet Yellen in a speech to the Economic Club of New […]
When Michael Lewis’ new book Flash Boys came out, the author caused a stir while making the media rounds to promote it. “The stock market is rigged,” he told 60 Minutes flatly. His comments set off a firestorm of debate as to whether sharp techies and their fast computers are screwing small investors.As titillating as […]
Last November, when the Environment Protection Agency (EPA) proposed moderating years of escalating mandates by reducing the amount of ethanol that must be mixed into gasoline, a top ethanol lobbyist seemed perplexed. “We’re all just sort of scratching our heads here today and wondering why this administration is telling us to burn less of a […]
Back in the 1980s, John Nestor became infamous for single-handedly causing massive traffic jams on the Capital Beltway. But in his professional life, he created a completely different kind of traffic jam... one that may have contributed to the deaths of thousands of innocent people. Juan Enriquez has the full story. Read on...
Stock investors are still acting as though Janet Yellen will be good for the economy… or at least good for stock prices.
Gold investors must think so too.
But will she be?
Yellen has no business or investment experience. Her entire career has been spent in academia and public policy institutions. She has never started a business or had a job in the private sector.
Does she have any idea how an economy functions? Not on the evidence…
In 2005, she described the developing housing bubble as a “good-sized bump in the road.” Was she worried about it? Apparently not. “The economy ought to be able to absorb the shock,” she claimed.
But how would she know?
And when, two years later, the economy hit the “bump,” it turned out she didn’t know anything. The economy wasn’t able to absorb the shock at all. Instead, the wheels flew off… and the economy went into a ditch.
And now it’s November and Yellen will soon be running the biggest, most powerful banking cartel the world has ever seen. Good luck to us all!
The Really Big Picture
The days are crisping up in Maryland. Here in Florida, it’s still summer.
We’ve come back to Florida to give a speech about writing. What can we say about it? Only that writing is easy; it’s thinking that’s hard.
We sat in the airport terminal in Baltimore. One man was reading a novel. Another was watching TV. Another sat down beside us and began playing a game on his iPhone. A woman was reading Woman’s Day magazine. Others talked on their phones.
Were we the only ones there who were thinking about the Fed’s interest rate policy? We were clearly the dumbbell in this group. Most people had better things to do.
But now we’re going to go back to thinking about how the Fed and the dollar fit into the general scheme of things — the really big picture, looking back 10,000 years and beyond.
The critical change came around 5,000 years ago. Little by little, man became “civilized.” We use the word cautiously. It is like a hand grenade without a pin. It could blow up on us at any moment.
What is civilization, anyway? Is it a good thing? A bad thing? Who’s really civilized, and who’s not? No matter what you say, you are bound to offend someone with deep prejudices on the subject…
But what the heck? Damn the torpedoes… full speed ahead!
A Civilized Dawn
Civilization is different from barbarism. Most anthropologists, archeologists, and philosophers focus on the wrong things — art, culture, and technology, for example. They miss the key differences — money, matrimony, and the mandates that people follow.
People did not suddenly awake to a civilized dawn. Instead, the progress from barbarism to civilization came in fits and starts, with much backing up and many detours.
Don’t bother to tell us the Germans were supposed to be civilized… yet they exterminated more than a million at Auschwitz… or that Americans are supposed to be civilized, but are sending drones to kill people they’ve never met. Even the most civilized peoples do uncivilized things. And most peoples, no matter how civilized they have become, still maintain some archaic, barbaric habits and institutions.
As civilization became more complex, the rules grew simpler. Typically, people became monogamous, monotheist, and monetarist.
You can see this progress in the Bible. The Old Testament is full of war… and many rules for how people are to get along with one another. In the New Testament, Jesus proposes only one rule, which leaves little place for making war: Do unto others as you would have them do unto you.
In pre-civilized days, a man might have had as many wives and concubines as he could manage. Civilized, modern men typically have only one. (And that is more than enough for many men.)
In pre-civilized days, commercial transactions were difficult and complex — usually involving a credit-based system that left obligations stretching forward into the future, often unresolved over many generations. Civilized man developed modern money — typically gold — which made it much easier to settle up and move on.
But the most profound difference was that barbaric people used force and violence to get what they wanted; civilized transactions are based on mutual consent and cooperation.
But wait. Where does that leave the dollar and the Fed?
Does the Fed allow willing buyers and sellers to set interest rates as they choose? Or does it force the issue… pushing interest rates around as though they were travelers in the airport security line?
Does the Fed permit investors to discover asset prices without interference? Or does it try to fix prices, claiming that it knows better than the rest of the world put together?
We know that the economy of the Soviet Union, driven by brute force, was a disaster. How do you think the economy of the U.S. — heavily persuaded by the padded force of the Yellen-led Fed — will fare?
Is today’s Fed a modern, civilized institution? Or an archaic throwback to the past?
And what about the dollar itself? Is it a form of modern money… or a barbarous relic, depending on the police power of the state to give it value?
More to come…
Article originally appeared here.