Economics

Bill Bonner: The End of Low Interest Rates

"A generation has come of age in a time of falling interest rates. When the last turn came, the boomers were just reaching maturity, setting up families, beginning their careers and starting to think about investing. From 1981 until last month, they knew nothing else. A world of falling interest rates is a gentle, forgiving world. But it is a strange world too... It is a world of make-believe, where people pretend they have income they don't really have. What happens when people have debt up the wazoo... and interest rates rise? What happens when the entire economy depends on unprecedented levels of debt at unsustainably low interest rates? That is what we are going to find out." Continue reading →

Continue ReadingBill Bonner: The End of Low Interest Rates

Foreclosures are the Solution, Not the Problem

"The majority of those foreclosed on and who sold short would have become clean potential buyers in 3 to 7 years ensuring a housing recovery was not only on deck but would be 'durable'. Millions of legacy HELOCs and HELOANs preventing folks from rebuying real estate indefinitely would have been exterminated making millions more potential buyers within 2 to 5 years. Bottom line, history will not be kind to loan mods and workouts. It will show that modifications, anti-foreclosure laws, banks protecting their HELOC assets — in general, unabated can-kicking — was responsible for housing to remain in a depression for years longer than it would have." Continue reading →

Continue ReadingForeclosures are the Solution, Not the Problem

Peter Schiff on Bullion Banks, and the Hidden Trove of QE Money

"Perianne talks about the Fed and gold with Peter Schiff. Justine Underhill presents a chart to explain just exactly what the Fed has been doing vis a vis QE. Also, in the US, the big banks have had to submit 'living wills' to regulators -- basically, a blueprint for their wind-down should they become insolvent -- or, more insolvent, we guess. But the central bank of central banks, which is the Bank for International Settlements, just came out with its own plan for how to deal with too-big-to-fail. It's 'simple,' they say. Just let the creditors and depositors take losses -- a la Cyprus -- and force the creditors to recapitalize a new banking entity." Continue reading →

Continue ReadingPeter Schiff on Bullion Banks, and the Hidden Trove of QE Money

My History With the Infinite Banking Concept (IBC)

"In this article, I will summarize Nelson Nash’s Infinite Banking Concept (IBC) for the novice, but I will do so in the context of my own experience in learning about it. Thus this article serves several purposes. First, I hope it clarifies for Austrian / libertarian readers why I became so interested in the economics of life insurance. Yet I also hope it further explains to people already in the IBC community why I think the IBC Practitioner’s Program is such an important component in bringing this message to a wider audience. Finally, it will hopefully prove useful as a general introduction to IBC for any reader, told in the style of 'one guy’s journey.'" Continue reading →

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Robert P. Murphy: The Economics of Bitcoin

"Some critics (who are often proponents of hard money such as gold) object that Bitcoin is in a perpetual 'bubble' because it has no 'intrinsic value.' Yet these critics often seem to overlook just how much the exchange value of gold and silver is (and was) due to their use as media of exchange. Thus, if Bitcoin is currently in a bubble, then, by the same token, gold bullion in the year 1900 (say) was also in a massive bubble because it was trading for a far higher exchange value than could be explained merely by its industrial and ornamental uses." Continue reading →

Continue ReadingRobert P. Murphy: The Economics of Bitcoin

Robert P. Murphy: The Economics of Bitcoin

"Some critics (who are often proponents of hard money such as gold) object that Bitcoin is in a perpetual 'bubble' because it has no 'intrinsic value.' Yet these critics often seem to overlook just how much the exchange value of gold and silver is (and was) due to their use as media of exchange. Thus, if Bitcoin is currently in a bubble, then, by the same token, gold bullion in the year 1900 (say) was also in a massive bubble because it was trading for a far higher exchange value than could be explained merely by its industrial and ornamental uses." Continue reading →

Continue ReadingRobert P. Murphy: The Economics of Bitcoin

Robert P. Murphy: The Economics of Bitcoin

"Some critics (who are often proponents of hard money such as gold) object that Bitcoin is in a perpetual 'bubble' because it has no 'intrinsic value.' Yet these critics often seem to overlook just how much the exchange value of gold and silver is (and was) due to their use as media of exchange. Thus, if Bitcoin is currently in a bubble, then, by the same token, gold bullion in the year 1900 (say) was also in a massive bubble because it was trading for a far higher exchange value than could be explained merely by its industrial and ornamental uses." Continue reading →

Continue ReadingRobert P. Murphy: The Economics of Bitcoin

Robert P. Murphy: The Economics of Bitcoin

"Some critics (who are often proponents of hard money such as gold) object that Bitcoin is in a perpetual 'bubble' because it has no 'intrinsic value.' Yet these critics often seem to overlook just how much the exchange value of gold and silver is (and was) due to their use as media of exchange. Thus, if Bitcoin is currently in a bubble, then, by the same token, gold bullion in the year 1900 (say) was also in a massive bubble because it was trading for a far higher exchange value than could be explained merely by its industrial and ornamental uses." Continue reading →

Continue ReadingRobert P. Murphy: The Economics of Bitcoin

Robert P. Murphy: The Economics of Bitcoin

"Some critics (who are often proponents of hard money such as gold) object that Bitcoin is in a perpetual 'bubble' because it has no 'intrinsic value.' Yet these critics often seem to overlook just how much the exchange value of gold and silver is (and was) due to their use as media of exchange. Thus, if Bitcoin is currently in a bubble, then, by the same token, gold bullion in the year 1900 (say) was also in a massive bubble because it was trading for a far higher exchange value than could be explained merely by its industrial and ornamental uses." Continue reading →

Continue ReadingRobert P. Murphy: The Economics of Bitcoin