Economics

Bill Bonner: Fed’s QE has not created one single extra job

"Our central banks are engaged in a breathtaking program of activism. We don't know where it will lead. But, from the historical record, activism and central banking go no better together than drinking and driving. Keep it up long enough and you're bound to have an accident. But the accident hasn't happened yet. So most people have stopped worrying about it. They smell the liquor on the driver's breath. But they get on the bus anyway. The most reckless driving in central bank history...raising the footings of the US financial system by a factor of 5 times...from $800 billion to $4 trillion...and it has not resulted in one single extra job." Continue reading →

Continue ReadingBill Bonner: Fed’s QE has not created one single extra job

Lower Taxes Tapped a Beer Revolution

"As recently as 35 years ago, there were fewer than 50 breweries in the whole country, and the fastest-growing type of American beer was light, which Miller introduced in 1975. The story of the U.S. ascent to the top tier of world beer began in the late 1970s, when brewing was liberated from government taxation and regulation that had held it back since Prohibition. Following the federal example, state legislatures also began rewriting their bans on home-brewing, and it is legal now in every state except Alabama. The rise of American beer wasn't an accident. It was spurred by efforts to cut taxes and regulation that unleashed entrepreneurship." Continue reading →

Continue ReadingLower Taxes Tapped a Beer Revolution

NYC To Hike Cigarette Age To 21 in Apparent Effort To Boost Black Market

"Let's say you're an official in a jurisdiction that has raised cigarette taxes so high that the majority of smokes consumed in the state come from the black market — either smuggled in from lower-tax jurisdictions or else outright counterfeits sold as the real deal to consumers trying to avoid being mugged as they enjoy their chosen vice. Assuming that your goal is to get everybody to go to the black market, what else can you do to nudge retailers and smokers to deal with the guys selling off the back of trucks? Well, how about raising the smoking age — effectively imposing prohibition on some existing smokers so that they have to go underground to get their smokes?" Continue reading →

Continue ReadingNYC To Hike Cigarette Age To 21 in Apparent Effort To Boost Black Market

Ron Paul on Bernanke’s Criminal Gang

"I am disappointed, but not surprised, that the Federal Reserve decided to hand the American people more of the same failed policies that caused and then perpetuated our current financial crisis. Chairman Bernanke may believe there is no inflation, but try telling that to seniors who are on a fixed income, students trying to save for college, and the millions of other Americans who are contending daily with rising prices. If the problem was the Fed not printing enough, and Congress not spending enough, why have the trillions of dollars in monetary stimulus only benefited big banks and corporations?" Continue reading →

Continue ReadingRon Paul on Bernanke’s Criminal Gang

Bubble Symmetry and Housing

"Hmm, what would have happened if the Federal Reserve hadn't dumped trillions of dollars into the mortgage market, and the Federal housing agencies hadn't subsidized mortgages and housing with 3% down payments and tax credits? Perhaps all the trillions of dollars of intervention has accomplished is extend Phase 2. Central bank and state manipulation distorted the symmetry of housing's decline, but did they stave off Phase 3 permanently? If bubbles eventually revert to their starting level, Phase 3--capitulation and a return to pre-bubble prices--still lies ahead." Continue reading →

Continue ReadingBubble Symmetry and Housing

Madness of a Stimulating Fed

"It would be nice to read a real evaluation of central banking in the modern mainstream press. But perhaps this is as close as we can expect to get. The author explains that low interest rates and money manipulation have given rise to wild economic swings and questions about the current monetary easing. In fact, he does more than question it. He actively questions the central bankers' mental health. Of course, the Fed will set off another destructive boom and bust cycle. In fact, it's already a given. The trouble with central banking is that it simply doesn't yield up rational conclusions." Continue reading →

Continue ReadingMadness of a Stimulating Fed

Is the Fed Blowing a New Housing Bubble?

"Over the past year, the Federal Reserve has ramped up its policy of quantitative easing, with the result being new stock market highs and surging bond prices. Moreover, housing prices jumped 8%, the biggest annual gain since 2006. The result is that more than a trillion dollars have been added to the market value of single-family homes. Homeowners are now wealthier and according to what economists call the 'wealth effect,' they should be willing to spend more, helping the economy. But recent data released by FHFA suggest that the increase in house prices is not being driven by a broad-based improvement in the economy's fundamentals." Continue reading →

Continue ReadingIs the Fed Blowing a New Housing Bubble?

Bubble, Bubble, Housing in Trouble

"It appears that the Fed’s zero-interest-rate and QE policies have finally achieved its insane goal of re-igniting a housing bubble. The Case-Schiller 20-City Index shows that housing prices increased by 1.2 percent in February and 9.3 percent year-over-year. All cities included in the index experienced substantial gains, which have been driven by staggeringly large increases in the bottom tier of the market. In Atlanta, bottom-tier home prices rose 36 percent year-over-year and at an annual rate of 70 percent in the past three months." Continue reading →

Continue ReadingBubble, Bubble, Housing in Trouble

Germany will think twice before saving France next time

"The Franco-German axis that has driven EU affairs ever since Schuman and Adenauer in the early 1950s is collapsing before our eyes. This was inevitable. Their interests have become incompatible under monetary union. The currency that was supposed to bind them is turning them into enemies, as this newspaper long warned. The latest argument gaining traction – advanced by Prof Bernd Lücke and the German eurosceptic party AfD among others – is that the only way to save the Franco-German relationship and therefore the EU is to break up the euro before it does more damage. Interesting twist." Continue reading →

Continue ReadingGermany will think twice before saving France next time