History Repeating

Jeffrey Tucker: The Triumph of Scrooge McDuck

"CNBC says, 'According to research from American Express Publishing and Harrison Group, the savings rate of the wealthiest 1% in the second quarter rose to 37%. That’s up from 34% in the second quarter of 2012 — and more than three times their savings rate in 2007.' In other words, their saving is actually increasing, even given the evidence that the everlasting recession has abated in some ways, which suggests that this class has little confidence that the high stock market and seemingly good news that trickles out are really sustainable. They are preparing for the next crisis in ways they wish they had prepared for the last one." Continue reading →

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Poor Economy = Low Gold Price?

"By the time 1979 hit, inflation was rising, gas prices were soaring, incomes were dropping, and mortgage rates were climbing. The S&P was rising, but not so much in real terms. GDP growth was high, but it was clearly not a rosy time for consumers or workers. So how did gold perform during this challenging economic environment? The gold price rose 23% in 1977 and 37% in 1978, both of which are considered economic expansion years. But as things worsened in 1979, the price accelerated and went into a mania, ending the year with an incredible 127% return." Continue reading →

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Housing…”For-Sale” Supply Wave Hitting Market?

"The housing market has been turbocharged by the greatest direct stimulus in history over the past 18 months. I hear so much that the past year 'recovery' has to be 'organic' because the 'government' is not providing any stimulus or subsidies. Perhaps, technically they are correct because the Fed is not a government agency. But when you factor in the power of the Fed buying rates down from 5.5% in 2011 to 3.25% in 2012/13 on demand and 6.5 million mortgage mods on supply you come up with a very volatile situation if that go-go-juice is ever taken away. And it was just taken away." Continue reading →

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Nazi gold and currency wars – A full guide

"Nazi gold is a phrase that refers to the bullion looted by the Nazis in the run up to and during the Second World War. Gold clearly plays a strong role in history and features as both a political and economic weapon during the Wars of the 20th Century. Upon invasion Nazis would loot a country’s gold reserves, along with other valuable assets, and promptly work to devalue the sovereign currency. This pillage of the financial system is not well known but it served effectively as a weapon in their campaign to take-down whole nations. The Nazis consolidated their power by holding gold whilst their victims were consigned to weak paper currencies." Continue reading →

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The US student loan problem – facts, charts, thoughts

"The unlimited availability of student loans has allowed colleges to sharply raise tuition and fees over the past few years - often simply because they could (as they kept on hiring). The rising cost of higher education in turn forced students to take out larger loans and in greater numbers, increasing the overall loan balances. This feedback loop is clearly unsustainable, particularly as household income growth remains weak. Higher delinquencies are inevitable and as long as the government funds this program, there really is only one way to arrest rising levels of student debt." Continue reading →

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Bernanke, Coolidge, and Buchanan: On Timing Your Departure

"Under him, the country suffered the worst economic setback since the Great Depression. He used the printing press to bail out some large banks and a few over-leveraged investment firms. He served as Hank Paulson's silent potted plant. He addicted the American economy to what amounts to hyperinflation of the monetary base. The commercial banks are not lending. The recovery is barely functioning. The economy has sustained its worst performance since the Great Depression. He has been in charge the entire time. He is trying to get out with his reputation intact. He is likely to make it, and whoever follows him will likely not make it." Continue reading →

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More than 1,000 Iraqis killed in July, highest monthly toll since 2008

"More than 1,000 Iraqis were killed in sectarian violence in July, the highest monthly death toll since 2008, the United Nations said, as Sunni Islamist groups stepped up their insurgency against Iraq’s Shi’ite-led government. Most of the 1,057 victims were civilians, killed in a relentless campaign of bombings and shootings that some Iraqis fear could drag the country into another war. July’s toll brought the number of people killed in militant attacks since the start of the year to 4,137. Last week hundreds of convicts ran free after simultaneous attacks on two high-security prisons, raising questions about the ability of the security services to combat al Qaeda." Continue reading →

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Why So Much Faith in Supreme Court Justices?

"A quick reading of the decision in Dred Scott v. Sanford (1857) should cause any reasonable person to question the assumption of judicial infallibility, and the wisdom of granting judges the definitive and final say in all cases. In essence, the Supreme Court declared black people inferior and that even free blacks were not citizens under the Constitution. The court reasoned that since black people – even those not held in slavery – were not citizens and possessed no rights, Scott had no standing to sue in court." Continue reading →

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The Largest Gold Share Rise of All Time

"During our many walks together, my father and I often compared his experiences in the 1920s and ’30s with mine in more recent decades. Each time brought new revelations. But we rarely missed the obvious fact that history repeats itself in strange ways. His experiences with the world’s leading gold mines in the early 1930s are a classic example. Their shares were downtrodden, misunderstood and undervalued, much as they are today. Then, right in the midst of the nation’s worst depression, select mining shares surprised nearly everyone. They bust out of their doldrums. They surged to their highest levels in history." Continue reading →

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David Galland: Answers from a Monetary Master

"Mr. Bernanke will get to visit his ideal world of 2% price inflation, but it will only be a whistle stop. The price inflation that lies ahead will be at least as bad as what happened in the 1970s episode, when the annual inflation rate approached 15%. The money that's already been printed so far may be enough to produce such a 1970s-size problem. Making matters worse is that the devices for paring down the amount of cash that you need for the sake of convenience—such as credit cards, ATMs and online banks—are now far more widely available and cheaper to use than they were in the 1970s." Continue reading →

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