Money For Nothing

Jim Grant Exposes “The Bureau Of Money Materialization” And A Submerging America

"Jim Grant spends exactly the correct amount of time (zero) discussing the 'urban myth' of the trillion dollar coin in this brief interview on CNBC; instead deciding to try and strike up some intelligent understanding of the dire situation we face. By providing context for our massive 16 trillion dollar debt (360 million pounds of $100 bills), and explaining how exponential the idiocy has become, Grant brings us full circle." Continue reading →

Continue ReadingJim Grant Exposes “The Bureau Of Money Materialization” And A Submerging America

How The Swiss National Bank Went “All In”, Three Times And Counting

"The nation's central bank is printing and selling as many Swiss francs as needed to keep its currency from climbing against the euro, wagering an amount approaching Switzerland's total national output, and, in the process, turning from button-down conservative to the globe's biggest risk-taker. Switzerland's virtue is the root of its problem: broad confidence in the Swiss currency and economy has investors hungry for francs to escape euros, the currency of its shaky European neighbors." Continue reading →

Continue ReadingHow The Swiss National Bank Went “All In”, Three Times And Counting

Sterling crisis looms as UK current account deficit balloons

"Some of the reasons for this need little explanation. Low growth has undermined attempts to reduce the fiscal deficit, which remains one of the highest in the OECD. This in turn is likely to lead to the loss of Britain’s prized triple A credit rating this year, making the UK comparatively less attractive to overseas investors. What’s more, capital flows from the eurozone to perceived 'safe havens' such as the UK are slowing as the crisis eases. There is also evidence of elevated concern among investors about Bank of England money printing." Continue reading →

Continue ReadingSterling crisis looms as UK current account deficit balloons

America’s Platinum Express

"Even if you are Scott Sumner himself, you should be very alarmed when you’ve now got arguably the most prominent economist on Earth arguing that the government should start paying its bills with coupons that are then monetized by the Fed. That is just the barest step removed from having the Fed literally create new money to cover the government’s spending. Forget the macroeconomics for a second. Surely there is the faintest hint of Public Choice economics buried in the souls of the market monetarists. Can we all agree that Krugman’s flippant remarks above are downright alarming?" Continue reading →

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Gold Lures Japan’s Pension Funds as Abe Targets Inflation

"Japanese pension funds, the world’s second-largest pool of retirement assets after the U.S., will more than double their gold holdings in the next two years as the new government pushes for a higher inflation target, according to an adviser to the funds. New Prime Minister Shinzo Abe’s pledge to spur inflation to 2 percent and end the yen’s appreciation means Japanese pension funds now have to hedge against rising prices and a currency decline after two decades of stagnation. Gold priced in yen reached a record a week ago." Continue reading →

Continue ReadingGold Lures Japan’s Pension Funds as Abe Targets Inflation

U.S. Inflation Since 1775 And How It Took Off In 1933

"Yesterday at the American Economic Association's 2013 Annual Meeting, Carmen Reinhart and Ken Rogoff offered a paper titled Shifting Mandates: The Federal Reserve’s First Centennial. The paper included a cool chart of inflation since 1775. The authors argue that inflation didn't take off until the U.S. went off the gold standard in 1933." Continue reading →

Continue ReadingU.S. Inflation Since 1775 And How It Took Off In 1933

Krugman: Let’s Just Print Funny Money

"Don’t like the platinum coin option? Here’s a functionally equivalent alternative: have the Treasury sell pieces of paper labeled 'moral obligation coupons', which declare the intention of the government to redeem these coupons at face value in one year. It should be clearly stated on the coupons that the government has no, repeat no, legal obligation to pay anything at all; you see, they’re not debt, and therefore don’t count against the debt limit. But that shouldn’t keep them from having substantial market value." Continue reading →

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Krugman Gives the Thumbs Up on the Minting of a Trillion Dollar Platinum Coin

"Should President Obama be willing to print a $1 trillion platinum coin if Republicans try to force America into default? Yes, absolutely.[...] So if the 14th amendment solution — simply declaring that the debt ceiling is unconstitutional — isn’t workable, go with the coin." Continue reading →

Continue ReadingKrugman Gives the Thumbs Up on the Minting of a Trillion Dollar Platinum Coin

Detlev Schlichter: It’s a mad mad mad mad world

"Shinzo Abe, Japan’s new prime minister, has some exciting new ideas about how to make Japan’s economy grow. How about the government borrows a lot of money and spends it on building bridges and roads all over the country? If that doesn’t sound so new, it is because it isn’t. It is what Japan has been doing for 20 years, and it is the main reason why Japan is now the most heavily indebted nation on the planet. But never mind. The Keynesians agree that this policy was a roaring success, and that this is why the country needs more of it. Mr. Abe also plans to force the Bank of Japan into printing more money, and this is surely going to be a great success, too." Continue reading →

Continue ReadingDetlev Schlichter: It’s a mad mad mad mad world