Free Republic

Recent actions by Congress, the US Treasury, and the Federal Reserve Bank, to "fix" the current financial crisis are having the opposite effect. They are making it worse. We have the same causes this time we have had in previous financial crises. Falling demand for goods and services. It's lack of demand, same as previous financial crises. Government is telling us it is a supply problem. Lack of money to lend. Lack of available credit. It's never a supply problem. It's never lack of supply. There is plenty of money to lend. People qualified to borrow money can borrow all...

Remarks delivered at the End the Fed rally in Washington, DC, November 22, 2008, across the street from the headquarters of the Federal Reserve Board of Governors. Welcome, and thank you all for braving the cold weather to make it out here to today's rally. My name is Paul-Martin Foss, and I am representing the office of US Congressman Ron Paul. Like many people in this country, I made it all the way through college without any knowledge at all of economics. While preparing for grad school, I began taking economics courses at George Mason University, where I received my...

In the face of stagnating growth in MZM the Fed is pouring money into the system.

Zimbabwe is the first country in the 21st century to hyperinflate. In February 2007, Zimbabwe’s inflation rate topped 50% per month, the minimum rate required to qualify as a hyperinflation (50% per month is equal to a 12,875% per year). Since then, inflation has soared. The last official inflation data were released for July and are hopelessly outdated. The Reserve Bank of Zimbabwe has been even less forthcoming with money supply data: the most recent money supply figures are ancient history—January 2008. Absent current official money supply and inflation data, it is difficult to quantify the depth and breadth of...

Zimbabwe inflation hits 231 million percent Oct 9, 2008 HARARE, Zimbabwe (AP) — Zimbabwe's state Herald newspaper quotes official statistics saying annual inflation in Zimbabwe has hit 231 million percent. Independent economists say the southern African nation's hyperinflation is running in the billions of percentage points.

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Zimbabwe is the first country in the 21st century to hyperinflate. In February 2007, Zimbabwe's inflation rate topped 50% per month, the minimum rate required to qualify as a hyperinflation (50% per month is equal to a 12,875% per year). Since then, inflation has soared. The last official inflation data were released for June and are hopelessly outdated. The Reserve Bank of Zimbabwe has been even less forthcoming with money supply data: the most recent money supply figures are ancient history-January 2008. Absent current official money supply and inflation data, it is difficult to quantify the depth and breadth of...

I'm sorry for the vanity but I have a question for our economists on this site. I'm in the process of moving at least some of my investments into more secure holdings. However, I was wondering if it would be possible that pumping $1T into the economy could trigger hyperinflation. I've been reading through this issue on various sites and it seems that some feel that hyperinflation could be trigger by the government failure to find buyers or pumping large amounts of dollars into the economy without proper tax revenues. Has there been any serious thought given about this issue...

Zimbabwe's central bank has revalued its currency in an effort to control the effects of hyperinflation. The bank is striking ten zeros off Zimbabwe dollar bank notes, making 10bn dollars now equal to one dollar. Reports from the capital, Harare, say long queues have formed outside banks as people seek to withdraw money. The move comes in response to an official inflation rate of more than 2,000,000%, although it is believed the true figure is at least 9,000,000%.

Robert Mugabe has kept his embattled regime in Zimbabwe afloat on a sea of paper money. Now, he'll have to try to do it without the paper. The Munich-based company that has supplied Zimbabwe with the special blank sheets to print its increasingly worthless dollar caved in to pressure on Tuesday from the German government for it to stop doing business with the African ruler. Mr. Mugabe's regime relies on a steady supply of the paper -- fortified with watermarks and other antiforgery features -- to print the bank notes that allow it to pay the soldiers and other loyalists...

Probably almost everyone is familiar with the hyperinflationary episode that engulfed Germany after the First World War. That nation’s economy was crippled by monetary problems that resulted in dreadful personal hardships, even though up to that time Germany had achieved one of the highest living standards in the world. The newly formed German government, named for the city where their constitution was drafted after the Kaiser’s abdication in 1918, kept pumping up the money supply. The process started relatively slowly, but quickly the pace of money creation accelerated. The Weimar government was paying its bills on credit – just like...

This week, as the financial sector began to give way under the unbearable weight of bad mortgage debt, the Federal Reserve stepped in to save the day. At least that’s what it says in the script. In a surprise move, the Federal Reserve announced its intention to swap $200 billion of treasury debt for $200 billion of potentially worthless mortgage-backed securities. The Fed may have been partially spurred to take the step as a result of the rapid collapse of Carlyle Capital Corp. a publicly traded private equity firm that is a subsidiary of the Carlyle Group. The Dutch firm...

$1 Million Note On the Way As Cash Crisis Worsens Zimbabwe Independent (Harare) NEWS 16 November 2007 By Paul Nyakazeya CASH shortages worsened this week amid speculation that the Reserve Bank of Zimbabwe was working on plans to introduce higher denominations of bearers' cheques. Business digest understands that the central bank is finalising the introduction of $500 000 and $1 million notes. The new bearer's cheque notes are likely to be introduced early next month. The denominations below $10 000 will be scrapped, sources said. "From the discussions and preparation we have had so far I would say the new...

In Zimbabwe, where hyperinflation has reached 7,900% and people have used up their entire savings just buying food, life has been reduced to this: the queue. Go to any Zimbabwean town these days and you'll find lines everywhere, like an invasion of giant pythons slithering into every supermarket door. Kaodza, a hustler in a country where the flour has all but run out and bread has become a luxury, gives a quick tutorial on how to get ahead in a queue. You don't just line up and wait to buy. There is an unspoken etiquette, with subtle rules. Only those...

JOHANNESBURG, Feb. 21 — President Robert G. Mugabe of Zimbabwe turned 83 on Wednesday to the strains of the song “God Bless President Mugabe” on state-controlled radio, along with an interview on state television, a 16-page paean to his rule in Harare’s daily newspaper and the prospect of a grand birthday party — costly enough to feed thousands of people for months, his critics argued — on Saturday. Zimbabwe’s economy is so dire that bread vanished from store shelves across the country on Wednesday after bakeries shut down, saying government price controls were requiring them to sell loaves at a...

Zimbabweans went on a panic-buying spree this weekend ahead of a switch to a new currency tomorrow that will see three zeroes deleted from the old tender. Under the move being introduced by Robert Mugabe's government to offset the country's hyperinflation, which is at 1,000 per cent, an old Z$50,000 bill will be replaced by a new Z$50 bill. The value will be the same, just under 50p. Shoppers with bags of notes were buying any asset that would hold its value, from refrigerators to whisky and goats. 'Everyone is counting their money to figure out what to buy so...

/begin my excerptFrom NK Border: Supernotes, Defacto Currency of N. Korea "Hyperinflation,... payment in Supernotes" [2006-07-31 12:11]  food section at No.1 Dept. Store in Pyongyang Recently, 100-dollar Supernotes are circulated as defacto currency (of N. Korea) among merchants, which is a shocking development. Until now, Supernotes have been inserted among genuine dollar bills when some trading outfits and drug smugglers make their payment in China and other places, but now they are used as unofficial means of payment at N. Korean markets. Some N. Korean merchants  started to use Supernotes(nominal value: 100 dollars) as '70 dollar bill' early this year, and this...

· Wealthy Briton's business affairs under investigation · Company 'under siege' says Harare associate One of Britain's richest men is reported to have fled Zimbabwe in a private jet this week after President Robert Mugabe, his former business ally, launched an investigation into his companies' affairs. John Bredenkamp, who was a sanctions-buster and gun-runner for the former Rhodesian leader Ian Smith, switched allegiances to become one of Mr Mugabe's most influential business associates. Often named as one of Britain's 50 richest men, with a fortune estimated at between £400m and £700m, Mr Bredenkamp flew out of Zimbabwe this week to...

ZIMBABWE'S annual inflation rate topped 1,000 per cent in April, underlining the severity of an economic crisis analysts say could trigger protests against Robert Mugabe's government.Zimbabwe, in its eighth year of recession, has the fastest shrinking economy of a country outside a war zone, according to the World Bank, and the highest inflation rate in the world. The official statistics agency said yesterday the annual inflation rate hit a record 1,042.9 percent in April after rising 913.6 per cent in March. "As expected, it's more doom and gloom," said John Robertson, a private economic consultant. "How do you start to...

Zimbabweans are speaking out with candour against the Government as the country descends further into economic chaos WITH his torn shirt and tattered trousers held up by a piece of string, Barons Chikamba is an unlikely millionaire. His life is a daily struggle despite the seemingly astronomical prices that he charges for even a short hop in the battered car that he uses to ferry visitors around Zimbabwe’s capital, Harare. Even his lowest fare is more than a million Zimbabwean dollars. It may sound a lot, but in a country where even the official rate of inflation is nearly 1,000...

SIgnificant publicity surrounded Ben Bernanke's appointment as our new Federal Reserve chairman. But there's also been increased speculation that Bernanke will preside over a Fed that is substantially less powerful than the institution his predecessor, Alan Greenspan, took over 18 years earlier. Take for example BusinessWeek's Nov. 7 cover story entitled "Honey, They Shrunk the Fed." The argument that the Fed is losing its ability to control the economy goes something like this: The flows of capital, especially coming from the Asian nations, are now so great that they overwhelm the ability of the central bank to control interest rates;...

Why the Fed has no other alternative but to print money! Next time the Fed embarks on its usual money printing exercise, consumer price inflation accompanied by renewed dollar weakness is likely to both exceed asset inflation - especially in the housing sector - and income gains. This should ensure that the forthcoming recession will be characterized by consumer price inflation and simultaneous economic weakness. In the past, I have demonstrated that economic growth and deflation is entirely compatible. The entire economic expansion of the US in the 19th century was a deflationary boom. Declining prices led to strong real...

Jimmy Carter aspired to make Government "competent and compassionate," responsive to the American people and their expectations. His achievements were notable, but in an era of rising energy costs, mounting inflation, and continuing tensions, it was impossible for his administration to meet these high expectations. Carter, who has rarely used his full name--James Earl Carter, Jr.--was born October 1, 1924, in Plains, Georgia. Peanut farming, talk of politics, and devotion to the Baptist faith were mainstays of his upbringing. Upon graduation in 1946 from the Naval Academy in Annapolis, Maryland, Carter married Rosalynn Smith. The Carters have three sons,...

The Law of Unintended Consequences "There has been widespread denial that there could be anything like a real estate 'bubble,' even given recent activity. Yet, anyone with a pulse can see wild speculation taking place all around them." --William F. Hague, President, W.F. Hague Investments Question: Why has the Fed allowed a housing bubble to develop? Answer: Because they didn't have any choice. The past several years of low interest rates have allowed households to extract cash from inflated property via cash-out refis, home equity loans, and sales; and to use lower interest rates to reduce monthly mortgage payments and...

The government is poised to hit the national debt's $7.4 trillion ceiling this month, and yesterday the Bush administration told Congress again that it should raise the limit.That would be a politically sticky move just weeks from the Nov. 2 elections.Rob Nichols, Treasury Department spokesman, said the government is on track to reach the limit early this month. He said that the forecast is made "on a day-to-day basis" and that Congress would be notified.The government can juggle accounts to stay under the limit through mid-November to avoid default, as it has in the past.

This morning's e-mail brought notice of a dot-com Initial Public Offering (IPO) from Alibris, Inc., an Internet bookseller whose services I have sometimes used to buy out-of-print books, so I'm on its mail list. I forwarded the Alibris e-mail to my correspondent, Jack Andersen, author of many Sages' Pages pieces. I asked him whether he thought this IPO was a harbinger of a new bubble. This was his answer. Yes……stocks, bonds, precious metals & commodities, housing……all asset classes. The Fed made cash worthless. So much so that individuals followed the pros into the carry trade (borrow short, buy any asset)....

CLEVELAND -- Police seized more than $1 million in drugs this week through the hard work of two Ohio State troopers, reported NewsChannel5. The first bust came when the Criminal Patrol Tactical Squad was looking for suspicious activity on the Ohio Turnpike Wednesday, and seized 20 pounds of marijuana. The marijuana was a rare high grade from British Columbia, worth more than $900,000. Two hours later, another bust occurred on the same Interstate when a trooper pulled over a pickup truck for tailgating. "His story wasn't quite right, so (the trooper) called for a drug dog which came to the...

U.S. Sept CPI rose 0.3 pct Thursday October 16, 8:32 am ET WASHINGTON, Oct 16 (Reuters) - U.S. Labor Department monthly Consumer Price Index (CPI-U), 1982-84 equals 100 (except where noted): Percent Changes: Seasonally Adj. Unadjusted . Sept Aug Sept03/02 All Items 0.3 0.3 2.3 Excluding Food/Energy 0.1 0.1 1.2 Energy 3.0 2.7 14.7 Food and Beverages 0.2 0.3 2.5 Food 0.2 0.3 2.4 CPI-Urban Consumers-X 185.2 184.6 N/A X-Data unadjusted. N/A-Not Available. Percent Changes: Seasonally Adj. Unadjusted . Sept Aug Sept03/02 Housing 0.1 0.1 2.4 Shelter 0.1 0.2 2.2 Rent of Primary Residence 0.2 0.2 2.9 Owners' Equivalent Rent-Y...

Weimar Republic I have a theory that nations are like individuals. Those whose leaders are smart, strong and lucky prosper, and those whose leaders are stupid, weak and unlucky suffer or perish. That's why it matters which leaders we choose. There are relatively few people in the United States who actually have the power to make important decisions. The Constitution, for example, vests 100 percent of the power of the federal government in only 537 individuals — one president, one vice president, 435 members of the House and 100 members of the Senate. Everybody else in the entire federal government...

While North Koreans rattle sabers, market reforms founder James Brooke The New York Times Wednesday, March 12, 2003 MOUNT KUMGANG, North Korea Even as it rattles its nuclear sabers, North Korea has been toying with a version of "market reforms" to patch up its ravaged economy. But eight months after changes like price incentives began, the economy retains an unmistakable Alice in Wonderland quality. North Korea's deep ambivalence about business could be seen in this mountain resort district on a recent Saturday, opening day of the Magnolia Blossom. Security police paced outside the freshly painted restaurant, hands clasped behind their...

May 03, 2002 (Financial Gazette/All Africa Global Media via COMTEX) -- ZIMBABWE'S worsening economic crisis and skewed government policies have claimed another casualty in the form of domestic savings, whose rapid decline to a mere seven percent of gross domestic product (GDP) in the past five years is diminishing further hopes of a meaningful turnaround in the economy. According to the Ministry of Finance's budget statements for 2001 and 2002, overall savings in Zimbabwe have fallen from 25 percent of GDP in 1997 to 20 percent in 1995 and then to nine percent in 1999. Economists estimate that savings have...