Posted on 11/23/2014 6:55:14 PM PST by Tolerance Sucks Rocks
(Reuters) - European Central Bank President Mario Draghi has moved closer to launching sovereign debt purchases and data this week will show just how dangerously low inflation has fallen in the $13 trillion euro zone economy.
A sickly Europe has held back global economic growth for years, and now it is contributing significantly to powerful forces already dragging down inflation across the globe.
A spectacular drop in crude oil prices over the past month will be the center of discussion when ministers from the world's top oil exporters meets in Vienna on Friday.
(Excerpt) Read more at reuters.com ...
something that should be mentioned...
all the big economies of the West...
need CONTINUOUS monetary stimulus..
24/7/365/ year after year after year,
just to stay close to avoiding a depression
“Nonsense. People will pray for government to get out of the way, lower taxes, decrease the size and spending of government, and get out of their way. How did the United States exist before 1913 and the creation of the “Federal Reserve?” It did very well for 137 years. Now in just over a hundred years, the country is bankrupt. Happy about that?”
People will pray for government to save them. Personally, I’d like to see everything you list. The majority are not you or me.
The world has stagnated for so long, it can’t take advantage of cheap energy, but the people can, if governments will get out of their way. Governments are so far in debt they need inflation to stay solvent. Set economies free. Let governments shrink to fit deflation.
Said monetary stimulus making up for crappy fiscal and regulatory policy.
More proto-keynesian, Federal Reserve Central bank nonsense.
Money printing and politically-controlled interest rates for the benefit of the progressive nanny state has made a few connected people wealthy and has saddled the rest with debt and hidden inflation.
I for one welcome deflation - I’m tired of the government and Wall Street stealing my wages and savings through inflation and low interest rates.
(Waving hand in air) Debt free!
“How did the United States exist before 1913 and the creation of the “Federal Reserve?” It did very well for 137 years.”
Uh, no. There were plenty of recessions, panics, and depressions during the 1800s. The lack of a central reserve bank didn’t make it a time of economic bliss.
https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States
For one thing the country isn’t bankrupt. It’s become a socialistic welfare state that is hostile to free enterprise, but it’s not bankrupt.
” through inflation and low interest rates.”
Low interest rates are a sign that there is no inflation. The bond vigilantes demand an inflation premium and as the Fed learned during the ‘70s they have enough firepower to dictate terms. Do you recall what rates were in the late ‘70s?
Duh. You missed my point entirely. We survived all those recessions and we ended up fine before 1913, not in debt to the tune of more than our GDP. Read my post again.
And what exactly did I miss? Your claim that the country is bankrupt when it’s not? Did the Treasury miss an interest payment for the first time since 1790? I must have missed it.
Your intimation that depressions only became a problem with the creation of the Fed? I suggest you look up “Long Depression”.
The non-sequitur that we’ve survived 137 years?
I suggest you omit the ‘duh’ when you’re having trouble making a point that is something beyond emoting, the duh just highlights your struggle.
I just paid 20 bucks for to mediocre rib-eye steaks at the Food Dog.
Pelham is correct. The United States is not bankrupt, nor even near bankruptcy, even if our true national debt is ten times the official count.
Where he’s wrong is in his analysis of the benefits of a Fed. It is an incumbency protection racket. It works to protect banks from the free market effects of their bad moves and it protects them from a nefarious government which manipulates markets to benefit political cronies.
Take a look at the pre-Fed era when very real market cycles wiped out entire gains and made fortunes. It was harsh, but it prevented socialism. The Fed exists to temper the natural market cycle. That attenuation gives a free hand to socialist policies and benefits incumbency.
It’s often mis-ascribed as an era of crony capitalism. It was in part as government colluded with crony capitalists, particularly the disastrously wasteful railroad expansions. Yet we also have examples of railroad expansion without government cronyism. Take a look.
http://wiki.mises.org/wiki/James_J._Hill
Few people know about James J. Hill, so I’m not surprised that Pelham and others maintain the AP US History perspective on that era. AP Economics also teaches the same lies about economics that every incumbent and Keynesian wishes Americans to know.
http://wiki.mises.org/wiki/Robber_Barons
http://wiki.mises.org/wiki/John_D._Rockefeller
Rockefeller did for that era what the Internet, Walmart and fracking has done for ours. Rockefeller dropped the price of oil from 58 cents a gallon to 8 cents a gallon. Oh, that awful deflation. But this is the good kind, due to productivity improvements.
http://fee.org/the_freeman/detail/john-d-rockefeller-and-the-oil-industry
https://www.theobjectivestandard.com/issues/summer-2008/standard-oil-company/
You might enjoy this video: https://www.youtube.com/watch?v=4Vw6uF2LdZw
Good article from an unusual source: http://www.philanthropyroundtable.org/topic/excellence_in_philanthropy/seven_myths_about_the_great_philanthropists
Here’s a little on the Gilded Age: http://wiki.mises.org/wiki/Gilded_Age
My hope is that Pelham and others will wipe the sleepers from their eyes and unlearn the historical mis-education most Americans suffer under.
The country is insolvent. The debt will never be repaid. The system will collapse and a reset will occur.
low interest rates are a sign of the government perverting the market for bonds. It has nothing to do with the rate of inflation.
the purpose of the Federal Reserve System (1913)
is ti stop financial panics and bank liquidity issues
in an otherwise sound bank.
nobody is perfect
My concern is not with stated purposes, but with results. The Fed is a direct cause of the Great Depression. It is also a direct cause of the current economic climate. Nobody is perfect and that’s why central planning fails. Why would financial central planning work any better than fiscal?
The FDIC exists to stop bank runs. It might be better to simply force banks to publicly report their financial health and let depositors buy their own insurance. My point is that if you believe in the free market you don’t turn to government as the first choice in solving problems.
Government is the problem. I’m not an anarchist. I want some government. We have too much now, way too much. If the federal, state and local governments were 80-90% smaller the Fed might not be so bad. As it is, the Fed is also a direct cause of bigger government.
Is there a free market system alternative available? Yes, and there was well before the Fed. They’re called bank clearing houses and some of them illegally “printed” money during runs and deflations. It was a natural outcome, but maintained the competitive limitations a free people would want.
Wait. If inflation is a bad thing, why is reducing inflation a bad thing?
in 2008 or so,
a long wave hit the shore
housing has bubbled, there is too much everything
the FReserveSystem cant fix that
What was the Federal Reserve doing prior to 2008? You see, they didn’t see it coming. They didn’t moderate it. They encouraged it. How can you keep government appointees from becoming beholden to their political masters?
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