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Dow @ 1,000,000; S&P @ 50,000; "Why Not?" says Jim Rogers

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June 16, 2009 – Comments (16)

Jim Rogers is a rare breed among great investors.  He is among the very few of which can be said two things:

He's made a ton of money using fundamental analysis and a long term view.

and

He understands how central banks (e.g. The Federal Reserve) impact market activity.

That is a rare combination. The same, unfortunately, can not be said of Buffett (surprising, since his father was such a strong opponent of paper money.)

"I was going to say I don't think the S&P 500 will see new highs," Rogers tells The Economic Times of India. "But I have to quickly temper that by saying against the dollar because the S&P 500 could triple from here if they print enough money and the value of U.S. dollar collapses. Then the S&P could go to 50,000, Dow Jones can go to 1 million." - NewsMax

Rogers' take on the stock market rally, the Fed, the future of the market, and his analysis of past markets is very similar to the Austrian School, Peter Schiff, and Ron Paul. It's also similar to the so-called "doom-and-gloomers" around here that get painted as cranks. However, I don't see anyone questioning Rogers' cred. It just goes to show that the media shapes most people's opinions and nobody in the media wants to hear from Jim Rogers right now.

In a previous post, and in many comments, I've discussed the idea that the market is rallying simply because the Fed expanded its balance sheet. The money had to go somewhere, and since it went to many investment bankers, I assume they pumped it into the market.  This seems logical to me, but many people think that's crazy. Why would it be crazy to assume that the Fed doubling its balance sheet couldn't push the S&P up 300 points?  It would be crazy to me to think that the market wouldn't react at all.

The point of this is that the government can accomplish any re-inflating of the bubble it wants... up to a point. The dollar will collapse one day - in our lifetimes - something most of us never contemplated until this past year.

The other point is that you are poorer. You may not feel poorer and you may not be able to discern the effects of your reduction in purchasing power right now, but you are definitely poorer, even if you caught the bull rally all the way up.  Wealth is measured by PPM (purchasing power of the money unit).  If the PPM erodes faster than you can make money, you're poorer. Plain and simple.  Of course, you didn't lose as much as someone who missed the 660 --> 940 rise, so I commend you on that.  But I think the doom-and-gloomers (so to say) have done pretty well over the past year as well.  All of us who do our homework (whatever your style) will make some money - ever increasingly worthless money.

(The Individualist is the ultimate optimist, so to paint them as doom-and-gloomers displays tremendous ignorance about our own ability to shape the world.)

The final point is that inflation is already here. Energy prices have been rising fast in America. Gas prices are on their fastest rise ever.  The market is being pumped to death.  Many sectors that are closely controlled or associated with the government are seeing fast rising prices.  This is predictable.  Excess printing of money leads to rising prices in a step-by-step manner as the money travels through the economy.  In the sectors where the money is spent first, prices will rise first. Classical economists call this the Cantillon Effect while the Austrian School calls it the Inflation Tax. Same difference.

A humorous note (well funny to me anyway): once again everyone in the media is trying to find someone to blame for rising oil prices.  Now it's the investors, fault!!!!!  LOL. Yep. It's not the wars or the endless printing of money. It's the investors.  If we just killed them off, I guarantee prices would plummet :)

On The Possibility of Stagflation by Robert Murphy

For what it's worth, the monetary aggregate M1 (very liquid assets such as cash and checking deposits) rose by 17 percent during 2008. Remember, during the Hoover years the Fed was unable to prevent M1 from falling at a steep clip. We need to keep these differences in mind before drawing any conclusions about what happens to prices "during a depression."

One last point about deflation/inflation: If you have been reading CNBC headlines and listening to Ben Bernanke, you would get the impression that we are still experiencing "deflationary pressures" in 2009. But guess what? If you look at the non-seasonally-adjusted consumer price Index figures maintained by the BLS, you will see that from December 2008 to April 2009, prices have risen at an annualized rate of 4.3 percent. Yes, you heard right: if you throw out the "seasonal adjustments" and just look at the raw CPI figures, over the last four months the rate of price inflation is well above Bernanke's professed "comfort level."

Full Article

David in Qatar

16 Comments – Post Your Own

#1) On June 16, 2009 at 4:43 AM, Tacomatight (69.11) wrote:

Nice article, question for you though: My developmental economics is a bit rusty but I thought it was PPP that was used:Parity Purchasing Power( not sure if that's what the acronym stands for)?

"The other point is that you are poorer. You may not feel poorer and you may not be able to discern the effects of your reduction in purchasing power right now, but you are definitely poorer, even if you caught the bull rally all the way up. Wealth is measured by PPM (purchasing power of the money unit)."

You say this but where is your proof and what does it mean if there are no tangible ways to recognize it? And why am I poorer than when oil was 150 bucks + a barrell? I remember reading that even with the inflated gas prices of a year or so ago, that adjusted for inflation, it was still far lower than during the OPEC oil embargo and the following fuel shock price of that time period. Doesn't this counter your argument?

And with the massive scales of production we now have with exporting the production of our consumer products to such places as China, are we not able to purchase household items at an unprecedented discount in America? When I think of the stuff folks need to buy on a daily basis, things that would have real impact on their lives, I hardly see the dollar buying less domestically. If anything I see things getting cheaper and cheaper, which is how it's supposed to work right?

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#2) On June 16, 2009 at 5:38 AM, whereaminow (61.23) wrote:

Tacomatight,

While PPP is useful for determining the strength of currencies relative to other world currencies, PPM is the classical economic valualtion of the amount of goods a consumer can purchase.  It may be useful to know that the dollar is gaining or losing versus other currencies (rising/falling PPP), but it is also important to understand that if all currencies are deteriorating the PPM of that very dollar (its ability to bring home the bacon) may still be falling even when its PPP is rising.

Brief arguments on PPM by classical, neoclassical, and mainstream economists can be found at the end of this study guide chapter.

The dollar certainly does buy less domestically. The PPM of the dollar has fallen over 95% since the Federal Reserve started operations in 1914 (with the express goal of protecting the dollar's purchasing power.)  You won't notice it from one day to the next, but over years and decades you certainly will. Think real estate, education, and health care just to name a few.

As you note, increasing productivity makes things cheaper.  In fact, prices fell almost every year from the late 1700's until the early 1900's (interrupted during times of war, when goverments are forced to print money in order to finance their conquests.)  Prices continue to fall today in sectors where the government is unable or unwilling to exert excessive influence, i.e. Technology.

This post isn't meant to be a "proof" of anything. It is an exercise in logical deduction.  Are you poorer now than you were when oil was $150/barrel?  Not you perhaps, individually, but the nation as a whole. Not when compared to one product or service, but when compared to all products available.  As a whole, American taxpayers are poorer now than they were last year, even though oil may be cheaper (for now), but when measured against all products and services, Americans are definitely poorer. And they will continue to get poorer as the newly created money passes through the economy.  Finally, the OPEC oil embargo was a rather severe event, and probably not a fair starting point to compare prices.  I don't see how it would either prove or disprove anything.

Also, if you have never been introduced to the manipulation of government figures, I invite you to have a look at Shadow Stats - John Williams' attempt to discern exactly what the real numbers look like.

Finally, the phenomenon of "inflation" is, in fact, a purposeful policy. I started a discussion on this here.

Thanks for your comments and questions.

David in Qatar

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#3) On June 16, 2009 at 8:56 AM, binve (< 20) wrote:

whereaminow, Excellent post! This is precisely why the Dow making a new high in 2007 vs 2000 is not as dramatic as it appears on its face. Once adjusted for inflation, the relative size of the two peaks looks very different. Thanks!

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#4) On June 16, 2009 at 9:47 AM, 4everlost (29.51) wrote:

Rogers' attitude almost always give me a smile.

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#5) On June 16, 2009 at 11:01 AM, StopLaughing (< 20) wrote:

Note: Austrian Economics has it limitations as does Money Theory and Keynsian Economics.

The  government, the fed and the collective activity of several governments have the ability to move or constrain interest rates, the strenght of various currencies, GDP etc for a while. In other words they have limited power but that power is slow and has lags. 

The market (or global market) is a complex system that also has it's own sources of power. To some extent it is a self adjusting system but often it will seek equilibriums that various governments do not want. 

If the goverment had enough power the Bush Admin would have avoided this disaster and gotten McCain elected. If the Chinese or the Russians had enough power they would simply buy control of the rest of the world. 

Governments have limited power but they do have power and do use it in concert with central banks, shadow banks and other organizations to help get thier agendas in place. 

Governments can also make major mistakes. The probability of a hyperinflation is unlikely, However, a slow moving loss of purchasing power has been happening for a long time. 

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#6) On June 16, 2009 at 4:27 PM, Bays (30.87) wrote:

Great read, whereaminow.

 You definitely know your stuff when it comes down to the Austrian School and money supply.  

I started my read on "The Ethics of Money Production" last night.  You had recommended it yesterday in another blog. 

Any more recommended reading?

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#7) On June 16, 2009 at 4:44 PM, WillSurfForFood (88.29) wrote:

 It just goes to show that the media shapes most people's opinions and nobody in the media wants to hear from Jim Rogers right now.

 

That is simply not true. 5 years ago few had heard of him, now he is interviewed on some financial news channel weekly. Everyone is aware of him. I like Jim Rogers but the media reports every word he says and I see links to interviews on many different blogs.

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#8) On June 16, 2009 at 10:15 PM, whereaminow (61.23) wrote:

binve,

Thanks for the comment and the rec. Glad you enjoyed the post!

4everlost,

Yeah he doesn't exactly shy away from calling out stupidity. Heh. Grumpy old men.....

StopLaughing,

Agreed. I don't think any theory is ever complete. The Austrian theories have issues as well, but they've been a lot better in predictive power than other economic schools. I think this comes from the difference of praxeology versus empiricism, logical deduction versus statistics, but it's a fun discussion nonetheless.

Bays,

Thanks dude. I would recommend reading Tom Woods' Meltdown. My personal favorite underrated book is Jesus Huerta De Soto's Money, Bank Credit, and Economic Cycles available on free pdf at the Mises Institute site.

WillSurfForFood,

You are probably right. I've been on vacation and I haven't been really paying attention to tell the truth. I think I overstated that. Hope it didn't ruin the blog for you.

David in Qatar

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#9) On June 17, 2009 at 4:30 AM, lucas1985 (< 20) wrote:

"Brief arguments on PPM by classical, neoclassical, and mainstream economists"
Neoclassical economics = mainstream economics. There's some nuances on orthodox economics (fresh water vs salt water) and some mainstream economists adopt a relatively large amount of Keynesian tenets (e.g., neo-Keynesians such as Paul Krugman) but in the end, mainstream economics is built on neoclassical foundations.

"f you look at the non-seasonally-adjusted consumer price Index figures maintained by the BLS, you will see that from December 2008 to April 2009, prices have risen at an annualized rate of 4.3 percent"
Good evidence that the Fed was able to generate expectations of inflation in the middle of extraordinary deflationary forces. If true, it means that the Fed did its job well.

"The dollar will collapse one day - in our lifetimes - something most of us never contemplated until this past year."
The fall of the dollar is not a surprise. It's the expected outcome of growing deficits (thanks to tax cuts on the rich and military spending on an imperial army), reduced productivity of the real economy (the result of the outsourcing of manufacturing to cheap labor contries) and a flawed financial system (savings glut, Triffin dilemma, etc). Also, I don't see the fall of the dollar as a bad thing. We need a multi-polar world, not monetary hegemony.

"A humorous note (well funny to me anyway): once again everyone in the media is trying to find someone to blame for rising oil prices.  Now it's the investors, fault!!!!!  LOL. Yep. It's not the wars or the endless printing of money. It's the investors.  If we just killed them off, I guarantee prices would plummet :)"
Nice distortion. The media isn't demonizing someone for the rise in oil prices. After a long time of risk aversion, low yields on "riskfree" assets, extremely low prices of raw materials and the possibility of an earlier recovery, investors are bidding up oil and other commodities.

"The Austrian theories have issues as well, but they've been a lot better in predictive power than other economic schools."
A broken clock is right twice a day. Neoclassical economics has been a failure for the most part but only the most orthodox economists were blind to the facts announcing the collapse. Almost all heterodox economists (marxists, post-Keynesians, institutional, etc), most neo-Keynesians (e.g., Roubini) and some neoclassical economists were alerting on the bubbles, deficits, deregulation of finance, etc.

"On The Possibility of Stagflation"

IMHO, stagnation is the most likely outcome of the Great Recession. I see another Japan in the makings. Only the green economy offers real hope. See the marxist view on stagnation and capitalism (1)

1- http://monthlyreview.org/080401foster.php

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#10) On June 17, 2009 at 5:19 AM, whereaminow (61.23) wrote:

lucas1985,

As an Argentine, you may not see the fall of the dollar as a bad thing, but many Americans would probably disagree. I would also like to see the dollar collapse, if only it leads to the end of government control of the supply of money.  As a Marxist, I'm sure you find Capitalist monopolies/cartels repulsive, so I'm sure that you detest the Federal Reserve and its heirarchical cartel of private banks.  Be sure to let Ron Paul know of your support to audit the Fed. 

On the flip side, again as a Marxist, you would also like to see high inflation as a form of wealth distribution (you know, to prevent savings... er, hoarding as you call it.)   Unfortunately, the benefit to inflation is to the politically connected, at the expense of poor and middle class.  I'm curious as to how you balance your goal of social justice with the Cantillon Effect / Inflation Tax of monopoly money creation.

And since one of the greatest beneficiaries of the inflation engine known as the Federal Reserve is the Military Industrial Complex, I'd like to know how you can both support the Fed but detest the MIC.  America's Imperialism would not be possible without high inflation.  With your hatred of American Imperialism, I'm sure you'll join Ron Paul not only for his call to immediately withdraw all troops from overseas, but also goal of ending the CIA and, most importantly, the Federal Reserve.

As a Marxist, I'm sure you are familiar with the term Roving Cavaliers of Credit (Das Kapital.) If you are an investor (why else would you be here), how do you balance your goal of ending the banking industry with your support of an institution (investment banking) that is closely tied with the American Cavaliers of Credit?

Finally, I have seen news stories that blame the rise in oil prices on investors. That is humorous to me. Sorry you didn't get the joke.

David in Qatar

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#11) On June 17, 2009 at 5:49 PM, DaretothREdux (49.46) wrote:

I know I feel poorer...but richer in spirit for having read this!

Dare

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#12) On June 17, 2009 at 7:46 PM, lucas1985 (< 20) wrote:

As an Argentine, you may not see the fall of the dollar as a bad thing, but many Americans would probably disagree.
Why a cheaper dollar would be a bad thing? You need to end your unsustainable current acount deficit. To do that, you need to export your way out of your hole. Also, if the fall of the dollar means the end of the dollar hegemony, I'm all for it. Keynes was right with his idea of the bancor and taxes on current account surpluses.

As a Marxist
Wrong again (why I'm not surprised?). I'm a progressive, but I hold no dogmatic viewpoints (with the exception of my secular humanism and my "faith" on rational knowledge). If you want to stereotype me, just imagine me as a reader of Le Monde Diplomatique. Since I'm open-minded I have no problems reading opposing viewpoints and the Monthly Review is a high-quality publication.

Be sure to let Ron Paul know of your support to audit the Fed.
If I were American, I'd hire an army of lawyers to check word for word a bill sponsored by Ron Paul. I'd support it only to chill down the wingnuts.

On the flip side, again as a Marxist, you would also like to see high inflation as a form of wealth distribution (you know, to prevent savings... er, hoarding as you call it.)   Unfortunately, the benefit to inflation is to the politically connected, at the expense of poor and middle class.
Inflation benefits debtholders and those able to claim higher wages (usually unionized labor) at the expense of savers. Since financial assets are mostly held by a wealthy minority, I'm not too worried about mild inflation. If you're a wage earner able to claim a better pay, inflation usually isn't a concern. If you hold non-indexed debt, you should put your capital on the productive economy.

I'd like to know how you can both support the Fed but detest the MIC.  America's Imperialism would not be possible without high inflation.  
America's imperialism has a variety of causes and a lot of them predate monetary hegemony. The end of monetary hegemony would be a big step at dismantling the superpower and going to a multi-polar, multilateral world. You would also need a big overhaul of foreign policy which is mostly flawed on my view.

With your hatred of American Imperialism, I'm sure you'll join Ron Paul not only for his call to immediately withdraw all troops from overseas, but also goal of ending the CIA and, most importantly, the Federal Reserve.
I would eagerly support the immediat withdraw of all troops from overseas, but I think it's a bit unrealistic seeing as how deeply involved is the USA in unnecessary wars abroad (not to mention foreign bases).
As for the Federal Reserve, if anyone has a better banking and monetary theory I'd review it.

If you are an investor (why else would you be here)
Yes, I'm an investor and a successful one. I'm here by casuality and by amusement. I find certain articles and bloggers as utterly hilarious.

how do you balance your goal of ending the banking industry with your support of an institution (investment banking) that is closely tied with the American Cavaliers of Credit?
I want to put finance at the service of the real economy. Finance is not an end in itself. That puts me at odds with Anglo-Saxon capitalism.

Sorry you didn't get the joke
I don't think it was joke. I think it was an attempt to present the mass media as horribly biased, unprofessional and always looking for scapegoats and soundbites.

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#13) On June 20, 2009 at 8:33 AM, whereaminow (61.23) wrote:

lucas1985,

It always helps if you know what you are talking about. It keeps you from embarrasing yourself.   

If I were American, I'd hire an army of lawyers to check word for word a bill sponsored by Ron Paul. I'd support it only to chill down the wingnuts.

Ron Paul's bills are the shortest in Congress, usually less than three pages, as opposed to the 1100 page monstrosities pushed forward by progressives such as Nancy Pelosi.  You don't need an army of lawyers. You can read them yourself. Take a moment to peruse The Ron Paul Library so that you can learn about the person you are trying to attack (shamelessly). It's obvious that you don't know much about him.

Why a cheaper dollar would be a bad thing? You need to end your unsustainable current acount deficit. To do that, you need to export your way out of your hole. Also, if the fall of the dollar means the end of the dollar hegemony, I'm all for it. Keynes was right with his idea of the bancor and taxes on current account surpluses.

Keynes supported dollar hegemony and was a key supporter of the Bretton Woods agreement which established the dollar as the reserve currency.  You obviously have never read Keynes's Economic Consequences of the Peace. 

Inflation benefits debtholders and those able to claim higher wages (usually unionized labor) at the expense of savers. Since financial assets are mostly held by a wealthy minority, I'm not too worried about mild inflation. If you're a wage earner able to claim a better pay, inflation usually isn't a concern. If you hold non-indexed debt, you should put your capital on the productive economy.

You've never actually studied economics or Keynes, have you?  Even Keynes admitted openly that inflation would hurt the unions, and that only through union concessions could the policy succeed:

"[A] demand on the part of the trade unions for an increase in money rates of wages to compensate for every increase in his cost of living is futile, and greatly to the disadvantage of the working class. Like the dog in the fable, they lose the substance in grasping at the shadow. It is true that the better organised might benefit at the expense of other consumers. But except as an effort at group selfishness, as a means of hustling someone else out of the queue, it is a mug's game …"  - Keynes, How to Pay for the War, 1940

At this point I lose interest. It's obvious to me that you've never actually studied. I don't know how you earned your first degree, but I'm certain it wasn't in economics.  If you apply the same haphazard attacks and policy recommendations to real life that you do to your comments I expect you to have a long and fruitful career as a government servant.  After all, no one rises to the top faster in government than the mediocre and misinformed.

David in Qatar

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#14) On June 20, 2009 at 2:43 PM, Bays (30.87) wrote:

whereaminow,

comments like that last one is why youre one of my favs. lol

 Keep up the good work

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#15) On June 22, 2009 at 6:54 PM, lucas1985 (< 20) wrote:

@whereaminow,
"At this point I lose interest."
Yeah, I'm starting to lose interest in this "debate" but my amusement only goes up. Please don't stop.

"It's obvious to me that you've never actually studied."
And where's your evidence for this baseless assertion? Since I did no mention of degrees/education in this discussion, I assume that you've read my last reply to your "Questions for Ron Paul" blog entry (1). For those who haven't been following this "debate", I've tried to make fun of an attack on my person. Given that I was tearing apart any logical argument in favor of notorious crank Ron Paul (2, 3) whereaminow suggested that this was some sort of personal tirade and/or the result of life issues. I answered that I could be a little tired because of doing multiple simultaneous activities and one of them is earning my 2nd degree.
Do I have to take pictures of my degree to convince you? Hint: I won't do that. After all, I'm just a random dude on the Internet, like yourself.

"I don't know how you earned your first degree, but I'm certain it wasn't in economics."

Where did I say that I have a degree in economics? More baseless assumptions, a common feature of your debating skills. But, since I'm an educated, well read, open minded person with an interest in economy (I do not discount the probabilities of studying economics in the future) and able to make reasoned, well researched arguments based on facts, I'm entitled to state my opinions and views on the subject. However, if you truly have some sort of formal education in economics, let me share my condolences for those who taught you and those who financed your education.

"I expect you to have a long and fruitful career as a government servant."
Thanks. I'd be very grateful to serve my people and my country. Although I already do communal service, I think that I could more shaping policies and such.

"After all, no one rises to the top faster in government than the mediocre and misinformed."
Right, because everyone knows that those working in government are a bunch of lazy, mediocre, self-serving sloths. Seriously, are you capable of making at least one logical, fact-based argument free of diatribe?

"It always helps if you know what you are talking about. It keeps you from embarrassing yourself."

You will do fine if you take your own advice. Some friends of mine are now reading this and knowing the cause of my amusement.

"Ron Paul's bills are the shortest in Congress, usually less than three pages, as opposed to the 1100 page monstrosities pushed forward by progressives such as Nancy Pelosi."
And your point is? You don't measure the thoughtfulness, importance, etc of a bill by page count, do you?

"You don't need an army of lawyers. You can read them yourself."
Supporting the work of a crank requires careful thought. I would not regret the advice of a lawyer.

"Take a moment to peruse The Ron Paul Library so that you can learn about the person you are trying to attack (shamelessly). It's obvious that you don't know much about him."
I took your advice and read some of the material on Ron Paul's site. It convinced me that he's a crank (2, 3)

"Keynes supported dollar hegemony and was a key supporter of the Bretton Woods agreement which established the dollar as the reserve currency."
Your claim is not supported by the facts. Keynes proposed an International Clearing Union (4, 5, 6) which would issue its own currency (6, 7) to settle international trade. Also he proposed mechanisms (taxes and others) to prevent the formation of huge global imbalances (8). This proposal was less than welcome by the Americans and we ended with half-baked solutions and institutions in the Bretton Woods system.

"You obviously have never read Keynes's Economic Consequences of the Peace."
I've read every relevant book written by Keynes and I'm the proud owner of a copy of the GT (9) I have a good grasp on most of his arguments and theories, thank you very much. You're the one who haven't read Keynes' work or maybe it's too complicated for a sloppy thinker like you.

"Even Keynes admitted openly that inflation would hurt the unions, and that only through union concessions could the policy succeed:"
My views on inflation and unions do not come from Keynes' work, that's your baseless assumption. I know very well the opinions of Keynes on organized labor, class conflict and such subjects (10). Please keep the distortions and straw men to yourself.

1-  http://caps.fool.com/Blogs/ViewPost.aspx?bpid=206210&t=01000860093551905860
2-  http://www.ronpaullibrary.org/document.php?id=24
3-  http://www.ronpaullibrary.org/document.php?id=1227
4-  http://en.wikipedia.org/wiki/International_Clearing_Union
5-  http://hansard.millbanksystems.com/lords/1943/may/18/international-clearing-union
6-  http://www.guardian.co.uk/commentisfree/2008/nov/18/lord-keynes-international-monetary-fund
7-  http://en.wikipedia.org/wiki/Bancor
8-  http://www.eco.utexas.edu/facstaff/Cleaver/368keynesoncu.htm
9-  http://www.fce.com.ar/ar/libros/detalles.aspx?IDL=317&
10- http://www.dollarsandsense.org/archives/2009/0509reusskeynesintro.html

 

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#16) On June 22, 2009 at 7:16 PM, muzzybelly (76.53) wrote:

Hyperinflation is not a possibility.  Rogers is just demogoguing.

The idea that low interest rates and increasing government debt inevitably leads to inflation is not informed by actual economics.  On easy example is public investment.   If the government borrows $100B to build a manufacturing plant that pumps out $1T worth of goods, that will cause inflation to go down.  The key is how the money is invested.  Another example:  borrowing $1T to reduce health costs by, say, $100B a year would be an excellent investment.  That's not what any health care plan on the table will do, just using it as an example.

In a glut of savings world, interest rates have to be low, even negative, for the economy to reach full potential.  The fact that inflation rises enough to make the credit markets clear (if the equilibrium rate is negative) does not mean it will keep rising.

 Of course, what can't go on forever won't.  Deficits cannot be run eternally, and liquidity has to be absorbed when excessive.  That doesn't mean that what is happening now will last forever. 

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