Use access key #2 to skip to page content.

Paul Krugman is Insane - aatcks Jim Rogers

Recs

15

November 07, 2010 – Comments (13)

Zerohedge has the post -

http://www.zerohedge.com/article/krugman-dementia-alert-former-enron-consultant-says-jim-rogers-has-been-absolutely-wrong-abo

While we approach the topic of Paul Krugman with the same eagerness one approaches a clogged up, never cleaned, bathroom at a frat party that is about 50 years past its due date, (pretty much like Keynesianism) this one just put us over the top. In his latest pointless drivel on the economy, instead of reverting to his usual mode of praying to John Keynes, bitching at those who dare call for accountability and the punishment of all those, such as Krugman, responsible for what is now a $4 trillion taxpayer monetary bailout tab, and begging for trillions, then quadrillions, then quintillions, then an infinite amount of money, the Op-Ed writer has instead decided to start a mudslinging campaign against none other than Jim Rogers, the co-founder of George Soros' Quantum Fund, who has been pretty much spot on with his calls for decades.

A quick compare and contrast - Jim Rogers, whose fortune is in the hundreds of millions, contrary to Krugman, who only has a worthless statue given to him by the same idiots who thought that Obama was worthy of being awarded for his "peace" initaitives, has always had to put his money where his mouth is, while the other one's only notable claim to fame is being a consultant, and a corrupt and massively conflicted one at that, for that icon of Keynesian free markets- Enron, which Krugman could not find enough words to praise, before it was uncovered that, just like Krugman's Keynesian ideal, was a fraud, a disaster, and the biggest bankrupty at the time, in the making. We could go on and on, and recapitulate Gonzalo Lira's thesis of why Krugman is either an "Imbecile or a Fraud" but luckily our readers are sufficiently intelligent and they can figure this out on their own. Which begs the question: just how dumb does Krugman take his readers to be, when he says something as patently imbecilic as the following: "And please note that inflationistas like Rogers have been wrong about absolutely everything this cycle (and the last cycle, and the cycle before that)." While this statement is so wrong and obtuse, it merely confirms that Krugman must obviously be an idiot if he believes that any of those unfortunate enough to read his meandering garbage will not spot who has been wrong not only about this cycle, but the one before, and the one before that.

And for those who can't, below we present a Bloomberg interview with Rogers from 2008 which demonstrates that Soros' former partner got pretty much everything right...

13 Comments – Post Your Own

#1) On November 07, 2010 at 1:29 PM, ETFsRule (99.94) wrote:

That's a lot of words, but not a single direct response to anything that Krugman actually said. It's pretty much just a series of ad hominem attacks. I don't understand why, for the sake of his own readers, this Zerohedge writer can't just make his points calmly and with some semblance of civility.

Anyway, here is Krugman's latest post about Rogers, here is where he points out that Rogers can't tell the difference between assets and liabilities, and here is where he points out that Rogers' predictions of inflation have so far been incorrect.

Report this comment
#2) On November 07, 2010 at 2:11 PM, abitare (35.58) wrote:

ETFsRule,

Did you read the post before you replied? 

"but not a single direct response to anything that Krugman actually said."

What? Read the links and entire post. 

Krugman is a mad man. 

 

Report this comment
#3) On November 07, 2010 at 2:40 PM, whereaminow (20.23) wrote:

ETFsRule,

What's the historical time lag between monetary creation and price inflation?

What do you make of the fact that several commodities have outpaced the price of gold and silver of the last year?

What do you make of the rise in the PPI and does that have any expected impact on future prices? 

David in Qatar 

Report this comment
#4) On November 07, 2010 at 2:51 PM, ETFsRule (99.94) wrote:

"Did you read the post before you replied?"

Yes. Did you?

"What's the historical time lag between monetary creation and price inflation?"

What monetary creation are you referring to?

Report this comment
#5) On November 07, 2010 at 4:19 PM, whereaminow (20.23) wrote:

What monetary creation are you referring to?

Well you could start by referencing any studies of the cause-effect analysis between monetary creation and price inflation.  I already know the answer, but I'm just curious about how steep the ignorance curve actually is for you. And if you don't like being insulted, quite side stepping the question.  Because if you are going to accuse JR of being wrong about predictions of inflation you should actually be versed in inflation history.

David in Qatar 

 

Report this comment
#6) On November 07, 2010 at 4:33 PM, ETFsRule (99.94) wrote:

David: You're an idiot.

Now that we've gotten the insults out of the way, let's get back to the issues. For starters, when did I accuse JR of being wrong about anything? I merely responded here to point out that the original post does not do a very good job of responding to Krugman's recent posts - in fact, it pretty much ignores them.

Regarding inflation, I believe the lag time is usually a little less than 2 years. But regardless of any lag time, wouldn't we need to see an increase in the rate of monetary creation, in order to cause an increase in the inflation rate?

Do you even realize that the rate of monetary creation over the past 2 years has been well below its historical average?

Report this comment
#7) On November 07, 2010 at 5:05 PM, whereaminow (20.23) wrote:

Do you even realize that the rate of monetary creation over the past 2 years has been well below its historical average?

Possibly, if we can even agree on what money is, the best way to measure it etc.

We also have to ignore that interesting episode 2 years ago.

And the answer is a lag of 18-30 months empirically.  To be safe, I would wait until at least 36 months before I started pounding my chest, for reasons I'm not going to get into while I'm three sheets to the wind.  And since all commodities and producer goods are rising, there is little doubt that those costs are soon to be passed on to consumers (if not already depending on your level of faith in hedonics,)

The fact that gold/silver are among the worst performing commodity classes over the past 12 months should also intern any bubble talk, but alas, we can only ask for so much.

I could go on, but Peyton is making The Manning Face and its distracting me.

David in Qatar 

Report this comment
#8) On November 07, 2010 at 5:26 PM, TheDumbMoney (43.71) wrote:

I hope we can agree that money equals more than just the monetary base. 

 I hope, too, that we can agree that, whatever certain people may think about what *should* be money, by money we are talking about dollars, and not yellow metal, or a basket of world currencies, or a total of all world currencies. 

If we do in fact agree to those two things, then I submit ETFsRule is quite correct that, NET, we haven't seen a lot of monetary creation lately....  And, by 'lately,' I mean in the last two years.  That is a major distinction between this time period, and, say, 2002 -- 2005...or between us, say, and...Zimbabwe a few years ago.

Report this comment
#9) On November 07, 2010 at 5:37 PM, whereaminow (20.23) wrote:

If we do in fact agree to those two things, then I submit ETFsRule is quite correct that, NET, we haven't seen a lot of monetary creation lately....  And, by 'lately,' I mean in the last two year

But that's kind of irrelevant to this question:

"What's the historical time lag between monetary creation and price inflation?" 

Isn't it?  It's always fun to watch ETF sidestep the important analysis.

David in Qatar

Report this comment
#10) On November 07, 2010 at 5:49 PM, ETFsRule (99.94) wrote:

"Possibly, if we can even agree on what money is, the best way to measure it etc.

We also have to ignore that interesting episode 2 years ago."

I'm not sure what you mean by this. Why would we have to ignore anything?

"And the answer is a lag of 18-30 months empirically.  To be safe, I would wait until at least 36 months before I started pounding my chest, for reasons I'm not going to get into while I'm three sheets to the wind."

Ok, we need to wait 36 months, but what is the starting point?

If we can agree that there hasn't been much monetary creation, then why would we need to treat inflation as a serious risk?

"The fact that gold/silver are among the worst performing commodity classes over the past 12 months should also intern any bubble talk, but alas, we can only ask for so much."

Gold and silver have performed outrageously well if you extend the timeline to 3 years, 5 years, 10 years, etc.

As for other commodities, I think it's shortsighted to worry about their recent price increases. People get so worked up about the increase in the price of wheat, or whatever else, over the past year. These commodities are just normalizing back to a fair price, after dropping more than they ever should have.

If you look at a 10-year chart you will see that the price of wheat is right in line with its long-term trend, and prices are still much lower than they were in 2007.

In short: inflation concerns are much ado about nothing.

Report this comment
#11) On November 07, 2010 at 6:00 PM, starbucks4ever (97.24) wrote:

Bernanke started printing 24 months ago, and kept printing for more than a year. Assuming a 24-month time lag, we should begin to see the front edge of the liquidity wave just about now. But it's only the front edge. It will take another 15 months for the whole wave to pass us by, and only then the enormity of inflation created by Bernanke & Co. will sink in. And then, during the whole 2013 we will be feeling the impact of QE2. Because we had low inflation for so long, people are still slow to anticipate what's coming. 

Report this comment
#12) On November 07, 2010 at 6:01 PM, whereaminow (20.23) wrote:

Ok, we need to wait 36 months, but what is the starting point?

Just check out the Fed's balance sheet graph. The starting point is Sept 08.

I also want to add that stagflation has always been my primary concern, one that I have recorded here at least 12-15 months ago on several occasions.  The unemployment level is already there. A >5% CPI rise seals the deal.  And that's by gov numbers. Dollar crisis concerns in Sept 08 were entirely justified.  That the Fed slowed its roll (until QE2 comes along) should have been noted by Rogers and Schiff, admittedly.  But of course, like me, they predicted QE2 as soon as QE1 happened, so maybe they aren't so dumb.

At this point, I'm also convinced that if I wore a Colts jersey, Peyton Manning would find a way to get me six receptions for 80 yards in the second half of the Eagles game. 

David in Qatar 

 

Report this comment
#13) On November 07, 2010 at 8:29 PM, ETFsRule (99.94) wrote:

More Krugman.

What I really found interesting, though, was comment #3 on that blog post. I wonder if you guys find this to be a fair representation of Milton Friedman's ideas? (and no, I didn't make the comment):

The one thing that Milton Friedman emphasised for most of his career was the importance of the rate of growth of the M2 definition of the money supply, which he felt determines the rate of growth of nominal rate of growth of the GDP and the rate of inflation.
At the moment the rate of growth of potential GDP in the long run is probably around 3% at least, if we add to that a long term goal of approximately a measured rate of inflation of 2% (which is the explicit goal in the EU, Canada and the UK), M2 should be growing at around 5% per year.
The actual rate of growth since Obama came into office two years ago is only around 3.2%, so the rate of growth of M2 is too low for the long run and in unsustainably low.
Therefore the Fed is right to take actions to raise the rate of growth of M2 to 5%.

Report this comment

Featured Broker Partners


Advertisement