Posted on 02/13/2012 5:19:08 PM PST by Tolerance Sucks Rocks
Simple common sense; the government has two ways to rob you of long term capital gains: taxes and inflation. If both are expected to be low, then people will invest money for the long run (i.e. in new businesses) rather than put their money in short term speculation.
The dollar is artificially propped up from time to time, but it will generally balance with this anti-American globalist economy by falling in the long run. Or more at once, when repudiation and currency adjustment time comes. Have fun with the service/debt economy and selling off natural resources. Enjoy the slide.
I would be fine with earlier interest rate hikes and all of the consequences of those, too. Let’s dump half of the spending on all who are dependent on various levels of government for their incomes (including services dependent on government employees, tourism, etc.) and get this default process over with.
Oh, really? The only way to determine the value of the dollar is to get foreigners to buy it. If they don’t, and the dollar slides . . . look in the mirror.
Wonderful. And I’ll wager not a single one of your links addressed my point.
Good grief! I agree with Cocaine Larry! The world is surely going to End.
Cut spending radically enough to pay down the accumulated debt, and the dollar will be a less risky investment. As for setting rates higher, defaulting nations give high yields. To me, personally, either way is fine—higher rates or lower rates. The default process will go on, until spending is cut far more than politicos are willing to see.
Southern European brothels raised their yields, but they didn’t cut public spending enough or produce enough to sustain revenues for their fat governments.
apologeezes to the Beatles
Great stuff, especially the first one, “America’s Ruling Class”. If you’d like some belly laughs at the expense of political elites, I’d recommend “Radical Chic” by Tom Wolfe (1970, only 90 pages).
The subtitle was Mau-Mauing the Flak Catchers, I remember. Read some excerpts, it was very clever and an instant classic. I just didn't feel like reading about black nationalists ripping and raging at white people, while guests at tony Manhattan parties hosted by Leonard Bernstein.
To hear him getting nervous about the dollar, and by extrapolation a number of financial-asset classes valued in dollars, is a real novelty. It feels like it should be a portent of some sort -- like walls bleeding and dogs howling, and statues suddenly speaking to us in Aramaic.
Took the words right outa my keyboard. To hear this from Cocaine Larry -- who would cheerfully barbecue live puppies over hot coals if it would yank the Nasdaq up fifty points -- is certainly noteworthy.
“To hear this from Cocaine Larry — who would cheerfully barbecue live puppies over hot coals if it would yank the Nasdaq up fifty points — is certainly noteworthy.”
I recommend Stubs BBQ Sauce, spicy of course; yummmm :)
Alternatively, it looks like no one listens to or reads Kudlow. Par for the course.
The minor clerisy's preoccupation with ministering to "social problems" (and their inveterate spreading of dependency) reminds me of the "relief" racket one sees at the local drugstores, whose manufacturers concoct a dozen different labels of the same "relief", e.g. miconazole, at the same potency guaranteed not to cure, but only to relieve. And keep the customer returning for more.
That was Don Regan's policy, under Reagan's first term. Regan, as Treasury Secretary, cooperated with Paul Volcker at the Fed to stop inflation, which strengthened the dollar.
Regan's policy was undercut and abrogated by Bush intimate James A. Baker III, who'd been Reagan's chief of staff (always trying to paint Reagan into a corner, and get him to sign Bushy pig-at-the-trough stuff into law, and Reagan would just slip away and do something more, well, Reaganesque). Baker engineered the "job swap" with Regan, whereby Regan became chief of staff, and Baker went to Treasury and promptly took the dollar south, leading to the 1987 Crash when his soft-dollar initiative caused a falling-out with German central bankers, and the markets got wind of it.
Baker's premise was that U.S. businesses needed a weak dollar to help them export. His initiative dated from 1985 and, under Greenspan, Bernanke, and Treasury secretaries ever since, has carried to the present day. It represents the monetary orthodoxy of Bushonomics and Clintonomics, and its insider name is "repression": Simultaneous interest-rate holddown and deliberate inflation resulting in the slow destruction of debt (good or bad), and the stealthy depreciation of privately-held wealth in order to convert it to government purposes through inflationary overspending.
It's the exact same policy the Fed pursued in the 1950's and 1960's under "Regulation Q" that capped savers' passbook savings rate at 5%, and for the same purposes.
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