Hoover’s interventionist policies set the stage for FDR’s “New Deal” that helped turn a recession into a “Great Depression”.
>Libertarians argued years later that Hoover’s economics were statist, & that he belonged in the continuum of government & business collaboration that began around the turn of the century. I must agree with them.<
>Roosevelt the Presidential candidate blasted the Republican incumbent for spending and taxing too much, increasing national debt, raising tariffs & blocking trade, as well as placing millions on the government dole. Roosevelt attacked Hoover for “reckless and extravagant” spending, of thinking “that we ought to center control of everything in Washington as rapidly as possible.” Roosevelt’s running mate, John Nance Garner, accused the Republicans of “leading the country down the path of socialism”. Hoover believed the government should spend more money on dams & public works during business downturns, a kind of early Keynesism.<
>Years later, one of Roosevelt’s closest advisers, Rexford Tugwell, admitted that “practically the whole New Deal was extrapolated from programs that Hoover started.”<
The New Deal Illusion
Excessive monetary expansion (inflating the money supply) is a necessary but not sufficient condition for rising price levels (price inflation).
Central bankers are putting into place the likelihood of a collapse of the global paper money regime.
According to my friend, Iván Carrino, the rate of expansion for Argentina was 182%!
“If I had asked people what they wanted, they would have said, ‘Faster horses'”
A true (alert) entrepreneur tries to anticipate what people might want before they realize it themselves!
HT: Mark Tier
“Eternity is a long time, especially towards the end.”
As such, endless Quantitative Easing (QE-∞) by the FED is gonna seem like a very long time when it continues to print more & more & more green pieces of paper (fiat-baseless) money!!!
Being “best” central banker is rather like being the “tallest midget”…?
Nature lets us know, naturally, what are our rights!!!
Certain rights are NOT granted by man-made laws or constitutions; they are a matter of nature. Among these are “life, liberty & the pursuit of happiness”….
“If Something cannot Go On Forever, It will stop.”
Eventually, people will begin to understand that when a central bank exchanges one piece of paper (fiat money) for another piece of paper (a bond or security) that it changes NOTHING THAT IS REAL.
Sooner or later, it will be apparent that much of the observed economic activity is unsupported by fundamentals.
The air in the US stock market bubble will go out as will the global bubble in government bonds.
Ill-advised monetary policy is at the heart of these economic imbalances, e.g., zero-interest rate policies (ZIRP), inflation targeting & quantitative easing (QE).
Central bankers are setting up the global economy for a massive collapse due to their ignorance about how excess liquidity sets up a boom-bust cycle.
What is it that gives anyone confidence in the future value of the US dollar…?
“In the United States neither paper currency nor deposits have value as commodities. Intrinsically, a dollar bill is just a piece of paper, deposits merely book entries. Coins do have some intrinsic value as metal, but generally far less than their face value. What, then, makes these instruments – checks, paper money, & coins – acceptable at face value in payment of all debts & for other monetary uses? Mainly, it is the confidence people have that they will be able to exchange such money for other financial assets & for real goods and services whenever they choose to do so.”
Federal Reserve Bank of Chicago, 1961
“In 1970 an ounce of gold ($35) would buy 15 barrels of OPEC oil ($2.30/bbl). In May 1981 an ounce of gold ($480) still bought 15 barrels of Saudi oil ($32/bbl).”
The Economy In Mind by Warren Brookes
At present, an ounce of gold buys about 20 barrels of oil.
The perfectly-elastic supply of money under a global paper (fiat) money system allows central bankers devalue the very currencies that they are charged with protecting.
If all paper currencies were destroyed, it would not change economic wealth. However, printing too many pieces of paper money will destroy wealth.
Attempts by ECB to bailout some euro-zone govts (buying their bonds to hold down interest rates) is wrong-headed. As it is, high bond yields are a reaction to NOT a cause of underlying problems that are only partly financial.
Govt finances of many of these countries are weak due to slow (or no) economic growth, making it unlikely that they can repay existing debts.
Keeping bond yields low allows public-sector debt-to-GDP ratios to continue rising.
Higher interest rates is like penicillin to the bacterial virus of excessive borrowing, whether by govts or individuals or businesses.