2015: How A Pork Bellies Trader And Milton Friedman Created “The Greatest Trading Casino In World History”

“I held in my hand the Holy Grail for the Chicago Mercantile Exchange. The most influential economic mind of the twentieth century provided the CME with the intellectual foundation upon which to build its financial superstructure.” Nixon’s estimable free-market advisors who gathered at the Camp David weekend were to an astonishing degree clueless as to the consequences of their recommendation to close the gold window and float the dollar. In their wildest imaginations, they did not foresee that this would unhinge the monetary and financial nervous system of capitalism. They had no premonition at all that it would pave the way for a forty-year storm of financialization and a debt-besotted symbiosis between central bankers possessed by delusions of grandeur and private gamblers intoxicated with visions of delirious wealth. In fact, when Nixon announced on August 15, 1971, that the dollar was no longer convertible to gold at $35 per […] Read More

2015: The Truth About The Monetary Stimulus Illusion

Authored by Tadashi Nakamae of Nakamae International Economic Research, Perhaps economic policymakers, including Federal Reserve Chair Janet Yellen and the Bank for International Settlements, should take a closer look at Japan, China, and yes, the United States when debating the limits of monetary stimulus and the dangerous nature of financial bubbles. The discussion is happening too late to be anything more than an intellectual exercise. Since its inception in 2008, easy monetary policy has created very few positive effects for the real economy—and has created considerable (and in some cases unforeseen) negative effects as well. The BIS warns of financial bubbles. Quantitative easing has already created asset price bubbles in the United States and elsewhere, and an investment bubble (this includes capital expenditure and real estate) in China and other emerging markets. Meanwhile, this policy has failed to have a positive impact on the real economy partly because central […] Read More

2014: The Coming Crash Is Simply The Normalization Of A Mispriced Market

Submitted by Charles Hugh-Smith of OfTwoMinds blog, The correlation between the Fed’s monetary heroin production and the stock market will break down as the market normalizes. In the spirit of calling things what they are, longtime correspondent Harun I. explains that market crashes are simply distorted/mispriced economies attempting to normalize. Here’s Harun’s commentary: Let’s examine the term “crash.” A crash is nothing more than the economy trying to normalize, however, everyone seems to think the environment created by bubbles (unpayable debt) is normal. This is truly fascinating because accepting unpayable debt as a norm means that prices are irrelevant, and since prices are irrelevant, there is no risk. But just because we think a thought does not make it a fact. Interestingly, each attempt at normalization requires exponentially greater amounts of expropriation of purchasing power. Exactly, how does one grow one’s way out of this? To clarify the term normalize, I mean that […] Read More