In the 1960s, Valéry Giscard d’Estaing, then the French Minister of Finance, coined the term “exorbitant privilege” to refer to the special benefits enjoyed by the USA by virtue of the fact that it is the issuer of the world’s reserve currency.
Most Americans remain largely unaware of what these short-term benefits are and the [...]
While I am an advocate of gold investments and gold money, I find that many gold bugs take rather simplistic views of gold markets, gold investments, and the economics behind it. I saw recently saw headlines from another site which thundered warnings about an immediate economic collapse or imminent hyperinflation. Many gold bug forecasters have [...]
Periodically the blogosphere, as well as some of the MSM and academia, raise the question of how Japan’s government is going to avoid insolvency. Federal debt exceeds 200% of GDP and continues to rise. Until now, the solution has been for interest rates to decline, thus allowing interest costs to stay relatively stable.
The bogeyman [...]
In this interesting article on Belarus, Simon Black discusses hyperinflation and dictatorship. It is my view that hyperinflation is not just a monetary event, but more of a political event. That is, it just doesn’t “happen” but rather it is a choice made by politicians to avoid the laws of economics. [...]
The current financial crisis may progress to a phase where people demand and hoard dollar bills but take electronic deposit credits only at a discount which increases until electronic deposit credits are repudiated entirely. The Federal Reserve would be powerless to solve the problem, because while they can create unlimited electronic deposit credits they can’t [...]
This article originally appeared in Bloomberg and is authored by Amity Shlaes, one of my favorite writers (see below).
A little is all right. That’s the message Federal Reserve Chairman Ben S. Bernanke has been giving out recently when asked about the evidence of inflation in the U.S. recovery.
Sometimes Bernanke doesn’t even go that far. [...]
Barman: Did you say the world is coming to an end? Shouldn’t we all lie on the floor or put paper bags over our heads? Ford: If you like. Barman: Will it help? Ford: Not at all. [Ford runs out of the pub]Barman: Last orders, please!
— from The Hitchhikers [...]
In line with my theme that for over half a year has emphasized the price-deflationary aspects of biflation, The New Yorker has provided a nice, brief update of the return of yet another post-Great Crash phenomenon in Delayed Gratification:
…As early as the fall of 2008, with the recession in full swing, Kmart started a [...]
“We think we have an agreement, but we are not sure what it is.”
—Negotiator at the Euro zone “crisis summit” last week, as reported in The Economist.
“You don’t have to be paranoid to be terrified.”
If a ballistics expert were so poor at his job that his [...]
This excerpt is from Delanceyplace.com which publishes these little pieces daily. This is from John Toland’s biography, Adolph Hitler. It demonstrates what can happen when you destroy money.
In today’s excerpt – in the early 1920s, a small, fringe political group led by an inexperienced Adolph Hitler was able to get more attention than it [...]
Around 2002, a developing country defaulted on its debt. Following protracted negotiations, agreement was reached that the bad debt would be replaced with a smaller amount of new good debt, with all investors losing around half their original investment. The country’s finance minister, accompanied by a vast retinue of assistants and bankers, embarked on [...]