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mises
Joined: 05 Nov 2007
Location: retired
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Pluto
Joined: 19 Dec 2006
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 Posted: Wed Sep 30, 2009 1:42 pm Post subject: |
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Here is an entertaining critique/rant of Central Banking seen through the lens of the Austrian School of Economics.
Central Banks: Pimps of the World Economy.
| JS Kim wrote: |
If you ask anyone that graduated from Wharton, Harvard or Oxford, or any number of other Western universities, with a degree in business or economics who Alan Greenspan is, I guarantee you that he or she knows (I myself graduated from the University of Pennsylvania); however, ask them who Friedrich A. Hayek is, and I doubt if anyone knows. Yet those of us that adhere to Austrian economic theories have used our understanding of sound monetary principles to accurately predict all steps of this crisis since 2006. So how did I learn about Austrian economic theories despite never having heard of Friedrich A. Hayek during my entire 18 years of schooling? For the last 15 years, I taught myself what the institutionalized formal educational system refused to teach me. For those of us that continue to analyze this financial global disaster through the lens of the Austrian School of Economics, despite the successful accuracy of our past predictions, even today, we are summarily dismissed as crazy �gloom and doomers�, while those that steadfastly adhere to Keynesian economics principles (all Western Central Banks as well as the governments and politicians they control), upon reflection, are the ones guilty of the predominant body of wildly inaccurate, unsound, and failed predictions over the past 3 years. Need a sample? How about the US housing markets being fine and properly valued? How about the US being on a path to full employment? How about strong future economic growth and a boom in US exports? Though in hindsight, these predictions sound more like the ramblings of a madman, these predictions were all made by our current Federal Reserve Chairman, Ben Bernanke, in 2005 and 2006.
In fact, by cleansing banking history and monetary policy in all textbooks of any honest discourse about the Austrian School of Economics, Central Banks have even shut out nearly all Western educated young women and men from possibly understanding the true roots of this crisis. The reason for this is simple. If people understood Austrian economic principles, there would be instantaneous revolt in the Western hemisphere against the loony monetary principles enforced upon us by Central Banks. Ignorance is the great pacifier. With great irony, those who are ignorant of Austrian economic principles and most hurt by the financial oligarchs that inflict Keynesian economic policies upon the economy often serve as their staunchest defenders and apologists. For example, the retail investor that defends current stock market rallies in China, Europe and the US as �fundamentally sound� and �sustainable� will be the first person to be wiped out when these rallies ultimately and necessarily crash.
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In fact, by cleansing banking history and monetary policy in all textbooks of any honest discourse about the Austrian School of Economics, Central Banks have even shut out nearly all Western educated young women and men from possibly understanding the true roots of this crisis. The reason for this is simple. If people understood Austrian economic principles, there would be instantaneous revolt in the Western hemisphere against the loony monetary principles enforced upon us by Central Banks. Ignorance is the great pacifier. With great irony, those who are ignorant of Austrian economic principles and most hurt by the financial oligarchs that inflict Keynesian economic policies upon the economy often serve as their staunchest defenders and apologists. For example, the retail investor that defends current stock market rallies in China, Europe and the US as �fundamentally sound� and �sustainable� will be the first person to be wiped out when these rallies ultimately and necessarily crash. |
Just like pimps keep their stable in line with destructive addicting drugs, so do central banks keep nations in line with cheap addicting credit. Interesting analogy.
Rather long article by JS Kim author of the website Smart Knowledge U via Zero Hedge. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Wed Sep 30, 2009 7:45 pm Post subject: |
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Great article. JS Kim is extremely intelligent. I follow him on Seeking Alpha:
http://seekingalpha.com/author/j-s-kim/articles
Pluto, you'll like James Quinn too:
http://seekingalpha.com/author/james-quinn/articles
From the article above:
| Quote: |
| One tenet that all Austrian economic adherents would support that will never receive any acknowledgment from Keynesian economists is the following: Central Banks are a burden upon all humanity, and that until all are banished from this earth, no progress in economic or political freedoms is possible. |
Ok, so I agree with this. Kinda. Anyways, to sell our position we have to tone it down a tad. Make a clear case. Hey, lefty, you don't want any more war? Kill the central bank. Hey, righty, you don't want massive government? Kill the central bank. |
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Pluto
Joined: 19 Dec 2006
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| Posted: Thu Oct 01, 2009 4:43 am Post subject: |
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| mises wrote: |
From the article above:
| Quote: |
| One tenet that all Austrian economic adherents would support that will never receive any acknowledgment from Keynesian economists is the following: Central Banks are a burden upon all humanity, and that until all are banished from this earth, no progress in economic or political freedoms is possible. |
Ok, so I agree with this. Kinda. Anyways, to sell our position we have to tone it down a tad. Make a clear case. Hey, lefty, you don't want any more war? Kill the central bank. Hey, righty, you don't want massive government? Kill the central bank. |
Yeah, I tried to mention it was an entertaining rant. It really isn't meant to be taken at face value. Still, there are some important critiques like the disappearance of Austrian critiques in today's world of academia. 2 years for me and there was only a fleeting reference to Schumpeter's "creative destruction." If you want to really know how Mr. Kim has drawn the conclusions he has, as well as people like Congressman Paul, Peter Schiff among others, there is a link to one of Hayek's work on pg. 16 of this thread. Prices & Production may be a good place to start. |
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caniff
Joined: 03 Feb 2004
Location: All over the map
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| Posted: Thu Oct 01, 2009 8:57 am Post subject: |
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A symptom not only of the current mess, but also of Detroit's corrupt political legacy whereby the city was allowed to put its eggs all in one basket (that of GM, Ford, Chrysler and the UAW - the "Big 4"). Truly sad.
http://money.cnn.com/2009/10/01/news/economy/_morgue/index.htm |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Thu Oct 01, 2009 9:14 am Post subject: |
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"Coming soon from your socialist utopia, from national health to nutrition, your utopian leaders are proud to serve the socialst food supplement your family is dying for you to eat - Soylent Green." |
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mises
Joined: 05 Nov 2007
Location: retired
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mises
Joined: 05 Nov 2007
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Pluto
Joined: 19 Dec 2006
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Thu Oct 01, 2009 7:37 pm Post subject: |
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The law of unintended consequences:
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Car sales dropped sharply in September, after the Cash 4 Clunkers program expired. Sales compared to August were�
* Honda: -52%
* Toyota: -44%
* Other: -41%
* GM: -37%
* Ford: -37%
* Chrysler: -33%
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http://blogs.reuters.com/rolfe-winkler/2009/10/01/que-sorpresa-car-sales-down-post-cash-4-clunkers/
This was "pulling demand forward" which is also the basis for the cash for casa's and the whole stimulus (soon with part deux!).
Unemployment numbers out tomorrow. Goldman's revised their expectations from -200k to -250k. I'm sure this was because of 1) their excellent research or 2) their direct line to hope and change. Expect 250 and the start of second stimulus talk. |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Thu Oct 01, 2009 7:55 pm Post subject: |
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the comments on the video are pretty amusing. Shockingly there are a number of skeptics. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Fri Oct 02, 2009 6:00 am Post subject: |
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http://www.bloomberg.com/apps/news?pid=20601068&sid=aZCXOOaX_XWI
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Oct. 2 (Bloomberg) -- Employers cut more jobs than forecast last month and the unemployment rate rose to a 26-year high, calling into question the sustainability of the economic recovery.
The unemployment rate rose to 9.8 percent, the highest since 1983, from 9.7 percent in August, the Labor Department said today in Washington. Payrolls fell by 263,000, following a revised 201,000 decline the prior month that was less than previously reported. |
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Koveras
Joined: 09 Oct 2008
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| Posted: Fri Oct 02, 2009 9:00 am Post subject: |
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| My brother, who makes a decent living even now by stocks and day trading, has just sent me a cryptic email about an impending cataclysm that he has discerned from the numbers. Meaningless to all of you, but I trust him. But anyway I have no assets so I have nothing better to do than post here. When I get home on sunday I'll shore up security. |
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mises
Joined: 05 Nov 2007
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mises
Joined: 05 Nov 2007
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