Hazards and Benefits

Rubbernecking at the economic train wreck of central planners is not without hazard.  A strained collar and dry eyes, for instance, are common perils.  So, too, is the lasting grimace of disbelief that comes with the roll-out of each zany scheme to save us from ourselves.

 

rictus-1Hazard of the dispassionate observer: the rictus of disbelief will get etched in one’s face.

 

Etched forehead lines and nighttime bruxism are several of the secondary effects.  Not owning shares of Amazon is another.  Though, over the long term, this will likely be an advantage.

Certainly, gawping at the present execution of monetary and fiscal policy in America is not without some benefit.  A healthy suspicion is garnered of politicians and public officials.  This, at the very least, relieves us from voter’s remorse.  Since we didn’t vote for President Obama we don’t have to live with the soiled consciousness that should surely befall those who made this grave miscalculation.

There’s also the preservation of one’s dignity that comes with the unwillingness to join in on the latest popular fad.  What a crock the Tea Party and Occupy Wall Street movements turned out to be.  Good thing we didn’t make a fool of ourselves diving head long into them.

Naturally, these are just a few of the recognizable remunerations that come with the territory.  There are some other, less obvious ones, too.

 

rictus-2Rictus of disbelief syndrome, advanced stage

 

For example, one of the unique rewards of being an unremitting gadfly is the curious pleasure that comes when a notable retread bubbles up to the surface at a new post within the ruling class.  There’s a hope and optimism that, perhaps, their prior fall from grace has endowed them with humility…or, at the very least, some restraint.  Yet this is rarely the case.

 

Positives for Society

Earlier this week, Minneapolis Federal Reserve Bank President Neel Kashkari commented that U.S. interest rates are “about right.”  Moreover, Kashkari sees some real positives for society from the Fed’s loose monetary policies.

 

“To me, just looking at the raw data, it says we should be accommodative, and I think we have this other societal need that we should be accommodative, because if we can keep people from being lost permanently, boy that’s a real positive for society.”

 

The last time we’d heard from Kashkari was late 2009.  At the time it was he himself who was in danger of being “lost permanently.”  Following his position of federal bailout chief, which primarily consisted of rapidly dispersing Henry Paulson’s $700 billion of TARP funds, he’d suffered a crackup.

In fact, he’d taken to a cabin in the Sierra Nevada Mountains – near Donner Pass – and discovered the meaning of life chopping wood.

 

Former Interim Asst. Secretary of Treasury Neel Kashkari is decompressing from his intense time in Washington. He was in charge of the 700-billion-dollar bailout plan, also known as TARP money to financially rescue the economy. He and his wife are hanging out at their home in Truckee, CA, back to nature and getting healthy. PICTURED: With a 20-inch chainsaw in hand, Kashkari cuts down a dead pine on his acreage with a surgeoun's precision. He'll use it for firewood.Kashkari the wood-chopper is boomeranging back –  all things considered, it may have been better if he had stayed in the woods.

Photo credit: Linda Davidson / The Washington Post

 

After making this graceful exit from public life, what in the world could have compelled Kashkari to sign up with the Fed?  We don’t really know for sure.  But based on this week’s comments it appears he thinks he can help people by championing cheap credit.

 

Regrettably, this goes to show that Kashkari didn’t learn a doggone thing from his time in Washington…scattering tax payer money to the big banks.  If he had, he’d understand that the moral hazard that comes with bailing out bankers perpetuates undue risk and ultimately puts savers and retirees in harm’s way.

He’d also recognize that stretching out the credit market primarily helps investment bankers and corporations; they are the ones who benefit most from borrowing money at an artificial discount.

 

Even Death Won’t Save Us

But it is Kashkari’s comment that interest rates are “about right” that’s saturated with the most conceit.  Does he know all?  Does he somehow possess the capacity to access and process all the bits of information that millions of buyers and sellers discern subjectively on daily basis?  If one man’s trash is another man’s treasure how can he possibly know what the correct price of anything should be?

 

Obviously, Kashkari cannot know this.  Neither can Fed Chair Yellen.  Nor the whole cadre of FOMC dot plotters.  Unquestionably, the cost of money is best left to consenting adults to determine on a transaction by transaction basis.

This, no doubt, is the fundamental shortcoming of today’s centrally planned monetary policies.  The consequences, however, are quite staggering. They have pushed public and private debt well past their serviceable limits.  They have stretched paper currencies out like Silly Putty and propagated bubbles and busts in real estate, stock markets, emerging markets, mining, oil and gas, and just about every other market there is.

 

pork barrelThere is pork at the end of the tunnel…

 

Nonetheless, these officers of the state won’t let it alone.  They may take recluse in the woods from time to time, but they always reappear with more positive offerings for society.  The most successful helpers ascend to the Senate, where they spend the rest of their days running interference as they shuffle money out the back door in overstuffed barrels of pork.

The only thing that stops them is death itself.  But, alas, even death won’t save us.  For there is always a long line of fellows, eager to step in and continue fight for the noble cause.

 

Image captions by PT

 

M N. Gordon is the editor and publisher of the Economic Prism.

 

 

 

Emigrate While You Can... Learn More

 


 

 
 

Dear Readers!

You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.

   

Bitcoin address: 12vB2LeWQNjWh59tyfWw23ySqJ9kTfJifA

   
 

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • How to Buy Low When Everyone Else is Buying High
      When to Sell? The common thread running through the collective minds of present U.S. stock market investors goes something like this: A great crash is coming.  But first there will be an epic run-up climaxing with a massive parabolic blow off top.  Hence, to capitalize on the final blow off, investors must let their stock market holdings ride until the precise moment the market peaks – and not a moment more.  That’s when investors should sell their stocks and go to...
  • What Kind of Stock Market Purge Is This?
      Actions and Reactions Down markets, like up markets, are both dazzling and delightful. The shock and awe of near back-to-back 1,000 point Dow Jones Industrial Average (DJIA) free-falls is indeed spectacular. There are many reasons to revel in it.  Today we shall share a few. To begin, losing money in a multi-day stock market dump is no fun at all.  We'd rather get our teeth drilled by a dentist.  Still, a rapid selloff has many positive qualities.   Memorable moments from...
  • Monetary Metals Brief 2018
      Short and Long Term Forecasts Predicting the likely path of the prices of the metals in the near term is easy. Just look at the fundamentals. We have invested many man-years in developing the theory, model, and software to calculate it. Every week we publish charts and our calculated fundamental prices.   A selection of 1 and ½ ounce gold bars – definitely more fondle-friendly than bitcoin, but a bit more cumbersome to send around. [PT]   However, predicting the...
  • US Stocks - Minor Dip With Potential, Much Consternation
      It's Just a Flesh Wound – But a Sad Day for Vol Sellers On January 31 we wrote about the unprecedented levels - for a stock market index that is - the weekly and monthly RSI of the DJIA had reached (see: “Too Much Bubble Love, Likely to Bring Regret” for the astonishing details – provided you still have some capacity for stock market-related astonishment). We will take the opportunity to toot our horn by reminding readers that we highlighted VIX calls of all things as a worthwhile...
  • Why I Own Gold and Gold Mining Companies – An Interview With Jayant Bandari
      Opportunities in the Junior Mining Sector Maurice Jackson of Proven and Probable has recently interviewed Jayant Bandari, the publisher of Capitalism and Morality and a frequent contributor to this site. The topics discussed include currencies, bitcoin, gold and above all junior gold stocks (i.e., small producers and explorers). Jayant shares some of his best ideas in the segment, including arbitrage opportunities currently offered by pending takeovers – which is an area that generally...
  • When Budget Deficits Will Really Go Vertical
      Mnuchin Gets It United States Secretary of Treasury Steven Mnuchin has a sweet gig.  He writes rubber checks to pay the nation’s bills.  Yet, somehow, the rubber checks don’t bounce.  Instead, like magic, they clear. How this all works, considering the nation’s technically insolvent, we don’t quite understand.  But Mnuchin gets it.  He knows exactly how full faith and credit works – and he knows plenty more.   Master of the Mint and economy wizard Steven Mnuchin and...
  • “Strong Dollar”, “Weak Dollar” - What About a Gold-Backed Dollar?
      Contradictory Palaver The recent hullabaloo among President Trump’s top monetary officials about the Administration’s “dollar policy” is just the start of what will likely be the first of many contradictory pronouncements and reversals which will take place in the coming months and years as the world’s reserve currency continues to be compromised.  So far, the Greenback has had its worst start since 1987, the year of a major stock market reset.   A modern-day...
  • Seasonality of Individual Stocks – an Update
      Well Known Seasonal Trends Readers are very likely aware of the “Halloween effect” or the Santa Claus rally. The former term refers to the fact that stocks on average tend to perform significantly worse in the summer months than in the winter months, the latter term describes the typically very strong advance in stocks just before the turn of the year. Both phenomena apply to the broad stock market, this is to say, to benchmark indexes such as the S&P 500 or the...
  • The Future of Copper – Incrementum Advisory Board Meeting Q1 2018
      Copper vs. Oil The Q1 2018 meeting of the Incrementum Fund's Advisory Board took place on January 24, about one week before the recent market turmoil began. In a way it is funny that this group of contrarians who are well known for their skeptical stance on the risk asset bubble, didn't really discuss the stock market much on this occasion. Of course there was little to add to what was already talked about extensively at previous meetings. Moreover, the main focus was on the topic...
  • US Equities – Retracement Levels and Market Psychology
      Fibonacci Retracements   Following the recent market swoon, we were interested to see how far the rebound would go. Fibonacci retracement levels are a tried and true technical tool for estimating likely targets – and they can actually provide information beyond that as well. Here is the S&P 500 Index with the most important Fibonacci retracement levels of the recent decline shown:   So far, the SPX has made it back to the 61.8% retracement level intraday, and has weakened...
  • Strange Economic Data
      Economic Activity Seems Brisk, But... Contrary to the situation in 2014-2015, economic indicators are currently far from signaling an imminent recession. We frequently discussed growing weakness in the manufacturing sector in 2015 (which is the largest sector of the economy in terms of gross output) - but even then, we always stressed that no clear recession signal was in sight yet.   US gross output (GO) growth year-on-year, and industrial production (IP) – note that GO...

Support Acting Man

Item Guides

Top10BestPro
j9TJzzN

Austrian Theory and Investment

Archive

350x200

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com

Diary of a Rogue Economist