Tag Archives: Pretense Of Knowledge

The Fed Can’t Stop Printing Money … or Else

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“Several surveys have shown that most people believe they have above-average driving skills. In fact, 93% of student drivers think their driving skills are above average. The law of averages tells us that this can’t possibly be true.  It reminds me of that survey that said 84% of Frenchmen think that they are above-average lovers. Wishful thinking.  Such high self-regard with respect to personal competence is known as ‘overconfidence bias.’ People tend to overestimate or exaggerate their abilities.  This bias is inherent in all of us. But it reaches an especially high level of intensity in one central banker.”

http://sovereign-investor.com/2013/09/03/the-fed-cant-stop-printing-money-or-else/

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Note to Fed: Giving the Banks Free Money Won’t Make Us Hire More Workers

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“As anyone in the actual position of hiring more staff knows, it is not a lack of cheap credit that makes adding workers unattractive, it is the lack of opportunities to increase profit margins by adding more workers. If the economic boom of the mid-1980s proves anything, it is that the cost of credit can be very high but that in itself does not restrain real growth. What restrains growth is not interest rates, it is opportunities to profitably expand operations.  What the Fed cannot dare admit is that in a crony-capitalist, globalized, State/cartel-dominated economy, there are few profitable opportunities, regardless of the cost of credit.”

http://charleshughsmith.blogspot.de/2013/02/note-to-fed-giving-banks-free-money.html

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MIT Economist’s Audacious Paper on Economic Climate Models

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“There is no underlying economic theory and we have no empirical data by which to estimate the impacts on humans coming from even moderate (let alone large) increases in global temperatures. Thus when economists design computer simulations of the global climate and economy, going centuries into the future, they literally just make up relationships between hypothetical temperature increases and the corresponding percentage decrease in the global GDP. Then, in an excellent illustration of ‘groupthink,’ the creators of these made-up damage functions justify them by pointing to third-party summaries done of their own (made-up) damage functions.”

http://consultingbyrpm.com/blog/2013/08/mit-economists-audacious-paper-on-economic-climate-models.html

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Bill Bonner: The Fatal Flaw at the Heart of Modern Economics

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Bill-Bonner2

“What machine has intelligent parts…each responding to its own information base, more or less independently? Second…and perhaps more importantly…the parts have desires of their own. You build a machine to accomplish the desires of the designer. An economy, on the other hand, is merely a way for the constituent parts to achieve their own ends. Imagine an automobile that goes where the steering wheel wants to go! Imagine a motor that runs faster when the carburettor feels frisky. You can see that this is like no machine ever created. The parts want to go in different directions…at different speeds…for different reasons. The economy is much more like a flock of birds than a Boeing 747.”

http://www.dailyreckoning.com.au/the-fatal-flaw-at-the-heart-of-modern-economics/2013/05/22/

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‘The Fed Is Trying Like Crazy, But Nothing It’s Doing Can Save The Economy’

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“David Rosenberg, the veteran Wall Street economist and bearish strategist at Gluskin Sheff, gave an intense presentation on Friday at John Mauldin’s Strategic Investment Conference. Titled ‘Bernanke: The Wizard Of Potemkin,’ this presentation offers a sobering look at the anemic U.S. economy, the labor market mess, and the Federal Reserve’s controversial efforts to get everything back on track.  Before you can even think about getting bullish, you must consider the eye-opening charts from Rosenberg’s presentation.”

http://www.businessinsider.com/david-rosenberg-bernanke-wizard-potemkin-mauldin-presentation-2013-5?op=1

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How Do You Like Your Central Planners, Bookish or Flamboyant?

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The-Circle-Bastiat-311

“I knew Yellen in grad school and have encountered Summers in person, and I agree fully with these characterizations. But the Economist’s editorialist misses entirely the bizarre, indeed grotesque, context of this discussion. The Fed is the world’s most powerful government economic planning organization and its decisions affect the lives and prosperity of millions, if not billions. All this will hinge on the personality of one person? How about a system in which authority is decentralized, power is limited, and nobody cares who calls himself ‘Fed Chair’?”

http://bastiat.mises.org/2013/08/how-do-you-like-your-central-planners-bookish-or-flamboyant/

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Was Keynes a Brilliant Investor?

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The-Circle-Bastiat-311

“Keynes’ initial foray into investing led to a smash up. He lost everything he had unwisely borrowed and had to be bailed out by his parents. He did not do well in the 1920′s. He was taken unawares by the the 1929 Crash and also by the 1937 rout. In both instances, he came perilously close to being wiped out again because of very concentrated holdings and continuing use of leverage. In short, Keynes was a speculator, at the same time that he criticized speculators and the ‘casino’ atmosphere of the market. The article does disclose Keynes’s very large gold mining stock position in the 1930′s but fails to note the irony of this holding or his private praise of gold as a  portfolio diversifier.”

http://bastiat.mises.org/2013/08/was-keynes-a-brilliant-investor/

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Bernanke Textbook Royalties

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EPJ13

“The textbook business can be very very lucrative. Fed Chairman Ben Bernanke is co-author (from before he was in government) of ‘Principles of Economics’ and ‘Principles of Macroeconomics’ (written with Robert Frank, published by McGraw-Hill) and ‘Macroeconomics’ (with Andrew B. Abel and Dean Croushore, from Pearson). It appears that the McGraw-Hill books are more lucrative, generating $100,000 to $1 million in income for the chairman, who also made $50,000 to $100,000 from Pearson.”

http://www.economicpolicyjournal.com/2013/08/bernanke-textbook-royalties.html

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Bernanke Is Getting Killed in the Bond Market

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“Federal Reserve Board chairman Ben Bernanke’s latest disclosure statement for year end 2012 shows that he held positions in the Blackrock High Yield Bond Fund and US Treasury strips. If he continues to hold these positions, he is losing big time.  His Blackrock bond position is down by at least 5%. Meanwhile, his strips position is likely getting destroyed.  Here is a chart on the PIMCO 25+ Year Zero Coupon U.S. Treasury Index ETF, which is likely comparable to what Bernanke is holding.  Over the last 12 months, it is down more than 24%.  Bottom line: Bernanke is not only screwing up the nation’s economy, he is screwing up his own portfolio.”

http://www.economicpolicyjournal.com/2013/08/bernanke-is-getting-killed-in-bond.html

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The Danger of an All-Powerful Federal Reserve

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“How will home builders react if the Fed decides their investments are bubbly and restricts their credit? How will bankers who followed all the rules feel when the Fed decrees their actions a ‘systemic’ threat? How will financial entrepreneurs in the shadow banking system, peer-to-peer lending innovators, etc., feel when the Fed quashes their efforts to compete with banks? Will not all of these people call their lobbyists, congressmen and administration contacts, and demand change? Will not people who profit from Fed interventions do the same? Willy-nilly financial dirigisme will inevitably lead to politicization, cronyism, a sclerotic, uncompetitive financial system and political oversight.”

http://online.wsj.com/article/SB10001424127887323906804579036571835323800.html

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