news
and comment
|
for previously archived news article pages, visit the news archive page (click on the button above) recent economics articles: |
Gold is still well below its 1980 peak in real terms. Gold prices can go down as well as up, making the market for gold a casino where participants wager that the price will keep rising. Like gold, the fortune of banks is heavily tied into government behaviour, housing is somewhat less heavily linked. Industrial use is around 450 tonnes a year. Another 450 tonnes goes to the hoarders, while jewelry use is about 2,400 tonnes. Overall, about 160,000 tonnes has been mined since the time of cave dwellers. In 2007 demand was 160% of production,
due to the latest gold bug fever.
related material
the web address for this article is | ||
interesting suggestion regarding the ‘too big to fail’ problem
(The article is also useful common sense.)
the web address for this article is | ||
on fixing
the global economy - investing in real capital First from a mistaken analysis of the current economic situation:
I gently suggest that the above is not very convincing. Keynes was a pragmatist. He was far more firmly based in the real world than the hoards of silly scribblers. The linked article looks a lot like magical thinking. As with so many poorly educated people, the writer clearly does not understand Keynes, but uses his name as some sort of vague boo word. According to the linked article (which is, in fact, rather unclear and apparently muddled), if you don’t consume, but accumulate numbers in an ‘account’ somewhere, you solve your present banking clag-up problems. It’s nonsense. Numbers in an account never produced anything in the real world. From the linked article:
What does the writer believe ‘capital’
is? Numbers in an account? Real capital is a bridge across the Thames, or a mass sewage system. The US ‘stimulus package’ (among other matters) is aimed at building bridges and repairing roads. That is real capital, as long as those ‘goods’ are useful, rather than bridges to nowhere. Look at Keynes’ semi-satirical illustration:
At the end of the process (for instance, ‘the stimulus package’), you may well have some negative numbers in accounts somewhere, but you do have your bridges, or concert halls, or studies of pig stinks. But the negative numbers are just numbers in accounts. You may not like the cavalier approach, but it is possible to cross out those numbers at the end of the day, or a few years. And that is precisely what governments do, for instance through inflation. Meanwhile, pensioners and ‘workers’ end up with less money value than they hoped (or believed they had). It is of vital importance to keep clear the differences between real capital and unstable numbers in accounts. Real capital is a person’s education, their good health as opposed to their demise, and bridges. It is not the unreliable numbers in an account somewhere. The numbers in the account are often wiped out very easily by a corrupt crook like Madeoff or Brown the Clown. Look at the Clown’s theft of tens of billions from pension ‘savings’. Keynesian stimulus is being very widely misunderstood, by the left as an edict to the burying of bottles, and by the dogmatist right as, again in the words of Keynes:
Brown: an awful example of misunderstanding and misusing Keynes’ ideas
This is a political issue. You cannot just wait/hope for the market to correct itself. In the meanwhile, people starve or, at best, waste their lives away in depressing circumstances. It is under these conditions that government stimulus is to be suggested. But wasting ‘money’ on make-work is a foolish and trivial reading of Keynes. Incidentally, Keynes also hated inflation. Keynes was writing early in the last century. With the great advances of the factory system, a citizen’s wage is now an ever increasing necessity. Governments have a great propensity to waste and destroy wealth in the pursuit of power. This is embodied in the regular critique of the Clown - that he did not prepare for a rainy day. The Clown has been spending the money/wealth he stole from productive business. That is a large part of why the UK is now in trouble. Brown has undermined production badly, in order to increase his power over individuals as he tried to establish a client state. His answer to his own devastation is - more of the same. The Clown is a weak-brained and corrupt cult socialist. Crowding out creative productive activity during stable times is idiocy of the first water. ‘Stimulus’ in the face of rising unemployment is a different matter. Keynes correctly regarded socialism as follows:
Keynes on the steady attenuation of work (regarding a citizen’s wage)
Written 1928-30.
And more. related material
the web address for this article is | ||
“an enormous problem” - bernanke, 10 march 2009
This applies to pricing transparency. Regarding mark to market:
The distance of shareholders from control From Keynes, National Self-Sufficiency, June 1933
Thanks to DVH for second link.
the web address for this article is | ||
simon heffer starts to understand the euro Article is recommended reading.
About time someone noticed....the euro is also similarly over-valued against the dollar.
How does he suppose the euro can be ‘devalued’? The only obvious route to that is to drop the euro. As for Milton Friedman’s comments of 3 years ago. I reported the problems with EMU over 10 years ago! Here are some quotes i used in that analysis:-
the web address for this article is | ||
on economics, politics and psychology A huge amount of economics is political.
Barack Obama is an extremist dogmatic socialist.
He’s straining to much enlarge government. Increasing numbers cannot earn enough by their work to buy the trinkets, so Brown is undermining the value of the huge accumulated debt. This will probably continue until the politicians are forced to introduce a citizens wage, or they decide to tolerate ever increasing social divide, with the less able part of society sinking ever lower. It is vital to realise the money is used as a means of social control by politicians. Money is, in part, a government cartel. People like the Clown are only interested in control, and they are socialist dogmatists. The Clown’s first concern is elections, not the good of the country or the people. The Clown is interested in the Clown, and is a dogmatic believer in his crazy cult. He and his mates also desire the trough. The whole political show revolves around elections. Thus, the general pattern is that governments loosen money, approaching elections; and squeeze it down after the election (“watch my lips, no new taxes”, and then the election over, taxes go up). The current contraction has decided not to wait for the politicians. You cannot understand modern economics without understanding politics. Next, humans show social rank by accumulated accoutrement. Look at bower birds trying to attract a mate. You cannot understand modern economics without understanding psychology. My concern is to ensure that people think sanely about economics, and most especially to realise when decisions are essentially political, and not ‘economic decisions’. There are available various responses to an economic contraction, from benign neglect to super-meddling. My concern is that such decisions are taken with open eyes and with attention to consequences, intended or otherwise; not taken as some dogmatic responses based on fundamentalist theories. I am also concerned that the issues are discussed widely, not based on false/foolish beliefs in ‘the market’, or ‘the wonders of government’/socialism. My prime target is that people attempt to think, rather that react mindlessly.
the web address for this article is | ||
on economic markets and engineering To compare economics with engineering, as a correspondent suggested, borders on delusionary. The atoms in steel and concrete do not have minds and motivations of their own, they exhibit very low levels of choice. Engineering calculations are, in general, very different to those of economics and markets. The advantage of markets is they can integrate the decisions of billions. The market is a live system and requires a very different approach to that of engineering. Socialism is, in part, born out of paranoid drives to control. Naturally, socialists tend to seek magic formulae. The market is the machine that calculates outcomes. Humans adapt to opportunities, and thence change their behaviour. Molecules of concrete do not seek advance/‘profits’. Markets tell you what is happening, or what has happened. They are far less suitable for telling you what is going to happen. It is the drive to control that is at the centre of the mental disease called socialsm. Trying to control the market is not much different from trying to control individuals. Apply enough ‘control’ and you kill people.
the web address for this article is | ||
You are here: economics news from February 2009 < News < Home |
latest | abstracts | briefings | information | hearing damage | memory | France zone |
email email_abelard [at] abelard.org © abelard, 2009, 25 february variable words |