Last Updated: Jul 9th, 2010 - 14:13:36 Newsletters : 2010 Newsletters : 30 April 2010 Thought for the Day Ben (helicopter) Bernanke believes in the esoteric theory espoused by that great thinker, John Maynard Keynes himself: "If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of lasses-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing." Ben went one step further and sent out cheques in the post to all American taxpayers. So did Rudd in Australia. This saved a lot of time and trouble. Fortunately, we seem to be a little more circumspect here in New Zealand. The rules of paper money - fiat currency - are simple. First we juice up the economy with a reduced interest rate as this will reduce unemployment. This promotes a boom which we then choke off by raising the interest rates. This produces a bust which increases unemployment and so we repeat steps one and two. Unfortunately the evidence shows that this is a positive feedback loop and each iteration produces greater distortions. This continues until the government stops trying to control the uncontrollable and the natural economy gradually subsides back down to its natural state. That is, the state where it would be if there was no government interference. OR - The politicians continue to print more and more money and the oscillations increase to the point where hyperinflation creates chaos and the economy disintegrates suddenly and disastrously causing great pain and grief amongst the population. This is the easy option of choice for most politicians. The world's central bankers have pretty much manoeuvered themselves into a united position. Are we all going to go bust simultaneously? Apr 29, 2010, 18:16 Newsletters : 2010 Newsletters : 30 April 2010 EMU Domino Fears as Spain Downgraded, Germany Drags Feet on Rescue Do you remember the golden rule? He who has the gold rules! [ Visit Website ] Apr 30, 2010, 16:03 Newsletters : 2010 Newsletters : 30 April 2010 The China Bubble After the bubble comes the bust. The implications for Australia are obvious, but what about us? [ Visit Website ] Apr 30, 2010, 15:57 Newsletters : 2010 Newsletters : 30 April 2010 The Implications of the Greek debt Crisis The world economy is now dependent upon the confidence we have in our fiat currencies. Can our leaders provide that confidence? [ Visit Website ] Apr 30, 2010, 15:52 Newsletters : 2010 Newsletters : 30 April 2010 Goldman Whac-A-Mole Now for an inside story to make your hair curl. This is fascinating stuff. This commentary is by Catherine Austin Fitts who was Assistant Secretary for Housing in the U.S. Department of Housing and Urban Development [HUD] back in 1989-1990 when George Bush Sr. was president. Interesting to get an inside look at how these people think! [ Visit Website ] Apr 30, 2010, 09:58 Newsletters : 2010 Newsletters : 30 April 2010 Pay Down The Debt The American government has found a new way to fund its debt. Perhaps this is what Sam Morgan thinks our government should do! [ Visit Website ] Apr 29, 2010, 15:41 Newsletters : 2010 Newsletters : 30 April 2010 The Gloom, Boom & Doom Report Marc Faber is famous for his Gloom, Boom and Doom report. Here is what Wikipedia has to say about him: "Faber was born in Zürich and schooled in Geneva, Switzerland where he raced for the Swiss National Ski Team. He studied Economics at the University of Zurich and, at the age of 24, obtained a Ph.D. degree in Economics magna cum laude. Faber is best known for the Gloom Boom & Doom Report newsletter and its related web site featuring "Dance of Death" paintings created by Kaspar Meglinger. During the 1970s Faber worked for White Weld & Company Limited in New York City, Zürich, and Hong Kong. He moved to Hong Kong in 1973. He was a managing director at Drexel Burnham Lambert Ltd Hong Kong[3] from the beginning of 1978 until the firm's collapse in 1990. In 1990, he set up his own business, Marc Faber Limited. Faber now resides in Chiangmai, Thailand, though he keeps a small office in Hong Kong. Faber has a reputation for being a contrarian investor and has been called "Doctor Doom" for a number of years. He was the subject of a book written by Nury Vittachi in 1998 entitled Doctor Doom - Riding the Millennial Storm - Marc Faber's Path to Profit in the Financial Crisis. Faber has become a frequent speaker in various forums and makes numerous appearances on television around the world including various CNBC and Bloomberg outlets, as well as on internet venues like Jim Puplava's internet radio show. He has also been a participant of the Barron's Roundtable." *** *** *** Here is his latest comment: [ Visit Website ] Apr 28, 2010, 09:49 Newsletters : 2010 Newsletters : 30 April 2010 Weakness Begets Weakness: from Banks to Sovereigns to Banks Advice from a couple of REAL Investment advisers. [ Visit Website ] Apr 27, 2010, 17:29 Newsletters : 2010 Newsletters : 30 April 2010 Hyperinflation Looms – The Dollar Arrives at Its ‘Havenstein Moment’ If this theory is correct then things are about to fall apart for the USA. Just how many Trillions of Dollars can a government create and spend without causing havoc. [ Visit Website ] Apr 22, 2010, 11:00 Newsletters : 2010 Newsletters : 30 April 2010 Government Borrowing Is Rising Risk to World Financial System This is what the IMF thinks. [ Visit Website ] Apr 22, 2010, 10:51 Newsletters : 2010 Newsletters : 30 April 2010 Conspiracy Watch When the world experiences a mania like the 18th century Dutch Tulip Bulb mania it matters not what is true. People believe what they want to believe. If enough people believe that the price of gold has been suppressed then enough people will buy the metal gold to really start the price rising. It is likely that a gold rush mania will start and the price of gold (and silver) will soar much higher than we can imagine now. This should be fun! [ Visit Website ] Apr 22, 2010, 09:37 Newsletters : 2010 Newsletters : 30 April 2010 Greek Tax Reforms to Cut Deficit The Greek politicians seem to think that increasing everybody's tax bill will make the country wealthier. This seems to be the thinking of desperate people as the country spirals out the back door. No country got richer by increasing taxes. I have never met anyone who could point to a success story along the higher tax lines. However, some countries have become wealthier by reducing tax - and the size of government. Hong Kong has a law which stops their government increasing taxes above a total of 20% of the economy. Will the Western Welfare States learn from this? Not likely! [ Visit Website ] Apr 21, 2010, 12:04 Newsletters : 2010 Newsletters : 30 April 2010 USA and UK Systemic Crisis Coming by Year End The Europeans see what politicians in the US and the UK are denying. The future looks bleak. [ Visit Website ] Apr 21, 2010, 11:03 Newsletters : 2010 Newsletters : 30 April 2010 Vacationing a Human Right, EU Chief Says What's strange about that. New Zealand sent two Kiwis (at least I assume they were NZ citizens) on a fully paid holiday to Hawaii and LA to enjoy the sights and watch the locals doing hip-hop. Helen Clark engineered this economic transformation years ago! The Western Welfare Nation States are in serious decline but just like Rome in 400AD the "Bread and Circuses" must go on - even as the empire collapses. No wonder the pundits say that this is the century of the Chinese! [ Visit Website ] Apr 21, 2010, 10:02 Newsletters : 2010 Newsletters : 30 April 2010 All That is Paper Does Not Glitter Like a train wreck in slow motion the world paper money machine slowly disintegrates. So slowly that nobody can see it happening. The last bit will be very sudden and extreme and everyone will see it, but at that point in time, no-one will be able to change anything. Apr 19, 2010, 17:36 Newsletters : 2010 Newsletters : 30 April 2010 George Selgin on Austrian Finance, Central Banks and the Virtues of Free Banking There are some academics who do understand economics! This discussion on money and the advantages of Free Banking illustrates the importance of starting from facts and applying logical thought - not just chanting of mantra. [ Visit Website ] Apr 19, 2010, 10:47 Newsletters : 2010 Newsletters : 30 April 2010 The 21st Century Bank Run Interesting thoughts. [ Visit Website ] Apr 16, 2010, 18:01 Newsletters : 2010 Newsletters : 30 April 2010 Quote for the Week When half of the people get the idea that they don't have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for... that, my dear friend, is the beginning of the end of any nation. Author Unknown Apr 15, 2010, 10:21