Root Causes
While some people are debating whether our current economic crisis was caused by amorphous human emotions like "greed" or "evil", I submit that at the root, the issue is something far deeper - a system that encouraged and incented the behaviour that has caused such turmoil. And all of the bailouts and purchasing of "toxic debt" will only worsen it in the long run.
The problem is with "money":
Testimony of Dr. Lawrence Parks on the MT Sound Money Bill (HB 639) from Constitutional Money on Vimeo.
(h/t to Strike the Root)
Labels: federal reserve, fiat money, Gold
4 Comments:
Ridiculous! This is a NATURAL, TEMPORARY, CYCLICAL, downturn. We still are better off as a whole financially and in terms of wealth then we were a decade ago. Wait another year or two and things will be booming like it is Summer 2007. See why:
http://adaugeoindex.blogspot.com
Well, "Adaugeo" clearly you didn't bother to watch the video and judging by your site, you are a pseudo-scientific believing lunatic.
You sound suspiciously like a Keynsian too.
If you think big spending coupled with tax cuts is sound fiscal policy, then you really don't know anything about economics.
Mike, old friend. I followed the link and listened to as much of Dr. Parks as I could bear. His logic is routinely strained and not always very honest either.
I just about stopped watching it altogether when he made his preposterous claims about Zimbabwe and hyper-inflation. That wasn't the result of Mugabe's monetary policy but it was merely one symptom of a whole host of tyrannical policies imposed by Mugabe. Parks' description is both simplistic and deceitful. But if you don't let facts get in the way it does nicely support his premise.
By the way, fascinating story in today's NYT about Norway, the shining beacon of Keynesian socialism and how gosh darn well that country's doing.
MoS,
Zimbabwe, like Wiemar Germany and like Argentina before it, has hyper-inflation because it is constantly creating fiat money out of the air - either actually printing it or creating electronic credit at banks.
With so much currency chasing essentially the same amount of goods and services, each individual denomination has less value and as such, it take more of them to purchase the same items - thus inflation. Add to that the fact that the money has no real backing or value and it gets worse. So in an attempt to futher pay up debts and rescue the economy, they print more, which devalues the currency more. And so on, into hyper-inflation.
If you look at it that way, inflation isn't the problem but they symptom of the greater monetary problem.
And yes, it is about Zimbabwe's monetary policy. Whatever other crazy policies Mugabe may have, it is the monetary policy that is causing the inflation - just like the same policy did in Germany in 1920, in Argentina in 2002 and like it probably will in the US in the next few years.
Pity you couldn't set aside your pre-conceptions long enough to watch the whole thing.
I have not seen the article about Norway, but I'd be interested in reading it. Everything I have read, including many mainstream economists prior to the latest meltdown, indicated that the stagflation of the 70's pretty much proved Lord Keynes to be wrong on economics.
I'm still hard pressed to see how creating money out of nothing and running massive deficits is a ticket to prosperity. If I did that, I'd be living under a bridge in a month.
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