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November 2013

Stagflation: Debt Grows, GDP Slows

The markets are torn between polar opposite schools of thought. There are those who believe we are in a period of intense deflation, which will continue for some time, and there are those who believe that inflation is inevitable and, in fact, is already with us as consumers can attest. Deflation The Fed must be in the deflation camp. Why else would they continue to create $85 billion/month of new …Read More

The Fed’s ‘Bizarro World,’ Part II

The “Seinfeld” TV comedy series (1989-98) had a set of episodes, known as “Jerry’s Bizarro World,” where everything “normal” was turned upside down and inside out. I have referred to this world in a previous column, and continue to find such Bizarro patterns in our real world. The Fed was established in 1913 to act as a lender of last resort to a financial system that had been plagued with …Read More

The Fed in Reverse

The Federal Reserve has strayed so far from its original mandate that its only effective policy tool, the so-called discount window, must now be used in reverse to be effective. A brief history of the Fed shows how we got to this point. The Fed was established in 1913 to act as a lender of last resort to a financial system that had been plagued with panics and the inevitable …Read More

The Fed is bungling world’s reserve currency

The Fed has proven to be a terrible caretaker of the responsibilities that come with reserve currency status, even while the U.S. economy benefits greatly from it. The bungling is so great that the dollar is now at risk of the loss of that status, and with it, those huge benefits. Some history After both world wars, the U.S. had the strongest economy. And despite FDR’s removal of the U.S. …Read More