It is Japan We Should Be Worrying About, Not America: "Japan is drifting helplessly towards a dramatic fiscal crisis. For 20 years the world's second-largest economy has been able to borrow cheaply from a captive bond market, feeding its addiction to Keynesian deficit spending – and allowing it to push public debt beyond the point of no return."
Four Reasons Hyperinflation Hasn’t Hit the US... Yet: "Everything we know about classic economic theory suggests the US economy should be experiencing Zimbabwe-like hyperinflation right now, thanks to the nearly $2.2 trillion the US Federal Reserve has pumped into the system....But we’re not... yet...So what gives?...Well, there are four reasons we haven’t yet seen hyperinflation..."
We Have Failed to Learn From the Death of Communism in 1989: "Properly speaking, capitalism is not a system at all (which is why most of its supporters prefer the term "free market economics"): it is just the human condition in economic form...If we had dared to look long enough at the events that followed 1989, as have many of those Eastern European countries which lived through them – if we had produced the plays and films and television documentaries and school texts that they had actually deserved – we might now have a fuller appreciation of the terror that follows from the need to extirpate individualistic impulses."
Chief Rabbi Lord Sacks: Islam Must Separate Religion From Power: "The Chief Rabbi, Lord Sacks of Aldgate, warned today that Europe was dying because the growth of secularism had made people too selfish to have children. Its loss of a tolerant religious culture made it vulnerable to the advance of fundamentalism, he argued." H/T: Darwiniana
Disaster for All Humanity, With One Exception: "In his global disaster movie 2012, which is premiering next week, director Roland Emmerich portrays the destruction of many secular and religious monuments--with one exception, the Kaaba. He was afraid that if his movie showed Los Angeles being destroyed, and showed Rome and St. Peters being destroyed, but also showed the Kaaba being destroyed, Muslims would be so outraged they would put out a fatwa on his head.”
2 comments:
Interesting article on the non-hyperinflation, but I think it misses the mark on a couple points. For one, inflation can only take root when real physical cash is printed. So far, all of our bailouts have been done with credit lines. Credit is extremely elastic, cash is not. I wrote about this last month: http://cancelourdebt.blogspot.com/2009/10/dangers-and-advantages-of-credit.html
Also, the glib dismissal of protectionism is wrong wrong wrong. Protecting our quality of life and living standard does not make things worse. Protectionism can hurt the countries that rely on exports, such as American in the 30's, or China today. If protectionism is so bad, why do modern countries like China and Japan do so well while practicing it, and how did America do so well for its first 150 years?
Thanks, Justin.
Question, though: Doesn't the expansion of the credit lines eventually lead to an expansion of cash? If that's a dumb question, I apologize; I wasn't an econ major.
Regarding protectionism: I have mixed feelings about that. Up until about a year ago, I was about as "pro-free trade" as you can get; now, I can understand some of the concerns regarding free trade, especially as it pertains to the decline of our manufacturing base.
Even so, I think I agree with the author's position: For whatever reason, China has chosen to become a major stakeholder in the US economy by purchasing $1 trillion in government debt. They have us in a headlock. And for that reason, it's not clear to me why we should piss them off by throwing up trade barriers, when they can make our lives more difficult by ramping up inflation (as the author points out).
The only long-term solution, as I see it, is to shrink the size of government, start paying off the debt, and start rebuilding our manufacturing base.
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