Tag Archive: central planning

Is the West repeating India’s mistakes?

2020-07-26

Following the publication of our last conversation with Jayant Bhandari, I received a lot of interesting feedback and remarks. The common denominator of all those comments was the astonishment of many Western readers at the real conditions and dynamics on the ground in India.

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Reject the “Next Generation EU Plan”

2020-06-13

by Claudio Grass

2020-06-13

The Václav Klaus Institute urging the Czech Government to reject the dangerous Ursula von der Leyen´s plan. It is rather rare that I share articles on my channel that are not from my own pen. The following article is therefore an exception and for good reason. It is written by none other than the former President of the Czech Republic Václav Klaus, with whom I have a long-standing relationship, based on great respect and many shared values.

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Open Letter to John Taft, Report 17 Dec

2019-12-18

by Keith Weiner

2019-12-18

Silver Basis and Co-basis and the Dollar Price

Dear Mr. Taft: I eagerly read your piece Warriors for Opportunity on Wednesday, as I often do about pieces that argue that capitalism is not working today. You begin by saying: “Financial capitalism – free markets powered by a robust financial system – is the dominant economic model in the world today. Yet many who have benefited from the system agree it’s not working the way it ought to.”

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Targeting nGDP Targeting, Report 3 Nov

2019-11-05

by Keith Weiner

2019-11-05

Not too long ago, we wrote about the so called Modern Monetary so called Theory (MMT). It is not modern, and it is not a theory. We called it a cargo cult. You’d think that everyone would know that donning fake headphones made of coconut shells, and waving tiki torches will not summon airplanes loaded with cargo. At least the people who believe in this have the excuse of being illiterate.

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Treasury Bond Backwardation, Report 22 Sep

2019-09-24

by Keith Weiner

2019-09-24

Something happened in the credit market this week. A Barron’s article about it began: “There have been disruptions in the plumbing of U.S. markets this week. While the process of fixing them was bumpy, it was more of a technical mishap than a cause for investor concern.” Keep Calm and Carry On. So, before they tell us what happened, they tell us it’s just plumbing, it’s been fixed, and that we should not be concerned.

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Directive 10-289, Report 25 Aug

2019-08-26

by Keith Weiner

2019-08-26

Everyone must ask himself the question. Do you want the world to move to an honest money system, or do you just want gold to go up (we italicize discussion of apparent moves in gold, because it’s the dollar that’s moving down—not gold going up—but we sometimes frame it in mainstream terms).

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GDP Begets More GDP (Positive Feedback), Report 30 June

2019-07-02

by Keith Weiner

2019-07-02

Last week, we discussed the fundamental flaw in GDP. GDP is a perfect tool for central planning tools. But for measuring the economy, not so much. This is because it looks only at cash revenues. It does not look at the balance sheet. It does not take into account capital consumption or debt accumulation. Any Keynesian fool can add to GDP by borrowing to spend. But that is not economic growth.

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What Gets Measures Gets Improved, Report 23 June

2019-06-25

by Keith Weiner

2019-06-25

Let’s start with Frederic Bastiat’s 170-year old parable of the broken window. A shopkeeper has a broken window. The shopkeeper is, of course, upset at the loss of six francs (0.06oz gold, or about $75). Bastiat discusses a then-popular facile argument: the glass guy is making money (to which all we can say is, “plus ça change, plus c’est la même chose”).

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Is Capital Creation Beating Capital Consumption? Report 3 Mar

2019-03-04

by Keith Weiner

2019-03-04

We have written numerous articles about capital consumption. Our monetary system has a falling interest rate, which causes both capital churn and conversion of one party’s wealth into another’s income. It also has too-low interest, which encourages borrowing to consume (which, as everyone knows, adds to Gross Domestic Product—GDP).

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Central Planning Is More than Just Friction, Report 17 February

2019-02-19

by Keith Weiner

2019-02-19

It is easy to think of government interference into the economy like a kind of friction. If producers and traders were fully free, then they could improve our quality of life—with new technologies, better products, and lower prices—at a rate of X. But the more that the government does, the more it burdens them. So instead of X rate of progress, we get the same end result but 10% slower or 20% slower.

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What They Don’t Want You to Know about Prices, Report 10 Feb

2019-02-11

by Keith Weiner

2019-02-11

Last week, in part I of this essay, we discussed why a central planner cannot know the right interest rate. Central planner’s macroeconomic aggregate measures like GDP are blind to the problem of capital consumption, including especially capital consumption caused by the central plan itself.

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Rising Interest and Prices, Report 13 Jan 2019

2019-01-14

by Keith Weiner

2019-01-14

For years, people blamed the global financial crisis on greed. Doesn’t this make you want to scream out, “what, were people not greedy in 2007 or 1997??” Greed utterly fails to explain the phenomenon. It merely serves to reinforce a previously-held belief.

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Inflation, Report 2 Dec 2018

2018-12-03

by Keith Weiner

2018-12-03

What is inflation? Any layman can tell you—and nearly everyone uses it this way in informal speech—that inflation is rising prices. Some will say “due to devaluation of the money.” Economists will say, no it’s not rising prices per se. That is everywhere and always the effect. The cause, the inflation as such, is an increase in the quantity of money. Which is the same thing as saying devaluation.

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Why the Fed Denied the Narrow Bank, Report 9 Sep 2018

2018-09-11

by Keith Weiner

2018-09-11

It’s not every day that a clear example showing the horrors of central planning comes along—the doublethink, the distortions, and the perverse incentives. It’s not every year that such an example occurs for monetary central planning. One came to the national attention this week. A company called TNB applied for a Master Account with the Federal Reserve Bank of New York.

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Janet Yellen Fights the Tide of Falling Interest

The Fed is going to have to take back this interest rate hike (Dec 16). The process that sets the interest rate is complex. I have written many words on its terminal decline. However, there are two simple reasons why the trend remains downward.

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America Needs The Gold Standard More Than Ever

The United States needs the gold standard more than ever. The gold standard is neither barbaric nor impractical, and it is more urgently needed every day. This is because the standard of paper money is failing. It has set in motion an accelerating series of crises, each worse than the previous. The nation cannot continue to borrow to infinity, nor can the U.S. endure zero interest much longer.

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Janet Yellen’s Fed Has The Makings Of A Potential Disaster

In 2013, President Obama nominated Janet Yellen to be the next Federal Reserve Chairman. We need to know what she stands for if we want to predict what the central bank will do to us next. Clearly, Yellen will continue Bernanke’s Quantitative Easing, but her papers and speeches show that she is quite different from her predecessor.

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