The direct cause of soaring prices is printing too much paper mon­ey; the direct cure is to stop printing it. The indirect cause of inflation is government over­spending and unbalancing the bud­get; the indirect cure is to stop overspending and to balance the budget.  FULL ARTICLE

Washington is telling us that our problems result from a lack of consumer spending. Therefore, the solution is for government spending to pick up the slack. However, if Americans are too broke to spend, then how can our government spend for us? The only money they have is taken from us through taxation. FULL ARTICLE

Economists generally agree that, in the long term, hyperinflation does more damage to an economy than severe recession. However, recession has always made a far more potent political impact. After all, it may be difficult to notice the monthly debasement of your paycheck (inflation), but it is abundantly clear when the check suddenly stops coming (recession). Knowing this, the Administration has chosen the path of inflation. FULL ARTICLE

Contrary to Greenspan, we can conclude that it is not long-term rates as such that fueled the bubble but the loose monetary policy of the Fed.  We can also conclude that the so-called savings glut in emerging economies had nothing to do with the last economic boom or the current economic crisis.  The only institution that can set in motion the expansion of money and a false boom is the Fed. FULL ARTICLE

After ignoring and downplaying the inflating credit bubble for much of his first two years in office, this week Fed Chairman Ben Bernanke emphasized, in testimony before the Senate Banking Committee, that no economic recovery would occur unless the financial system was restored. He was quite correct in his belated diagnosis. His prescriptions, on the other hand, are much more dubious. FULL ARTICLE

Faced with a prospect of downgrading its lifestyle, the U.S. government is instead borrowing trillions of dollars to artificially inflate our deflating bubble economy. The money is being used to both expand the size of government and finance additional consumer spending. Given our financial position, this is the exact opposite of what we should be doing. FULL ARTICLE

In the worldview of Geithner and like-minded economists, credit, rather than savings, is the central figure in the economic equation. Therefore, he sees anything that eases the process of lending to be an effective economic policy. With such a view in mind, the centerpiece of Geithner’s plan is the commitment of up to $1 trillion to revive the collapsed market for securitized debt. In the lead up to the Crash of 2008 securitization, more than anything else, permitted Americans to borrow more than they had ever borrowed before. FULL ARTICLE

Washington is choosing to pursue the policy of continued and ever-increasing false prosperity, financed eventually by hyper-taxation, hyper-debt and hyper-inflation accompanied by a gradually eroded standard of living. The jobs created by the Bill are by and large non-productive, and will divert resources from the private sector and rob consumers of their power to make free choices in the marketplace. FULL ARTICLE

Featured Post for 02/13-02/19. As a nation of consumers, and not producers, with little to offer to the rest of the world except raw materials, food crops, military hardware and bad films (none of which industries employ many people), we are headed to a recovery that will not feel like a recovery at all. FULL ARTICLE

Peter Schiff on the Economic Crisis that’s coming our way.

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