“Brutally Honest†complains that Christianity is immoral because it does not hate capitalism enough – no of course that is not what he complains. He complains Christianity is immoral, because it teaches that God gave us the world, and commanded us to be fruitful and multiply, to take dominion over the world, to fill it and subdue it. He is worried that we are going to run out of oil, …
Category: economics
Escalating prophecies of doom
When prophecies of doom are not working out, the first reaction is to escalate them: Ted Turner tells us: We will be eight degrees hotter in thirty or forty years, and basically none of the crops will grow, most people will have died, and the rest of use will be cannibals, civilization will have broken down. Over past millenia, global temperatures have risen and fallen several degrees. A few thousand …
Commodity derivatives: the new currencies
E-gold, which I thought would save the world, turned out to be something of a bust, with essentially zero use in real internet commerce, but “unenumerated reports†that we are seeing the financial markets going into commodity based fractional reserve monies in a big way, many trillions of dollars.  Still, you cannot pay for your we hosting or cell phone minutes with commodity based monies. These moneys are for big …
Housing price bottom
When I say prices look like they have bottomed, I don’t mean that the prices sellers are asking may have bottomed. Asking prices are, for the most part, still way too high. But if we look at sales that are actually being made, both for houses, and for land with secure development approval, the prices are a good deal lower, the people buying are the smart money, and the people …
Future Housing prices
Real mortgage interest rates are high and rising in the US, because the the future value of the US dollar is uncertain. Lenders fear the possibility of very high inflation, so demand high interest rates. This makes it difficult to buy a house. At the same time, borrowers fear deflation.  They fear they could put down a deposit, then be wiped out as the value of house falls, along with …
Alan Greenspan on crack
Four days ago, Alan Greenspan posted an article wondering what went wrong: “We will never have a perfect model of risk†“Risk management systems – and the models at their core – were supposed to guard against outsized losses. How did we go so wrong?†Hey Alan! Check your spam folder for 2006. You will find it is full of ads saying: “Buy the house of your dreams for no …
Stagflation
The US economy faces recession: To stimulate the economy, the fed is lowering interest to near zero and the government handing out six hundred dollars to everyone. But what the US faces is not recession, but stagflation, and handing out free money is not the cure for stagflation. Stagflation was first observed in the first great fiat money inflation of modern times, the French assignat. The more assignats they printed, …
Moral hazard:
Financiers know that if they misbehave, the Federal Reserve will print money and give it to them in return for worthless collateral. Public knows that when the central bank prints money, its value diminishes, and thus the public become reluctant to sell, and unable to buy. Hence stagflation.
Yes, the Fed can just keep on printing money.
The business times quotes an anonymous “senior London Banker†Someone will go under in this crisis, that’s for sure. The question is whether they stay under or get rescued. Let’s see whether this latest round of stabilisation helps, but if it doesn’t, it’s difficult to see what Plan B is. The Fed can’t just keep on printing money. Yes, the Fed can just keep on printing money. The banks have …
Fed blows three hundred billion in one day.
Yesterday, the fed, in an effort to restore liquidity, “loaned†the banks three hundred billion dollars with mortgage backed securities as “securityâ€. Because these securities are not worth @#$% it in fact purchased these securities. And because the mortgages backing these securities are not worth @#$% it in fact purchased the mortgages. And because the mortgages are for more than the value of the properties, it in fact purchased the …