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lowrentyieldmakessense(honest!)

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Posts posted by lowrentyieldmakessense(honest!)

  1. how about some humilty from the experts who think they can manage the economy and everyones life

    link

    The “Pretence of Knowledge” was the title of economist Friedrich Hayek’s 1974 Nobel speech. In his first few sentences, he described the then-prevailing economic condition in words appropriate to today:

    … [this economic condition] has been brought about by policies which the majority of economists recommended and even urged governments to pursue. We have indeed at the moment little cause for pride: as a profession we have made a mess of things.

    Hayek’s words in 1974 were not meant to describe today’s condition, although they were extremely prescient. His hope was that the limits of knowledge would be recognized by the economics profession so that we would never reach our current situation.

    Hayek’s call was for professional humility at a time when Keynesians arrogantly believed they could manage the economy and the business cycle. His was a caution about how little we really know about the economy and can ever know about it:

    .. in the study of such complex phenomena as the market, which depend on the actions of many individuals, all the circumstances which will determine the outcome of a process, … will hardly ever be fully known or measurable.

    Hayek described the role of economics as follows:

    The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

    Two decades earlier Hayek had dedicated his The Road to Serfdom to the socialists of all parties in hopes that they would see the error of their ways. This warning was ignored by the political class as his Nobel speech was subsequently ignored by most economists.

    Last week the Chairman of the Federal Reserve, Ben Bernanke, testified before Congress. He described the condition of the economy as “unusually uncertain.” That phrase, fogged up enough to make Alan Greenspan proud, was inconsistent with Mr. Bernanke’s prior “pretence of knowledge.” Peeling back the Fedspeak, Mr. Bernanke essentially admitted that he was baffled by the economy and had no idea what might happen next.

    For anyone who has looked at Mr. Bernanke’s (the Fed’s) forecasting record, this quasi-admission should not surprise. Mr. Bernanke has not foreseen anything with reasonable accuracy. As Mish pointed out:

    Ben Bernanke was pretty certain there would not be a recession, that housing was not in a bubble, that the unemployment rate would peak at 8.5%, that paying interest on reserves would enable the Fed to hold short-term rates above 2%.

    Bernanke was wrong on every count. At least now he admits he is guessing.

    Most economists have ignored Hayek’s caution for humility. Bernanke’s doubts in his recent testimony are both new and troublesome. It suggests that he does not know what to do next. He has tried everything that he “knows” in dosages never before imagined. Despite his actions, monetary and fiscal actions have not moved the economy. This is not the way the world is supposed to work, at least according to the (increasingly disrespected) prevailing macro-economics.

    Mr. Bernanke and others of his generation and training have absorbed what Mark Twain described as dangerous knowledge:

  2. Gold will never replace currencies--too many transactions and the internet could not cope. Its all relative. If all the fiat currencies drop together the fiat has dropped and all remains the same. The fiat for gold and silver can also drop as history shows.

    Some dips portend a crash. Remember the last three gold crashes? Buying on the first 20 or so dips would have been lethal. Falling knives and all that.

    Unless, of course, gold is a one-way bet and then it is safe to buy all the dips. The new paradigm perhaps?

    really

    thats a line from the bankers

    not that i think gold is the answer - competing currencies are already being used - this will grow and the paper promises of the bankers and government will become worth a lot less - its always been the case if anyone can be bothered to check out some history

    i am sure Goldman will make more money than most when paper currencies collapse

  3. bloody hell, thats a bit of a stodgy presentation.

    and they are all knowing

    When all is said and done, the financial

    and fiscal policies will have cost taxpayers a

    substantial sum, but not nearly as much as

    most had feared and not nearly as much as

    if policymakers had not acted at all. If the

    comprehensive policy responses saved the

    economy from another depression, as we es-

    timate, they were well worth their cost.

  4. what planet are these pricks on

    link

    Numerous current stories show how disconnected mainstream policy-makers are from reality.

    For example, Ryan Grim points out that there is an "unbelievable disconnect" between the American people (who are people are against the Afghanistan war) and Congress and the political elite (gung-ho to escalate this never-ending war):

    Even after the Wikileaks revelations, even though there is no logical reason to be in Afghanistan, even though the war won't help the economy, and even though most Americans want us to get out, Congress keeps increasing funding for the endless war.

    And Alan Blinder (economist, banking consultant and former Vice Chairman of the Board of Governors of the Federal Reserve System) and chief Moody's economist Mark Zandi wrote a paper yesterday called How We Ended the Great Recession:

    link

  5. http://www.nytimes.com/2010/07/29/business/economy/29workers.html?_r=1&ref=business

    How many of you here with your own businesses would employ more people if the govt picked up the wages?

    I wonder when this freebie is removed how many of these people will still be in a job? If the profit aren't there to pay for you no one is going to keep you on.

    hey its been happening in Doncaster for a few years - if your business has the right post code

  6. Strong criticism of the big four auditing companies from the FSA. But then again weren't the FSA meant to be regulating the auditors?

    Auditors under fire for role in bank crisis

    "The FSA stressed these failings could give rise to enforcement action." :lol: Will anyone at the FSA face enforcement action? <_<

    The whole system failed, from banks to regulators via auditors. This is one to keep an eye I think though somehow I doubt any serious action come as a result. Remember Fred Goodwin?

    mark to market

    or mark to model

    and

    who do the auditors answer to the management or the shareholders

  7. http://www.nytimes.com/2010/07/28/business/global/28iht-euro.html?_r=1&ref=business

    Do consumers borrow more than business?

    Anyone got any stats European consumer borrowing compared to business? Would an increase of 2.8% in consumer borrowing make up for businesses not borrowing or are the VI's spinning again?

    they are struggling to keep this debt bubble going arent they

    still they know if they fail its all over for the debt based currencies - its over anyway but they can maybe delay the end for a little bit longer

  8. The level of corruption correlates much more with the political system than with the economic system. Dictatorships tend to be much more corrupt than democracies. It doesn't matter if a country leans left or right.

    Luckily, countries with lower corruption tend to be more efficient, and get richer, and more powerful, than corrupt countries. Hence the wealth and power of the western liberal democracies.

    What we have witnessed in this past century was a Darwinian selection process. The liberal democracies have won. It is the best system.

    Of course they have to be regulated, but competently.

    BTW, that was Labour failure. They messed it up - very badly indeed. (Particularly re. monetary policy, particularly since Brown the [email protected] tampered with the inflation index in Dec 2003... you know the story... I am sure you are all tired of reading that from me. Sorry.)

    Yes, regulation is essential, of course!

    and where are these competent regulators

  9. Real wealth comes from land and labour, which can't be packed up and moved. Consider the experience of an aristocratic Russian émigré in London, after his home country had stopped playing by the previous rules.

    gold skirts

  10. It's depressing to have to keep repeating this stuff day after day, isn't it?

    With a free market, the big banks would have collapsed. Hell, the whole twisted state backed cartel might have gone down with it. Moreover, there wouldn't have been such a big boom in the first place. But hey, lets not let that get between a man and his socialist rantings! :rolleyes:

    yep its depressing

    most have been brainwashed though

    what we need is people to think more and to see things as they really are rather than with their preconceived ideas

  11. Why will the people wake up?

    It's not like thieving banksters is a new phenomenon.

    As an example the Rothschilds have been wealthy since before Waterloo, they became stupendously wealthy after that.

    At no time have enough people woken up together to change things since 1812, why should they ever wake up?

    That's the secret of the silent parasite.

    We are all living in the bankers matrix.

    I dunno I would guess a far greater proportion of the public now know

    internet cant last much longer

  12. Ha ha ha! Nice one: I do find it quite amusing that all the free market loonies seem to be totally unaware that the next people to be gobbled up by the out of control globalisation behemoth will be them...the working class has already been stripped of its dignity, prospects and finances...the next available pool of the money for the plutocrats to gobble up is that of the entrepeneurial and middle class. Look at the state of the middle class in America, and weep...

    loonies

    who are the ones who want to cease the monopoly that the plutocrats have over money

  13. A serious question.

    When the last remaining public sector workers have been set alight on their crosses;

    After the all the boomers, elderly and sick have been culled;

    Once all the poor, disenfranchised youth and unemployed have been ground down and turned into cattle feed........

    Who do the bankstas and elites deflect the blame against next?

    The Self Employed?

    Mormons?

    Dinner Ladies?

    Men with beards?

    Simon Cowell?

    Will YOU be the subject of their propaganda for the ignorant?!? We were once told to “follow the money”, however the only things people tend to follow these days are false headlines and witch hunts.

    The funny thing about witch hunters, was that often they didn’t actually do any of the burning. They just pointed at their chosen victims, and just let the mob deal with the grisly rest. How pertinent.

    One day the people will wake up and work out the root cause of all our predicaments, and the root cause will be jettisoned from our society.

    sexist

    what about women with beards

  14. It is good to replace people with machines. They used to do that in the U.K. (Think Luddites!). They still do this in Germany and it is why Germany is the economic power house of Europe. They stopped doing this in the U.K. since the war and we have been in decline ever since. (Notable exception is financial services).

    Germany has relatively high minimum wages set per sector by COLLECTIVE BARGAINING - That's right, the Unions and Employers! :)

    Do you think Germany is doing less well than the U.K. because of its relatively high minimum wages?

    i am going to pay myself £500k and then watch the profits roll in

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