http://www.inflationomics.com/?source=RSS A body of economic thought that favors inflationary policies. In popular terminology, indicates the sway of inflation thought in education and the affairs of government. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Letter from a Reader&source=RSS 4/30/2012 I recently received a letter from a reader who wondered why the United States should back its currency with gold. To learn more... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=When Money Fails to Function&source=RSS 3/30/2012 Money functions best as a medium of exchange when its value fluctuates the least. When it maintains a relatively constant value, it allows people to price goods relative to other goods. When money fails to function, how can people price goods? http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/Fed-Buying-Debt.php?article=WSJ: Fed Buying 61 Percent of U.S. Debt&source=RSS 3/29/2012 The Federal Reserve is propping up the entire U.S. economy by buying 61 percent of the government debt issued by the Treasury Department, a trend that cannot last, Lawrence Goodman, a former Treasury official and current president of the Center for Financial Stability, writes in a Wall Street Journal opinion article published Wednesday. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/US-Deficit.php?article=US Rakes Largest Monthly Deficit in History&source=RSS 3/17/2012 A few days ago we noted that based on preliminary data, the February budget deficit would hit $229 billion (yes, nearly one quarter of a trillion in one month, about where real Greek GDP is these days)—the largest single monthly deficit in history. Unfortunately, this number was low. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/US-Money-Base-will-Explode.php?article=US Money Base Will Explode&source=RSS 3/15/2012 With tremendous volatility in gold and silver, KWN wanted to speak with the firm that is calling for $10,000 gold to get their take on what readers should be focused on at this point. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/All Your Internets.php?article=All Your Internets&source=RSS 3/13/2012 And what happens to the politically incorrect, now? http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/Greek Deal to Collapse.php?article=Greyerz: Greek Deal to Collapse Causing Trillions to be Printed&source=RSS 3/8/2012 Today, Egon von Greyerz told King World News even if a Greek deal is announced, at some point it will collapse. Von Greyerz also said the consequences of the collaps will be massive. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Four Problems with Taxing the Rich&source=RSS 2/27/2012 According to The Wall Street Journal, President Obama would like to raise taxes on the rich. Apparently, he wants you to believe that this will reduce the federal government's budget woes. There are four problems with this. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Symptoms of the Three Phases of Inflation&source=RSS 1/30/2012 Inflation, of course, is the expansion of the money and credit supply (cause) beyond the expansion of the underlying goods in the market. In time, this expansion tends to raise prices (effect). When rising prices are perceived by most people, people begin to expect rising prices and adjust their behavior accordingly. http://www.inflationomics.com/?source=RSS http://www.caseyresearch.com/articles/when-will-gold-reach-new-high?ppref=IFN443ED0112B&source=RSS 1/20/2012 Some investors are frustrated and a few are worried that gold seems stuck in a rut. This stall in price has happened before, of course, but since 2001, it's always eventually powered to a new high. Unless one thinks the gold bull market is over, it's natural to wonder how long might we have to wait before seeing another new high. http://www.inflationomics.com/?source=RSS http://www.caseyresearch.com/cdd/rise-praetorian-class&source=RSS 1/19/2012 Much attention has been paid to the "disappearing middle class" and the "vanishing American Dream." While the observations are laregely accurate, they are also misleading. http://www.inflationomics.com/?source=RSS http://www.caseyresearch.com/articles/us-government-bankrupt?ppref=IFN420ED0112A&source=RSS 1/14/2012 Everyone knows that the U.S. government is bankrupt and has been for many years. But I thought it might be instructive to see what its current cash-flow situation actually is. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=2012 Forecasts&source=RSS 12/30/2011 A new wave of foreclosures is on its way. This is... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/Suspend Habeas Corpus.php?article=Suspend Habeas Corpus&source=RSS 12/12/2011 Americans seem ready to forfeit their most basic civil liberty--actually, all their civil liberties--without a whimper. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Lamenting Bailouts&source=RSS 11/29/2011 Some people are lamenting the bailouts the Fed has been making because the bailouts are ultimately falling on taxpayers, but... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=The 99 percent Movement&source=RSS 10/27/2011 Response to the "99% movement"... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Governmental Influence&source=RSS 09/30/2011 As inflation grows, so does government’s influence. Why? http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/Secrets-of-QE-Gold-and-Currency-Wars.php?article=Secrets-of-QE-Gold-and-Currency-Wars&source=RSS 9/20/2011 Along with volatility in stocks and historically low yields in bonds, investor attention has recently been drawn to currencies. This is due to the currency wars that broke out in 2010 and have expanded lately. The recent Brazilian decision to cut interest rates to halt the appreciation of the real and the Swiss decision... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/The-Center-of-Gravity-Shifts-Slowly.php?article=The-Center-of-Gravity-Shifts-Slowly&source=RSS 9/2/2011 To an extent not fully appreciated by the investing public, financial markets are influenced by human emotion just as much as they are by economic data, corporate earnings, and dividend yields. Of all human motivations, fear is perhaps the most powerful. When people get scared, the "fight or flight" instinct forces us to take action. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Market Demand vs Government Demand&source=RSS 08/29/2011 How much difference can there be? http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/Beyond-the-tipping-point.php?article=Beyond-the-tipping-point&source=RSS 8/14/2011 The first thing we must understand is that the economic policies of the Keynesians and central bankers are not pure economics. Rather, they are the pursuit of social objectives by economic means. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Government Fight against Money&source=RSS 07/26/2011 To follow the travails of a $20 gold coin from 1913 to the present... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Traditionally Hyperinflations were Local&source=RSS 06/29/2011 Ever wonder why the hyperinflation in Germany during the 1920s was limited to Germany, or the hyperinflation in Zimbabwe a few years ago was limited to Zimbabwe? http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Hedgers vs Speculators&source=RSS 05/30/2011 Hedgers have a very different mind-set (and purpose) from speculators. Hedgers want to transfer the risk of price change away from themselves. They do not cherish the perpetual fluctuations in prices that stem from changes in supply and demand. They prefer to transfer that risk of price change to others who are willing to assume such a risk. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/new-Zimbabwe.php?article=new-Zimbabwe&source=RSS 5/17/2011 On April 13, 2009, our article When Government Money Monopolies Fail wondered whether Zimbabwe might show the world the way to sound money. The latest news from Zimbabwe is a warning from the Zimbabwe central bank, which says... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Some Long-Term Consequences of Inflationomics&source=RSS 04/30/2011 By promoting inflationomics, central banks around the world have succeeded in raising prices and diminishing the purchasing power of their respective currencies. Some of the long-term consequences of this policy have been: http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/debunking-anti-gold-propaganda.php?article=debunking-anti-gold-propaganda&source=RSS 4/21/2011 A meme is now circulating that gold is in a bubble and that it's time for the wise investor to sell. To me, that's a ridiculous notion. Certainly a premature one. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/will-precious-metals-survive-double-dip.php?article=will-precious-metals-survive-double-dip&source=RSS 4/14/2011 It is rare in recent history for precious metals to appreciate in parallel with the broader stock market. Yet, this has been the case in the two years since the stock market began crawling out of the wreckage of the 2008 financial crisis. Although metals have vastly outperformed U.S. equities over that time frame, it is noteworthy that... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=A Tale of Two Brothers&source=RSS 03/30/2011 How do you prepare for hyperinflation? Warren Buffett bought a railroad.  Let me tell you a story…a tale of two brothers and how they faced hyperinflation. It was 1919, just after WWI in Germany when two brothers inherited... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Cycles&source=RSS 03/29/2011 Some people believe that human behavior is as predictable as night and day—that humans follow set patterns of behavior routinely. And while many humans do maintain a routine (work, sleep, play), many don’t. Some people are known as contrarians. They like to do the opposite of what the majority is doing. Some people work at night and sleep during the day. Some people work harder than others, while others don’t work. And one has to wonder which side of the globe is more productive at any given time? How does this affect predictability of human behavior? http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/golds-hyperbolic-trajectory.php?article=golds-hyperbolic-trajectory&source=RSS 3/29/2011 I am not a mathematician, but those knowledgeable about math have explained to me the difference between a parabola and a hyperbola. I'll cut through the math to get to the key point. A hyperbolic rise in price is much faster than a parabolic one. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/debunking-the-gold-bubble-myth.php?article=debunking-the-gold-bubble-myth&source=RSS 3/15/2011 Gold's continuous ten-year rise hasn't sheltered it from controversy. Despite producing consistent returns in virtually all currencies year after year, some market pundits still question its validity as an asset class. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/qe-is-dead.php?article=qe-is-dead&source=RSS 3/12/2011 Interview with Jim Rickards: Perpetual QE—The Stock is the Flow. QE has now become a permanent part of the financial landscape of the United States. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/the-driver-for-gold.php?article=the-driver-for-gold&source=RSS 3/9/2011 You already know the basic reasons for owning gold—currency protection, inflation hedge, store of value, calamity insurance—many of which are becoming clichés even in mainstream articles. Throw in ... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Deflation_or_Hyperinflation&source=RSS 02/28/2011 Deflation, of course, is the contraction of the money supply relative to the supply of goods, while inflation is the expansion of the money supply relative to the supply of goods. Hyperinflation has the added element of ... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Virginians%20Worry%20about%20Hyperinflation&source=RSS 01/24/2011 Some legislators in the Commonwealth of Virginia are worried about hyperinflation! See House Joint Resolution No. 557. Should the Commonwealth... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/race-to-debase.php?article=race-to-debase&source=RSS 1/9/2011 Take a moment to examine how gold and silver crushed their paper currency competition in 2010. In US dollar terms gold was up... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/year-of-the-bank-run.php?article=year-of-the-bank-run&source=RSS 1/7/2011 Is a bank run about to bring Europe to its knees? Some market watchers say... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/how-inflation-will-happen.php?article=how-inflation-will-happen&source=RSS 1/5/2011 Right now, we are in the middle of deflation. The Global Depression we are experiencing has squeezed both aggregate demand levels and aggregate asset prices as never before. Since the credit crunch of September 2008, the U.S. and world economies have been slowly circling the deflationary drain. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/smart-money.php?article=smart-money&source=RSS 12/6/2010 Zero Hedge readers already know that in the latest week the insider selling to buying ratio hit unprecedented levels. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Deficits%20Do%20Matter2&source=RSS 11/24/2010 Some people have wondered what Dr. Sennholz would say about the situation today if he were still alive. Well... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Is%20the%20Fed%20Really%20Exempt&source=RSS 11/18/2010 The Fed may be exempt from marking its portfolio to market. It may be exempt from an audit, or counterfeit laws, or seeking profitable investments in the short-run, but... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/no-exit.php?article=No%20Exit&source=RSS 11/9/2010 Disasters sometimes sneak up in small steps, each of which appears unthreatening at the time but which cumulatively spell collapse. The Fed is leading the United States... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/opium-wars-revisited.php?article=Opium%20Wars%20Revisited:%20Will%20China%20Corner%20the20%Gold%20Market?&source=RSS 11/7/2010 It's sad how history has a way of repeating itself, especially when repetition is a bad thing. Our current best example is the trade imbalance with China and countries' refusal to address the problem in a meaningful way. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Too%20Big%20to%20Fail&source=RSS 10/28/2010 I'm sure you've all heard it at least once before: “the company is too big to fail.” Somehow, by virtue of reaching some arbitrary size, a company becomes too large to be allowed to fail. Why? http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=The%20Grip%20of%20Inflationomics&source=RSS 9/27/2010 The following is part of the text of the statement released on September 21, 2010, by the Federal Open Market Committee: “Measures of underlying inflation are currently at levels somewhat below those the Committee judges most consistent, over the longer run, with its mandate... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/remote/they-are-printing-too-much-money.php?article=They%20Are%20Printing%20Too%20Much%20Money&source=RSS 9/20/2010 There is too much money being printed. No rocket science is needed to reach that conclusion. The markets are giving us a clear message. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Enterprise%20Zones%20for%20Chronically%20Unemployed%20Individuals&source=RSS 8/16/2010 Special Economic Zones (SEZ), or enterprise zones are known the world over for their ability to stimulate business. In China, they were begun in the 1980s as a way to increase foreign direct investment. Why not adapt them to reduce unemployment? http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Two%20Roads%20to%20Bankruptcy&source=RSS 7/29/2010 The U.S. government debt is climbing by the second (see the debt clock). And that doesn’t count Medicare, Social Security, the states (which will need to be bailed out), and the European countries that are grossly over-extended. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Keeping%20Interest%20Rates%20Low&source=RSS 6/25/2010 Many people believe the Fed should keep interest rates low because low interest rates make it easier to service debt and they allow restructuring of the financial industry to occur more quickly. Still others… http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=There%20Are%20Two%20Prices&source=RSS 5/17/2010 Most people probably think I mean bid and ask, but that's not what I'm talking about. I mean... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Unwitting%20Speculators&source=RSS 4/22/2010 In The Swaps That Swallowed Your Town, Gretchen Morgenson refers to the credit default swaps that hid Greece’s obligations, the costs to New York State to close out swaps in which Lehman Brothers was the counter-party, and swap-imperiled Jefferson County, Alabama, which is on the verge of bankruptcy. Apparently, part of the problem lies with swap advisers, who have a vested interest in seeing to it that a swap is purchased. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Government%20for%20the%20People%20or%20Over%20the%20People& source=RSS 3/31/2010 How can you tell whether a government is for the people or over the people? Here are some tell-tale signs: http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=The%20Composition%20of%20Wealth&source=RSS 2/25/2010 Back in college (early 1970s), I remember in Dr. Sennholz's U.S. Economic History class his comments about the composition of wealth in a socialistic country versus a capitalistic country. At the time, he compared India's wealth during the late 1800s with that of the United States during the same time frame. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Some%20Problems%20with%20Nationalizing%20Businesses&source=RSS 1/26/2010 Whether governments nationalize their country’s farms (Zimbabwe), oil industry (Venezuela), or mortgage industry (U.S. -- Federal Home Loan Mortgage Corporation and Federal National Mortgage Association), they all have several things in common. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Inflation%20War%20Against%20Money&source=RSS 12/23/2009 It's a two-pronged attack: people are forced to accept a money-substitute instead of money; and propaganda is used to convince them that the money-substitutes (paper money) are OK—confusion reigns. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Hyperinflation&source=RSS 11/06/2009 Ever wonder why the German hyper-inflation of the early 1920s was limited to Germany? Ever wonder why the Hungarian hyper-inflation of 1946 was limited to http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Jawboning&source=RSS 10/09/2009 An article in the Monday, October 5, 2009 issue of The Wall Street Journal was entitled "Jawboning Starts to Complicate Currency Markets." It started out by http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Cash%20for%20Everyone&source=RSS 09/22/2009 Everyone has heard of Cash-for-Clunkers - i.e., the U.S. government's program of giving money to someone who trades a junk vehicle in to purchase a new vehicle. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Cracks%20in%20the%20Dollar%20Dam&source=RSS 08/31/2009 As confidence in the U.S. dollar wanes, gold's popularity rises. More and more people are realizing that gold (and silver) are safer (as a store of value) than are paper dollars. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Healthcare%20Meltdown&source=RSS 07/29/2009 Back in the 1950s, it was the American dream to own one's own home. And in time, it became a way to garner more votes for politicians to promise "affordable" housing, and every effort was made during the next 50 years to make that dream come true for as many people as possible. Eventually, "affordable" housing was made possible through "government sponsored http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Taxing%20the%20Competition&source=RSS 06/22/2009 When a U.S. corporation does business in most parts of Europe, it necessarily holds Euros. And when the Euro rises, relative to the U.S. dollar (or the dollar falls relative to the Euro!), those Euro-holding U.S. corporations are required to recognize a gain on their Euro holdings, and pay tax on that gain. The same is true for all non-U.S.-dollar currency held in U.S. corporations around the world. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Derivatives%20Explained&source=RSS 06/04/2009 Thousands of people who have prepared for the Series 3 exam (commodity futures broker license exam) in the United States know that the futures markets developed in the United States during the 1840s as an answer to the gluts and shortages associated with the harvest cycle that naturally occurs with the seasons of http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Government%20Money%20Monopolies&source=RSS 04/13/2009 It is true that governments try to establish money monopolies to the exclusion of gold and silver because gold and silver impose a discipline (limit) on government spending. However, if governments don't act responsibly with their currencies, their currencies will be shunned in the long run, and http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=The%20Inflation%20Question&source=RSS 03/19/2009 Someone recently asked me what my thoughts are regarding the potential for a resurgence of inflation, given the copious amounts of money being printed by most central banks. Following are some of my thoughts: http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Government%20is%20Doing%20Something&source=RSS 02/23/2009 There are two ways to allocate scarce resources: http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Debt%20Makes%20a%20Debtor&source=RSS 01/12/2009 There's an old saying that "a debt makes a debtor, a large debt makes an enemy." So let's talk about the world's largest enemy, I mean debtor. Of course, we're talking about the U.S. government and its creation, the Federal Reserve System. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Baltic%20Index%20Bodes%20Badly&source=RSS 12/08/2008 The Baltic Dry Index (BDI) measures the cost of moving raw materials by ocean freighter. This index, which is a leading economic indicator, has dropped from its lifetime high of 11,793 on May 20, 2008, to 666 on December 5, 2008, a 94.35% decline in six months. http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=US%20Weighs%20Purchasing%20Stakes%20In%20More%20Firms&source=RSS 11/04/2008 "U.S. Weighs Purchasing Stakes In More Firms" is the title of an article in today's Wall Street Journal. The article talks about the $700 billion rescue fund and what might be done with the remaining funds, as only $163 billion has been spent so far. Should they expand the scope of the lending to non-banks? What about "transit agencies" and "auto manufacturers?" The conclusion of the article was ... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Some%20Things%20Are%20Clear&source=RSS 10/29/2008 While it's becoming more difficult to see the short-term effects of prior government interventions in the market place ... http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=As%20Inflation%20Grows&source=RSS 09/30/2008 As inflation grows, so does a government's domestic influence. Why? http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Nationalized%20Lending&source=RSS 09/12/2008 Let's review things. The Fed lowered interest rates to stimulate the economy. So much money was made available that banks were encouraged to lend money to anyone who could fog a glass. People borrowed cheap money and drove up housing prices (among other things). The high prices called out more supply; i.e., more houses were built. A glut ensued. Prices dropped. Loan defaults and foreclosures resulted when homeowners were unable to refinance their mortgages, make higher payments after their adjustable rate mortgages were adjusted, or sell their houses (banks don't like to lend money while prices are dropping). http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Excess%20Profits&source=RSS 08/13/2008 What are they in excess of? A fair amount? Who can determine what is fair or excessive? Voters who know nothing about the business? Politicians who just want to get votes for having done something for the voters? http://www.inflationomics.com/?source=RSS http://www.inflationomics.com/article.php?article=Excessive%20Speculation&source=RSS 07/16/2008 Last month, in a 402 to 19 vote, the U.S. House of Representatives voted in favor of a bill requiring the Commodity Futures Trading Commission (CFTC) to curb "excessive" speculation in the U.S. crude oil futures markets. In short, the House wants to lay the blame for crude oil price increases on speculators.