Arkady's Thoughts

The Federal Reserve undertook a very serious decision last week announcing QE3 and while the stock market and commodity market responded positively, it remains unclear what this decision means for the average American. The seriousness of the Fed decision cannot be understated and is hinged on the following commitment : "The Committee will closely monitor incoming information on economic and financial developments in coming months. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability" The actual plan consists of three primary actions.  Outright purchase of MBSs, buying long term Government bonds and keeping the short term rates near zero until 2015.  What is frightening is that this plan will continue until the economy impr...

With the OWS movement leaving many Americans confused as to whether they should support or stay away, one thing is for certain, Americans are aware of a certain truth that is happening in our country.  We have a certain combination of events that is leaving many people struggling and asking very good questions. The truth is this; We have structurally high unemployment, salaries are stagnant, debt burdens are rising, costs for education, health and energy are on the rise and we are increasingly overwhelmed with clear and present danger coming from every corner of the earth. To make matters worse the ruling elite of this country and the very wealthy are continuing to benefit while the remainder of the population struggles.  This is the appeal of the OWS movement despite the fact that the members making up the movement are advocating entirely unappealing solutions in the form of wealth distribution, punishing success and other hard left ideologies. Of course in a country w...

I have had many issues with the way certain mainstream GOP blogs portray libertarian leaning candidates like Ron Paul and Gary Johnson, but sometimes they expose their own lack of understanding to such a point that it becomes impossible to ignore. HotAir's self proclaimed RINO Allahpundit who is generally very "reasonable" decides to poke fun at Ron Paul because Paul found Rick Perry's comments about the Fed to be ridiculous: Via  Politico , the key bit’s at 4:00. Can we now safely agree that Perry went too far? When  Ron Paul  is taking shots at you for being fringe-y, you’ve crossed a line that no man should cross. Except maybe in  libertarian Waterworld . “Now they have this other governor, I can’t remember his name,” Paul joked. “He realizes that talking about the Fed is good, too. But I’ll tell you what, he makes me sound like a moderate. I have never once said Bernanke has committed treason. But I have suggested very strongly...

Karl's latest response to me titled ' Arkady:  Read the damn Constitution ' is another attempt by Karl Denninger to defend the absurd ( Kucinich bill ) while demonstrating to the world that he and only he has read the Constitution and understands it properly.  Karl, we know you are a bright guy and are quite capable, yet when you belittle others and flaunt your impeccable intelligence you exhibit signs of insecurity. I would simply like to cover two critical points here.  First, anyone supporting this bill and claiming to be part of the Tea Party is doing the Tea Party movement a great disservice, Karl should either disassociate himself from the Tea Party or take back his support for the bill.  Secondly, the matter of this bill's Constitutionality specifically as it pertains to the issuance of fiat money is turning into a joke. Karl's view: Nowhere in The Constitution, in point of fact, is a monetary standard - either fiat or metallic - defined for the Federal...

I feel honored to have my name in the headline of Karl's blog, must have done something right - or wrong in this case.  Karl did not like me calling him out on his defense of Kucinich Bill and decided to skewer me a bit.  All in good fun, I had no intention to make this personal what so ever even if Karl believes that I have an "absolute vacuum" between my ears.  Meh, helps with the neck pain at least. Karl does not actually state his defense for the bill or any of the points I brought up as to why the bill is just a blatant Marxist lurch, but instead focused on the Constitutional aspect of the debate.  Fine, if Karl believes that Congress can be trusted to maintain the supply of money, believes that paying off the existing national debt in newly printed United States Notes is somehow possible without a major debasement and thinks Congress should control money for the purpose of infrastructure investment - so be it.  To the Constitution we go. Karl demon...

In the previous post I presented the latest bill proposed by Dennis Kucinich and why America's Left is just as interested in removing the Federal Reserve as is the Constitutionalist minority. Incidentally there recently has been some talk of a speech by a one named Bill Still.   His speech can be found here. He presents the problem in today's global economic hardship as stemming from our money supply.  True. He further goes on to say that fractional lending and Federal borrowing is causing financial slavery.  Also true. What is his solution?  To allow sovereign nations to control the money supply by themselves through creation of money.  This is the intellectual and philosophical backdrop of Dennis Kucinich and his latest bill. Bill Still cites an interesting example, which he refers to as "tally sticks".  Once upon a time the King decided to use tally sticks as a form of currency in order to solve the pesky problem of the money supply gr...

I have always mused and wondered out loud about the peculiar alliance between the likes of Ron Paul - a small government sound money advocate and people like Alan Grayson and Bernie Sanders who are admitted socialists.  What is it about these two completely polarizing political viewpoints that brought them together to fight the Fed?  In fact, I was utterly shocked that some libertarians mourned the defeat of Alan Grayson this past November citing his defeat as a loss in the battle against the Federal Reserve. At the time my speculation was rather simple.  Socialists resent the Federal Reserve just as much as we do, however for entirely different reasons.  We resent the Fed for several basic reasons.  The Federal Reserve is a monopoly and controls the supply of money.  It centrally plans interest rates and has a flawed mandate to create full employment which is an illogical desire - because employment should always be liquid.  Finally the Feder...

Not funny ha-ha, but funny oh-crap.   Below is a clip of Jon Stewart eviscerating The Ben Bernank with his own words.   Recently Bernanke gave a 60 minute interview which he blew smoke up people's asses and got away with it.  Since we no longer have any real journalists left in this country, Stewart decided to tackle the subject by himself.  Now there are a few problems with this clip, but overall Stewart is on the right track.  First, it is possible that Bernanke is actually telling the truth about the latest round of bond purchases as not actually having to print money.  This is because the reserve bank holdings are gigantic, they are now exceeded over a trillion dollars.  This is money that is collectively shared within the Reserve system among the 12 regional reserve banks.  Normally when the economy is humming along and credit is being dispensed liberally (think dot com bubble, real estate bubble) the reserve moneys are under ...

"That's it, America is the next Weimar Republic and we will print ourselves to death" says one.  "No, we are going to see another Great Depression deflationary event" says another.  "We will turn into Japan and have a multi-year malaise" says a third.   Among those that have escaped the clutches of Krugman and other hopelessly failed economists a debate rages.   Yet how can so many people be in virtual agreement over everything, but so strongly diverge over the outcome?   This is creating a lot of confusion for those starting to pay attention to things like the Federal Reserve, credit expansion, what *really* caused the housing market to collapse, true reasons behind the Great Depression and other hugely critical aspects of the economy and our history. Let us delve into this topic and lay out a course of where the economy might head in the next several years. Defining the terms Before we begin let us define the terms, because there is a good c...