by Monty Pelerin
Monty Pelerin’s World
The stage of most modern economies can be described by 3Ds — Demographics, Debt, Demise. The first two are strangling us and will lead to economic and perhaps social demise.
Most people look around and understand something is terribly wrong with economies of the world. There is no need for an advanced economics degree to reach that conclusion. Perhaps the absence of such training makes it easier to recognize the weaknesses and fallacies in the last three or more decades of insane economic policy.
Keynesian Economics is all that most people know. Its adoption is primarily responsible for the current state of the world. To be exceedingly generous to Keynes, were he alive he certainly would reject some, perhaps most, of what has soiled his name and economic analysis. How much, however is moot. Current-day believers have extended his remedies to areas that he perhaps would consider erroneous.
The price of gold is heading up again in 2016, as investors worry about the safety of the stock market. As a result, you may be noticing more radio commercials and online ads for gold coins.
Mike Gleason: I’m happy to welcome back our good friend, David Morgan, of TheMorganReport.com. David, it’s always a pleasure to talk with you. How have you been?
Ready for today’s investment challenge? Give a plausible argument for why the stock market should have plunged earlier this week upon learning that the Fed may raise rates at its June meeting.
This past week, the big news for the market was the release of the April 27th FOMC minutes which once again suggested the Federal Reserve may be on a path to hike rates sooner rather than later. The reality is simple, with the markets hovering on critical support, a Presidential election just around the corner and no real evidence of economic recovery, the likelihood of a rate hike in June is approaching zero.
Silver may not be as scarce as gold, but its attractiveness to investors has been gaining momentum in 2016. Many are asking why are silver prices rising, and the answer is twofold.
In yesterday’s reckoning, we brought you the first part of our interview with Chuck Butler. Chuck’s the writer of the indispensable Daily Pfennig newsletter andthe managing director of EverBank’s Global Markets Group.
The market seems happy that the JPY trades comfortable north of 110 as we saw a small 0.5% gain in the Nikkei today. Hang Seng performed better closing up over 1%. with Shanghai also closing near its highs. A quiet session to close the week but at least on a positive note.
Scratching the Surface
Breathless news that driverless cars are poised to take over the roadways has so far left us skeptical—partly because we believe that the technological challenges to real-world implementation are higher than tech cheerleaders want to believe, and partly because we see that regulators, the insurance industry, and public opinion are likely to provide higher hurdles than commonly supposed. The technological transformation has a way of confounding its early-adopting apostles by taking longer than they think—and then catching the skeptics flatfooted when it finally matures after a period of incubation outside the limelight.
On July 21, 2009, then-Fed Chairman Ben Bernanke wrote an op-ed published in the Wall Street Journal seeking to allay any fears over balance sheet expansion. This was all relatively new, and at that time the recovery seemed a good bet and appeared to be underway in many places. Bernanke’s goal was to soothe any fears that “inflation” would get out of control because of the FOMC’s actions in QE1 and other expansionary programs.
Imagine the great American humorist Mark Twain returning to comment on this U.S. election year. Even his poisonous disdain for politics might be exhausted trying to chronicle the Clinton-Trump circus.