Archive for September, 2010|Monthly archive page

The Japanese Crisis—No More Mr Nice Guy

During the 1980s, there was a great deal of angst about the growth of the Japanese economy relative to the US and the rest of the world.  Japan was expanding into overseas markets on the strength of its hyper-efficient economy while allegedly enjoying protection from foreign competition in its domestic market.  Of course, we now know that Japan was in a bubble, and we look on the 1990s as Japan’s “lost decade”. Continue reading

Dow 13000?

I do not make predictions about absolute price levels for anything, but when I saw this commentary on Russell Napier’s notes on the outlook for equity markets and the similarities to my own outlook, I sat up and took notice.  He is forecasting a 30%+ increase in equities over the course of the next 18 months, which is roughly the time period I have been looking at, as well.  Thirty percent may sound like a lot in the present gloominess, but I think there is good reason to think we are, as I said before, in store for an Indian summer. Continue reading

Bonner’s “Empire of Debt”

I bought this book some months back not knowing anything about Bonner or the Agora empire, although as it turned out, I had an acquaintance who had been working in a province of that empire for some time.  I bought the book on the strength of its title—someone who was not a member of the conspiracy-theory left or right had finally connected the dots between American expansion and economics in a concrete fashion—and on the strength of the names recommending the book on the dust jacket—Nassim Nicholas Taleb, Jim Rogers, Lew Rockwell. Continue reading

Mish vs Fed: Who’s Right About the Economy?

Ludwig von Mises warned about being over-reliant on index numbers when assessing economic conditions.  Not only are they often subject to political manipulation (e.g., inflation numbers, GDP numbers, unemployment numbers), but they are subject to simple human error.  This aversion for bureaucratically determined index numbers played no small role in his rejection of even the possibility of having a centrally planned monetary and/or economic system. Continue reading

Gold and Stocks: Watch Out!

If I did not know better, I would think that the good Mr Katz was answering my response to his previous article on movements in the precious metals markets, particularly silver and gold.  Whether or not that might be true, I wanted to take the opportunity to mark clearly where I agree and disagree with the gold bug community.  I am extremely sympathetic to both their principles and their predictions about the economy and markets, but not for the next year or so. Continue reading

Why Peter Schiff is Only Half Right

It is no surprise to find out that Peter Schiff is bearish about stocks, but his most recent admonition to “dump stocks” could not be timed worse, in my opinion.  He applies the tried and true intermarket observation—that stocks and commodities have an inverse relationship—to our current situation.  Unfortunately, the relationship is not quite that simple. Continue reading

Republican Civil War

I just watched Senators DeMint and Murkowski, of South Carolina and Alaska, respectively, on CNN.  I do not recall senators in the same party ever using that kind of language about their own, especially in such a public venue.

Pat Buchanan is right to point out the parallels between the Tea Party and the rightwing rebellion of the Goldwater years that culminated in the election of Reagan in 1980. Continue reading

The Revolution Will Not Be Published

I just finished reading Joseph Campbell’s compelling third volume of The Masks of God.  I have not read the other three volumes, although the second volume is waiting patiently on my shelf; nor have I read any of his other books.  There is so much material covered in the third volume alone, from prehistoric European culture to Zoroastrianism to Islam to medieval Christianity, Babylonian mythology and the rise of Israel. Continue reading

The End of Empire?

In a recent article in Institutional Investor entitled “Paradise Lost”, Nouriel Roubini and Ian Bremmer argue that the Great Financial Instability will accelerate the decline of American power, especially relative to that of the rest of the world (with China in the van).  I find this point of view plausible in the short term, but more doubtful over the course of the long-term. Continue reading

What are gold and silver saying about each other?

I like reading Howard Katz’s commentaries on 24hGold.com, because he is, as he describes himself, a one-handed economist.  Prudence, caution, and wisdom suggest that we should hedge our bets, diversify, keep our options open.  But, the real world demands action before we are ready and before we know what is happening.  The economist who on-the-one-hands and on-the-others leaves us ill-prepared for action.  At some point, you’ve got to make a call.  And, that’s what I like about Mr Katz. Continue reading