All power to the state! – Money madness at the IMF

IMF headquarters

You cannot escape an all-pervasive sense of crisis these days. Impending doom does not only announce itself in actual events but also via the proliferation of ever more hair-raising schemes that claim to solve our problems. Maybe it should not surprise us if, at a time when the world’s most powerful central banks keep interest rates at zero for years on end and keep printing quantities of money that are simply outside the facilities of human imagination (trillions? quadrillions?), bravely hoping it will end differently this … [Read more...]

The triumph of politics

Richard Nixon

On August 15, 1971, President Richard Nixon declared that the United States would no longer honour its promise to exchange US dollars held by foreign central banks for gold at a fixed price of $35 an ounce. The innocuous term 'Nixon closed the gold window' that is now widely used to describe this act does not quite convey its significance. (Was something to be stopped from going out or from coming in through the window? Can the window be reopened again?) What Nixon did was cut the last remaining official link between the … [Read more...]

Thoughts on the Greek crisis and the politicization of economics

Mosaic of Plato's Academy

 Should the Greeks have a referendum on whether they want to stay in the euro? Are the upcoming elections such a referendum? Would it be better for the Greeks if they left the euro? - Are you, like me, sick and tired of hearing these questions and then the answers based on the same stale and superficial logic? Most commentators assume that it was a mistake of 'the Greeks' to enter European Monetary Union and that they would do better outside of it. I suspect some undue generalization behind such verdicts. For who do these … [Read more...]

Aggregate nonsense

dollar notes falling from sky

The economic policy debate is dominated by wishful thinking and fallacies of the most dangerous kind, propagated no less by the high and mighty in the policy bureaucracy and the alleged experts in the media. Here is my point, and every clear-thinking person already knows it: That economic growth, and thus recovery from the crisis, will come about through the actions of governments is complete and utter nonsense. It is an illusion to assume that running budget deficits and printing lots of money and manipulating prices will … [Read more...]

Deceits and delusions – Some thoughts on the euro-crisis and democracy

Eurotower In Frankfurt

Anybody with any knowledge of economics should feel uneasy at the sight of a country where half of recorded economic activity is conducted by the state. Are such semi-socialist societies operable, and if so, for how long? That complete socialism is impossible and that any attempt to establish it must fail, we know for sure since Ludwig von Mises explained it in detail in 1922 with his masterly Die Gemeinwirtschaft (Socialism). The only reasons that the Soviet Union did not collapse earlier but managed to drag out its … [Read more...]

Faster, Pussycat! Print! Print!

Money printing press

It is a beautiful autumn day in London, unseasonably warm and sunny, the city looking its very best, and I am trying to find a hook for this blog. I should write about the European debt crisis, the sharp drop in equity markets last week after "Operation Twist" was announced, and the washout in commodity markets, not least in gold. I will cover all these topics but what should my hook be? A good place to start is always the mainstream media, first and foremost the Financial Times, that most mainstream of mainstream organs, … [Read more...]

At Last, the Death of Politics

Dollar note on a hook

For over a year now the Eurocracy has tried to put Humpty-Dumpty together again, to somehow restore belief in the solvency of the European welfare state, which is ultimately the real issue at the core of the current malaise rather than just the  problems of the more recklessly extravagant periphery. The Greek state cannot live within its means but neither can any of the others. Meanwhile, over at the global superpower, the public is slowly waking up to the fact that this government, too, is going bust, thanks to … [Read more...]

The Paper Bureaucracy

Picture of Gordon Brown

Gordon Brown as the next head of the IMF? What a splendid idea - at least as long as Charlie Sheen is not available. No seriously, the despicable, interventionist IMF and the unpopular etatist Brown - a perfect match --perfect, I hope for further discrediting the global paper money bureaucracy, the new political elite lording it over us at our expense, the guys who brought you the crisis and now promise to fix everything - with more paper money and more debt and more policy interventions. Here is a man who was never … [Read more...]