CB, I saw the article on Krugman. I didn't realize that he had been a big flop at a portfolio managers' conference and then wrote a piece calling them stupid sheep. The guy can't be all bad. <G>
Basically, my joke about the million or billion dollars is a snide way of saying that the Fed is the cause of the current bubble, not the solution. What the Fed has done has been to create extremely easy money and credit. Yes, you had to have scamsters take advantage of these conditions and make leveraged, speculative plays at casinos that they laughingly call banks, brokerage houses and hedge funds. But the Fed is the great enabler. With speculative inflation in asset prices, you always get an economic bubble that reflects itself in a wealth effect and huge consumer spending binges. When the asset bubble pops, so does consumer spending. And so does the economy. The bigger the asset inflation, the bigger the crash in the economy. Asia is suffering through theirs now.
So, Alan Greenspan solves every problem by lowering rates and printing money. My comment, why not just give us all a huge sum of cash shows that there has to be a practical limit to this type of foolish Fed behavior. My attitude is to agree with the Austrian school that all major crashes are caused by easy credit. Krugman seemed to have understood this in Asia but cannot see it in the USA. Or, perhaps he is just hoping the consuming binge continues until his textbook is published. <G>
In all honesty, though Epstein gave a fairly even look at the guy, I think he came off as a goof who happened to get lucky in Asia.
The best writer on Austrian School economics is Richebacher. If you find anything by him, especially about the Depression or the current bubble, be sure to read it.
MB |
