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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (89589)	11/2/2008 7:59:54 PM
From: Sunny Jim	Read Replies (2) \| Respond to of 116555

Mish, I have a question regarding FDR's devaluation in 1933. Does this refer to his abandoning the gold standard and increasing the price of gold from $20.67 to $35 per ounce? My second question is, if there was a specific currency devaluation today by either the FED or the President, what form would it take? Thanks for any insights.

To: mishedlo who wrote (89589)	11/2/2008 10:39:17 PM
From: studdog	1 Recommendation Read Replies (1) \| Respond to of 116555

I have read quite a bit about the Austrian economic school. I think I can sum up my understanding of their approach to economic downturns by paraphrasing Voltaire. Referring to physicians, he said "The role of the doctor is to sufficiently amuse the patient while nature effects a cure". The Austrian school feels the role of the government/central bank is to sufficiently amuse the population while creative destruction cures the economy. While the Austrians are probably right, we are not going to get this approach no matter who is elected. So, Mish, you have been so right about deflation, and have been so articulate about why the current Paulson/Bernanke approach is wrong. Using the Austrian School as a guide certainly accurately predicted our current mess. I don't find though, much evidence that their prescription of nonintervention has ever really been applied, and the chances of it being applied now are slim to none. We do not have the stomach for it. So given that circumstance, what else might work? It appears that massive deficit spending worked for the Japanese early in the Great Depression. I think it can be argued that it worked for us when we got around to deficit spending 23% of GDP in WWII. Our current leaders, other than Ron Paul, are not going to embrace the Austrian School. It is not going to happen. So what else might we do? Is there any other way out? Or, will anything we do, like FDR, just prolong the agony? Now that your predictions have come to pass and we appear to be on the edge of an economic abyss the answer to those questions are all that matter now. Karl

To: mishedlo who wrote (89589)	11/2/2008 11:37:22 PM
From: studdog	Read Replies (1) \| Respond to of 116555

Austrian answers to my questions: posted 2 days ago Do We Need More of Keynes Now? mises.org The Austrians are great at demolishing Keynes and Friedman but unless I have missed something, their only prescription for an economic downturn such as ours is to do nothing. This ultimately may work in the long run, but as Keynes famously said, "we are all dead in the long run" and for all practical purposes the Austrian school is fantasy because no government is going to embrace it in its pure form. Half ass attempts to embrace it, such as our recent bastardized form of laissez faire are doomed to fail (see The Myth that Laissez Faire Is Responsible for Our Present Crisis mises.org ) Maybe the Austrian School will rise as a Phoenix from the ashes of our burnt out post depression civilization and form the basis of a new system but it ain't happening now.