Mike McIlveen's List: Economy Opinion and Commentary

• rom 1997 on, it was a relentless $10 billion-per-month increase in Fed Credit (the stuff that appears as if by magic, but actually by pushing buttons on a computer) on the books of the banks, which is "money available for lending", which then becomes huge multiples of that money (thanks to the fraud of unrestrained fractional-reserve banking) when someone borrows it from the banks. It was a constant "money from thin air" scenario! How could one NOT see disaster ahead when the entire history of economics is this same story, over and over!

   

  I mean, it was beyond incredible! And every week I expected to start seeing reversals, but I never did! Instead, it went on and on, week after week, month after month, year after year, fostering unbelievable, incomprehensible amounts of debt to create monstrous, unbelievable bubbles in the stock market, bubbles in the bond market, bubbles the housing market, bubbles in the derivatives market and bubbles in the size of governments as everything just kept on growing bigger and bigger as a result of all of this outpouring of money from the Federal Reserve!

• In concert with the claims I made in the prior Martenson Insider post, The Fed bought $7 billion in Treasuries today and even more yesterday.

   

  This is at the upper end of their recent range of already exceptional purchasing activity.

   

  If things are so rosy that every single dip is being bought in the stock market with a vengeance, I wonder why these printing operations are really necessary?

   

  This $14 billion plus buying activity by the Fed represents fresh money created out of this air that was exchanged for the sovereign debt of the US.  However, since the Fed has, for all practical purposes, never undone its permanent operations (hey, that's why they are called "POMOs") we can consider these additions of money as good as permanent themselves.

    

  

• To sum it all up, the US economy is in recovery. Paul Krugman says that we’ll soon realize that Gross Domestic Product (GDP) is growing. He actually said that on the Sunday TV chat circuit. Not to put too fine a point on it, but I would really like to know what you mean by that Paul? Do you mean that the Atlanta homebuilders are going to open up a new suburban frontier down in Twiggs County so that commuters can enjoy driving Chrysler Crossfires a hundred and sixty miles a day to new jobs as flash traders in the Peachtree Plaza? Do you mean that the Home Equity Fairy is going to wade into the sea of foreclosure and save twenty million mortgage holders currently sojourning in the fathomless depths with the anglerfish? Do you mean that all the bales of deliquescing, toxic “assets” hidden in the vaults of Citibank, JP Morgan, Bank of America, et al, (not to mention on the books of every pension fund in the USA, and not a few elsewhere) will magically turn into Little Debbie Snack Cakes on Labor Day weekend? Do you mean that American Express and Master Card are about to declare a jubilee on accounts in default everywhere? Do you mean that General Motors will produce a car that a.) anyone really wants to buy and b.) that the company can sell at a profit? Are you saying we get a do-over, going back to, say, 1981? Did we win some cosmic lottery that hasn’t been announced yet? What’s growing in this country besides unemployment, bankruptcy, repossession, liquidation, gun ownership, and suicidal despair? In short, are you out of your mind, Paul Krugman?

• The Progressive Economics Forum aims to promote the development of a progressive economics community in Canada. The PEF brings together over 125 progressive economists, working in universities, the labour movement, and activist research organizations. On this site you’ll learn more about our network, our research and education products, and ways to contribute to its growth and success through membership, meetings and conferences, and our annual student essay contest.
• • put comment here
• Prizes will be awarded to an essay of 5,000-10,000 words on any subject related to political economy, economic theory or an economic policy issue, which best reflects a critical approach to the functioning, efficiency, social and environmental consequences of unconstrained markets.

• The Progressive Economics Forum organized an open letter, and released it on October 8, 2008. Signatories include four chairs of economics departments, two former Presidents of the Canadian Economics Association, a former federal Secretary of State (Finance), and a former Quebec Minister of Industry. The text and a list of the 87 signatories are here.
   

   

  First John Kenneth Galbraith Prize in Economics 2008

  • this is so important

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