The folks over at The Daily Reckoning are on a mission. Their treasure? Insight. Insight into why it is that the smartest economists in the world are so stupid. Incidentally, they hope to understand why the GDP is such a fraudulent measure of prosperity
Over the course of three odd decades, billions of dollars were lent to people who shouldn’t have been allowed to borrow lunch money. And now, there are losses in the trillions. The real question is, will the market finally be allowed to correct itself?
Bill Bonner and the analysts over at The Daily Reckoning are feeling fairly vindicated this week. They have been investigating how the federal government may have rigged the system over the past 30 years, directing funds to help the rich get richer.
Modern economists – especially the famous ones – close their eyes to how an economy actually works, focusing instead on a make-believe world of numbers and theories, with little connection to the world in which most people live.
Mali, a British military working dog, gives his handler, Cpl. Daniel Hatley, a lick after receiving the PDSA Dickin Medal, the animal equivalent of the Victoria Cross, for his heroic action in Afghanistan, in London on Nov 17 .
Bill Bonner is not too pleased with economists right now. In his latest post he claims that as a result of their conceits and delusions, trillions of dollars have been clipped from the world’s GDP, billions of people are poorer and their lives shorter.
There are times when governments need to build tanks. An economist can’t tell the difference between a Tiger tank and a BMW. But a passenger can. It doesn’t take him long to realize that a tank is no way to travel.
What’s the point of having an economy, asks Bill Bonner? It makes no sense to waste trillions of dollars’ worth of resources just to “protect the economy,” he says. The whole point of an economy is to create more stuff, not to waste it.
So who's right? The French seem preoccupied with the mistresses of their new chief, and the details of their last meal. Meanwhile back in America, President Barack Obama is happily married, but taking flak for his economic and foreign policies.
Markets soar when the Fed hints at more money, and crash when it hints that it will sit still. When you operate with an elastic currency, and expand credit 50 times in 50 years, Bill Bonner warns, don't be surprised when the market inevitably falls over.
A Washington garden party serves as a think tank hothouse, providing the Daily Reckoning with some interesting insights into the current US situation. Representing a variety of backgrounds, the group was united by a hatred of the US "empire."
Europe’s austerity policies nor America’s growth policies have worked. In Europe, governments collectively spent 44.8% of GDP in 2000. Today it is 49.2%. That’s not austerity, that’s stimulus, according to Bill Bonner.
Americans' wealth has shrunk so much that, in 2010, median family net worth was no more than it had been in 1992 after adjusting. According to the Fed's report, two decades of accumulated prosperity had vanished, mainly due to falling home prices.
Bonner takes on "zombies" in the social security system, health care and now the Department of Defense. A new computer virus, allegedly developed by the US and Israel, has him worried about what might happen if it falls into the wrong hands.
Argentina's hard-charging president Cristina Fernandez de Kirchner has instituted new policies that place stringent controls on foreign-currency purchases, while insisting citizens convert their US dollars to pesos. The Daily Reckoning team is skeptical.