great depression

With or without hyperinflation, today’s welfare-state obligations – just like 1919’s war reparations – are simply too big to be paid…

The EUROZONE’S PROBLEM? In short, it’s history…precisely what the single currency was supposed to neuter, of course.

Greece’s still-pending €110bn bail-out has already cost three lives in Athens’ riots today. More bloodshed inside Western Europe would make a horrific end for this grandest of grand post-war projects…the crowning achievement of Europe’s longest-ever period of peacetime.

But thanks to history – and the very same history that built the Euro, as well – Germany cannot inflate. The rest of Europe, however, cannot do anything else. Sharing one printing press was always unwise. Now it makes UK prime minister Gordon Brown look smart for staying outside. Which really is saying something.

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What shall we do with those people deprived of work by wealth and technology…?

HOW TO FILL the days, hours and minutes? It’s now seven decades since John Maynard Keynes peered into the future and declared that, one day, trying to scratch a living would cease being “the permanent problem of mankind.”

On the contrary, the moustachioed baron said in 1930; the problem ahead was that people would have too much leisure, too much free time, and not enough to do.

Keynes was bang on of course, as ever. His vision, detailed in Economic Possibilities for Our Grandchildren, has in fact come to pass 30 years early, despite those very wars and conflicts he thought would impair it. By 2030, and “for the first time since his creation” Keynes wrote, “man will be faced with his real…problem – how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.”

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It seems that not only is our friend Michael Pascoe unable to see the value of gold, but he is obviously quite incapable of working out a basic sum – that 1 + 1 = 2.

And his unwavering faith in the ability of the Reserve Bank of Australia is commendable, yet completely mad. After all, the RBA is the same crowd that’s overseen the destruction in the value of your money over the last fifty years.

And here’s the proof courtesy of the RBA’s website:

They don’t even hide the fact that they’ve singularly failed in one of their main aims, to provide a stable currency.

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We always believe it’s good to hand out awards to people who deserve it. Whether it’s for doing good things or bad things, we believe they should receive an award to recognize their “achievement.”

In this instance, the newly inaugurated “No —- Sherlock Award” goes to the US Federal Reserve’s Federal Open Market Committee (FOMC). Like the board of the Reserve Bank of Australia (RBA), the FOMC is responsible for making interest rate decisions for the central bank.

And last night the FOMC released the minutes of its November 3-4 meeting, which contained the following, hehem, wonderful lines:

“Members noted the possibility that some negative side effects might result from the maintenance of very low short-term interest rates for an extended period, including the possibility that such a policy stance could lead to excessive risk-taking in financial markets or an unanchoring [sic] of inflation expectations. While members currently saw the likelihood of such effects as relatively low, they would remain alert to these risks.”

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