Tag Archives: The Dollar

Apropos of Everything: Take 30 Minutes to Understand What is Actually Happening in our Economy

This brilliant report clearly explains the complex forces at play in our current economy. Topics covered include The Fed, inflation, The Great Depression, The Dollar, deflation, geopolitics, budget deficits, consumer spending, and more.

This is a must-read.

First, Let's Lower the Bar

The simple reality is that if We the People of the US want Medicare, in even a reformed and more efficient manner, we must find a way to pay for it. It will not be cheap. Raising income taxes on the “rich” is not enough. You have to go back and raise income taxes on the middle class, too. Oh, wait, that will be a drag on the economy and consumer spending. And in any event it will not be enough.

Thoughts on Liquidity Traps

Simply put, monetary policy is far less effective in affecting real (or even nominal) economic activity than investors seem to believe. The main effect of a change in the monetary base is to change monetary velocity and short-term interest rates. Once short-term interest rates drop to zero, further expansions in base money simply induce a proportional collapse in velocity.