And here’s QE Explained, for those who haven’t seen it yet:

But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.

Then abolish this law without delay, for it is not only an evil itself, but also it is a fertile source for further evils because it invites reprisals. If such a law — which may be an isolated case — is not abolished immediately, it will spread, multiply, and develop into a system.

The person who profits from this law will complain bitterly, defending his acquired rights. He will claim that the state is obligated to protect and encourage his particular industry; that this procedure enriches the state because the protected industry is thus able to spend more and to pay higher wages to the poor workingmen.

Do not listen to this sophistry by vested interests. The acceptance of these arguments will build legal plunder into a whole system. In fact, this has already occurred. The present-day delusion is an attempt to enrich everyone at the expense of everyone else; to make plunder universal under the pretense of organizing it.

Connecting the dots from 1850, when Bastiat wrote this, to today, hardly seems necessary. 162 years later, and Bastiat’s The Law is fresh as a daisy.

• 1984: (warning of a surveillance state)
• 2001: “This [housing] bubble will burst, as all bubbles do”.
• 2002: “Over the next decade, Americans will become poorer and less free”

When measured on a per capita basis, cumulative GDP growth since the start of the recession in ’08 is extremely disappointing. Especially when you consider all the measures which were supposedly designed to boost growth.

QE1, QE2, TARP, ZIRP, stimulus (think Solyndra & Fisker, not roads & bridges). Failure & wealth transfer have resulted.

Perhaps the most economically impactful “stimulus” enacted so far is the payroll tax cut. Social Security payroll tax deductions were temporarily reduced from 6.2% to 4.2% in 2011. Although there will be bickering, for now it seems like the tax cut will be extended indefinitely (ignore the unsustainable long-term nature of it all, if you can).

Some economists venture to guess that the payroll tax cut (2% less taxes on all wages/salaries below a certain threshold) will contribute 1-1.5% to annual GDP as long as it remains in place.

So picture the chart to the left, without a big chunk of the recent upturn. Now picture it if properly adjusted for inflation. It’s not a pretty picture.

Conclusion: any economist that says we’re not currently in a recession/depression is trying to sell you something.

Chart via WSJ’s Jason Lahart.

As a result of the bad debts created, China will continue to devalue their currency and continue to have high inflation.

The clip below is from 1991, at a Spina Bifida Foundation roast of Pat Buchanan. Rockefeller’s jokes about protecting the rich, joining the Trilateral Commission, and world domination are all quite interesting. Despite what you may hear, these are real organizations. They have real agendas. For example, Mario Monti, recently-installed “technocrat” head of Italy, chairs the group’s European operations. More after the clip.

By the way Pat, do you bank with Chase Manhattan?

Some people immediately tune out at the mention of a group like the Trilateral Commission. Don’t get all conspiracy theory on me bro. Call groups like this what you will, they’re quite real. I can’t vouch for their intentions, as I haven’t been invited yet.

But we can get some insight from contemporary historical accounts. Such as this one from the great libertarian economist Murray Rothbard:

Alan is a long-time member of the famed Trilateral Commission, the Rockefeller-dominated pinnacle of the financial-political power elite in this country. And as he assumes his post as head of the Fed, he leaves his honored place on the board of directors of J.P Morgan & Co. and Morgan Guaranty Trust. Yes, the Establishment has good reason to sleep soundly with Greenspan at our monetary helm. And as icing on the cake, they know that Greenspan’s “philosophical” Randianism will undoubtedly fool many free market advocates into thinking that a champion of their cause now perches high in the seats of power.

Love Rothbard. More at Mises.org.

So when an influential idiot like Christina Romer says, “the spectre of inflation is quickly fading”, as she did on Bloomberg TV recently, it makes one wonder. What is the time period these people are looking at? A week? A month? Only ones when commodities are down?

Stop to consider the fact that these price increases have occurred despite stagnant wages (the Keynesian’s preferred deflation argument being that inflation cannot occur without matching wage hikes) AND crawling money-velocity since the crunch. No matter what the Fed does, it is screwed going forward.

1. Tighten? Raise rates. Crush increasingly credit-dependent zombie economy (and banks, for some reason the Fed seems to favor the institutions who own it)
2. Expand lending? Massive inflation, continuation of zombie economy.
3. Keep lending slow, monetize debt. Hyperstagflation, ugly.

If I had my pick, I would of course go #1. Every time. But that’s not likely to be the case (for a while yet).

And regarding investment choices today, they’re a bit like a school cafeteria; sh1tty choices, but clear winners. I am looking to buy more precious metals and foreign bonds (pizza & french fries).

Compare to Krugman’s view at the time.