China, along with the rest of the universe, continues to prove just how wrong Keynesians are about infrastructure/stimulus spending. Almost always, the result of such spending is a handout to politicos. It causes incalculable disruptions to the real economy. No matter how well-intentioned the pundits who begged for it were.
As a result of the bad debts created, China will continue to devalue their currency and continue to have high inflation.
*Correction: The man in this clip is Senator Jay Rockefeller, not David Rockefeller.
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.
A broad index of commodities, as tracked by IndexMundi.com (great site), is up 252% in the last 10 years.
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.
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).
Pretty much nailed it …
Compare to Krugman’s view at the time.
