Tag Archives: John Maynard Keynes

Our economic system (Keynesianism) is totally broken and invalid for solving our global economic problems going forward because it is a one-way street where debt grows and grows to unsustainable levels. The end game is default and bankruptcy.

Inflation lurks in the shadows. It destroys value by gradually eroding real returns over time. It is financial death by a thousand cuts. Investors too often look at "the numbers" in their portfolio without asking what those numbers can actually buy over time. It's a classic mistake that John Maynard Keynes termed "money illusion."

Just as the amount of outstanding debt has spiraled uncontrollably higher, so too will inflation. The hubris of central bankers who somehow believe they will know the precise time to alter easy money policies in order to prevent a monetary disaster is only exceeded by the foolishness of Congressional oversight in granting that authority. Word count: 1139

At present, the governors of the Fed are creating massive distortions in the financial markets with little hope of improving real economic growth or employment... Quantitative easing promises to have little effect except to provoke commodity [gold and silver] hoarding, a decline in bond yields to levels that reflect nothing but risk premiums for maturity risk, and an expansion in stock valuations to levels that have rarely been sustained for long (the current Shiller P/E of 22 for the S&P 500 has typically been followed by 5- to 10-year total returns below 5% annually). [Let me explain.] Words: 3066

Our leaders in Washington are so detached from reality it begs the question, "What are they smoking?" I'm not talking about the insane amounts of spending that's going on in our capital, or even about the patently unpayable debts and promises they're making to all of us and our foreign creditors. Although I think these things, too, result from whatever drugs they're on inside the beltway I am referring the way Washington manipulates its official statistics. Words: 1107