Skip to main content

What government is doing to our money

Please read the following essay, "What Government Is Doing to Our Money", by Lew Rockwell.

Rockwell gives an excellent summary of how an economy characterized by inflation differs from an economy in which deflation is the norm. Here is an excerpt:

For years, Fed officials and others have warned about the grave dangers associated with deflation. Now, we see this very thing taking place in clothing, technology, and other goods that you can buy at large discount stores.

What is the result? It's been a wonderful blessing to consumers. Indeed, it has been our saving grace in times of soaring prices for education, energy, houses, and medical care. If some prices had not fallen, the American economy would be in much worse shape.

Does deflation make business more difficult? Most certainly. Retailers can't hold on to inventory as long as they use to. The maintenance of profitability involves relentless innovation, keen-eyed cost watching and cutting, constant attention to the competition. In a deflationary environment, consumers expect outstanding services, a big bang for their buck, and slavish service. They are ready to defect to the competition over the slightest thing.

All these are facts of life in a deflationary environment. My only question is: why we should regret this? If we seek an economy in which waste is held to a minimum, the people are served, the consumer is king, business operates with top efficiency and innovation, this is all to the good. Deflation never harmed anyone except those who are not willing to work hard for their profits.

There is also an MP3 audio file of this speech. To hear it, just click the link that's at the top of the page.

Popular posts from this blog

Lessons from Hedge Fund Market Wizards: Scott Ramsey

Today we continue our series, "Lessons from Hedge Fund Market Wizards" , with a look at Jack Schwager's interview with Scott Ramsey of Denali Asset Management.  Ramsey, a futures trader and CTA who works on the island of St. Croix, spoke to Schwager about his first foray into the markets, his evolution as a trader, and the process he stands by to protect and grow his clients' money. 1) . Ramsey started trading in college. He was roped into the OTC metals market via a broker's ad in the Wall St. Journal. The broker charged customers a flat fee to buy and sell as much as they wanted in a particular market for six month. At the time, Scott was a novice and didn't know about futures, so he traded metals in this fashion through the inflationary run-up of the late 1970s. 2) . Scott had to rethink his trading strategy after he bought silver at $50 an oz., only to watch it collapse to $26 following a long string of limit-down days. He sold as soon as the market...

Finance Trends 2019 Mid-Year Markets Review

Email subscribers of the Finance Trends Newsletter receive the first look at new articles and market updates, such as the following piece, sent out to our email list on Sunday (6/14).   Hello and welcome, everyone! If you received our last email notice over the July 4th holiday, you'll know that this weekend's newsletter will serve as a mid-year market update and a follow-up to issue #29, " How to Reinvest in a Rising Market ".   Ladies and gentlemen, without further ado, let's start the show...  Finance Trends Newsletter: Our Mid-Year Market Review When we last spoke, back in February, the U.S. stock market was rallying off its December-January lows. As the S&P 500 and Nasdaq reclaimed their 200 day moving averages in February and March, it became increasingly apparent that a lot of retail investors (and perhaps some institutional investors) were left under-invested while watching this recovery move from the sidelines.  The U.S. stock ...

How to "Pull the Trigger" on Your Trading Ideas

In our last post, I quoted hedge fund manager, Jim Leitner on the importance of following up on your investment ideas.  Today I'd like to follow up and share some thoughts on how you can learn to consistently "pull the trigger" on your best trading setups and investing ideas. In order to help you do that, we'll take from the best and offer up key insights from interviews with top traders and trading psychologists like Alan Farley, Brett Steenbarger, and Doug Hirschhorn .  Now before we get to their key insights on overcoming trading anxiety and pulling the trigger on your trading ideas, let's remember what Jim Leitner said in his interview: "Learn to love to listen to people and when you hear something interesting, follow up on it. Don't just think, "Well that's an interesting idea" only to find out a year later that the company you could've bought shares in is now up 500-fold. You never want to say woulda, coulda, shoulda...