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...................................... Unusual Suspects, end of day, Monday, September 22
.......... "Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back." -- J.M. Keynes .......... "In matters of style, swim with the current; in matters of principle, stand like a rock." -- Thomas Jefferson .......... Alexander Fraser Tytler wrote in The Decline and Fall of the Athenian Empire (1776):
"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can
vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising
the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always
followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years. These nations have
progressed through this sequence: 'From bondage to spiritual faith; From spiritual faith to great courage;
From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy;
From apathy to dependence; From dependence back into bondage.'"
Sounds about right. ;-) .......... Today a woman at the mystery book store (Crime in Store) I regularly visit in Bloomsbury recommended James Sallis and Val McDermid to me. I'd never heard of either one of them, but I'll give them both a shot once I get a little less busy in the next week or two. .......... Paul Kasriel writes in his most recent commentary that:
"...the Fed's accommodative monetary policy is short-circuiting a necessary economic adjustment process and is destined to
lead to a worsening trade-off between economic growth and inflation ... consider the possibility that layoffs are contributing
to higher observed productivity rather than higher productivity contributing to layoffs. If productivity were increasing because
all workers were becoming more productive, that is, the productivity schedules were shifting outward, then the Fed could print
more money without causing higher absolute inflation ... But if observed productivity is rising because of movements up along
the productivity schedules, then the Fed's printing of more money will ultimately result in higher absolute inflation."
I always find it useful after reading something like that to remember what Will Rogers said: "An economist's guess is liable to be just as good as anyone else's." .......... Michael Lewis writes a hilarious column on the talents of Richard Grasso:
"An otherwise unexceptional fellow, performing fairly routine functions for a not terribly profitable enterprise, staffed and
owned by some of the most financially self-interested people on the planet, talked and charmed them into forking over an annual
salary of as much as $25.6 million, building himself a retirement nest egg worth $140 million."
.......... Jim Griffin considers the contrary case that if the renminbi were freely floated the market might actually devalue it. (I personally think that's absurd):
"The contrarian case has its strengths.... China's trade surplus with the U.S. doesn't represent its overall stance;
the 'workshop of the globe' is a big importer of materials and components and its global net trade position is
approaching balance. It has a weak banking system and almost nothing in the way of capital markets. Why wouldn't
its citizens, the world's most numerous, prefer to diversify their assets by increasing their holdings of the world's
monetary standard, the U.S. dollar? And why shouldn't the dollar appreciate as a result?"
Griffin later writes this paragraph which I've read five times and still don't understand, lol.
"And the FOMC, having assessed the deflationary risks, as indicated by that low core CPI reading, against the ascendancy
of the yuan in the unquantifiable long-term, is right to weight the former over the latter for an unspecified considerable period."
.......... Stephen Roach writes about the upshot of the recent G-7 meeting in Dubai:
"As the yen and the euro rise ... export competitiveness in Japan and Europe will be diminished ... the key impacts on Japan and Europe
would be to accelerate the focus on reforms ... Stronger currencies...[force] nations or regions to unshackle domestic demand by making
internal markets more flexible, businesses more efficient, and price-setting mechanisms more competitive."
"In the end, a lopsided world has no choice other than to accede to a weaker dollar." .......... Johan Norberg correctly writes: "The uneven distribution of wealth in the world is due to the uneven distribution of capitalism." Previous Entry >>> Random Thoughts -- September 20 & 21 |
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Chairman MaoXian |
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