"INFLATE OR DIE?”
BILL BONNER (GURUN MED HUMOR)

GURU CORNER
If we're serious about increasing the capacity of our medical institutions, free trade and deregulation offer real solutions.

For the government not to perish under the crushing weight of its gargantuan debt load, it must stimulate inflation.

What they’d like to do – and what I think they’re planning to do – is debase the dollar by 3% or 4% a year for the next 20 years.

Debasing the dollar by 4% a year over 20 years would reduce the value of the dollar by 55%, and therefore reduce their debt load by 55%.

Add in some economic growth. Problem solved.

The foreign policy "experts" gave us the Iraq war and the War on Terror, whose results have been much worse than doing nothing.

The "experts" gave us the monetary policy -- supported by Democrats and Republicans alike -- that produced the housing bust and the financial crisis of 2008.

Our "experts" in the present crisis are not going to come out of this looking any better.

What's more, the "experts" aren't experts in anything other than their own fields, if even there.

When they act as if their concerns should be society's only or primary concern, they are going beyond their area of expertise. The "experts" are not qualified to judge for us what we should value.

The lockdowns of the past month have not been conducive to the common good. While they have saved the lives of many people, they have also endangered—and are still endangering—the lives and livelihoods of many others. They have created a new and dangerous political precedent.

Many argue that unregulated markets would fail due to lack of consumer knowledge, or information asymmetry. But competition in free markets actually gives rise to all kinds of mechanisms that help consumers make informed decisions. This is as true of medical tests as for any other good.

Chile, like many other countries, needs to do this: cut taxes, deregulate, and limit spending.

As Johann Wolfgang von Goethe put it, “Let everyone sweep in front of his own door, and the whole world will be clean.” We keep busy with our own broom.

By contrast, do the office seekers and grandstanders – Donald Trump, Nancy Pelosi, Joe Biden et al. – make the world a better place? They create no wealth, so every “benefit” they give to some must come at the expense of others.

And their policies? People who insist that you follow their ideas are always those whose ideas are idiotic. Typically, they are big… and dumb, appealing to the masses’ desire for glory, larceny, and security.

Roosevelt is one of the saddest figures in White House history. Born rich, he never had an honest job in his entire life.

And he never added a penny to the world’s wealth.

In his speech – given at the Sorbonne in Paris – he lauds the risk taker… the doer… the striver… and achiever. Yet his own big achievements were amateurish… lethal… and most came at someone else’s expense.

In his hand-tailored uniforms, with his own private army of dreamers, schemers, and vainglorious world improvers, he was the picture of the warmongering martinet.

But probably the most frequent, and most emphatic, criticism we’ve gotten over the last three years concerns our views on Donald J. Trump.

The reality TV star really seems to stir up emotions, pro and con. Some readers are annoyed with us because they think we like him. Others are cheesed off because they think we don’t.

To infinity, and beyond! Reserve Bank credit (i.e., the Fed’s sum total of interest-bearing assets) jumped to $6.598 trillion, up $146 billon from last week’s reading and 62% year-over-year. On an annualized three-month basis, Reserve Bank credit is up 446%, compared to 362% last week and 90% four weeks ago.

In economics, for example, the more expert you become, the more you are willing to believe things that couldn’t possibly be true… such as that a small group of technocrats in the Federal Reserve headquarters can do a better job of setting interest rates than millions of borrowers and lenders in the free market…

…or that you can “replace” real wealth with fake money… or that Donald Trump knows when the price of oil is too high… or too low…

…and that the wise men and women of the Federal Open Market Committee know when prices are rising too fast or too slow, or when the economy ought to be growing or contracting (never!)…

Paul Krugman, with his “noble” prize, is about as expert as you can get. But his views are nothing more than sophisticated claptrap.

It is fundamentally wrong to put the entire economy at the service of a single goal and to commit to a single solution. Human action always involves weighing up different goals and different means."

The stimulus packages being handed out across this world provide us with an opportunity to document the anticapitalist process as it unfolds in real time, keeping in mind that when these inflation schemes fail, it will likely be blamed on capitalism.

Part of what made the Great Depression last so long was increased uncertainty about what regulation or tax the government might impose next. Today's looming threat of ongoing "shutdowns" creates a very similar situation.

Whether we're talking about gasoline or toilet paper, the details of how the good is produced are irrelevant to the fact that price controls cause shortages. Only price freedom ends them.

The old saw that dividend stocks are good for bear markets is actually a high-risk gamble.

"Saving lives versus saving money" comparisons confuse ends with means. The end of saving the economy is not to have more money. The end is to have resources necessary to preserve the lives and health of countless human beings.

As the debt bombs in Italy and Spain and France get worse, it increasingly looks like the eurozone will have to bail out a huge portion of the European economy. Either that, or break up the EU, provoking a new crisis.

So-called price gouging is a gimmick used by politicians and the media to rally supporters and viewers. It's almost never about predatory business practices, and it's always the people who end up paying the cost of price control laws.

The optimistic tone in the markets may extend into this week as major economies plan to ease lockdown measures.

However, the Fed and ECB will have to maintain an accommodative tone to prove investors’ “faith” in them has not been misplaced and avoid hindering the recovery in sentiment. We think they will: mostly to the detriment of USD and to the benefit of AUD.