Those who would seek to promote “full employment” by creeping inflation, induced by credit policy, are trying to correct structural maladjustments, which are inevitable in a highly dynamic economy, by debasing the savings of the people. If their advocacy of this course is motivated by concern for the “little fellow,” they should explain to the holders of savings bonds, savings deposits, building and loan shares, life insurance policies and pension rights, just how and why a rise in prices of, say, 3% a year is a small price to pay for achieving “full employment.”
- Former Fed chair William McChesney Martin put it this way in a fall 1955 address, quoting from Allan Sproul, then president of the New York Fed (via Grant’s)
I talked about this most recently in my chat with Michael Farris. Inflation is a form of default (and the most regressive tax.)
"Federal Reserve Chairman Ben Bernanke appears to be guiding the economy to a soft landing..."
We knew this was coming:
Thanks, Jason
Ever notice that guys worth $4.7 Billion don't worry much about the cost of living?
I heard a market guru on a new podcast say, quote, "We haven't had any inflation in 40 years." (He’s in his upper-40’s)
He casually threw out that we need "10% inflation for 10 years," as if that wouldn't destroy what's left of the middle-class. He mentioned GINI ratio without referencing Fed's Cantillon Effect.
I've been hearing more & more podcast guys talking like this lately. It's disgusting.
Any day now…
Ron Paul asking Citadel-intern Ben Bernanke in 2008 how big the Fed balance sheet should be.
The Scourge of Corporate Financialization: Income Inequity, Employment Instability, Productive Fragility Good article
I’ve written on this topic a lot, for example in threads here and here:
I think that in many cases share repurchases have been very bad for corporations’ long-term health (but great for the top execs).
Here’s Warren Buffett discussing the issue in 1999.
There is only one combination of facts that makes it advisable for a company to repurchase its shares: First, the company has available funds — cash plus sensible borrowing capacity — beyond the near-term needs of the business and, second, finds its stock selling in the market below its intrinsic value, conservatively-calculated...
If a company’s stock is selling well below intrinsic value, repurchases usually make the most sense. In the mid-1970s, the wisdom of making these was virtually screaming at managements, but few responded. In most cases, those that did made their owners much wealthier than if alternative courses of action had been pursued. Indeed, during the 1970s (and, spasmodically, for some years thereafter) we searched for companies that were large repurchasers of their shares. This often was a tipoff that the company was both undervalued and run by a shareholder-oriented management. That day is past.
Now, repurchases are all the rage, but are all too often made for an unstated and, in our view, ignoble reason: to pump or support the stock price…
Buying dollar bills for $1.10 is not good business for those who stick around…
In the early years of this century, Bernard Shaw asked the explorer Henry Stanley how many of his men could take over leadership of the party if he, Stanley, were ill. 'One in twenty,' said Stanley. 'Is that figure exact or approximate?' 'Exact.'
The matter of the dominant 5 per cent was rediscovered during the Korean War by the Chinese. Wishing to economise on man-power, they decided to divide their American prisoners into two groups: the enterprising ones and the passive ones. They soon discovered that the enterprising soldiers were exactly one in twenty: 5 per cent. When this dominant 5 per cent was removed from the rest of the group, the others could be left with almost no guard at all.
2020 was the year literally everyone dropped their mask.
It was amazing. And really, really sad. I won't dwell on this one with examples, but there are hundreds. Indeed, literally everyone did it. Prior to 2020 I thought half the people in the world were reliable mutuals, if just needing the right encouragement. Now I think maybe 14% of the people in the world are capable of thinking for themselves, and 2-5% of standing up against petty tyranny.
- PdxSag
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