Gyroscopic Investing

I came across an interesting documentary about central banks, mostly about the Bank of Japan. It makes a lot of outrageous assertions, but even if only 1% of them is true, it's a scary world we live in.

https://www.youtube.com/watch?v=p5Ac7ap_MAY

http://princesoftheyen.com/

Not sure why people get so terrified by the boogeyman aka (central banks).

If you want to be terrified, go look at a long term inflation/deflation chart pre-Fed.  Huge swings back and forth from wild inflation, to massive deflation.  We're talking 10-20% moves in both directions routinely.

I think fiscal policy is far more damaging to most economies than monetary policy. Yet we keep electing the same riff raffs and inventing conspiracies to blame bankers.

clacy wrote: I think fiscal policy is far more damaging to most economies than monetary policy. Yet we keep electing the same riff raffs and inventing conspiracies to blame bankers.

'cuz people wanna be in political/fiscal control and micro-manage other people and don't want to be controlled themselves by those they have no power over.  This fear drives all conspiracy theories.

clacy wrote: Not sure why people get so terrified by the boogeyman aka (central banks).

If you want to be terrified, go look at a long term inflation/deflation chart pre-Fed.  Huge swings back and forth from wild inflation, to massive deflation.  We're talking 10-20% moves in both directions routinely.

I think fiscal policy is far more damaging to most economies than monetary policy. Yet we keep electing the same riff raffs and inventing conspiracies to blame bankers.

"Terrified" is probably too strong a word here. Central banks are certainly an important, probably essential, part of any economic system. The concern here is about transparency and accountability, two traits that some central banks, e.g. the ECB, awfully lack.

did HB name central banks in his work? he was a gold bug....usually gold bugs are suspicious of central banks?

People get so much more crazy over central banks vs fiscal policy because of the belief of these two myths:

1) Central Bank "money printing" significantly increases the confetti-nominal purchasing power of the private sector because it effectively "throws money out of helecopters."  Not to mention, the Central Bank directly interacts with Member Banks, and organizes bailouts to some degree, so these are naturally going to bring on tons of conspiracy theory activity... some of which is warranted... much of which is hogwash.

2) Fiscal policy appears to have a "natural" control mechanism in interest rates, so if the government spends too much, many people think the interest rates will eventually hold "it" accountable.  Further, almost everyone, even Austrians, likes tax cuts.  If one wants tax cuts, one can only rattle on about deficits being dangerous for so long before the cognitive dissonance starts to creep in.  In reality, the fed controls rates, and usually uses Treasury debt to exercise said control... as well as many of the common measurements of debt sustainability deficit hawks use mimic that of a household rather than a permanent economic unit such as a government.

Given those two misconceptions of reality, you're going to have a lot of attention going to the wrong places.

murphy_p_t wrote: did HB name central banks in his work? he was a gold bug....usually gold bugs are suspicious of central banks?

He was a gold bug up until it made its big move in the 1970s, which he correctly predicted. After that he became something different completely and gold was really just a tool for him... at least from everything that I have read and heard.