Sunday, February 3, 2013

Sunday roundup (02-03-13)

Quote of the Day:

"What is needed for a sound expansion of production is additional capital goods, not money or fiduciary media.  The credit boom is built on the sands of banknotes and deposits. It must collapse. If the credit expansion is not stopped in time, the boom turns into the crack-up boom; the flight into real values begins, and the whole monetary system founders.  The final outcome of the credit expansion is general impoverishment." -- Ludwig Von Mises, "Human Action" (The Golden Truth blog)

The eurozone crisis is not finished: The renationalisation of banking means that the monetary union is still unsustainable (The Financial Times)

Merkel says EU budget talks will be tough, outcome unclear (Reuters)

Twin crises in Italy and Spain stalk markets as political unrest prevails: The escalating political crises in Italy and Spain are being watched with growing concern by bond investors, fearful that both countries could slide into paralysis and lose the crucial backing of the European Central Bank. (The Telegraph)

Spain’s Disappearing Economy Demands a Bold New Approach (Bloomberg)

Silvio Berlusconi accused of 'dangerous propaganda' over Italy tax cut vow: Threetime PM promises to refund €4bn proceeds from loathed property tax if his rightwing coalition wins wide-open elections (The Guardian)

IMF sees 140m jobs shortage in aging China as 'Lewis Point' hits: China’s vast reserve of cheap workers in the hinterland is vanishing at a vertiginous pace. (The Telegraph)

Japan Finance Minister Models Policy After 1930s Stimulus (Bloomberg)

MF Global customers to get most of their money back: Freeh (Reuters)

     The aim of this blog is to show (mostly from reports in mainstream respected news sources) that there is reason to believe that both the United States and the global economies remain fragile in the wake of the financial crisis of 2008 and that a number of threats that exist today could, if they worsened, bring about economic depression -- not just a minor depression, but a depression worse than the Great Depression. This blog further attempts to show that the financial crisis of 2008 was largely a result of the devastating consequences of excessive risk taking and the absence of effective regulation of such behavior. Furthermore, this blog maintains that not only have the lessons that should have been learned from this experience not been learned, but that the risks to the economy, including the persistent building up of "too big to fail" institutions, have actually increased since the crisis began. Finally this blog also brings to light, from time to time, reports of a parallel threat to economic well-being developing in the energy industry, which suggest an energy shock may be coming much closer in time than is generally imagined.

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