Paul Krugman and David Walker: The key to economic success for the U.S.
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I have a new refrain that I would like to issue after each government edict: The refrain is GOBBLE, GOBBLE, meaning did the sheep it that up or what?
We know that the government has the inflation problem under control, after all they tell us we have no inflation: GOBBLE, GOBBLE!
We are printing as much money as we can because there is no inflation: GOBBLE, GOBBLE.
High food prices had nothing to do with “The Arab Spring” and if you think your paying more for basic commodities, it simply is a temporary crisis that will be solved at our next meeting: GOBBLE, GOBBLE.
DT.
DT……Here is my advice to the American people (the sheeple that is )…Gobble…
Gobble Gobble…..Gobble…..Gobble Gob……………If you have to speak to them…………
Then you must speak a language they understand…..Gobble Gobble…………..
Not all of us Americans, Mr. Irish. (That God, by the way!)
Big Al
Great comment, Machine Gun!
Big Al
WALKERr….knows numbers….and can use an adding machine…..and knows simple math………Were as KRUGMAN….well,now
,, he thinks he nows theory….and sometimes the theory does not work..
…So…….Walker “the chickens come home to roost , after the amount of grain runs out….., and Krugman, “the fox in the chicken house”,or he knows the alotment of chicken dinners runs out.. and need to get out of the hen house before the owners come home with the shotgun…..
I found it interesting, The Tall, that Mr. Krugman did not agree ultimately with Mr. Walker.
How about you?
Big Al
Now the keynesians are going to be lost , because we are at the end of the book, and the last chapter,…..All have had a road map, which they believed in to be correct, but, we a young child finds out their is no tooth fairy, they are bewildered……they are in need of ADULT SUPERVISION…..and Krugman needs some adult supervision,,,,he also, needs to learn how to shave, his grooming is sloppy and so is his methods,….plus, he is going to have to go back to school and learn a new profession….maybe, he could apply for a TSA job…..
JERRY….he has to be taught two plus two =four………not five minus eighteen = twenty seven.
You know, Mr. Irish, on a serious note I saw Mr. Krugman admitting that the deficit would ultimately be a big problem. That is a pretty big admission for a Keynesian.
Big Al
I actually thought that he acted in a very civil manner, The Tall.
As I commented somewhere else he was certainly more polite than the average Fox personality! But then most of them are simply actors.
Big Al
The US has never seen a situation quite like what we are in and therefore no road map. Krugman is a old line Keynesian that has one answer—-based on the interview, even Krugman sounds a little unsure of himself. Walker is correct about Washington and thqt is government has a hard time planning. Is there hope that may change? Possible, but it better be soon. Because of our financial situation and the economy, it’ll be harder then ever for government to plan out a program over the long term since they in all likelihood will be in reactive mode on a continual basis. Ultimately, it will then be the markets that will force changes within government and for the first time in a long time Washington will be held captive to the markets and will have to be reactive to the bludgeoning of the market place——and that won’t be pretty.
I saw Bernanke being interviewed recently, he wasn’t as cocky as he has been in the past in fact he looked pale and nervous, body language is so telling, I would not want the duress for all the gold stored (yikes) at The Fed. DT
DT, you’re correct. I’m becoming more bullish on the PMs in the last 11/2 yrs. of consolidation then I’ve been at any time. We have a little more correction in the stocks and then a buying opportunity. The daily silver chart looks very positive today with the weekly in a neutral position. I wouldn’t be surprised if we move higher the next 2-3 weeks. The charts will tell the story next week.
Let’s plan on doing an interview next week, Doc.
Let me know what works for you,
Big Al
Al, that would be fine—–just e-mail me or I’ll e-mail you the beginning of the week.
DT, if I was Bernanke, there is one thing that would really be haunting me—-the fact that this “recovery” is maturing along with the conventional markets. If you accept the premise that we are still in a secular bear market for stocks, then currently we’re in a cyclical bull market within that secular bear. Over the last 100 years, the average duration of cyclical bulls have been 26 months. An outlier would be the Bush era cyclical which lasted 63 months. Why—-of course, because of excessive monetary/fiscal stimulus. The current cyclical bull is now 46 months; another outlier. Why this long? Of course, monetary/fiscal stimulus of unprecedented levels. The affect of monetary stimulus seems to wearing off and the odds of this cyclical bull going 63 months is minimal. Corporate profits/earnings appear to peaking along with margins. When the conventional markets enter their next cyclical bear and the economy goes south, you think Ben looks pale now; you “ain’t” seen anything next. I’m sure that the realization of slow growth along with the next recession is scaring him to death.
Doc,
As a follow up to my “punchbowl comment” in today’s other blog. What you are describing up above is…what the FED didnt realize in that the “punchbowl” we have been drinking out of at “unprecedented levels” is massively spiked! A hangover is waiting for the FED and us AFTER our “drunken stupor” wears off…it wont be pretty!
You know, Marc, that is a really good analogy!
Thanks,
Big Al
Good point, Doc!
Big Al
Machine Gun,
I really don’t know how some of the folks in D.C. can stand the pressure.
Big Al
No Doc, it won’t be pretty.
I must say that I found the unsureness of Mr. Krugman to be very interesting.
I must also say, in all fairness, that I thought that he was very polite unlike many of the Fox hosts.
Big Al
Al, I once watched Krugman on CNBC business and you could see and feel the tension in the room since they indirectly insinuated that he didn’t know what he was talking about. The Bloomberg interview was very respectful with both walker and Krugman handling themselves well.
As far as the “unsureness” of Krugman—–I have the feeling he’s starting to wonder about his previous alignment with unlimited spending especially when he sees that the Fed is saying an unemployment rate of 6.5% is now their signpost—-and then the unemployment rate moves up today to 7.9%.
Yep, that is certainly kind of interesting Doc!
Big Al
The unemployment rate did tick up slightly, the the market liked the number. So what was it? Was it a good #, was it a bad #, was it bad enough to keep QE coming but good enough to offer confidence that the recovery is moving forward. The bottom line is this jobs report today really moved the market, taking the DOW to 14k. Why? If it was a terrible # than it was the fact that QE will continue that moved the DOW. Then why didn’t it move gold for the same reason? This is a good question and we need to seriously think about this. If it was a good # then perhaps the DOW is finally moving for the right reason, jobs equals spending equals earnings. This too is gold negative. I’m holding gold, but it clearly has a lot of cross winds
I have to disagree, with respect, about the cross winds The Greater.
I say that because, in my mind at least, the basic fundamentals remain very, very strong. These fundamentals are uncertainty; massive money printing; the knowledge that significant inflation is probably right around the corner; international turmoil and uncertainty; demand still very strong from the Far East; and, the list goes on and on.
I might be wrong folks, but I would be amazed if I am in the long term.
Big Al
James, 3 possibilities: 1. The ISM numbers came in better then expected and a stronger consumer confidence number came out of the University of Michigan index. 2. New IRA etc. money that comes into the markets at the beginning of each month. 3. The employment numbers for November and December came in much better making the 4th quarter GDP figure suspect.
richard – all this points to an economy that is getting better, and the need to own gold lessens. Today’s price action in gold was absolutely terrible. It barely managed to break even. I’m really tired of the whole thing. Other than a black swan event at this point I don’t see anything out there that can lift gold.
James, don’t get depressed yet—-if the stock market really reflects an economy that is getting better, I’ve got to believe we would have seen a major sell-off in gold recently. The fact it hasn’t tells me there is underlying strength yet to this market. The first cycle of gold may be over but the fact it’s holding it’s own may be finally signalling coming increased money velocity and inflation. Don’t give up now—-hang in there as long as the PMs are still in a sideways and consolidation pattern.
My thoughts exactly, Doc!
See my comment to “The Greater”
Big Al
P.S. Did you get my e-mail re: the California Investment Conference?
Big Al
Then, The Greater, how do you explain the fact that gold and silver have not broken down as many “experts” predicted it would.
Remember when gold was trading between $1100 and $1200 some of my friends, who I consider to be very bright, said this is it and gold will plummet.
It may be a strange market, but I continue to bet on it!
Big Al
Lets hope!
I might add that the dollar is starting to look very vulnerable. 2 of the black swans waiting in the wings are a currency war (Japan has started) and ultimately inflation—-we have a long ways to go.
David Walker is sane. A rare quality these days. Follow him on Twitter @DaveWalkerCAI
Yes, Fred B, he is very sane.
Thanks for the comment,
Big Al
Have i ever mentioned that i think Silver is a good play..(physical )…….2014…gold ,silver ratio….mid 30’s……….
I have never heard you say that Mr. Irish!
Have you changed your mind regarding collecting exotic butterflies.
I knew you would finally come around!
Big Al
Al..I would like to collect EXOTIC LADIES……But i am too..old..too.. ugly….& too broke
5 years ago I thought things looked rather bad, but then a year went by and 2008 things really got bad. Then came the series of money printing, everywhere money printing, first in the US several hundred billion above the table to the Government only to find out it was 16 trillion by the Fed to places all over the world. 2009 went by with some nicely greased wheels in the economy, trillions and trillions of grease, but still deflation and poor jobs remained. The Fed and all central banks around the world tried one thing after another, but still rather poor results.
Debt has not been controlled nor abated and all the money printing in the world can never fix it because debt is really not the disease, debt is the symptom. The disease is what people expect and want as played out in a rather poorly performed kabuki theater called government. Because most of these governments are so called Democracies, which they are not being more like oligocracies but people and government pretend it so, it is likely that nations in trouble will abandon their so called democracies and try something entirely different. That is what the US is now doing, abandoning first its Republic, then abandon its democracy and moving towards some form of Imperial top down command. Tyranny is the natural result.
In many ways I am glad I am no longer young, even though I have hope.
You know, Clay, it’s kind of funny. I felt that things really began to turn back in 1999 when my neighbor, a conservative guy who was/is a hospital administrator, told me his IRA was off about 50%.
That conversation; the insane real estate market; the insane amount of personal debt that continued to grow; the political arena; and, on and on and on really made me stop and think about the current paradigm.
I changed the whole aspect of my radio show; and, since timing is everything now I look like a hero.
Hell, I am far from a hero. I just have some common sense.
Best to you,
Big Al
Krugman actually said “I joke a bit it will come down to a sales tax and death panels.”
How do you “joke ‘a bit’ about DEATH PANELS”?
He reminds me of the smugness of Dr. David Houle.
And for you poker players Krugman has an interesting “tell”.
Notice on at least two instances he feints drinking from an empty coffee cup.
Watch the video again at his introduction and on the second Krugman bite he pretends to drink from a cup. Then when he sets it on the desk the sound tells us the cup is empty.
Paul Krugman drinking from an empty cup because there is no there ….there!
http://www.bloomberg.com/news/2013-01-24/buffett-reaps-gains-as-usg-to-eagle-build-on-u-s-housing-rally.html I think Warren wants to sell his shares, I am not a buyer! DT