Comments on: Ross Gittins blogs for Troppo

By: observa

observa — Thu, 11 Dec 2008 01:47:28 +0000

And if you want a lesson in Austrian Economics 101 Ross go here- http://www.adpemploymentreport.com/ner/charting.aspx
and check the boxes ADP Overall and ADP Goods Producing employment for the time period Dec 2006 to current.

By: observa

observa — Thu, 11 Dec 2008 01:33:08 +0000

No Ross it’s not balance sheet driven recessions, just the ritual cleansing by real savings, investment and production as every Louis Leech and Gordon Gecko leverages off the real economy due to those excessive monetary claims loaded on to its back until eventually it cries enough. It’s easiest to see in the Big Cahuna US right now. Govts grown fat on those taxes when 25% of corporate profits were derived from financial intermediation and now look at them all and the irony as the great productive names come with the begging bowl, after they too were seduced like the GMACs and GE money Genies by the lure of easy money. How can they resist one more hit of funny money on top of all that has gone before and their complicity in it all, described historically well here-
http://www.atimes.com/atimes/Global_Economy/JL11Dj01.html
Detroit, the symptom of a raging disease in the West right now and the only answer from its movers and shakers is more credit creation and fiscal bankruptcy to match their moral and intellectual bankruptcy. Is there a politician among us who can say no to more of the same and tell it like it is and has to be? Back to real savings, investment and production, just as soon as we’ve all borne those real losses and the fanciful public and private claims on production have deleveraged to some semblance of economic reality.

By: observa

observa — Wed, 10 Dec 2008 03:20:01 +0000

I see Ross has had an ‘Austrian’ moment in the SMH titled- “It’s not inflation that did us in, it’s the borrowing”

‘WARNING: The following comment benefits from the wisdom of hindsight. It’s an idea that’s crossed my mind several times in the past decade but now I’m sure of it: for all that time the world’s central bankers have been on the wrong tram, worrying about inflation when they should have been worrying about excessive borrowing.
It’s the old case of generals still fighting the last war.’

….’This is the point that’s yet to sink in: recessions come not from excessive braking to control inflation, but from excessive borrowing and the bursting of asset bubbles. These days we have balance sheet-driven recessions.’

Ross almost gets it- ‘It’s the money supply stoopids!’