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A Strange Appetite for US Debt

January 23, 2012 By Bill Bonner Leave a Comment

We went around the world last week. We wish we could say we learned something. But modern travel has been standardized…and culture and technology have been “globalized”…so that the more you travel the more you feel you never left home.

“How was your trip around the world?” asked our assistant when we got back in the office in Baltimore.

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When the Public Sector Debt Bubble Blows Up

January 4, 2012 By Bill Bonner Leave a Comment

What’s ahead for 2012?

We gave you a hunch yesterday. The price of gold will probably go nowhere this year.

We have a feeling that 2012 is not going to be a great year for money you get from the ground. Oddly, it will probably be a better year for the money you get from trees.

How is that possible? We all know paper money is going to be worthless. Yes…dear reader…but not necessarily in 2012. It’s just part of the curious way Mr. Market does business…and a feature of his nasty habit of ruining as many investors as possible.

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When the Public Sector Debt Bubble Blows Up

January 4, 2012 By Bill Bonner Leave a Comment

What’s ahead for 2012?

We gave you a hunch yesterday. The price of gold will probably go nowhere this year.

We have a feeling that 2012 is not going to be a great year for money you get from the ground. Oddly, it will probably be a better year for the money you get from trees.

How is that possible? We all know paper money is going to be worthless. Yes…dear reader…but not necessarily in 2012. It’s just part of the curious way Mr. Market does business…and a feature of his nasty habit of ruining as many investors as possible.

[Read more...]
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The Paradox of Stimulating Growth With Government Spending

August 6, 2010 By Bill Bonner Leave a Comment

Here we are at the end of another week. What have we learned?

Not much. Yesterday, the markets went nowhere.

So, we'll think a bit more about Tim Geithner and the other men who rule us. Geithner wrote an article for The New York Times, “Welcome to the Recovery.?

The gist of the article was that, though the recovery wouldn't be quick and easy, it was still real and moving forward.

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Who Pays Bad Debts?

July 2, 2010 By Bill Bonner Leave a Comment

A front-page photo in Tuesday's Financial Times shows lightning striking near the Parthenon. Zeus must be reading the paper.

Greece is supposed to cut its public spending by an amount equal to 10% of its GDP. Even so, its public debt is expected to rise to nearly 150% of GDP by 2016 – or three times the level of Argentina when it defaulted in 2001.

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Who Pays Bad Debts?

July 2, 2010 By Bill Bonner Leave a Comment

A front-page photo in Tuesday's Financial Times shows lightning striking near the Parthenon. Zeus must be reading the paper.

Greece is supposed to cut its public spending by an amount equal to 10% of its GDP. Even so, its public debt is expected to rise to nearly 150% of GDP by 2016 – or three times the level of Argentina when it defaulted in 2001.

[Read more...]
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Japanese Debt Crisis to Mirror that of Greece?

June 14, 2010 By Bill Bonner Leave a Comment

So, what is going on in Japan?

The government has gotten by for the last 20 years by borrowing from its own citizens. It now has the biggest debt-to-GDP ratio in the world.

As the private sector de-leveraged the public sector borrowed and spent – the same thing that is happening in America today. And maybe Richard Koo is right. Maybe this did prevent a deeper recession in Japan. Unemployment never rose over 5%. And the economy never actually suffered sustained negative growth levels.

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A Faux Recovery Based on Economic Stimulus

June 14, 2010 By Joel Bowman Leave a Comment

More money! More stimulus! And more borrowing from the future to combat the errors of the past…

President Obama wants another $50 billion, presumably to keep the economy “stimulated.? We “must take these emergency measures…? he wrote in a letter to congressional leaders, or else risk “…massive layoffs of teachers, police and firefighters.?

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Recovery Flops!

June 11, 2010 By Bill Bonner Leave a Comment

In the reign of Emperor Zhao, in 81 BC, 60 Confucian scholars were asked to consider the effect of government meddling in the economy. The Middle Kingdom was in a fix. Mongol raiders were pressing it from the East; the government was going broke. Taking the advice of Sang Hongyang, the feds of that era had put in place various state monopolies and price controls. The result?

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