Live It Up, the Dollar Is Dead?

By -
In this piece I argue that you shouldn't pay down your credit cards. Am I pulling a Paulson? On the contrary, I am giving very unpatriotic advice.

Comments

  1. Silas Barta2:16 PM

    So are you saying that lots of people are (very stupidly) underpricing interest rates right now? That is, credit card companies who are easy on the "temporary 0%" deals, and everyone who buys Treasuries who extends car loans?

    I've felt this way for a long time, but I don't understand what's causing it, or how I can be the only one who thinks this.

    ReplyDelete
  2. Bob Murphy7:03 PM

    Silas,

    I hadn't thought of it like that, but yeah you're right. Think of it this way: If millions of people followed my advice, that would not only push up gold prices and hurt the dollar on the foreign exchanges, but would also raise US interest rates as more people tried to borrow dollars.

    ReplyDelete
  3. Bob Murphy7:04 PM

    BTW Silas, I'm not saying the loan-making organizations are doing anything dumb. I think part of what is happening is that people are afraid to take on more debt, and so when the Fed shovels money into one end of the banking system, the rates have to be held pretty low to get people to expand their obligations on the other end. But if the Fed is giving you money on great terms, you're not necessarily dumb for loaning it out at low rates yourself.

    ReplyDelete
  4. Silas Barta10:01 PM

    Well, I'll say it for you then: the folks who set risk-free interest rates (i.e. marginal buyers of government securities) are idiots. They won't even demand interest rates sufficient to cover the true inflation rate!

    The foreigners who need a safe place, the insurers that are obligated to buy government securities, the banks that make loans ... okay, you guys are in the clear. But the folks with an actual choice, but act as if inflation is going to drop soon (or a if they won't be taxed) and the US will NEVER debase the currency in any notable way in the next 30 years? What the heck is wrong with you guys?

    ReplyDelete
  5. Anonymous8:30 AM

    Silas: I guess this is why Peter Schiff thinks 30-year treasuries is where the real bubble is.

    ReplyDelete

Post a Comment

Popular posts from this blog

Libertarians, My Libertarians!

By -
Cruel to be kind means that I love you . Because, while I think you are mistaken, your hearts are in the right place -- yes, even you, Silas --  unlike some people . This Breitbart fellow (discussed in the link above), by all appearances, deliberately doctored a video of Shirley Sherrod to make her remarks appear virulently racist, when they had, in fact, the opposite import. I heard that at a recent Austrian conference, some folks were talking about "Callahan's conservative turn." While that description is not entirely inaccurate, I must say that a lot of these people who today call themselves conservative give me the heebie-jeebies.
Read more

"Pre-Galilean" Foolishness

By -
 I am currently reading The Master and His Emissary , which appears to be an excellent book. ("Appears" because I don't know the neuroscience literature well enough to say for sure, yet.) But then on page 186 I find: "Asking cognition, however, to give a perspective on the relationship between cognition and affect is like asking astronomer in the pre-Galilean geocentric world, whether, in his opinion, the sun moves round the earth of the earth around the sun. To ask a question alone would be enough to label one as mad." OK, this is garbage. First of all, it should be pre-Copernican, not pre-Galilean. But much worse is that people have seriously been considering heliocentrism for many centuries before Copernicus. Aristarchus had proposed a heliocentric model in the 4th-century BC. It had generally been considered wrong, but not "mad." (And wrong for scientific reasons: Why, for instance, did we not observe stellar parallax?) And when Copernicus propose
Read more