Wednesday, November 2, 2011

Taking Questions for the Next Robert Wenzel Show

I'm preparing my notes for the next Robert Wenzel Show, which will be up on line this Sunday at 7:00 AM ET. If you have any questions you would like me to answer, or any topics you would like me to cover, just leave a note in the comments section below.


  1. We often hear that the Federal Reserve only controls short term interest rates. I think I know why this is wrong but would like to hear your or Rothbard's thoughts

  2. What percentage of one's long-term portfolio would you suggest for inflation hedges (gold, silver, stocks in same, other resource stocks)?

  3. Is a diktat union forming in the EU?

    Will diktat emerge as the Eurozone's new money?

    In a world of collapsing soverign authority, will Germany manifest as a sovereign nation state? Or will anarachy manifest, which will eventually enable sovereign individuals to fully become free to practice free enterprise. Or will EU leaders meet in summits and waive national sovereignty and appoint a sovereign leader and a banker to rule over a totalitarian collective?

  4. Any RSS feed? is it on itunes?

  5. 1. From reading your articles, and knowing that you are in principle against inflation, it seems that you are quite confident about the efficacy of repeated inflation to be able to continually generate artificial booms. The question is at what point will you conclude, or can you even see yourself concluding, that further credit expansion and inflation won't be able to generate another artificial boom? What will you have to know before you will conclude that more inflation would be ineffective, other than hyperinflation and currency breakdown?

    2. In your opinion, who's the better political philosopher, and why? Hoppe or Rothbard? Keep in mind that Rothbard once said that Hoppe's political philosophy puts his to shame, not that I am trying to goad you in any particular direction.

    3. Who won the last Wenzel-Murphy debate, regarding liquidity preference theory and Keynes? What arguments do you think won the debate?

    4. Did the St. Louis Cardinals steal the world series title, or did the Texas Rangers get robbed of the world series title?

  6. When will Peter Schiff be your guest?

  7. Could you discuss from a theoretical point of view how the price of gold and other commodities should change in the following scenarios: 1) central banks monetize debt and prevent the countries from defaulting 2) central banks allow the countries to default.

  8. Could you give a quick tutorial on what numbers/figures amateur FED watchers should be paying attention to. That is, where do we go and how do we interpret M2, MZM, balance sheet etc.

  9. I would like to hear a detailed discussion on how the US economy would work under a gold standard - whether it be partially backed or fully backed. Also, what are the implications to the banking sector (ie fractional reserve banking), stock market, etc.. and what are some potential pitfalls? I think a lot of people are supportive of a gold standard, but most have trouble envisioning just how it would work.

  10. Personally, I am rather curious about which currencies to hold. The Dollar is rapidly losing value; the Euro seems to be blowing up; the Japanese are destroying the value of their Yen; Swiss are weakening their Francs too; the British Pound is as bad as € and $. What's left?

    I'm a short-term trader, so I'm getting very worried about losing purchasing power due to the massive inflation. I don't want to be subtracting double-digit inflation percentages when counting my profits at the end of the fiscal year.

    Here's an idea for you guys that are involved in brokerage firms or smth. Allow people like myself to keep their trading account in gold or silver. That way I wouldn't spend sleepless nights worrying about what might happen in the currency-front tomorrow.

  11. Tell us a bit about you. What's your background, where'd you go to school, how did you come to learn about economics/finance, when and why did you become an Austro-libertarian? And, other things of that nature.

    Inquiring minds want to know.... ;)

  12. How does a fixed money supply standard work with respect to re-paying loans?

  13. I second Joseph Fetz's questions, as well as Pete's Rothbard/Hoppe question, and add my own:

    Do you imagine that Ron Paul will run as a third party candidate (assuming he does not win GOP nomination), and if so, what impact do you see him having, if any?

  14. I'd be interested in knowing more about the role of government spending in GDP and if it's possible to separate that spending out such that one can ascertain whether we really ever technically left the recession/depression.

  15. Who would win in a fight? G. Gordon Liddy or 3 of Gaddafi's female bodyguards?

  16. Once, in a post, you mentionned reading Stuart Diamond's Getting More. What is your opinion on this book and more generally : what books would your recommend on negociation and what books are you reading at the moment ?

  17. Obviously the Fed is trying to releave overextended debtors, and entities holding their debt, through inflation. As a middle aged person who was fairly successful I stand to be wiped out to seriously fleeced by inflation. What do you suggest as an inflation hedge?

    Peter Schiff seems to be advocating foreing currencies or investments in foreign companies in strong currency nations. Lots of gold pugs recommend physical gold, but gain is taxed as a collectable so you can't offset your losses in other instruments and 1/3 of your inflation protection is taxed away upon liquidation. My investment advisor recommends domestic stocks claiming the stock market holds up well against inflation. An inflation indexed bond might do reasonably well, but unless you put your entire net worth in inflation indexed bonds you only protect some portion of your accumulated assets. Again, you are taxed on nominal gain of the bond while you might be standing still in terms of purchasing power.

    So what do you recommend as a way to preserve assets in this age?

  18. I would really like for you to give an Austrian Response to Nominal GDP targeting as proposed by Lars Christensen or Scott Sumner.

    I would really appreciate it.

  19. Robert,

    Given that you view the world as is, what do you think of a whiteswan event that would somehow cause a prolonged boom in the western world notwithstanding the massive capital misallocations and government suffocation of wealth creation? Or is the west so doomed (in the medium and long term) that we all have to hold our noses and move to mongolia? I ask because of my experience in indian economy, which, inspire of extraordinary central control for half a century, and still one of the most corrupt bureaucratic nations, is doing better. I think it is mostly because the government is increasingly irrelevant in daily affairs. What is the chance of this happening in the west?

  20. Murphy, you're a goofball as always. LOL

  21. what about the 50k even a bum could make

  22. Re-posted from the first show:

    If you ever do interviews I suggest:

    Janet Tavakoli
    Iris Mack
    Joe Salerno

    and of course:

    Bob Murphy
    Lew Rockwell
    Tom Woods
    Kare De Coster
    Tom DiLorenzo
    David Gordon

    Possible topics:

    What is money and what constitutes the money supply?

    ABCT and China

    Economic Indicators: What to watch and what to watch out for

  23. A thorough dissection of the inflation vs. deflation debate. What each position hinges on.

  24. I second Mr. Fetz's question but would ask which great libertarians you have been able to meet (e.g. Ron Paul, Rothbard, etc).

  25. I'd like your guess on what happens to the housing market during a crack up boom...and your wager as to whether housing prices have bottomed.


    Oh, it might also be nice if you can tell us whether you think we're in a crack up boom or not I guess

  26. 1. How would education work in a free market system?

    2. Do you have any experience with homeschooling. Do you recommend it or discourage it based on your experiences?

    3. How do you think medicine would work in a free market?

  27. Amongst other nefarious going-on's The Fed is manipulating yet another boom and People like Marc Faber said the Fed can string things along for another 5 - 10 yrs.

    What exactly is there to be optimistic about?

    I cannot conceive of another housing bubble, is another one likely? Especially with People such as yourself saying now is a good time to buy a house. I think perhaps you meant: now is a good time to get a mortgage on a house - If - you think your income stream will hold up?

    I gather you don't think housing prices will fall much further?

  28. Go in depth discussing the phony Fed audits done now because the most common defense of the Fed is that it is already audited.

    Discuss the pros and cons of going back to an official government gold standard vs just simply eliminating legal tender laws and all cap gains taxes on gold/silver.

    How many others in DC in the supposed conservative movement agree with Krauthammer's article in 1996 that the american people should be completely disarmed? The recent Tom Woods article on his site publicized this. What other kind of authoritarian views do the elitist GOPers and neo-cons have?

    When will inflation really start kicking in?

  29. Talk about former austrian econ types who joined the dark side. Callahan, Selgin, etc

  30. I live in Iowa. Here, many are amazed by the rise in farm land prices over the last twenty years. Some prices have tripled in the last ten years.

    Jim Rogers says to become a farmer because there's a good future in commodities.

    Yet I can't help but think it might all be a Fed induced bubble that can be explained by Austrian BCT. Farmers even take advantage of low interest rates to borrow for land and equipment and the ever increasing costs of production, which makes it seem even more like a bubble. Your thoughts?

  31. Anon 6:01,

    Selgin does still retain a great deal of Austrian ideas, even though there is now a heavy neo-classical influence to his work (esp. with regard to monetary policy). Callahan pretty much discarded all things Austrian and/or libertarian, so there is no comparison really. I don't know that they fall into the same category.

    Honestly, having began my economic study as a neo-classical, I do understand a great deal of Selgin's work with regard to monetary policy (I didn't become an Austrian until around 2006-2007). I will say that his work on free banking is compelling even though it is essentially a challenge to the Rothbardian free banking system. To be honest, I am still on the fence, because both have compelling arguments regarding FRB.

    I will say that I do understand Selgin's complaint that many Austrians tend to idolize Mises and Rothbard, and that a great deal of newer Austrian works are merely repetitions of older Austrian works, and that they always cite Austrian scholars (kind of like a closed circle of references and citations). Basically, that Austrians disregard ALL works by non-Austrians on the basis that they are not Austrians. I can agree with this to a point (not completely).

    In case nobody has been able to notice, I am a full-fledged Rothbardian. This doesn't mean that I will never question Rothbard, it only means that I believe his theories to be the most correct and logical. However, that does not mean that I will entirely disregard good economic work merely because it isn't Austrian and/or Rothbardian, because my goal is to acquire knowledge from all sources.

    I won't say that Selgin joined the dark side, because he still does do some good economic work. But, then again, he certainly doesn't deserve any praise as one of the greats of economic science. Callahan, on the other hand, had one decent book and has not contributed to the social science of economics since; he's a lacky and a comments section rabble rouser.

  32. Anon 6:16,

    The rise in land/rents for agricultural purposes is directly attributed to the rise in agricultural commodities. Value imputation is very important here, the input prices for any good is ultimately dictated by the value of its product. If costs for agricultural commodities is rising, then ceteris paribus the cost associated with the production of such will rise, as well.

  33. Anon 6:16,

    Sorry, but I thought of something else more relevant to your question. With regard to the ABCT, low interest rates on long term investment would definitely have the tendency to bid up the factors of production, which includes land. Rising consumer/commodity prices of agricultural output would definitely have the tendency to steer capitalists more toward agricultural factors of production, thus increasing prices of those factors.

    Jim Roger actually made a very good call. He saw that consumer and commodity prices of agricultural products were increasing and thus concluded that with low interest rates many capitalists would increase investment in agricultural factors. He knew that there was a large gap between the input and output prices of the agricultural structure of production, and he bought the early low. Now, as more investment goes into these factors to equilibrate with the output, he stands to make quite a decent return.

    I hope that helps you to understand the mechanisms at work here a little better.

    Disclaimer: I am not a trained economist or financial adviser. I just read A LOT and I almost never sleep.

  34. I often see people asking the question "what proportion of my savings should I devote to gold and silver." I am confused as to why, other than liquidity, would the answer not be 100% or as much as you can. It is a fairly obvious observation that only gold and silver (et al) are the only investments to make to preserve and grow your savings. I am 24 and poor and buy as much silver as I can afford.

  35. Not really an important comment, but I have noticed that Callahan's blog template is almost identical to Wenzel's. I noticed this a little while back when I had both open on my Mac. When I went to "Exposé", I couldn't tell which was which. Like I said, not important, just odd.

  36. Robert, please explain what is driving the recent increase in the money supply. My understanding is that to "print" money the fed has to use one of the following mechanisms:
    1. buy treasury bonds or other assets with "printed" money (net, i.e. operation twist is balance sheet neutral so doesn't inflate)
    2. decrease the reserve ratio to enable banks to lend more
    3. decrease the interest paid on excess reserves to encourage banks to lend more.

    As far as I know none of these policies have been used in the past few months. Is there some other mechanism by which the fed is printing the money, or is the true cause of the money supply expansion something else (e.g. banks deciding to make more loans from excess reserves)?

  37. If there is a Greek default, how will the ECB deal with this as they will be insolvent at they point, since they do not have enough capital.

    As an Austrian, how do you believe the ECB would react in such a scenario?

  38. Are derivatives really reckless and outrageously leveraged bets? If so, why are they still being speculated on (if you answer b/c the bankers know the Fed will bail them out, then explain why the bankers don't put ALL their money in derivatives)? What are the up-sides of derivatives? Even though the Fed blew up the bubble, is it accurate to say that derivatives were the TRIGGER of the financial crisis of 2008?

  39. Can you detail your position on the U.S. trade deficit, particularly this meme of "America needs to manufacture/produce more". I am confused on this issue b/c it's the only one where I find solid-libertarian economists/economic commentators, i.e., Peter Schiff and Don Boudreaux(GMU Econ professor) with polar opposite positions.

    I share Boudreaux's position that it's essentially a non-issue, and frankly I'm perplexed at Schiff's constant harping on the trade deficit as a bad thing.

    This is the only economic policy issue where I as an Austro-Libertarian am completely confused as to what conclusion the libertarian/austrian economic viewpoint would logically arrive at.

    Looking forward to your show!

  40. I watched Judge Napolitano on John Stewart and the Judge said gov't should not pick winners and losers. JS replied,"Then how do we help the losers?" Surprisingly, the judge had no answer. He appeared to go back to his talking points about his book without really dealing with the issue. If libertarians are to win the battle of ideas with socialists etc, we must have that answer at our fingertips. Please discuss how the losers in society are not, as the liberals would say left out on the street to fend for themselves.
    And please make sure Ron Paul has the answer and is able to discuss it in his campaign. Too many times I hear that Libertarians are only out for themselves or every man for himself. I know this is not true, since I am one. But how do we get it into others heads that losers will be better off with our ideas than with statist tyranny?

  41. Please add a "PRINT" option to your posts.

  42. Another question: What is the next bubble?

    First we had .com, then housing, now what? Schiff has been calling it a government bubble. Where do you seeing all these Helicopter Ben dollars going?