Saturday, May 26, 2012

Krugman Wants the Fed to Print $2 Trillion More

Yup, just print paper money that's what wealth is, according to Paul Krugman.

FT's  Martin Wolf reports on lunch with PK:

So what, I wonder, would he do if he were put in charge? He says he would add maybe another $2tn to the Fed’s balance sheet, by purchasing a wider range of assets, including more private sector liabilities.
This policy prescription I must add is based on PK's faulty understanding of a babysitting co-op story.

Guess what PK's prescription is for the eurozone. He tells Wolf:
 I think it might be rescuable with a higher inflation.
But gold must really bother him. He brings it up to Wolf:
“And then there is something about the appeal of this hard-money, gold-standard thing and it’s always had an appeal, but it seems even stronger now. I would have thought that the fact that people like me have been so much closer to [being] right on inflation and interest rates would move a substantial number of people into thinking that maybe their preconceptions were not right.” But no.
LOL. Oh yeah, he has been right about gold. Here's the 10 year gold chart:

Since he makes a lot of stuff up, this PK comment is not hard to believe:
I am still teaching. I probably work 70 hours a week but not 100 hours a week. But I am damned fast. I write faster than just about anybody in journalism, it turns out, which is interesting.

 No wonder the Spanish economy is in so  much trouble:
So how’s his new book doing? “It’s good. It’s funny. We’re on the bestseller list in the US. But it’s selling like hotcakes in Europe. We’re in fourth printing in Spain and they’re about to put ads on the sides of Madrid buses, apparently.”


  1. "LOL. Oh yeah, he has been right about gold. Here's the 10 year gold chart:"

    Are you trying to say that Krugman has been wrong about the price of gold? When has Krugman ever made any strong predictions of the price of gold? And why does the price of gold even matter to the economy?

    And why do you ignore is point about inflation and interest rates? How many times have you warned about the upcoming double digit inflation rates and interest rates? Interest rates especially are huge a gaping whole that you have yet to explain. Just last last month you told people to short bonds because interesting were heading dramatically higher across the yield curb, but the opposite happened.

    But whatever, you're right. The Depression is over! Lets celebrate our 8.1% unemployment!

    1. New reader I assume. Bob Wenzel speaks ad nauseum at why the Krug is wrong. Please reader other posts if you are truly concerned. However I highly doubt that would be of interest to you since your curiosity hasn't piqued enough for you to run a couple Google queries about gold and it's history.

    2. Cher Doktor, Was not Krugman making a comment about Gold above?!? And yes, a commodity that people view as a stable, durable, divisible means of exchange (i.e. I seem to remember that being the definition of money) despite government and certain economists attempts to the contrary does matter to the economy.

      As for the inflation argument, if you use the government manipulated obfuscating contrived definition of inflation (i.e. general rise is prices) then sure inflation may "seem" low. If you use the pre 20th century definition that was understood clearly by everyone (i.e. an increase in the money supply since it is impossible to determine how the money will flow through the economy - note that the increase in money supply is the cause, the increases in general prices the possible effect), then you would realise that inflation has been in double digits for quite some time. As for interest rates, you seem to forget that they are manipulated (i.e. determine by a dozen men in secret rather than by the market). One nasty effect of which is that banks cannot make money doing what they normally do. An egregious example of this was JP Morgan's grasping for yield through its CDS operations which have lost $3 billion dollars and counting. Wake up!!!

  2. I remember hearing Paul Krugman saying there would be nothing wrong with a QE 4, 5, 6 "as long as it shows results". The trouble with that thinking is that it WILL show results... in the short term. Unfortunately, it won't be until down the line when we will witness the horrible consequences of these policies. In the meantime, these Krugman types will go right on thinking that they are correct, and the Ron Paul types are the crazy ones.

  3. If $2T, why not $4T, or $100T?

  4. Is it wrong for me to want the fed to print 2 trillion bucks too? I just want gold to go up.

    1. Selfish lout.

      I do too :)

    2. additionally, i'd like to see the fed gov fail.

    3. Ah, hating in an ignorant fashion won't solve our common problems. If the our nation's government WERE to collapse,
      the entire population would suffer, except for a few superrich possessed of islands, and successful, isolated
      self-sufficient farmers (if they exist).

      For example,anyone who wishes Social Security/Medicare to fail must not have any older relatives they care about dependent on SSA just to survive. It IS possible to do all the "right things" and still end up almost penniless at age 65.

      One CANNOT guarantee their own or anyone else's financial security/success. Businesses thrive, fail, disappear, etc.
      Even Facebook has had bad luck very recently--their IPO was an embarrassment. (This was partly due to fb NOT disclosing their many ethical, technical and legal problems, but then, that is not surprising, who does?)

  5. "I write faster than just about anybody in journalism"

    Perhaps he should print out that $2 trillion himself.

  6. Oh man. Nothing has been more painful than watching the Bill Maher show with Paul Krugman on last night.

    He reiterated his nonsense about WW2 ending the Great Depression. He even took the time to 'joke' about his proposal for humanity to prepare for an alien invasion to fix our current problems.

    The debate on Bill Maher is always between some idiots on the right and some idiots on the left. Barely ever is anyone [allowed] on the show who is willing to call out the whole system for it really is. It's the same pattern for pretty much all of TV. God help us

  7. Rolling up debt into a central balance sheet and running the printing presses with reckless abandon- a true American tradition since 1791. And Krugman castigates Ron Paul for dwelling in the past?

  8. Krugman is just a sniveling, marx apologist fucking idiot who is a wannabe "intellectual" yet never manages to say anything that corresponds to facts or reality. His "solutions" have included such gems as urging the Fed to purchase on the open market-which is what Zimbabwe so famously did. He ridicules gold's position in the economy with his slavish dismissal of all monetary history and dismisses basic realities-such as the historical definition of inflation and the tragedies it has wrought in the past-with an arrogant smugness rational people find intolerable. He ignores simple truths such as the broken window fallacy because his pea brain tells him cowtowing to his intellectual and political heroes is more important than truth. It's rather amazing he gets air time at all considering he's consistently wrong on almost every point, including an unjustified confidence in his correctness.

  9. Mark Steyn reminds us of something Krugman said in 2008 when he proclaimed Europe "The Comeback Continent"

  10. Romnefeller will nominate Krugman for Fed chairman after Helicopter Ben's term expires. To be forewarned is to be forearmed.