Saturday, February 2, 2013

Krugman Calls The Artificial Boom a "Virtuous Circle"

By, Chris Rossini
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The following is a fine example of the blind leading the blind.

King Krugman talks with Joe Weisenthal, BusinessInsider's cronic gold hater (i.e., the guy who puts out headlines like "GOLD IS GETTING CRUSHED THIS MORNING" when the metal is down $7).

Krugman talks about how we're "underhoused"...and how "Bernanke gets it". But most interesting is Krugman's euphemism for the current situation. He calls it a "virtuous circle".

As Rothbard wrote of monetary inflations:
"...while it proceeds on its merry way, [it] sows the seeds of its own demise.
So tuck Krugman's "virtuous circle" comment away in your mind for a future date.

At that time, the media will talk about how no one saw the disaster coming; blame will be pushed off on white collar executives, who will be carted off in handcuffs; and Krugman will find a way to spin his comment to mean that he was actually *warning* everyone of the danger ahead.

Have fun:


  1. "virtuous circle" is apparently the new Keynesian code word for "Ponzi scheme".

    Nothing up our sleeves, we put it in this pocket, and Presto, we take it out of this pocket. Don't you just love magic??? What a bunch of buffoons...

  2. Krugman outright admits that "the Govt does not have to pay its bills"

    he has explicitly WARNED the idiots who own govt bonds

  3. Chris, when is your disaster coming? What does this word mean? Just warning of something that can mean everything and nothing doesn't cut it. Then you're the broken clock which may be right some time in the future but is, really, just useless. Rothbard's metaphor is not much more enlightening either. Where's the beef?

    Rothbard actually put it quite nicely in the link you provide. I quote:
    "The market economy, moreover, contains a built-in mechanism, a kind of natural selection, that ensures the survival and the flourishing of the superior forecaster and the weeding-out of the inferior ones. For the more profits reaped by the better forecasters, the greater become their business responsibilities, and the more they will have available to invest in the productive system. On the other hand, a few years of making losses will drive the poorer forecasters and entrepreneurs out of business altogether and push them into the ranks of salaried employees."

    It seems to me with the constant prediction of "a coming disaster" you are well on your way out of business, or at least you should be. Interesting also that Prof. Rothbard does not seem at all concerned about the necessity of making forecasts. It seems to me he endorses making them. So again, what is the SPECIFIC disaster you speak of and when is it coming? Rothbard clearly indicates that the criterion should be a couple of years of bad forecasts to be cast aside, so just saying it's all so complicated, sometime, maybe, in the next decade doesn't cut it in Prof. Rothbard's opinion.

    1. Since you are engaged in applying the profit/loss test to the entrepreneurial business that Chris is engaged in while making posts to this blog, can you please clarify what the business model is? Can you point out how this blog makes money for Chris, and what metrics you can use to estimate this blog's revenues?

      Honest question, seriously. I really want to know how you apply Rothbard's quote to this situation.

    2. Wenzel already covered the trollish..."give me a date" bullshit:

    3. To Anonymous at 6:09.
      The business model for many people warning of some vague disaster at some point in the future is the forecasting equivalent of snake oil selling. Mr. Schiff for example uses his similarly vague forecasts right now to sell gold to gullible seniors and others without the background to question his flawed and misleading statements on monetary policy or "price inflation" measurement. My guess is that Chris wants to jump on this bandwagon eventually.

      Excuses are made when forecasts turn out to be wrong. Funnily enough forecasting is also absolutely desirable in hindsight when forecasts turned out correct (Mr. Schiff's and others' housing bubble forecast comes to mind). But forecasting becomes somehow "bullshit" (to speak in the second anon's tone) when it doesn't work so well. Snake oil sellers can make profits for a while, no doubt. But, reality hits at some point.

    4. "Mr. Schiff for example uses his similarly vague forecasts right now to sell gold to gullible seniors and others without the background to question his flawed and misleading statements on monetary policy or "price inflation" measurement."

      On the above: no one holding gold long is taking a beating....most of Schiff's customers that were hurt financially were so in non-dollar denominated stocks because Schiff didn't forsee global money printing via central bank coordination.

      Schiff is making money on the basis of his beliefs of his fundamentals of the US economy...and hoping he will make money for his clients on that basis. No doubt that Krugman for example, is doing the same thing on the other side of most of the "debates" though the clientele is different. (Speaking tours, engagments, connections via supporting Obama & Keynesian idealogy, etc.)

      In other words, there's many people on both sides of the discussions that are benefitting financially from their specific take on things.

      As always, caveat emptor.(for both sides)

      At the end of the day we each have to take/check the information and make the decision we think is best.

    5. Nick, I couldn't agree with you more. But what information DO I take from Chris' piece here? What is the disaster scenario and when does it hit? He doesn't give any information that's even borderline useful.


    Here Krugman says the NRA is an "insane" organization. Interesting because Gallup shows the NRA has a higher approval rating than Obama. I like how angry he gets when the woman on the panel calls him out for his stupid remark and he stutters and stammers his fat little face by shouting about low crime rates in international nations that have banned guns.