Monday, February 10, 2014

J.M. Keynes: The Damage Still Done by a Defunct Economist

Richard Ebeling emails:
Dear Bob,

I have a new article on the news and commentary website, "EpicTimes," on "J.M. Keynes: The Damage Still Done by a Defunct Economist."

February 4th marked the 78th anniversary of the publication of John Maynard Keynes' most famous book in 1936, "The General Theory of Employment, Interest, and Money,"

I explain how Keynes' goal was to undermine the market-oriented policies that in general had prevailed before him: free markets, government balanced budgets, and the gold standard.

In their place, he advocated government manipulation of markets through deficit spending, paper money, and price inflation.

His devil's brew of government intervention has caused all the economic instability and disorder of the last seven decades, in spite of demonstration-after-demonstration that Keynesian Economics is an illogical and misguided set of policies that leads to the very boom and bust Keynes claimed he wanted to mitigate.


  1. Had Keynes not existed, I believe in some manner TPTB would have found someone else to justify concepts for stimulus, flexible currency, not tying money to hard assets. Keynes teachings have to be the biggest con-scam perpetrated upon mankind. At present I am reading Ludwig Von Mises “The Theory of Money and Credit” circa 1912, and am beginning the chapter titled Monetary Policy, of which I like these quotes: "But even though questions of currency policy are never more than questions of the value of money, they are sometimes disguised so that their true nature is hidden from the uninitiated. Public opinion is dominated by erroneous views on the nature of money and its value, and misunderstood slogans have to take the place of clear and precise ideas." Another book I am reading "The Dao of Capital"(pp 173-174, Spitznagel) discusses Von Mises and Keynes: "Soon after the release of Theory of Money and Credit, Mises was easily eclipsed by Keynes, when this dapper, fresh, and sophisticated English gentleman's book, The General Theory of Employment, Interest, and Money, was published in 1936. So what if Keynes lost his shirt in the stock market crash? Apparently more important was that his book appeared scientific and sophisticated, thanks to the inclusion of fancy math and even Greek letters, all of which conveyed rigor and modernity. And he seemed a man of action (whether constructive or destructive was perhaps secondary). The good Lord Keynes fearlessly fought the battle against unemployment with proposals of artificially stimulating demand--thus pretending that consumer preferences are different than they actually are--draining the government's coffers, and running the monetary printing presses. It was a Keynesian avalanche, and Mises was swept aside--not refuted by Keynes and his ilk, but ignored."

  2. Morgan Warns of Possible Physical Gold Shortage

    The bit of controversy today is how much gold exactly is flowing from West to East, most specifically to China?

    Bloomberg had a piece in print today about the record amount of gold that was imported by China last year through Hong Kong, exceeding 1,000 tonnes for the first time. You may read it here.

    What was even more interesting were the gold bullish comments that were made by two guests, one from Pimco and the other by Ed Moy, the chief strategist at Morgan Gold. I include the interview below. He notes that there is concern about a physical gold bullion shortage.

    "Quantitative easing has had a distorting effect on the price of gold...Overall when you look at gold, there are two separate pieces here. One is how the West looks at gold, and they have been investing in a lot of electronic derivatives and proxies for gold. Whereas the East has been buying a lot of physical gold. That demand has actually gone up. China looks like it bought 1,000 tonnes in 2013 making them the number one buyer in the world

    Do you have a concern about a possible gold shortage?


    How ironic, now that JPM has hammered the paper price of gold down and covered their shorts, and are said by some informed analysts to be sitting net long gold. Classic.