Monday, May 19, 2014

Lessons from the Great French Inflation

Richard Ebeling emails:
Dear Bob,

I have a new article on the news and commentary website, “EpicTimes,” on “Lessons from the Great French Inflation.”

Governments and central banks around the world continue to expand the quantity of money in the banking system and manipulate interest rates in attempts to “stimulate” employment and output.

Such misguided policies always have led to disastrous price inflation and economic ruin, often exacerbated by government attempts to hide the effects resulting from their own policies through price controls.

One of the most famous historical examples of this was during the French Revolution. Government extravagance during under the French kings had led to annual budget deficits, mounting debt, and special interest intrigues by those who lived off government largess.

It brought about the French Revolution during which a mountain of paper money was created to fund “make works” projects, subsidize the demands of “the masses,” and wage war. Its end result was monetary ruin the harmed the weak and the poor the most.

It was matched by the insanity of an intricate web of price and wages controls in the name of “fighting inflation” that brought about shortages, food riots, and a swarm of bureaucrats and regulators who held the power of life and death over those who violated the government edicts.

As the Austrian-born economist, Joseph A. Schumpeter, once pointed out:

“Louis the XV was a most enlightened monarch. Feeling the necessity of stimulating expenditure he secured the services of such expert spenders Madame de Pompadour and Madame de Barry. They went to work with unsurpassable efficiency. Full employment, maximum resulting output, and general well-being ought to have been the consequence. It is true that instead we find misery, shame and, at the end of it all, a stream of blood. But that was a chance coincidence.”

Best Wishes,


  1. Chilean Activist Burns $500 Million of Student Loan Documents in Protest Against Debt Serfdom

    Since the parasitic Central Bank driven financial system is more or less entrenched in every country on earth, every country on earth is experiencing increased concentrations of wealth into the pockets of a handful of oligarchs. Meanwhile, those nations which heretofore had a middle class are finding that this entire socio-economic class is disappearing into the dustbin of history via a variety of methods, not the least of which is criminal quantities of student loans. These loans are pushing an entire generation into inescapable serfdom, while many university administrators are enriching themselves at their expense.

    So it appears student loan based debt serfdom is also a major issue in Chile, and one activist, known as "Papas Fritas," decided to take matters into his own hands. During a takeover at Universidad del Mar, he was able to get his hands on $500 million of student debt, which he subsequently torched.


    There you have it – the wisdom of two Ivy League educated economists who are primarily liable for the death of the American middle class. They now receive $250,000 per speaking engagement from the crooked financial parties their monetary policies benefited; write books to try and whitewash their legacies of failure, fraud, and hubris; and bask in the glow of the corporate mainstream media propaganda storyline of them saving the world from financial Armageddon. Never have two men done so much damage to so many people, so quickly, and are not in a prison cell or swinging from a lamppost. Their crimes make Madoff look like a two bit marijuana dealer.

  3. Prices Skyrocket In East End Real Estate

    Is $50 million the new $20 million?

    Recent reports of the highest residential real estate sale in the country—$147 million for a 16-acre Further Lane property on the ocean in East Hampton—have jaws dropping. That number blows away the earlier record for the Hamptons, which was $109 million for 40 acres, also on Further Lane, back in 2007. Are ultra-high-priced sales random isolated events? Or is this a trend following what’s going on in Manhattan and London, where high-end buyers are dropping huge sums on properties in the quest for a safe investment for cash?

    I checked in with a few top brokers to get their take on the Further Lane sale as well as the state of the ultra-high-end market in general.

    Peter Turino, broker and principal of Brown Harris Stevens of the Hamptons, said: “The Further Lane sale is remarkable and sets a new price point for the top-echelon real estate. I sold this property to Chris Browne in 1996 for $13.385 million. It does not surprise me that it traded 18 years later for 11 times that amount. Anyone familiar with the three-lot compound knows it is without equal.”

    “Since we have had several megawatt sales over the last five to six months, it’s inevitable that if economic conditions remain strong we are going to see other benchmark sales,” Mr. DePersia said. “We seem to be in that zone right now, where deals are happening at astonishing prices in all sectors of the market.”

    He described bidding wars on many of his listings, including some that had just hit the market. One buyer even agreed to wait until after the summer to close, which is unusual, as most people looking in spring want to be in by Memorial Day, and giving up the summer months would normally be a deal-breaker.

    “The high-end market is the strongest I have seen in the 24 years I have been a broker in the Hamptons!” said Susan Breitenbach, also a top broker with the Corcoran Group. “High-end rentals are very strong as well as sales.”