I’ll Take Gold Over the Euro Any Day!

In 1999 Europe started a unique monetary experiment by introducing a common fiat currency, the euro. Today, the euro is legal tender in 22 countries. There are, however, huge disparities between the economies and policies of these countries, which makes for equally huge conflicts of interest. This was one of the main concerns of the euro’s opponents before its introduction.

They argued that these large economic differences would make it impossible to have a common monetary policy fitting all. Consequently, it would be impossible to enforce the necessary fiscal policies to ensure a stable currency …

They argued that politicians would…

Wall Street, J. P. Morgan, Warren Buffett, and Elton John

This past week’s approximately $2 trillion pledge of support for their financial markets by the Europeans has stabilized the global financial markets somewhat. Commercial paper and LIBOR rates have fallen a bit. All is not well however. US mortgage rates rose by a half per cent. This may further weaken the housing market and send another tsunami wave through bank balance sheets.

By the way, if the Europeans are going to spend $2 trillion to “fix” their financial problems, how in the world will a measly $700 billion fix the financial problems in the US? After all, the US is…

The Statistical Battleground

With consumer confidence now testing generational lows, our politicians are, nevertheless, continuously assuring us that the economy is strong and that there is no cause for worry.

Although it is standard procedure for governments to soothe their citizenry with placebo politics in order to avoid panic and uprising, there is a line after which such a campaign is counterproductive. In fact, misleading statements about financial security are potentially dangerous to the country’s long-term economic wellbeing, and potentially toxic to investors.

Economic and financial statistics are the battleground over which the war of perception is fought. But as the saying goes:…