Where is the boom he is trying to create?
Also, because it's probably related to the Fed and we're on the subject (and I can't exactly find an answer on Google), why are gasoline prices so high? What's driving up the cost?
Welcome to the Mises Forum! Be sure to check the newbie thread for forum tips and how-tos.
Christopher Zimny:Where is the boom he is trying to create?
Check out some of these.
why are gasoline prices so high? What's driving up the cost?
Economics 101: The Price of Gas
Gas Prices are Going up. Or are they?
What's the Deal with Oil Prices?
Another Reason to End the Fed
Gas Prices Fact or Fiction: A Primer on Supply and Demand
Charting the Course to $7 Gas
The Oil-Price Bubble
What Can We Do about Gasoline Prices?
Thanks for the sources John James. I just read (so far) "Gas Prices are Going up. Or are they?" and it reminded me of a conversation I had with a friend a few weeks ago: I told him that the reason that gas prices were rising is inflation, citing the changes in price of a gallon of gas in terms of gold for the past decade versus the price of a gallon of gas in US dollars and Euros and his reply was that a reason why gold could be relatively constant is speculation. I replied that this speculation, if this was the case, could be due to lack of confidence in the future value of the dollar (due to inflation) so that his point is understood, but not quite what he seemed to be implying (i.e. it's all the speculators' fault).
Did I explain it correctly? Is there a better way to state that inflation is the culprit (I plan to read all the sources you posted above- I wouldn't be surprised if the answer is contained in a link above and I just haven't read it yet)?
If I had a cake and ate it, it can be concluded that I do not have it anymore. HHH
ThatOldGuy: I told him that the reason that gas prices were rising is inflation, citing the changes in price of a gallon of gas in terms of gold for the past decade versus the price of a gallon of gas in US dollars and Euros and his reply was that a reason why gold could be relatively constant is speculation. I replied that this speculation, if this was the case, could be due to lack of confidence in the future value of the dollar (due to inflation) so that his point is understood, but not quite what he seemed to be implying (i.e. it's all the speculators' fault). Did I explain it correctly? Is there a better way to state that inflation is the culprit (I plan to read all the sources you posted above- I wouldn't be surprised if the answer is contained in a link above and I just haven't read it yet)?
Well, kind of. Either way though, I doubt your answer got to the crux of his argument in his mind, which is basically that "evil speculators" are what drives price increases.
Sorry to bombard you again, but see here.
Bond market.
"If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion."
Thank you. Do you have a video that might explain this? I ask because I seem to remember Peter Schiff talking about this for some reason, something about a government bubble I think. What are the consequences of a bond bubble (or government bond bubble, I suppose) as a oppose to a normal one?
And thank you John James! I appreciate the links!
Christopher Zimny:What are the consequences of a bond bubble (or government bond bubble, I suppose) as a oppose to a normal one?
What is a "normal bubble"?
Like the .com or housing bubbles. I thought since this is a government bubble (that has to do with public funds) it might have a worse effect than even those.
Just to clarify:
By govt bubble Peter meant that all the new money the Fed prints is going to the govt to finance its many spending schemes. Everyone [=exaggeration a bit] is working for the govt, Washington DC is the only place in America where housing prices are rising, working for the govt is like working in the palace of Louis XIV, and it's a bubble that cannot last forever. Either the govt will have to cut spending drastically because they spend so much newly printed money, or they will destroy the value of the dollar, ending the bubble that way.
The bond market is a subsection of this govt bubble, with the Fed buying up new treasuries as they come out, enabling the spending to continue, and of course buying those bonds when the govt offers very low interest rates.
From what I gather, Peter is concerned that because of inflation, interest rates on everything will have to rise so that lenders get back as much money as they lent. After all, if you know your dollar will be worth 5% less at the end of a year, you will charge 5% [at least] to anyone who borrows it. And although the Fed can ignore this and keep on buying Treasuries at a low interest rate [because what do they care, they can just print more and more for free], there are still some elememts of the private sector and some foreign govts that buy bonds, and they will stop buying if interest rates dont rise. And the govt cannot afford to raise interest rates, because where will the money come from to pay those high rates? [=once again, destruction of the dollar if they print to do it]. Thus, the private sector and foreign govts will stop buying bonds [as is already happening].
So from that angle as well, the bond market is in a bubble.
My humble blog
It's easy to refute an argument if you first misrepresent it. William Keizer