It's very strange.
In one recent article, Edmund Conway, the chief economics nabob on the Torygraph, quite rightly described 'quantitative easing' as being like a nuclear weapon.
Which means that he must be able to see clearly enough to know the destructive power of the state's counterfeiting of the money supply.
He must know that if they printed a million pounds tomorrow, for every man, woman, and child in the United Kingdom, and then stuffed it into everyone's letter boxes, then it would be true that we would all become millionaires overnight, but it would also be true that a box of matches would cost somewhere approaching a hundred thousand pounds.
In other words, printing money is an illusory solution to the economic problem of there being a scarcity of real resources, due to the mis-management of these resources, and their less than optimal use, due to the wrecking of the monetary pricing system caused by constant production of fiat currency from out of thin air.
He is bright enough to know this.
However, in another recent article, the cheerful Mr Conway seems to have been mentally transfigured by a Damascene conversion, and to have been completely taken in by the magical effects 'quantitative easing' has brought about in the last few months, along with its evil twin brother, the zero percent interest rate - which together combine to create an effective negative cash interest rate - which is why everyone is now trying to get out of cash.
But Mr Conway does not recognise this as possibly the dangerous beginnings of Ludwig von Mises' Die Flucht in die Sachwerte, or The Flight into Real Values.
Instead, everything is now 'green shoots' and Conway appears to believe the buffoonery of Bernanke in claiming that this recession will be over in time for 'Ice Creams in Berlin' by Christmas.
Now, I could have 'Fisked' this article, and written a dreary blow-by-blow account of how Mr Conway is wrong in virtually every way that you could possibly imagine, except perhaps on his thoughts about China, where as a good Jim Rogers man, I follow his optimism. However, that piece would have been incredibly tedious for you to read, and even more incredibly tedious for me to write, so let's come up with a solution a hundred times better than that. Let's just watch a related Peter Schiff video, instead, on the same kind of economic idiocy plaguing the United States.
Just imagine that Edmund Conway is the lady in the dress, and we'll be right on the money:
If that's a little frisky for you, and you prefer things a little more staid, I heartily recommend a more sober description of the flight into real values by the man himself, Ludwig von Mises, as written about in 1946, in his essay, 'The Trade Cycle and Credit Expansion: The Economic Consequences of Cheap Money'.
Just check out the following ScribD book. Go to page 221 and read the essay there (in fact read all five essays in this book). The description of how the flight into real values comes about, due to the inflation of the money and credit supply, could almost be a perfect description of the current phase we are going through in this recession.
Be afraid. Be very afraid. The Great 21st Century Depression hasn't even really begun yet, certainly in the United States and its Anglo-Saxon mini-me clone in the United Kingdom.
On the Manipulation of Money and Credit (1978) - Ludwig Von Mises
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