How great would it be if you could build the ultimate online business and finally quit your job?
You now have the opportunity to begin building your ultimate online business, this will shorten your path to success by years, months , and weeks
Everything inside the Ultimate Profit System works and it’s taken out the frustration for you by removing the stuff that doesn’t work
It’s been done like this so no matter what level you’re at in your online journey you will be able to pick this Ultimate Profit System up and turn it into a profitable online business
Get started building your Ultimate Profit System today!
- Product: Ultimate Profit System
- Creator: Jason Fulton & Robert Phillips
- Price: $10
- Launch Date: 2013-11-27 at 11:00 EST
- OFF Discounts For 7 Days
- Bonus Page: Yes – Clicking here to receive huge bonus worth over $4500
- Special Offer: Yes – Clicking here to get it with Discount OFF Now
- 100% money back guarantee
- Website: http://ultimateprofitsystem.net
What is Ultimate Profit System?
Ultimate Profit System – The simplest method to direct clients for your website would be to develop links that permit customers to click your hooks and become directed aimed at your website to understand more about that picture and product. Use different sights, colors, and explanations. Once they get to your site, you ought to have more beautiful pictures from the image that introduced them to your website to begin with. You would like them to assume how the product will appear within their home, where they are able to put it, and just how far better it’ll make their existence. Show your items home based configurations that will personalize using the merchandise for that possible client. This is actually the perfect spot for more testimonials. Success breeds success and success encourages additional business!
>>>Click Here See Details<<<
Ultimate Profit System benefits:
These 5 simple steps found inside the Ultimate Profit System can take you from nothing to 6 figures online per year
If you want a long term business model that will work today and in ten years time this is it
The Ultimate Profit System has 6 core modules which include:
Ultimate Profit System is designed to help you build the ultimate online business that you can start profiting with over and over again
The Ultimate Profit System contains 6 modules that are broken down into simple step by step instructions so you can start implementing and taking action right away
Module 1: Ultimate Profit System Revealed
In this module i will be going over exactly what the ultimate profit system is, revealing the complete system
Then in the following modules ill be braking down every step so you can start implementing and taking action right away
So as you seen in the introduction I struggled online for a long time and looking back, I WISH I HAD THIS SYSTEM in my hands when I first started!.
In fact if I had your advantage today I would have been a success a lot quicker
You now have in your hands the ultimate profit system, this will shorten your path to success by years, months , and weeks
Everything I show you works and I’ve taken out the frustration for you by removing the stuff that doesn’t
I’ve done this so no matter what level you’re at in your online journey you will be able to pick this ultimate profit system up and turn it into a profitable online business
So let’s talk about what the ultimate profit system is and what it isn’t
Module 2: Ultimate Niche & Product Creation Secrets
So you now understand the concept of the ultimate profit system, you’ve been given an overview of how it actually works, now it’s time to start implementing this system
The first step involves simple niche research followed by the actual product creation Remember you have nothing to be scared of here, everything I explain is in very simple terms
I’ve created a simple 3 step question to help you decide if a niche is profitable to enter!
Now it’s time to talk about product creation and this method is made real easy by using the 10×10 matrix this is going to form the outline of your product once it’s been completed everything falls into place really quickly and the clarity you will have after completing your 10×10 martrix is incredible
Module 3: Ultimate Automated Funnel
Create an automated funnel that delivers buyers to you while you sleep Set this up once and It will pay you forever also talks briefly on the salesletter
* i’m giving a marlon sanders copywriting course as a bonus to this product
Module 4: Ultimate Traffic Technique
We all know that you can have every element in place a niche chosen, product created, salespage written
But in the end without traffic you wont succeed online
Without traffic you can’t generate buyers…. Simple
We also know that buying traffic can either not be done because you don’t have the finance or you waste your money on traffic you don’t know how to track properly
So in this module I’m going to talk about the ultimate traffic technique that doesn’t cost you a cent
We are going to be using affiliates to drive traffic
Don’t be afraid of this technique, it works
Get this right and you will have traffic for life… free traffic
Module 5: Ultimate Backend Profits
This is the best part about the ultimate profit system and where it really gets it’s name from
You can literally double , triple and even dectuple ( that means ten times haha,) your profits on your backend
And the options are limitless when it comes to your backend,
I doubled my income by implementing just one method
You can implement all 3 methods to triple your income
You’ve done all the hardwork to here, now cash in !
Module 6: Tying Everything Together
These simple 5 steps can take you from nothing to 6 figures
If you want a long term business model that will work today and in ten years time this is it
If you commit to the ultimate profit system going forward to you have the keys to success in your hands
No more buying shiny new products , push button solutions or one click softwares
Author: Jason Fulton & Robert Phillips
Price:
Maybe after looking at some great functions of Ultimate Profit System, you think that it’ll be expensive, right? NO! It only costs $10 in price, In my opinion, this is a soft price for an awesome product that could help to build the ultimate online business that you can start profiting with over and over again. I highly recommend you should get it NOW when the price at lowest. Because the price will increase. So if you decide to use it, quickly to grab it right now!
Conclusion:
Don’t miss this… if you want to shorten your learning curve and explode your earning curve you need to act right away
Get The both of Vip Bonus $4500. The Bonus only here
- Get Ultimate Profit System by Clicking here to download it now
- After completing the transaction, forward the receipt to my email at: [email protected]
- You will receive all the bonuses within 24 hours
- Call me: +84935852325 you’ll accept Bonus within 15′
Another Products:
Set up your own smart, professional looking Facebook store in seconds and give your products maximum exposure. Social Mini Store will create drag and drop facebook landing pages in minutes and is connected with all major autoresponders. The same can be exported as HTML and used in your own domain as well . This would be one of the simplest landing page generating software for facebook as well as for your website.
Social Mini Store is a web based application which we have been using to promote other products as an affiliate.
It will create Beautiful landing pages in a fly and you can have the same landing page in your facebook tab as well as our wordpress blog or on your own domain.
Thanks for visit my page Ultimate Profit System Review. Hope you could find useful information here. Get Bonus
I’ve just found out that if I start attending a WA state college as a non-resident, then there is a good chance my tuition will STAY non-residential, and looking at the way state/non-profit colleges struggling in this recession I don’t want to take any chances. Getting to the point, I am considering taking a non-credit Paralegal training course until Fall ’10 when I can start attending college. My thinking is that it will allow me to get a better job to pay for my college/other expenses, as opposed to working minimum wage like most do. BUT there is a section in the course description that says, “Although there are no requirements for paralegals (except in Cali) to have professional training/related college degree, MOST LAW FIRMS will want a candidate with previous law firm experience or a college degree.
He/She who has some law experience/knowledge please let me know your thoughts on this situation. Is it a waste of my time taking this course??
It goes on to recommend a legal internship or relevant law school training after taking the course.
It’d probably help me get an internship correct???
Am I mistaking that when the Federal Reserve Act was passed (on Christmas Eve) in 1913, it transferred the power to coin and issue our nations money and to regulate the value thereof from Congress to a Private corporation. And my country now borrows what should be our own money from the Federal Reserve (a private corporation) plus interest. Is that correct and the debt can never be paid off under the current money system of country
Is single payer the ultimate goal??
KH, just because you claim you work in the field of health care doesn’t mean your point of view is any more valid than anyone else. Epidemiologists agree that at least 70-80% of our nation’s health care consumption comes from life style choices. If your disease is brought on to you from your lifestyle, why should others be forced to help you pay for it?
The CDC estimates 50% of Americans will be Type 2 diabetics by mid-century mostly from eating our Western Diet.
The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.
John Maynard Keynes
The best way to destroy the capitalist system is to debauch the currency.
Vladimir Lenin
@ideogenetic- Yea I see that I didn’t know there was more to it. Damn Lenin was a better person than John Maynard Keynes. I believe in classical and Austrian economics but I admit that I am very ignorant when it comes to Communism.
I’ve just found out that if I start attending a WA state college as a non-resident, then there is a good chance my tuition will STAY non-residential, and looking at the way state/non-profit colleges struggling in this recession I don’t want to take any chances. Getting to the point, I am considering taking a non-credit Paralegal training course until Fall ’10 when I can start attending college. My thinking is that it will allow me to get a better job to pay for my college/other expenses, as opposed to working minimum wage like most do. BUT there is a section in the course description that says, “Although there are no requirements for paralegals (except in Cali) to have professional training/related college degree, MOST LAW FIRMS will want a candidate with previous law firm experience or a college degree.
He/She who has some law experience/knowledge please let me know your thoughts on this situation. Is it a waste of my time taking this course??
It goes on to recommend a legal internship or relevant law school training after taking the course.
It’d probably help me get an internship correct???
I WANT TO make a video where i have another video in it, it’s not a copyrighted video, it’s not a music video or anything it’s just a prank some guy done i want to use it in my video i gain no profit and put a link of the video in the description and incase it might help i also liked and favourites the video but i didn’t message the owner is this legal PS : how does RayWJ do his videos anyway ?
and the expect labor to act otherwise? It seems to me that capitalism has been hoist with its own petard (here goggle petard), philosophically and practically.
Workman don’t care about the quality of their work. Laborers goof off from their jobs. All they care about is getting more for doing less. The ultimate survivability of the company doesn’t interest them.
These are all charges made by capital against labor, and they are in large part true. But why are they true? What has happened to the “old virtues” of reliability, loyalty, craftsmanship, scrupulosity?
What has happened is that the workmen have been thoroughly indoctrinated with the philosophy of profit about all, profit here and now, and damn the consequences. They are just practicing what has been preached to them from the other side of the hall.
Capitalism IS AN ECOMOMIC SYSTEM (caps on purpose here) that works well within carefully defined limits. It is not a social system. It is not a philosophy of life. It is not a gospel. It is simply an arrangement of working, owning and producing; and like any other human arrangement, it has its own built-in flaws that must continually be corrected and rectified.
But if you convince people that profit, that the desire to get more and have more, takes precedence over any other set of motivations-and if you elevate this to a principle of life, not just an economic doctrine- then it is hard to blame them for acting on that principle.
If getting the most you can is what counts, labor will try to get the most it can. If buying low and selling dear is the firs axiom of capital, then pulling down the highest wages for the smallest expenditure of effort becomes the first axiom of labor.
ok, so i’m drawing a character in pixia and there’s this part where i need t color in the shades with red but i want to see the eyes as well. is there a way to make the brush less “opaque” so that i can color in the shades without making the eyes disappear? thanks.
im specifically looking to remove red eye.
including researchers’ plagiarizing others’ work, using other scientists’ methods to develop lucrative patents, or just plain fabricating data. How important an issue is this for society? What are the boundary lines of ethical scientific behavior? How should the scientific community or society “police” scientists? What punishments would be appropriate for violations of scientific ethics?
ok, so i’m drawing a character in pixia and there’s this part where i need t color in the shades with red but i want to see the eyes as well. is there a way to make the brush less “opaque” so that i can color in the shades without making the eyes disappear? thanks.
I generally understand the role of The Monarchy. I understand Elizabeth is not so much a legislator, and that She represents all of Britain. I have a positive opinion of Royalty, because They seem to personify something uniquely British, and I love British crap. Especially English.
Over here, they have some A-list celebrity status, sharing tabloid cover space with Tom Cruise and Angelina Jolie. Every time they fart, we hear about it. Prince Harry seems like the ultimate awesome dude, especially as we follow his military service.
On the other hand, I hear criticism of them. I hear that they lavishly waste taxpayer dollars (which would not be, and has not been, if you’ll recall, tolerated by Americans).
At what point did their role change into how it is modernly perceived? I guess I could Google that, but isn’t human contact so much more fulfilling?
@Alex – DUHHHH HUH HUH HUH, UMURCUN BE DOOPID. DUUUU HYUCK HYUCK. MY TYPES 4 WORDS & GETS A LIKE. ME BE SURPERIOUR.
ok, so i’m drawing a character in pixia and there’s this part where i need t color in the shades with red but i want to see the eyes as well. is there a way to make the brush less “opaque” so that i can color in the shades without making the eyes disappear? thanks.
Is it because no profits can be made or it can harm people?
I WANT TO make a video where i have another video in it, it’s not a copyrighted video, it’s not a music video or anything it’s just a prank some guy done i want to use it in my video i gain no profit and put a link of the video in the description and incase it might help i also liked and favourites the video but i didn’t message the owner is this legal PS : how does RayWJ do his videos anyway ?
I am wondering if I will receive any money from a cal grant with a gps of 3.92 . My parent’s annual income is around $250,000. I was rejected by fafsa.
Is single payer the ultimate goal??
KH, just because you claim you work in the field of health care doesn’t mean your point of view is any more valid than anyone else. Epidemiologists agree that at least 70-80% of our nation’s health care consumption comes from life style choices. If your disease is brought on to you from your lifestyle, why should others be forced to help you pay for it?
The CDC estimates 50% of Americans will be Type 2 diabetics by mid-century mostly from eating our Western Diet.
The so-called “credit crisis” is gaining momentum. Investors increasingly question the solidity of the banking system, as evidenced by banks’ tumbling stock prices and rising funding costs. With bank credit supply expected to tighten, the profit outlook for the corporate sector, which has benefited greatly from “easy credit” conditions, deteriorates, pushing firms’ market valuations lower. In fact, peoples’ optimism has given way to fears of job losses and recession on a global scale.
Free market advocates, however, should not get carried away by the price action in the market place. In a free market, there is nothing wrong with individuals reassessing hitherto held expectations, entailing changes in relative prices. A free market is a discovery process, based on trial and error. Usually the effects of errors made by some are compensated for by the gains of successful decisions taken by others, and the economy expands.
Sometimes, however, the effects of errors dominate, and the economy experiences what people call a crisis: income growth is (feared to be) lower than what people think it should, and could, be. In that sense a crisis is a correction of bad decisions. It is an indispensable part of the free market. It pushes those producers out of business who do not satisfy the needs of their clients, and it rewards those who serve their customers well.
A crisis must be feared, however, if it has been caused by government action, and if the obvious signs of the crisis provoke ever greater doses of government intervention. In this case, the market would be prevented from doing its job properly. Bad decisions would be perpetuated, and the ultimate crisis may become nasty.
Diagnosing the Causes of the Crisis
It is against this background that one may wish to review the US central bank’s series of rate cuts, the latest being a big 75-basis-points rate slash on January 22, 2008, which brought the official Fed Funds Target Rate to 3.5%.[1] While the Fed’s moves were mostly hailed in public as appropriate measures to help the economy avoid recession, Austrian economists hold a completely different view.
According to the Austrian Monetary Theory of the Trade Cycle it is the government-run money-supply monopoly that has not only caused the crisis; the theory also diagnoses that rate cuts will not solve the crisis, but will make it even worse.
Central banks, the government agents holding the power over the printing press, pursue a monetary policy of “interest rate steering” or, in other words, pushing the interest rate down as much as possible by relentlessly increasing credit and money supply. It is this inflationary monetary policy that causes trouble.
Ludwig von Mises pointed out that
today credit expansion is exclusively a government practice. As far as private banks and bankers are instrumental in issuing fiduciary media, their role is merely ancillary and concerns only technicalities. The governments alone direct the course of affairs. They have attained full supremacy in all matters concerning the size of circulation credit. While the size of the credit expansion that private banks and bankers are able to engineer on an unhampered market is strictly limited, the governments aim at the greatest possible amount of credit expansion.[2]
Initially, the artificial lowering of the interest rate creates an illusion of richness and affluence. The increase in the money stock via bank credit expansion erroneously suggests that the supply of savings increases. Investment picks up, and the economy expands. The illusion of plentiful resources leads to malinvestment, and sooner or later the boom turns into a bust. While the money-fueled expansion is a manifestation of the crisis, it is actually the slump — the correction of malinvestment — that people complain about.
The alleged fight against the crisis
Once a crisis unfolds, central banks are called upon to lower interest rates — in ignorance of the fact that a monetary policy of pushing down the interest rate has caused the misery in the first place. Cheaper borrowing costs, it is believed, would revive the economy by stimulating investment and consumption, thereby adding to output and employment. Lower interest rates would raise the prices of stocks, bonds, and housing, translating into “wealth effects” which in turn strengthen demand.
The obsession with a policy of lowering the interest rate is rooted in a deep-seated ideological aversion against the interest rate. It is a destructive ideology, in particular if the government is in charge of the money supply. Because then the government central bank will lower the interest rate to whatever is deemed appropriate from the viewpoint of the government, pressure groups, and vested interest.
However, the interest rate is a reflection of peoples’ “time preference”: because of scarcity, people value goods and services available today (“present goods”) more highly than goods and services available at a later point in time (“future goods”).[3] This is why present goods trade at a premium over future goods. That premium is the interest rate, or the “time preference rate.” The interest rate is a free-market phenomenon.
A policy of suppressing the market interest rate through a government-sponsored credit expansion, Mises noted, is a policy against the free market:
Credit expansion is the governments’ foremost tool in their struggle against the market economy. In their hands it is the magic wand designed to conjure away the scarcity of capital goods, to lower the rate of interest or to abolish it altogether, to finance lavish government spending, to expropriate the capitalists, to contrive everlasting booms, and to make everybody prosperous.[4]
Causing Inflation
A monetary policy of lowering the interest rate via expanding credit and money corresponds to the widely held view that “some inflation” is a requisite for economic expansion. In fact, the “inflation bias” has become so widespread that nowadays inflation (the rise in the money supply) is much less feared than deflation (the decline in the money supply).
Mises was aware of what happens once the inevitable crisis caused by a manipulation of the interest rate unfolds: “In the opinion of the public, more inflation and more credit expansion are the only remedy against the evils inflation and credit expansion have brought about.”[5]
The current credit crisis is a sad case in point: with monetary policy having caused inflation and malinvestment, it is now called upon to pursue a policy that leads to even more inflation and malinvestment.
Could monetary policy become “ineffective,” that is, could it fail to create inflation? For instance, the Bank of Japan’s rate cuts around the beginning of the 1990s — as a reaction to falling asset prices and a growing volume of bad loans in banks’ portfolio — did not succeed in bringing credit and money growth rates back to precrisis levels. Even with official rates at virtually zero, the economy remained in stagnation and the Japanese stock market continued to decline.
Against the backdrop of the Japanese experience it should be noted that there is no limit to central-bank money printing. Central banks can, at any one time, buy any assets from banks and nonbanks such as bonds, real estate, foreign currencies, etc. If a central bank buys, say, debt from the corporate sector, it increases the money stock in the hands of nonbanks directly; the commercial banking sector is not needed for increasing the money supply.
Central banks’ unlimited power over the money supply has been made pretty clear by the chairman of the US Federal Reserve, Ben S. Bernanke, in November 2002:
[T]he U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.[6]
So if the government is determined to create inflation, there should be hardly any doubt that there will be inflation. The Fed’s series of rate cuts suggests that the bank tries to create additional credit and money via lowering the interest rate on base money. But if such action fails to yield inflation, it does not take much to expect that the central bank may take recourse to less “regular” operations, if and when such an inflation policy is deemed necessary to solve the credit crisis.
So far, at least, US bank credit and money supply growth has remained at a very high level. In December 2007, banks’ commercial and industrial loans grew at 10.9% y/y, and total bank loans and leases were up 10.8% y/y. Real estate loans — most likely as a consequence of the defaults in the subprime markets — slowed down somewhat, but were still running at 6.3% y/y. Against this background the Fed rate cuts should actually accelerate the erosion of the exchange value of money further.
Threatening Freedom
Inflation is a societal evil. It redistributes real wealth from creditors to debtors. It impairs the role of money as a means of exchange. The efficiency of the market’s price mechanism is greatly reduced, encouraging bad decisions, which in turn harm peoples’ economic well-being. At the end of the day, inflation is a serious threat to freedom. The majority of the people, suffering badly from inflation, would most likely blame the free market for their plight, rather than blame the central bank for the debasing of the currency.
Print $17
Audio $25
Mises noted:
Nothing harmed the cause of liberalism more than the almost regular return of feverish booms and of the dramatic breakdown of bull markets followed by lingering slumps. Public opinion has become convinced that such happenings are inevitable in the unhampered market economy. People did not conceive that what they lamented was the necessary outcome of policies directed toward a lowering of the rate of interest by means of credit expansion. They stubbornly kept to these policies and tried in vain to fight their undesired consequences by more and more government interference.[7]
From the Austrian viewpoint, the current credit crisis appears to be a precursor of great inflation. If a deliberate policy of great inflation is chosen in the United States, a monetary policy of debasing the currency would most likely also take hold in other currency areas of the world. The credit crisis has become a threat to the free societal order: as people become dispirited with the free market order, the door would be pushed open for anti–free market policies.
————————————–…
Thorsten Polleit is Honorary Professor at the Frankfurt School of Finance & Management. Send him mail. See his archive. Comment on the blog.
Notes
[1] The FOMC rate cut was made “in view of a weakening of the economic outlook and increasing downside risks to growth. While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households.” US Federal Reserve, Press Release, 22 January 2008.
[2] Mises, L. v. (1996), Human Action, p. 794.
[3] For the explanation of the Austrian theory of the interest rate, see Rothbard, M.N. (1993), Man, Economy, and State: A Treatise on Economic Principles, pp. 31
1 day ago – 2 days left to answer.
Please guys don’t make me bore with long details just tell me in short which is better for only Gaming windows 7 ultimate or windows 8 professional?
I’m going to try to get a rebate, as I don’t use Windows, when I buy my new computer. You wouldn’t happen to know what the wholesale cost for the operating system is, would you? Thanks.
PS Any advice on getting the refund for the operating system?
I would like to convert my road bike from SPD pedals and MTB shoes to true road pedals and road shoes for 30-60 mile rides. I would like a system that is easy to get in and out of – that is my first priority since I sometimes ride on city streets. I have never ridden anything but SPD’s or platform pedals so I want to know the pros and cons of Look, Time, Speedplay, etc.
I am wondering if I will receive any money from a cal grant with a gps of 3.92 . My parent’s annual income is around $250,000. I was rejected by fafsa.
That unfettered and unregulated capitalism is a brutal and revolutionary force which exploits human beings and the natural world until exhaustion or collapse?
What else could be the inevitable outcome of a system with no other motive than profit for its owners?
Sheldon Wolin in his book, Democracy Inc., speaks of an “inverted totalitarianism”
“In inverted totalitarianism, the sophisticated technologies of corporate control, intimidation and mass manipulation, which far surpass the those of previous totalitarian states, are effectively masked by the noise, glitter and abundance of a consumer society. Political participation and civil liberties are gradually surrendered. The corporate state, hiding behind the smoke screen of the public relations industry, the entertainment industry and the tawdry materialism of a consumer society devours us from the inside out. It owes no allegiance to us or to the nation. It feasts upon our carcass”.
Chris Hedges “A Brave New Dystopia” Truthdig.org
I generally understand the role of The Monarchy. I understand Elizabeth is not so much a legislator, and that She represents all of Britain. I have a positive opinion of Royalty, because They seem to personify something uniquely British, and I love British crap. Especially English.
Over here, they have some A-list celebrity status, sharing tabloid cover space with Tom Cruise and Angelina Jolie. Every time they fart, we hear about it. Prince Harry seems like the ultimate awesome dude, especially as we follow his military service.
On the other hand, I hear criticism of them. I hear that they lavishly waste taxpayer dollars (which would not be, and has not been, if you’ll recall, tolerated by Americans).
At what point did their role change into how it is modernly perceived? I guess I could Google that, but isn’t human contact so much more fulfilling?
@Alex – DUHHHH HUH HUH HUH, UMURCUN BE DOOPID. DUUUU HYUCK HYUCK. MY TYPES 4 WORDS & GETS A LIKE. ME BE SURPERIOUR.
I am wondering if I will receive any money from a cal grant with a gps of 3.92 . My parent’s annual income is around $250,000. I was rejected by fafsa.
ok, so i’m drawing a character in pixia and there’s this part where i need t color in the shades with red but i want to see the eyes as well. is there a way to make the brush less “opaque” so that i can color in the shades without making the eyes disappear? thanks.
ok, so i’m drawing a character in pixia and there’s this part where i need t color in the shades with red but i want to see the eyes as well. is there a way to make the brush less “opaque” so that i can color in the shades without making the eyes disappear? thanks.
ok, so i’m drawing a character in pixia and there’s this part where i need t color in the shades with red but i want to see the eyes as well. is there a way to make the brush less “opaque” so that i can color in the shades without making the eyes disappear? thanks.
and the expect labor to act otherwise? It seems to me that capitalism has been hoist with its own petard (here goggle petard), philosophically and practically.
Workman don’t care about the quality of their work. Laborers goof off from their jobs. All they care about is getting more for doing less. The ultimate survivability of the company doesn’t interest them.
These are all charges made by capital against labor, and they are in large part true. But why are they true? What has happened to the “old virtues” of reliability, loyalty, craftsmanship, scrupulosity?
What has happened is that the workmen have been thoroughly indoctrinated with the philosophy of profit about all, profit here and now, and damn the consequences. They are just practicing what has been preached to them from the other side of the hall.
Capitalism IS AN ECOMOMIC SYSTEM (caps on purpose here) that works well within carefully defined limits. It is not a social system. It is not a philosophy of life. It is not a gospel. It is simply an arrangement of working, owning and producing; and like any other human arrangement, it has its own built-in flaws that must continually be corrected and rectified.
But if you convince people that profit, that the desire to get more and have more, takes precedence over any other set of motivations-and if you elevate this to a principle of life, not just an economic doctrine- then it is hard to blame them for acting on that principle.
If getting the most you can is what counts, labor will try to get the most it can. If buying low and selling dear is the firs axiom of capital, then pulling down the highest wages for the smallest expenditure of effort becomes the first axiom of labor.
and the expect labor to act otherwise? It seems to me that capitalism has been hoist with its own petard (here goggle petard), philosophically and practically.
Workman don’t care about the quality of their work. Laborers goof off from their jobs. All they care about is getting more for doing less. The ultimate survivability of the company doesn’t interest them.
These are all charges made by capital against labor, and they are in large part true. But why are they true? What has happened to the “old virtues” of reliability, loyalty, craftsmanship, scrupulosity?
What has happened is that the workmen have been thoroughly indoctrinated with the philosophy of profit about all, profit here and now, and damn the consequences. They are just practicing what has been preached to them from the other side of the hall.
Capitalism IS AN ECOMOMIC SYSTEM (caps on purpose here) that works well within carefully defined limits. It is not a social system. It is not a philosophy of life. It is not a gospel. It is simply an arrangement of working, owning and producing; and like any other human arrangement, it has its own built-in flaws that must continually be corrected and rectified.
But if you convince people that profit, that the desire to get more and have more, takes precedence over any other set of motivations-and if you elevate this to a principle of life, not just an economic doctrine- then it is hard to blame them for acting on that principle.
If getting the most you can is what counts, labor will try to get the most it can. If buying low and selling dear is the firs axiom of capital, then pulling down the highest wages for the smallest expenditure of effort becomes the first axiom of labor.
i want to do a system restore on my laptop, i already moved all improtant data to an external HDD, but i can’t find the restore disc. can i download a copy of the disc online and put it on a disc. or can i do it without one?
I WANT TO make a video where i have another video in it, it’s not a copyrighted video, it’s not a music video or anything it’s just a prank some guy done i want to use it in my video i gain no profit and put a link of the video in the description and incase it might help i also liked and favourites the video but i didn’t message the owner is this legal PS : how does RayWJ do his videos anyway ?
ok, so i’m drawing a character in pixia and there’s this part where i need t color in the shades with red but i want to see the eyes as well. is there a way to make the brush less “opaque” so that i can color in the shades without making the eyes disappear? thanks.
I am wondering if I will receive any money from a cal grant with a gps of 3.92 . My parent’s annual income is around $250,000. I was rejected by fafsa.
and the expect labor to act otherwise? It seems to me that capitalism has been hoist with its own petard (here goggle petard), philosophically and practically.
Workman don’t care about the quality of their work. Laborers goof off from their jobs. All they care about is getting more for doing less. The ultimate survivability of the company doesn’t interest them.
These are all charges made by capital against labor, and they are in large part true. But why are they true? What has happened to the “old virtues” of reliability, loyalty, craftsmanship, scrupulosity?
What has happened is that the workmen have been thoroughly indoctrinated with the philosophy of profit about all, profit here and now, and damn the consequences. They are just practicing what has been preached to them from the other side of the hall.
Capitalism IS AN ECOMOMIC SYSTEM (caps on purpose here) that works well within carefully defined limits. It is not a social system. It is not a philosophy of life. It is not a gospel. It is simply an arrangement of working, owning and producing; and like any other human arrangement, it has its own built-in flaws that must continually be corrected and rectified.
But if you convince people that profit, that the desire to get more and have more, takes precedence over any other set of motivations-and if you elevate this to a principle of life, not just an economic doctrine- then it is hard to blame them for acting on that principle.
If getting the most you can is what counts, labor will try to get the most it can. If buying low and selling dear is the firs axiom of capital, then pulling down the highest wages for the smallest expenditure of effort becomes the first axiom of labor.
I am wondering if I will receive any money from a cal grant with a gps of 3.92 . My parent’s annual income is around $250,000. I was rejected by fafsa.
ok, so i’m drawing a character in pixia and there’s this part where i need t color in the shades with red but i want to see the eyes as well. is there a way to make the brush less “opaque” so that i can color in the shades without making the eyes disappear? thanks.
Do they want a for profit discriminatory school system where wealth buys academic success?
Do they want a tiered system where a child gets the best education based on their parents wealth, and not the academic performance of the child?
Do they want a system where poor families cannot afford to give to give their kids an equal education?
I’m going to try to get a rebate, as I don’t use Windows, when I buy my new computer. You wouldn’t happen to know what the wholesale cost for the operating system is, would you? Thanks.
PS Any advice on getting the refund for the operating system?
The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.
John Maynard Keynes
The best way to destroy the capitalist system is to debauch the currency.
Vladimir Lenin
@ideogenetic- Yea I see that I didn’t know there was more to it. Damn Lenin was a better person than John Maynard Keynes. I believe in classical and Austrian economics but I admit that I am very ignorant when it comes to Communism.
I generally understand the role of The Monarchy. I understand Elizabeth is not so much a legislator, and that She represents all of Britain. I have a positive opinion of Royalty, because They seem to personify something uniquely British, and I love British crap. Especially English.
Over here, they have some A-list celebrity status, sharing tabloid cover space with Tom Cruise and Angelina Jolie. Every time they fart, we hear about it. Prince Harry seems like the ultimate awesome dude, especially as we follow his military service.
On the other hand, I hear criticism of them. I hear that they lavishly waste taxpayer dollars (which would not be, and has not been, if you’ll recall, tolerated by Americans).
At what point did their role change into how it is modernly perceived? I guess I could Google that, but isn’t human contact so much more fulfilling?
@Alex – DUHHHH HUH HUH HUH, UMURCUN BE DOOPID. DUUUU HYUCK HYUCK. MY TYPES 4 WORDS & GETS A LIKE. ME BE SURPERIOUR.
i want to do a system restore on my laptop, i already moved all improtant data to an external HDD, but i can’t find the restore disc. can i download a copy of the disc online and put it on a disc. or can i do it without one?
Three socioeconomic categories: owners/shareholders, business managers, and proletariat subordinates. Seems that owners hire managers to demand ultimate efficiency out of workers while exploiting their efforts to seize maximum profits. Don’t most business owners have enough money? Is it fair that 40% of the population receive (not necessarily earn) 78.68% of income / leaving 60% with 21% income?
I’ve just found out that if I start attending a WA state college as a non-resident, then there is a good chance my tuition will STAY non-residential, and looking at the way state/non-profit colleges struggling in this recession I don’t want to take any chances. Getting to the point, I am considering taking a non-credit Paralegal training course until Fall ’10 when I can start attending college. My thinking is that it will allow me to get a better job to pay for my college/other expenses, as opposed to working minimum wage like most do. BUT there is a section in the course description that says, “Although there are no requirements for paralegals (except in Cali) to have professional training/related college degree, MOST LAW FIRMS will want a candidate with previous law firm experience or a college degree.
He/She who has some law experience/knowledge please let me know your thoughts on this situation. Is it a waste of my time taking this course??
It goes on to recommend a legal internship or relevant law school training after taking the course.
It’d probably help me get an internship correct???
I am wondering if I will receive any money from a cal grant with a gps of 3.92 . My parent’s annual income is around $250,000. I was rejected by fafsa.
I generally understand the role of The Monarchy. I understand Elizabeth is not so much a legislator, and that She represents all of Britain. I have a positive opinion of Royalty, because They seem to personify something uniquely British, and I love British crap. Especially English.
Over here, they have some A-list celebrity status, sharing tabloid cover space with Tom Cruise and Angelina Jolie. Every time they fart, we hear about it. Prince Harry seems like the ultimate awesome dude, especially as we follow his military service.
On the other hand, I hear criticism of them. I hear that they lavishly waste taxpayer dollars (which would not be, and has not been, if you’ll recall, tolerated by Americans).
At what point did their role change into how it is modernly perceived? I guess I could Google that, but isn’t human contact so much more fulfilling?
@Alex – DUHHHH HUH HUH HUH, UMURCUN BE DOOPID. DUUUU HYUCK HYUCK. MY TYPES 4 WORDS & GETS A LIKE. ME BE SURPERIOUR.
We consume too much! We eat too much in the west! The rich get richer and the poor get poorer! Is our system floored?
I am wondering if I will receive any money from a cal grant with a gps of 3.92 . My parent’s annual income is around $250,000. I was rejected by fafsa.
I would like to convert my road bike from SPD pedals and MTB shoes to true road pedals and road shoes for 30-60 mile rides. I would like a system that is easy to get in and out of – that is my first priority since I sometimes ride on city streets. I have never ridden anything but SPD’s or platform pedals so I want to know the pros and cons of Look, Time, Speedplay, etc.
The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.
John Maynard Keynes
The best way to destroy the capitalist system is to debauch the currency.
Vladimir Lenin
@ideogenetic- Yea I see that I didn’t know there was more to it. Damn Lenin was a better person than John Maynard Keynes. I believe in classical and Austrian economics but I admit that I am very ignorant when it comes to Communism.
I am wondering if I will receive any money from a cal grant with a gps of 3.92 . My parent’s annual income is around $250,000. I was rejected by fafsa.
I’ve just found out that if I start attending a WA state college as a non-resident, then there is a good chance my tuition will STAY non-residential, and looking at the way state/non-profit colleges struggling in this recession I don’t want to take any chances. Getting to the point, I am considering taking a non-credit Paralegal training course until Fall ’10 when I can start attending college. My thinking is that it will allow me to get a better job to pay for my college/other expenses, as opposed to working minimum wage like most do. BUT there is a section in the course description that says, “Although there are no requirements for paralegals (except in Cali) to have professional training/related college degree, MOST LAW FIRMS will want a candidate with previous law firm experience or a college degree.
He/She who has some law experience/knowledge please let me know your thoughts on this situation. Is it a waste of my time taking this course??
It goes on to recommend a legal internship or relevant law school training after taking the course.
It’d probably help me get an internship correct???
I’m going to try to get a rebate, as I don’t use Windows, when I buy my new computer. You wouldn’t happen to know what the wholesale cost for the operating system is, would you? Thanks.
PS Any advice on getting the refund for the operating system?
The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.
John Maynard Keynes
The best way to destroy the capitalist system is to debauch the currency.
Vladimir Lenin
@ideogenetic- Yea I see that I didn’t know there was more to it. Damn Lenin was a better person than John Maynard Keynes. I believe in classical and Austrian economics but I admit that I am very ignorant when it comes to Communism.
The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.
John Maynard Keynes
The best way to destroy the capitalist system is to debauch the currency.
Vladimir Lenin
@ideogenetic- Yea I see that I didn’t know there was more to it. Damn Lenin was a better person than John Maynard Keynes. I believe in classical and Austrian economics but I admit that I am very ignorant when it comes to Communism.
and the expect labor to act otherwise? It seems to me that capitalism has been hoist with its own petard (here goggle petard), philosophically and practically.
Workman don’t care about the quality of their work. Laborers goof off from their jobs. All they care about is getting more for doing less. The ultimate survivability of the company doesn’t interest them.
These are all charges made by capital against labor, and they are in large part true. But why are they true? What has happened to the “old virtues” of reliability, loyalty, craftsmanship, scrupulosity?
What has happened is that the workmen have been thoroughly indoctrinated with the philosophy of profit about all, profit here and now, and damn the consequences. They are just practicing what has been preached to them from the other side of the hall.
Capitalism IS AN ECOMOMIC SYSTEM (caps on purpose here) that works well within carefully defined limits. It is not a social system. It is not a philosophy of life. It is not a gospel. It is simply an arrangement of working, owning and producing; and like any other human arrangement, it has its own built-in flaws that must continually be corrected and rectified.
But if you convince people that profit, that the desire to get more and have more, takes precedence over any other set of motivations-and if you elevate this to a principle of life, not just an economic doctrine- then it is hard to blame them for acting on that principle.
If getting the most you can is what counts, labor will try to get the most it can. If buying low and selling dear is the firs axiom of capital, then pulling down the highest wages for the smallest expenditure of effort becomes the first axiom of labor.
The so-called “credit crisis” is gaining momentum. Investors increasingly question the solidity of the banking system, as evidenced by banks’ tumbling stock prices and rising funding costs. With bank credit supply expected to tighten, the profit outlook for the corporate sector, which has benefited greatly from “easy credit” conditions, deteriorates, pushing firms’ market valuations lower. In fact, peoples’ optimism has given way to fears of job losses and recession on a global scale.
Free market advocates, however, should not get carried away by the price action in the market place. In a free market, there is nothing wrong with individuals reassessing hitherto held expectations, entailing changes in relative prices. A free market is a discovery process, based on trial and error. Usually the effects of errors made by some are compensated for by the gains of successful decisions taken by others, and the economy expands.
Sometimes, however, the effects of errors dominate, and the economy experiences what people call a crisis: income growth is (feared to be) lower than what people think it should, and could, be. In that sense a crisis is a correction of bad decisions. It is an indispensable part of the free market. It pushes those producers out of business who do not satisfy the needs of their clients, and it rewards those who serve their customers well.
A crisis must be feared, however, if it has been caused by government action, and if the obvious signs of the crisis provoke ever greater doses of government intervention. In this case, the market would be prevented from doing its job properly. Bad decisions would be perpetuated, and the ultimate crisis may become nasty.
Diagnosing the Causes of the Crisis
It is against this background that one may wish to review the US central bank’s series of rate cuts, the latest being a big 75-basis-points rate slash on January 22, 2008, which brought the official Fed Funds Target Rate to 3.5%.[1] While the Fed’s moves were mostly hailed in public as appropriate measures to help the economy avoid recession, Austrian economists hold a completely different view.
According to the Austrian Monetary Theory of the Trade Cycle it is the government-run money-supply monopoly that has not only caused the crisis; the theory also diagnoses that rate cuts will not solve the crisis, but will make it even worse.
Central banks, the government agents holding the power over the printing press, pursue a monetary policy of “interest rate steering” or, in other words, pushing the interest rate down as much as possible by relentlessly increasing credit and money supply. It is this inflationary monetary policy that causes trouble.
Ludwig von Mises pointed out that
today credit expansion is exclusively a government practice. As far as private banks and bankers are instrumental in issuing fiduciary media, their role is merely ancillary and concerns only technicalities. The governments alone direct the course of affairs. They have attained full supremacy in all matters concerning the size of circulation credit. While the size of the credit expansion that private banks and bankers are able to engineer on an unhampered market is strictly limited, the governments aim at the greatest possible amount of credit expansion.[2]
Initially, the artificial lowering of the interest rate creates an illusion of richness and affluence. The increase in the money stock via bank credit expansion erroneously suggests that the supply of savings increases. Investment picks up, and the economy expands. The illusion of plentiful resources leads to malinvestment, and sooner or later the boom turns into a bust. While the money-fueled expansion is a manifestation of the crisis, it is actually the slump — the correction of malinvestment — that people complain about.
The alleged fight against the crisis
Once a crisis unfolds, central banks are called upon to lower interest rates — in ignorance of the fact that a monetary policy of pushing down the interest rate has caused the misery in the first place. Cheaper borrowing costs, it is believed, would revive the economy by stimulating investment and consumption, thereby adding to output and employment. Lower interest rates would raise the prices of stocks, bonds, and housing, translating into “wealth effects” which in turn strengthen demand.
The obsession with a policy of lowering the interest rate is rooted in a deep-seated ideological aversion against the interest rate. It is a destructive ideology, in particular if the government is in charge of the money supply. Because then the government central bank will lower the interest rate to whatever is deemed appropriate from the viewpoint of the government, pressure groups, and vested interest.
However, the interest rate is a reflection of peoples’ “time preference”: because of scarcity, people value goods and services available today (“present goods”) more highly than goods and services available at a later point in time (“future goods”).[3] This is why present goods trade at a premium over future goods. That premium is the interest rate, or the “time preference rate.” The interest rate is a free-market phenomenon.
A policy of suppressing the market interest rate through a government-sponsored credit expansion, Mises noted, is a policy against the free market:
Credit expansion is the governments’ foremost tool in their struggle against the market economy. In their hands it is the magic wand designed to conjure away the scarcity of capital goods, to lower the rate of interest or to abolish it altogether, to finance lavish government spending, to expropriate the capitalists, to contrive everlasting booms, and to make everybody prosperous.[4]
Causing Inflation
A monetary policy of lowering the interest rate via expanding credit and money corresponds to the widely held view that “some inflation” is a requisite for economic expansion. In fact, the “inflation bias” has become so widespread that nowadays inflation (the rise in the money supply) is much less feared than deflation (the decline in the money supply).
Mises was aware of what happens once the inevitable crisis caused by a manipulation of the interest rate unfolds: “In the opinion of the public, more inflation and more credit expansion are the only remedy against the evils inflation and credit expansion have brought about.”[5]
The current credit crisis is a sad case in point: with monetary policy having caused inflation and malinvestment, it is now called upon to pursue a policy that leads to even more inflation and malinvestment.
Could monetary policy become “ineffective,” that is, could it fail to create inflation? For instance, the Bank of Japan’s rate cuts around the beginning of the 1990s — as a reaction to falling asset prices and a growing volume of bad loans in banks’ portfolio — did not succeed in bringing credit and money growth rates back to precrisis levels. Even with official rates at virtually zero, the economy remained in stagnation and the Japanese stock market continued to decline.
Against the backdrop of the Japanese experience it should be noted that there is no limit to central-bank money printing. Central banks can, at any one time, buy any assets from banks and nonbanks such as bonds, real estate, foreign currencies, etc. If a central bank buys, say, debt from the corporate sector, it increases the money stock in the hands of nonbanks directly; the commercial banking sector is not needed for increasing the money supply.
Central banks’ unlimited power over the money supply has been made pretty clear by the chairman of the US Federal Reserve, Ben S. Bernanke, in November 2002:
[T]he U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.[6]
So if the government is determined to create inflation, there should be hardly any doubt that there will be inflation. The Fed’s series of rate cuts suggests that the bank tries to create additional credit and money via lowering the interest rate on base money. But if such action fails to yield inflation, it does not take much to expect that the central bank may take recourse to less “regular” operations, if and when such an inflation policy is deemed necessary to solve the credit crisis.
So far, at least, US bank credit and money supply growth has remained at a very high level. In December 2007, banks’ commercial and industrial loans grew at 10.9% y/y, and total bank loans and leases were up 10.8% y/y. Real estate loans — most likely as a consequence of the defaults in the subprime markets — slowed down somewhat, but were still running at 6.3% y/y. Against this background the Fed rate cuts should actually accelerate the erosion of the exchange value of money further.
Threatening Freedom
Inflation is a societal evil. It redistributes real wealth from creditors to debtors. It impairs the role of money as a means of exchange. The efficiency of the market’s price mechanism is greatly reduced, encouraging bad decisions, which in turn harm peoples’ economic well-being. At the end of the day, inflation is a serious threat to freedom. The majority of the people, suffering badly from inflation, would most likely blame the free market for their plight, rather than blame the central bank for the debasing of the currency.
Print $17
Audio $25
Mises noted:
Nothing harmed the cause of liberalism more than the almost regular return of feverish booms and of the dramatic breakdown of bull markets followed by lingering slumps. Public opinion has become convinced that such happenings are inevitable in the unhampered market economy. People did not conceive that what they lamented was the necessary outcome of policies directed toward a lowering of the rate of interest by means of credit expansion. They stubbornly kept to these policies and tried in vain to fight their undesired consequences by more and more government interference.[7]
From the Austrian viewpoint, the current credit crisis appears to be a precursor of great inflation. If a deliberate policy of great inflation is chosen in the United States, a monetary policy of debasing the currency would most likely also take hold in other currency areas of the world. The credit crisis has become a threat to the free societal order: as people become dispirited with the free market order, the door would be pushed open for anti–free market policies.
————————————–…
Thorsten Polleit is Honorary Professor at the Frankfurt School of Finance & Management. Send him mail. See his archive. Comment on the blog.
Notes
[1] The FOMC rate cut was made “in view of a weakening of the economic outlook and increasing downside risks to growth. While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households.” US Federal Reserve, Press Release, 22 January 2008.
[2] Mises, L. v. (1996), Human Action, p. 794.
[3] For the explanation of the Austrian theory of the interest rate, see Rothbard, M.N. (1993), Man, Economy, and State: A Treatise on Economic Principles, pp. 31
1 day ago – 2 days left to answer.
As the rich and dominant mode of media the corporate right-wing interests are able to assemble CNN/Fox/ABC/NBC etc to lie to us and get us into fake wars and policies that work against America’s interest. How do we reverse the trend?
I’ve just found out that if I start attending a WA state college as a non-resident, then there is a good chance my tuition will STAY non-residential, and looking at the way state/non-profit colleges struggling in this recession I don’t want to take any chances. Getting to the point, I am considering taking a non-credit Paralegal training course until Fall ’10 when I can start attending college. My thinking is that it will allow me to get a better job to pay for my college/other expenses, as opposed to working minimum wage like most do. BUT there is a section in the course description that says, “Although there are no requirements for paralegals (except in Cali) to have professional training/related college degree, MOST LAW FIRMS will want a candidate with previous law firm experience or a college degree.
He/She who has some law experience/knowledge please let me know your thoughts on this situation. Is it a waste of my time taking this course??
It goes on to recommend a legal internship or relevant law school training after taking the course.
It’d probably help me get an internship correct???
I’m going to try to get a rebate, as I don’t use Windows, when I buy my new computer. You wouldn’t happen to know what the wholesale cost for the operating system is, would you? Thanks.
PS Any advice on getting the refund for the operating system?
I’ve just found out that if I start attending a WA state college as a non-resident, then there is a good chance my tuition will STAY non-residential, and looking at the way state/non-profit colleges struggling in this recession I don’t want to take any chances. Getting to the point, I am considering taking a non-credit Paralegal training course until Fall ’10 when I can start attending college. My thinking is that it will allow me to get a better job to pay for my college/other expenses, as opposed to working minimum wage like most do. BUT there is a section in the course description that says, “Although there are no requirements for paralegals (except in Cali) to have professional training/related college degree, MOST LAW FIRMS will want a candidate with previous law firm experience or a college degree.
He/She who has some law experience/knowledge please let me know your thoughts on this situation. Is it a waste of my time taking this course??
It goes on to recommend a legal internship or relevant law school training after taking the course.
It’d probably help me get an internship correct???
I’m going to try to get a rebate, as I don’t use Windows, when I buy my new computer. You wouldn’t happen to know what the wholesale cost for the operating system is, would you? Thanks.
PS Any advice on getting the refund for the operating system?
I’ve just found out that if I start attending a WA state college as a non-resident, then there is a good chance my tuition will STAY non-residential, and looking at the way state/non-profit colleges struggling in this recession I don’t want to take any chances. Getting to the point, I am considering taking a non-credit Paralegal training course until Fall ’10 when I can start attending college. My thinking is that it will allow me to get a better job to pay for my college/other expenses, as opposed to working minimum wage like most do. BUT there is a section in the course description that says, “Although there are no requirements for paralegals (except in Cali) to have professional training/related college degree, MOST LAW FIRMS will want a candidate with previous law firm experience or a college degree.
He/She who has some law experience/knowledge please let me know your thoughts on this situation. Is it a waste of my time taking this course??
It goes on to recommend a legal internship or relevant law school training after taking the course.
It’d probably help me get an internship correct???
I am wondering if I will receive any money from a cal grant with a gps of 3.92 . My parent’s annual income is around $250,000. I was rejected by fafsa.
I’m going to try to get a rebate, as I don’t use Windows, when I buy my new computer. You wouldn’t happen to know what the wholesale cost for the operating system is, would you? Thanks.
PS Any advice on getting the refund for the operating system?
I’ve just found out that if I start attending a WA state college as a non-resident, then there is a good chance my tuition will STAY non-residential, and looking at the way state/non-profit colleges struggling in this recession I don’t want to take any chances. Getting to the point, I am considering taking a non-credit Paralegal training course until Fall ’10 when I can start attending college. My thinking is that it will allow me to get a better job to pay for my college/other expenses, as opposed to working minimum wage like most do. BUT there is a section in the course description that says, “Although there are no requirements for paralegals (except in Cali) to have professional training/related college degree, MOST LAW FIRMS will want a candidate with previous law firm experience or a college degree.
He/She who has some law experience/knowledge please let me know your thoughts on this situation. Is it a waste of my time taking this course??
It goes on to recommend a legal internship or relevant law school training after taking the course.
It’d probably help me get an internship correct???
I WANT TO make a video where i have another video in it, it’s not a copyrighted video, it’s not a music video or anything it’s just a prank some guy done i want to use it in my video i gain no profit and put a link of the video in the description and incase it might help i also liked and favourites the video but i didn’t message the owner is this legal PS : how does RayWJ do his videos anyway ?
I’ve just found out that if I start attending a WA state college as a non-resident, then there is a good chance my tuition will STAY non-residential, and looking at the way state/non-profit colleges struggling in this recession I don’t want to take any chances. Getting to the point, I am considering taking a non-credit Paralegal training course until Fall ’10 when I can start attending college. My thinking is that it will allow me to get a better job to pay for my college/other expenses, as opposed to working minimum wage like most do. BUT there is a section in the course description that says, “Although there are no requirements for paralegals (except in Cali) to have professional training/related college degree, MOST LAW FIRMS will want a candidate with previous law firm experience or a college degree.
He/She who has some law experience/knowledge please let me know your thoughts on this situation. Is it a waste of my time taking this course??
It goes on to recommend a legal internship or relevant law school training after taking the course.
It’d probably help me get an internship correct???
As the rich and dominant mode of media the corporate right-wing interests are able to assemble CNN/Fox/ABC/NBC etc to lie to us and get us into fake wars and policies that work against America’s interest. How do we reverse the trend?
I am wondering if I will receive any money from a cal grant with a gps of 3.92 . My parent’s annual income is around $250,000. I was rejected by fafsa.
I would like to convert my road bike from SPD pedals and MTB shoes to true road pedals and road shoes for 30-60 mile rides. I would like a system that is easy to get in and out of – that is my first priority since I sometimes ride on city streets. I have never ridden anything but SPD’s or platform pedals so I want to know the pros and cons of Look, Time, Speedplay, etc.
The so-called “credit crisis” is gaining momentum. Investors increasingly question the solidity of the banking system, as evidenced by banks’ tumbling stock prices and rising funding costs. With bank credit supply expected to tighten, the profit outlook for the corporate sector, which has benefited greatly from “easy credit” conditions, deteriorates, pushing firms’ market valuations lower. In fact, peoples’ optimism has given way to fears of job losses and recession on a global scale.
Free market advocates, however, should not get carried away by the price action in the market place. In a free market, there is nothing wrong with individuals reassessing hitherto held expectations, entailing changes in relative prices. A free market is a discovery process, based on trial and error. Usually the effects of errors made by some are compensated for by the gains of successful decisions taken by others, and the economy expands.
Sometimes, however, the effects of errors dominate, and the economy experiences what people call a crisis: income growth is (feared to be) lower than what people think it should, and could, be. In that sense a crisis is a correction of bad decisions. It is an indispensable part of the free market. It pushes those producers out of business who do not satisfy the needs of their clients, and it rewards those who serve their customers well.
A crisis must be feared, however, if it has been caused by government action, and if the obvious signs of the crisis provoke ever greater doses of government intervention. In this case, the market would be prevented from doing its job properly. Bad decisions would be perpetuated, and the ultimate crisis may become nasty.
Diagnosing the Causes of the Crisis
It is against this background that one may wish to review the US central bank’s series of rate cuts, the latest being a big 75-basis-points rate slash on January 22, 2008, which brought the official Fed Funds Target Rate to 3.5%.[1] While the Fed’s moves were mostly hailed in public as appropriate measures to help the economy avoid recession, Austrian economists hold a completely different view.
According to the Austrian Monetary Theory of the Trade Cycle it is the government-run money-supply monopoly that has not only caused the crisis; the theory also diagnoses that rate cuts will not solve the crisis, but will make it even worse.
Central banks, the government agents holding the power over the printing press, pursue a monetary policy of “interest rate steering” or, in other words, pushing the interest rate down as much as possible by relentlessly increasing credit and money supply. It is this inflationary monetary policy that causes trouble.
Ludwig von Mises pointed out that
today credit expansion is exclusively a government practice. As far as private banks and bankers are instrumental in issuing fiduciary media, their role is merely ancillary and concerns only technicalities. The governments alone direct the course of affairs. They have attained full supremacy in all matters concerning the size of circulation credit. While the size of the credit expansion that private banks and bankers are able to engineer on an unhampered market is strictly limited, the governments aim at the greatest possible amount of credit expansion.[2]
Initially, the artificial lowering of the interest rate creates an illusion of richness and affluence. The increase in the money stock via bank credit expansion erroneously suggests that the supply of savings increases. Investment picks up, and the economy expands. The illusion of plentiful resources leads to malinvestment, and sooner or later the boom turns into a bust. While the money-fueled expansion is a manifestation of the crisis, it is actually the slump — the correction of malinvestment — that people complain about.
The alleged fight against the crisis
Once a crisis unfolds, central banks are called upon to lower interest rates — in ignorance of the fact that a monetary policy of pushing down the interest rate has caused the misery in the first place. Cheaper borrowing costs, it is believed, would revive the economy by stimulating investment and consumption, thereby adding to output and employment. Lower interest rates would raise the prices of stocks, bonds, and housing, translating into “wealth effects” which in turn strengthen demand.
The obsession with a policy of lowering the interest rate is rooted in a deep-seated ideological aversion against the interest rate. It is a destructive ideology, in particular if the government is in charge of the money supply. Because then the government central bank will lower the interest rate to whatever is deemed appropriate from the viewpoint of the government, pressure groups, and vested interest.
However, the interest rate is a reflection of peoples’ “time preference”: because of scarcity, people value goods and services available today (“present goods”) more highly than goods and services available at a later point in time (“future goods”).[3] This is why present goods trade at a premium over future goods. That premium is the interest rate, or the “time preference rate.” The interest rate is a free-market phenomenon.
A policy of suppressing the market interest rate through a government-sponsored credit expansion, Mises noted, is a policy against the free market:
Credit expansion is the governments’ foremost tool in their struggle against the market economy. In their hands it is the magic wand designed to conjure away the scarcity of capital goods, to lower the rate of interest or to abolish it altogether, to finance lavish government spending, to expropriate the capitalists, to contrive everlasting booms, and to make everybody prosperous.[4]
Causing Inflation
A monetary policy of lowering the interest rate via expanding credit and money corresponds to the widely held view that “some inflation” is a requisite for economic expansion. In fact, the “inflation bias” has become so widespread that nowadays inflation (the rise in the money supply) is much less feared than deflation (the decline in the money supply).
Mises was aware of what happens once the inevitable crisis caused by a manipulation of the interest rate unfolds: “In the opinion of the public, more inflation and more credit expansion are the only remedy against the evils inflation and credit expansion have brought about.”[5]
The current credit crisis is a sad case in point: with monetary policy having caused inflation and malinvestment, it is now called upon to pursue a policy that leads to even more inflation and malinvestment.
Could monetary policy become “ineffective,” that is, could it fail to create inflation? For instance, the Bank of Japan’s rate cuts around the beginning of the 1990s — as a reaction to falling asset prices and a growing volume of bad loans in banks’ portfolio — did not succeed in bringing credit and money growth rates back to precrisis levels. Even with official rates at virtually zero, the economy remained in stagnation and the Japanese stock market continued to decline.
Against the backdrop of the Japanese experience it should be noted that there is no limit to central-bank money printing. Central banks can, at any one time, buy any assets from banks and nonbanks such as bonds, real estate, foreign currencies, etc. If a central bank buys, say, debt from the corporate sector, it increases the money stock in the hands of nonbanks directly; the commercial banking sector is not needed for increasing the money supply.
Central banks’ unlimited power over the money supply has been made pretty clear by the chairman of the US Federal Reserve, Ben S. Bernanke, in November 2002:
[T]he U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.[6]
So if the government is determined to create inflation, there should be hardly any doubt that there will be inflation. The Fed’s series of rate cuts suggests that the bank tries to create additional credit and money via lowering the interest rate on base money. But if such action fails to yield inflation, it does not take much to expect that the central bank may take recourse to less “regular” operations, if and when such an inflation policy is deemed necessary to solve the credit crisis.
So far, at least, US bank credit and money supply growth has remained at a very high level. In December 2007, banks’ commercial and industrial loans grew at 10.9% y/y, and total bank loans and leases were up 10.8% y/y. Real estate loans — most likely as a consequence of the defaults in the subprime markets — slowed down somewhat, but were still running at 6.3% y/y. Against this background the Fed rate cuts should actually accelerate the erosion of the exchange value of money further.
Threatening Freedom
Inflation is a societal evil. It redistributes real wealth from creditors to debtors. It impairs the role of money as a means of exchange. The efficiency of the market’s price mechanism is greatly reduced, encouraging bad decisions, which in turn harm peoples’ economic well-being. At the end of the day, inflation is a serious threat to freedom. The majority of the people, suffering badly from inflation, would most likely blame the free market for their plight, rather than blame the central bank for the debasing of the currency.
Print $17
Audio $25
Mises noted:
Nothing harmed the cause of liberalism more than the almost regular return of feverish booms and of the dramatic breakdown of bull markets followed by lingering slumps. Public opinion has become convinced that such happenings are inevitable in the unhampered market economy. People did not conceive that what they lamented was the necessary outcome of policies directed toward a lowering of the rate of interest by means of credit expansion. They stubbornly kept to these policies and tried in vain to fight their undesired consequences by more and more government interference.[7]
From the Austrian viewpoint, the current credit crisis appears to be a precursor of great inflation. If a deliberate policy of great inflation is chosen in the United States, a monetary policy of debasing the currency would most likely also take hold in other currency areas of the world. The credit crisis has become a threat to the free societal order: as people become dispirited with the free market order, the door would be pushed open for anti–free market policies.
————————————–…
Thorsten Polleit is Honorary Professor at the Frankfurt School of Finance & Management. Send him mail. See his archive. Comment on the blog.
Notes
[1] The FOMC rate cut was made “in view of a weakening of the economic outlook and increasing downside risks to growth. While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households.” US Federal Reserve, Press Release, 22 January 2008.
[2] Mises, L. v. (1996), Human Action, p. 794.
[3] For the explanation of the Austrian theory of the interest rate, see Rothbard, M.N. (1993), Man, Economy, and State: A Treatise on Economic Principles, pp. 31
1 day ago – 2 days left to answer.
The so-called “credit crisis” is gaining momentum. Investors increasingly question the solidity of the banking system, as evidenced by banks’ tumbling stock prices and rising funding costs. With bank credit supply expected to tighten, the profit outlook for the corporate sector, which has benefited greatly from “easy credit” conditions, deteriorates, pushing firms’ market valuations lower. In fact, peoples’ optimism has given way to fears of job losses and recession on a global scale.
Free market advocates, however, should not get carried away by the price action in the market place. In a free market, there is nothing wrong with individuals reassessing hitherto held expectations, entailing changes in relative prices. A free market is a discovery process, based on trial and error. Usually the effects of errors made by some are compensated for by the gains of successful decisions taken by others, and the economy expands.
Sometimes, however, the effects of errors dominate, and the economy experiences what people call a crisis: income growth is (feared to be) lower than what people think it should, and could, be. In that sense a crisis is a correction of bad decisions. It is an indispensable part of the free market. It pushes those producers out of business who do not satisfy the needs of their clients, and it rewards those who serve their customers well.
A crisis must be feared, however, if it has been caused by government action, and if the obvious signs of the crisis provoke ever greater doses of government intervention. In this case, the market would be prevented from doing its job properly. Bad decisions would be perpetuated, and the ultimate crisis may become nasty.
Diagnosing the Causes of the Crisis
It is against this background that one may wish to review the US central bank’s series of rate cuts, the latest being a big 75-basis-points rate slash on January 22, 2008, which brought the official Fed Funds Target Rate to 3.5%.[1] While the Fed’s moves were mostly hailed in public as appropriate measures to help the economy avoid recession, Austrian economists hold a completely different view.
According to the Austrian Monetary Theory of the Trade Cycle it is the government-run money-supply monopoly that has not only caused the crisis; the theory also diagnoses that rate cuts will not solve the crisis, but will make it even worse.
Central banks, the government agents holding the power over the printing press, pursue a monetary policy of “interest rate steering” or, in other words, pushing the interest rate down as much as possible by relentlessly increasing credit and money supply. It is this inflationary monetary policy that causes trouble.
Ludwig von Mises pointed out that
today credit expansion is exclusively a government practice. As far as private banks and bankers are instrumental in issuing fiduciary media, their role is merely ancillary and concerns only technicalities. The governments alone direct the course of affairs. They have attained full supremacy in all matters concerning the size of circulation credit. While the size of the credit expansion that private banks and bankers are able to engineer on an unhampered market is strictly limited, the governments aim at the greatest possible amount of credit expansion.[2]
Initially, the artificial lowering of the interest rate creates an illusion of richness and affluence. The increase in the money stock via bank credit expansion erroneously suggests that the supply of savings increases. Investment picks up, and the economy expands. The illusion of plentiful resources leads to malinvestment, and sooner or later the boom turns into a bust. While the money-fueled expansion is a manifestation of the crisis, it is actually the slump — the correction of malinvestment — that people complain about.
The alleged fight against the crisis
Once a crisis unfolds, central banks are called upon to lower interest rates — in ignorance of the fact that a monetary policy of pushing down the interest rate has caused the misery in the first place. Cheaper borrowing costs, it is believed, would revive the economy by stimulating investment and consumption, thereby adding to output and employment. Lower interest rates would raise the prices of stocks, bonds, and housing, translating into “wealth effects” which in turn strengthen demand.
The obsession with a policy of lowering the interest rate is rooted in a deep-seated ideological aversion against the interest rate. It is a destructive ideology, in particular if the government is in charge of the money supply. Because then the government central bank will lower the interest rate to whatever is deemed appropriate from the viewpoint of the government, pressure groups, and vested interest.
However, the interest rate is a reflection of peoples’ “time preference”: because of scarcity, people value goods and services available today (“present goods”) more highly than goods and services available at a later point in time (“future goods”).[3] This is why present goods trade at a premium over future goods. That premium is the interest rate, or the “time preference rate.” The interest rate is a free-market phenomenon.
A policy of suppressing the market interest rate through a government-sponsored credit expansion, Mises noted, is a policy against the free market:
Credit expansion is the governments’ foremost tool in their struggle against the market economy. In their hands it is the magic wand designed to conjure away the scarcity of capital goods, to lower the rate of interest or to abolish it altogether, to finance lavish government spending, to expropriate the capitalists, to contrive everlasting booms, and to make everybody prosperous.[4]
Causing Inflation
A monetary policy of lowering the interest rate via expanding credit and money corresponds to the widely held view that “some inflation” is a requisite for economic expansion. In fact, the “inflation bias” has become so widespread that nowadays inflation (the rise in the money supply) is much less feared than deflation (the decline in the money supply).
Mises was aware of what happens once the inevitable crisis caused by a manipulation of the interest rate unfolds: “In the opinion of the public, more inflation and more credit expansion are the only remedy against the evils inflation and credit expansion have brought about.”[5]
The current credit crisis is a sad case in point: with monetary policy having caused inflation and malinvestment, it is now called upon to pursue a policy that leads to even more inflation and malinvestment.
Could monetary policy become “ineffective,” that is, could it fail to create inflation? For instance, the Bank of Japan’s rate cuts around the beginning of the 1990s — as a reaction to falling asset prices and a growing volume of bad loans in banks’ portfolio — did not succeed in bringing credit and money growth rates back to precrisis levels. Even with official rates at virtually zero, the economy remained in stagnation and the Japanese stock market continued to decline.
Against the backdrop of the Japanese experience it should be noted that there is no limit to central-bank money printing. Central banks can, at any one time, buy any assets from banks and nonbanks such as bonds, real estate, foreign currencies, etc. If a central bank buys, say, debt from the corporate sector, it increases the money stock in the hands of nonbanks directly; the commercial banking sector is not needed for increasing the money supply.
Central banks’ unlimited power over the money supply has been made pretty clear by the chairman of the US Federal Reserve, Ben S. Bernanke, in November 2002:
[T]he U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.[6]
So if the government is determined to create inflation, there should be hardly any doubt that there will be inflation. The Fed’s series of rate cuts suggests that the bank tries to create additional credit and money via lowering the interest rate on base money. But if such action fails to yield inflation, it does not take much to expect that the central bank may take recourse to less “regular” operations, if and when such an inflation policy is deemed necessary to solve the credit crisis.
So far, at least, US bank credit and money supply growth has remained at a very high level. In December 2007, banks’ commercial and industrial loans grew at 10.9% y/y, and total bank loans and leases were up 10.8% y/y. Real estate loans — most likely as a consequence of the defaults in the subprime markets — slowed down somewhat, but were still running at 6.3% y/y. Against this background the Fed rate cuts should actually accelerate the erosion of the exchange value of money further.
Threatening Freedom
Inflation is a societal evil. It redistributes real wealth from creditors to debtors. It impairs the role of money as a means of exchange. The efficiency of the market’s price mechanism is greatly reduced, encouraging bad decisions, which in turn harm peoples’ economic well-being. At the end of the day, inflation is a serious threat to freedom. The majority of the people, suffering badly from inflation, would most likely blame the free market for their plight, rather than blame the central bank for the debasing of the currency.
Print $17
Audio $25
Mises noted:
Nothing harmed the cause of liberalism more than the almost regular return of feverish booms and of the dramatic breakdown of bull markets followed by lingering slumps. Public opinion has become convinced that such happenings are inevitable in the unhampered market economy. People did not conceive that what they lamented was the necessary outcome of policies directed toward a lowering of the rate of interest by means of credit expansion. They stubbornly kept to these policies and tried in vain to fight their undesired consequences by more and more government interference.[7]
From the Austrian viewpoint, the current credit crisis appears to be a precursor of great inflation. If a deliberate policy of great inflation is chosen in the United States, a monetary policy of debasing the currency would most likely also take hold in other currency areas of the world. The credit crisis has become a threat to the free societal order: as people become dispirited with the free market order, the door would be pushed open for anti–free market policies.
————————————–…
Thorsten Polleit is Honorary Professor at the Frankfurt School of Finance & Management. Send him mail. See his archive. Comment on the blog.
Notes
[1] The FOMC rate cut was made “in view of a weakening of the economic outlook and increasing downside risks to growth. While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households.” US Federal Reserve, Press Release, 22 January 2008.
[2] Mises, L. v. (1996), Human Action, p. 794.
[3] For the explanation of the Austrian theory of the interest rate, see Rothbard, M.N. (1993), Man, Economy, and State: A Treatise on Economic Principles, pp. 31
1 day ago – 2 days left to answer.
The so-called “credit crisis” is gaining momentum. Investors increasingly question the solidity of the banking system, as evidenced by banks’ tumbling stock prices and rising funding costs. With bank credit supply expected to tighten, the profit outlook for the corporate sector, which has benefited greatly from “easy credit” conditions, deteriorates, pushing firms’ market valuations lower. In fact, peoples’ optimism has given way to fears of job losses and recession on a global scale.
Free market advocates, however, should not get carried away by the price action in the market place. In a free market, there is nothing wrong with individuals reassessing hitherto held expectations, entailing changes in relative prices. A free market is a discovery process, based on trial and error. Usually the effects of errors made by some are compensated for by the gains of successful decisions taken by others, and the economy expands.
Sometimes, however, the effects of errors dominate, and the economy experiences what people call a crisis: income growth is (feared to be) lower than what people think it should, and could, be. In that sense a crisis is a correction of bad decisions. It is an indispensable part of the free market. It pushes those producers out of business who do not satisfy the needs of their clients, and it rewards those who serve their customers well.
A crisis must be feared, however, if it has been caused by government action, and if the obvious signs of the crisis provoke ever greater doses of government intervention. In this case, the market would be prevented from doing its job properly. Bad decisions would be perpetuated, and the ultimate crisis may become nasty.
Diagnosing the Causes of the Crisis
It is against this background that one may wish to review the US central bank’s series of rate cuts, the latest being a big 75-basis-points rate slash on January 22, 2008, which brought the official Fed Funds Target Rate to 3.5%.[1] While the Fed’s moves were mostly hailed in public as appropriate measures to help the economy avoid recession, Austrian economists hold a completely different view.
According to the Austrian Monetary Theory of the Trade Cycle it is the government-run money-supply monopoly that has not only caused the crisis; the theory also diagnoses that rate cuts will not solve the crisis, but will make it even worse.
Central banks, the government agents holding the power over the printing press, pursue a monetary policy of “interest rate steering” or, in other words, pushing the interest rate down as much as possible by relentlessly increasing credit and money supply. It is this inflationary monetary policy that causes trouble.
Ludwig von Mises pointed out that
today credit expansion is exclusively a government practice. As far as private banks and bankers are instrumental in issuing fiduciary media, their role is merely ancillary and concerns only technicalities. The governments alone direct the course of affairs. They have attained full supremacy in all matters concerning the size of circulation credit. While the size of the credit expansion that private banks and bankers are able to engineer on an unhampered market is strictly limited, the governments aim at the greatest possible amount of credit expansion.[2]
Initially, the artificial lowering of the interest rate creates an illusion of richness and affluence. The increase in the money stock via bank credit expansion erroneously suggests that the supply of savings increases. Investment picks up, and the economy expands. The illusion of plentiful resources leads to malinvestment, and sooner or later the boom turns into a bust. While the money-fueled expansion is a manifestation of the crisis, it is actually the slump — the correction of malinvestment — that people complain about.
The alleged fight against the crisis
Once a crisis unfolds, central banks are called upon to lower interest rates — in ignorance of the fact that a monetary policy of pushing down the interest rate has caused the misery in the first place. Cheaper borrowing costs, it is believed, would revive the economy by stimulating investment and consumption, thereby adding to output and employment. Lower interest rates would raise the prices of stocks, bonds, and housing, translating into “wealth effects” which in turn strengthen demand.
The obsession with a policy of lowering the interest rate is rooted in a deep-seated ideological aversion against the interest rate. It is a destructive ideology, in particular if the government is in charge of the money supply. Because then the government central bank will lower the interest rate to whatever is deemed appropriate from the viewpoint of the government, pressure groups, and vested interest.
However, the interest rate is a reflection of peoples’ “time preference”: because of scarcity, people value goods and services available today (“present goods”) more highly than goods and services available at a later point in time (“future goods”).[3] This is why present goods trade at a premium over future goods. That premium is the interest rate, or the “time preference rate.” The interest rate is a free-market phenomenon.
A policy of suppressing the market interest rate through a government-sponsored credit expansion, Mises noted, is a policy against the free market:
Credit expansion is the governments’ foremost tool in their struggle against the market economy. In their hands it is the magic wand designed to conjure away the scarcity of capital goods, to lower the rate of interest or to abolish it altogether, to finance lavish government spending, to expropriate the capitalists, to contrive everlasting booms, and to make everybody prosperous.[4]
Causing Inflation
A monetary policy of lowering the interest rate via expanding credit and money corresponds to the widely held view that “some inflation” is a requisite for economic expansion. In fact, the “inflation bias” has become so widespread that nowadays inflation (the rise in the money supply) is much less feared than deflation (the decline in the money supply).
Mises was aware of what happens once the inevitable crisis caused by a manipulation of the interest rate unfolds: “In the opinion of the public, more inflation and more credit expansion are the only remedy against the evils inflation and credit expansion have brought about.”[5]
The current credit crisis is a sad case in point: with monetary policy having caused inflation and malinvestment, it is now called upon to pursue a policy that leads to even more inflation and malinvestment.
Could monetary policy become “ineffective,” that is, could it fail to create inflation? For instance, the Bank of Japan’s rate cuts around the beginning of the 1990s — as a reaction to falling asset prices and a growing volume of bad loans in banks’ portfolio — did not succeed in bringing credit and money growth rates back to precrisis levels. Even with official rates at virtually zero, the economy remained in stagnation and the Japanese stock market continued to decline.
Against the backdrop of the Japanese experience it should be noted that there is no limit to central-bank money printing. Central banks can, at any one time, buy any assets from banks and nonbanks such as bonds, real estate, foreign currencies, etc. If a central bank buys, say, debt from the corporate sector, it increases the money stock in the hands of nonbanks directly; the commercial banking sector is not needed for increasing the money supply.
Central banks’ unlimited power over the money supply has been made pretty clear by the chairman of the US Federal Reserve, Ben S. Bernanke, in November 2002:
[T]he U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.[6]
So if the government is determined to create inflation, there should be hardly any doubt that there will be inflation. The Fed’s series of rate cuts suggests that the bank tries to create additional credit and money via lowering the interest rate on base money. But if such action fails to yield inflation, it does not take much to expect that the central bank may take recourse to less “regular” operations, if and when such an inflation policy is deemed necessary to solve the credit crisis.
So far, at least, US bank credit and money supply growth has remained at a very high level. In December 2007, banks’ commercial and industrial loans grew at 10.9% y/y, and total bank loans and leases were up 10.8% y/y. Real estate loans — most likely as a consequence of the defaults in the subprime markets — slowed down somewhat, but were still running at 6.3% y/y. Against this background the Fed rate cuts should actually accelerate the erosion of the exchange value of money further.
Threatening Freedom
Inflation is a societal evil. It redistributes real wealth from creditors to debtors. It impairs the role of money as a means of exchange. The efficiency of the market’s price mechanism is greatly reduced, encouraging bad decisions, which in turn harm peoples’ economic well-being. At the end of the day, inflation is a serious threat to freedom. The majority of the people, suffering badly from inflation, would most likely blame the free market for their plight, rather than blame the central bank for the debasing of the currency.
Print $17
Audio $25
Mises noted:
Nothing harmed the cause of liberalism more than the almost regular return of feverish booms and of the dramatic breakdown of bull markets followed by lingering slumps. Public opinion has become convinced that such happenings are inevitable in the unhampered market economy. People did not conceive that what they lamented was the necessary outcome of policies directed toward a lowering of the rate of interest by means of credit expansion. They stubbornly kept to these policies and tried in vain to fight their undesired consequences by more and more government interference.[7]
From the Austrian viewpoint, the current credit crisis appears to be a precursor of great inflation. If a deliberate policy of great inflation is chosen in the United States, a monetary policy of debasing the currency would most likely also take hold in other currency areas of the world. The credit crisis has become a threat to the free societal order: as people become dispirited with the free market order, the door would be pushed open for anti–free market policies.
————————————–…
Thorsten Polleit is Honorary Professor at the Frankfurt School of Finance & Management. Send him mail. See his archive. Comment on the blog.
Notes
[1] The FOMC rate cut was made “in view of a weakening of the economic outlook and increasing downside risks to growth. While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households.” US Federal Reserve, Press Release, 22 January 2008.
[2] Mises, L. v. (1996), Human Action, p. 794.
[3] For the explanation of the Austrian theory of the interest rate, see Rothbard, M.N. (1993), Man, Economy, and State: A Treatise on Economic Principles, pp. 31
1 day ago – 2 days left to answer.
i want to do a system restore on my laptop, i already moved all improtant data to an external HDD, but i can’t find the restore disc. can i download a copy of the disc online and put it on a disc. or can i do it without one?
I would like to convert my road bike from SPD pedals and MTB shoes to true road pedals and road shoes for 30-60 mile rides. I would like a system that is easy to get in and out of – that is my first priority since I sometimes ride on city streets. I have never ridden anything but SPD’s or platform pedals so I want to know the pros and cons of Look, Time, Speedplay, etc.
ok, so i’m drawing a character in pixia and there’s this part where i need t color in the shades with red but i want to see the eyes as well. is there a way to make the brush less “opaque” so that i can color in the shades without making the eyes disappear? thanks.
Is single payer the ultimate goal??
KH, just because you claim you work in the field of health care doesn’t mean your point of view is any more valid than anyone else. Epidemiologists agree that at least 70-80% of our nation’s health care consumption comes from life style choices. If your disease is brought on to you from your lifestyle, why should others be forced to help you pay for it?
The CDC estimates 50% of Americans will be Type 2 diabetics by mid-century mostly from eating our Western Diet.
One of the biggest lies/pieces of propaganda used by the Super Rich and the media they own is to convince us that human beings are inherently selfish by nature, therefore it’s not possible for Socialism or Communism to ever work.IF we are inherently selfish then how come so many people are prepared to die to save others IE Firemen,Soldiers etc, surely that is the ultimate act of being unselfish and of having a social conscience IE caring for others (and before yourself too).So many people over time have been prepared to die for others it must prove that there is not an automatic selfish gene within the human race, in fact it shows that we are more likely to have a social conscience.The truth as I see it is that we are trained from a young age to be ultra competitive with each other, os we get the bigger house and car than our rivals.We all know however that humans need friends and they need relationships and that we all feel happier when we do things together and when we help each other out, yet we all feel it is unnatural to be so competitive and it stresses most of us out.We are all more relaxed when we aren’t so competitive and when we help each other and when we go out into or see nature.So it seems clear to me that human beings by nature are sociable beings with a need to work together and to help each other and that being selfish and competitive has been trained into us through the education system and the media which the Super Rich Capitalists control in order that we fit in with their system and don’t listen to any alternatives and find out the truth about them and don’t try to rock the boat.Other leis you have been told are that Communism exists.It doesn’t.The Super Rich have not allowed it and it hasn’t been tried in the correct way yet.Oh and the other big lie you are told to stop you talking to us and finding out the truth rather than their lies about their main opponent so of course they would always lie about it, is that everyone would be paid the same under Communism, therefore that puts you off cos you think that extra skill or extra arduous work would not be rewarded fairly.That’s a lie, yet another one to stop you finding out the truth about Communism.Of course we realise that you have to pay different wages depending on the level of skill or if a job is more arduous.Redistribution of wealth from the Super Rich and from the Tax Avoiders is not the same thing as having wages equal which we wouldn’t.
I am wondering if I will receive any money from a cal grant with a gps of 3.92 . My parent’s annual income is around $250,000. I was rejected by fafsa.
I am wondering if I will receive any money from a cal grant with a gps of 3.92 . My parent’s annual income is around $250,000. I was rejected by fafsa.
The so-called “credit crisis” is gaining momentum. Investors increasingly question the solidity of the banking system, as evidenced by banks’ tumbling stock prices and rising funding costs. With bank credit supply expected to tighten, the profit outlook for the corporate sector, which has benefited greatly from “easy credit” conditions, deteriorates, pushing firms’ market valuations lower. In fact, peoples’ optimism has given way to fears of job losses and recession on a global scale.
Free market advocates, however, should not get carried away by the price action in the market place. In a free market, there is nothing wrong with individuals reassessing hitherto held expectations, entailing changes in relative prices. A free market is a discovery process, based on trial and error. Usually the effects of errors made by some are compensated for by the gains of successful decisions taken by others, and the economy expands.
Sometimes, however, the effects of errors dominate, and the economy experiences what people call a crisis: income growth is (feared to be) lower than what people think it should, and could, be. In that sense a crisis is a correction of bad decisions. It is an indispensable part of the free market. It pushes those producers out of business who do not satisfy the needs of their clients, and it rewards those who serve their customers well.
A crisis must be feared, however, if it has been caused by government action, and if the obvious signs of the crisis provoke ever greater doses of government intervention. In this case, the market would be prevented from doing its job properly. Bad decisions would be perpetuated, and the ultimate crisis may become nasty.
Diagnosing the Causes of the Crisis
It is against this background that one may wish to review the US central bank’s series of rate cuts, the latest being a big 75-basis-points rate slash on January 22, 2008, which brought the official Fed Funds Target Rate to 3.5%.[1] While the Fed’s moves were mostly hailed in public as appropriate measures to help the economy avoid recession, Austrian economists hold a completely different view.
According to the Austrian Monetary Theory of the Trade Cycle it is the government-run money-supply monopoly that has not only caused the crisis; the theory also diagnoses that rate cuts will not solve the crisis, but will make it even worse.
Central banks, the government agents holding the power over the printing press, pursue a monetary policy of “interest rate steering” or, in other words, pushing the interest rate down as much as possible by relentlessly increasing credit and money supply. It is this inflationary monetary policy that causes trouble.
Ludwig von Mises pointed out that
today credit expansion is exclusively a government practice. As far as private banks and bankers are instrumental in issuing fiduciary media, their role is merely ancillary and concerns only technicalities. The governments alone direct the course of affairs. They have attained full supremacy in all matters concerning the size of circulation credit. While the size of the credit expansion that private banks and bankers are able to engineer on an unhampered market is strictly limited, the governments aim at the greatest possible amount of credit expansion.[2]
Initially, the artificial lowering of the interest rate creates an illusion of richness and affluence. The increase in the money stock via bank credit expansion erroneously suggests that the supply of savings increases. Investment picks up, and the economy expands. The illusion of plentiful resources leads to malinvestment, and sooner or later the boom turns into a bust. While the money-fueled expansion is a manifestation of the crisis, it is actually the slump — the correction of malinvestment — that people complain about.
The alleged fight against the crisis
Once a crisis unfolds, central banks are called upon to lower interest rates — in ignorance of the fact that a monetary policy of pushing down the interest rate has caused the misery in the first place. Cheaper borrowing costs, it is believed, would revive the economy by stimulating investment and consumption, thereby adding to output and employment. Lower interest rates would raise the prices of stocks, bonds, and housing, translating into “wealth effects” which in turn strengthen demand.
The obsession with a policy of lowering the interest rate is rooted in a deep-seated ideological aversion against the interest rate. It is a destructive ideology, in particular if the government is in charge of the money supply. Because then the government central bank will lower the interest rate to whatever is deemed appropriate from the viewpoint of the government, pressure groups, and vested interest.
However, the interest rate is a reflection of peoples’ “time preference”: because of scarcity, people value goods and services available today (“present goods”) more highly than goods and services available at a later point in time (“future goods”).[3] This is why present goods trade at a premium over future goods. That premium is the interest rate, or the “time preference rate.” The interest rate is a free-market phenomenon.
A policy of suppressing the market interest rate through a government-sponsored credit expansion, Mises noted, is a policy against the free market:
Credit expansion is the governments’ foremost tool in their struggle against the market economy. In their hands it is the magic wand designed to conjure away the scarcity of capital goods, to lower the rate of interest or to abolish it altogether, to finance lavish government spending, to expropriate the capitalists, to contrive everlasting booms, and to make everybody prosperous.[4]
Causing Inflation
A monetary policy of lowering the interest rate via expanding credit and money corresponds to the widely held view that “some inflation” is a requisite for economic expansion. In fact, the “inflation bias” has become so widespread that nowadays inflation (the rise in the money supply) is much less feared than deflation (the decline in the money supply).
Mises was aware of what happens once the inevitable crisis caused by a manipulation of the interest rate unfolds: “In the opinion of the public, more inflation and more credit expansion are the only remedy against the evils inflation and credit expansion have brought about.”[5]
The current credit crisis is a sad case in point: with monetary policy having caused inflation and malinvestment, it is now called upon to pursue a policy that leads to even more inflation and malinvestment.
Could monetary policy become “ineffective,” that is, could it fail to create inflation? For instance, the Bank of Japan’s rate cuts around the beginning of the 1990s — as a reaction to falling asset prices and a growing volume of bad loans in banks’ portfolio — did not succeed in bringing credit and money growth rates back to precrisis levels. Even with official rates at virtually zero, the economy remained in stagnation and the Japanese stock market continued to decline.
Against the backdrop of the Japanese experience it should be noted that there is no limit to central-bank money printing. Central banks can, at any one time, buy any assets from banks and nonbanks such as bonds, real estate, foreign currencies, etc. If a central bank buys, say, debt from the corporate sector, it increases the money stock in the hands of nonbanks directly; the commercial banking sector is not needed for increasing the money supply.
Central banks’ unlimited power over the money supply has been made pretty clear by the chairman of the US Federal Reserve, Ben S. Bernanke, in November 2002:
[T]he U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.[6]
So if the government is determined to create inflation, there should be hardly any doubt that there will be inflation. The Fed’s series of rate cuts suggests that the bank tries to create additional credit and money via lowering the interest rate on base money. But if such action fails to yield inflation, it does not take much to expect that the central bank may take recourse to less “regular” operations, if and when such an inflation policy is deemed necessary to solve the credit crisis.
So far, at least, US bank credit and money supply growth has remained at a very high level. In December 2007, banks’ commercial and industrial loans grew at 10.9% y/y, and total bank loans and leases were up 10.8% y/y. Real estate loans — most likely as a consequence of the defaults in the subprime markets — slowed down somewhat, but were still running at 6.3% y/y. Against this background the Fed rate cuts should actually accelerate the erosion of the exchange value of money further.
Threatening Freedom
Inflation is a societal evil. It redistributes real wealth from creditors to debtors. It impairs the role of money as a means of exchange. The efficiency of the market’s price mechanism is greatly reduced, encouraging bad decisions, which in turn harm peoples’ economic well-being. At the end of the day, inflation is a serious threat to freedom. The majority of the people, suffering badly from inflation, would most likely blame the free market for their plight, rather than blame the central bank for the debasing of the currency.
Print $17
Audio $25
Mises noted:
Nothing harmed the cause of liberalism more than the almost regular return of feverish booms and of the dramatic breakdown of bull markets followed by lingering slumps. Public opinion has become convinced that such happenings are inevitable in the unhampered market economy. People did not conceive that what they lamented was the necessary outcome of policies directed toward a lowering of the rate of interest by means of credit expansion. They stubbornly kept to these policies and tried in vain to fight their undesired consequences by more and more government interference.[7]
From the Austrian viewpoint, the current credit crisis appears to be a precursor of great inflation. If a deliberate policy of great inflation is chosen in the United States, a monetary policy of debasing the currency would most likely also take hold in other currency areas of the world. The credit crisis has become a threat to the free societal order: as people become dispirited with the free market order, the door would be pushed open for anti–free market policies.
————————————–…
Thorsten Polleit is Honorary Professor at the Frankfurt School of Finance & Management. Send him mail. See his archive. Comment on the blog.
Notes
[1] The FOMC rate cut was made “in view of a weakening of the economic outlook and increasing downside risks to growth. While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households.” US Federal Reserve, Press Release, 22 January 2008.
[2] Mises, L. v. (1996), Human Action, p. 794.
[3] For the explanation of the Austrian theory of the interest rate, see Rothbard, M.N. (1993), Man, Economy, and State: A Treatise on Economic Principles, pp. 31
1 day ago – 2 days left to answer.