Sunday, June 26, 2011

Sunday Night Special -
A future beyond traffic gridlock
Bill Ford is a car guy - his great-grandfather was Henry Ford. He grew up inside the Ford Motor Co. When he worries about cars' impact on the environment, and about our growing global gridlock problem, it's worth a listen. His vision for the future of mobility includes "smart roads," even smarter public transport and going green like never before .. 17 minutes
The Hindsight Fallacy
Slate article on the real reason it's so hard to predict bubbles .. although after the fact it seems obvious that prices were irrational and an unhappy end was inevitable, bubbles are neither obvious nor inevitable at the time .. relates the evolution of a bubble as: "Some asset class, often a product of new technology or financial innovation, becomes fashionable, and prices rise rapidly as demand outstrips supply. Excitement over early riches leads to speculation that the normal economic rules have changed, thereby justifying valuations that are based largely on assumptions about future profits. As prices balloon well beyond early investors' wildest dreams, disagreement over the correct measure of value increases. Then, finally, some adverse event that might normally have little impact triggers a downward spiral of selling, often accompanied by outright panic."
Click here to link to the article
The Great Corn Con
NY Times article looks at how Washington has managed to help drive up food prices, added billions to the deficit .. "Rather than ameliorate the problem, the government has exacerbated it, reducing food supply to a hungry world. Thanks to Washington, 4 of every 10 ears of corn grown in America — the source of 40 percent of the world’s production — are shunted into ethanol, a gasoline substitute that imperceptibly nicks our energy problem. Larded onto that are $11 billion a year of government subsidies to the corn complex."
Click here to link to the article
"The euro will not exist in a year. The whole thing was dysfunctional from the beginning."
- French Economist Charles Gave
The 'Father' of the Euro
Endorses a Gold Standard!
Recent article that appeared in Forbes details Robert Mundell's recent call for the Euro to become a 'gold backed currency', explains how a switch to such a system could benefit debt troubled economies in Europe such as Greece .. Mundell urges gold convertibility for the euro, the currency which he fathered, as well as for the dollar .. as Forbes’ own Steve Forbes advised the presidential candidates last week, the "debate should be focused on what the best gold system is, not on whether we need to go back on one." .. concludes: "The gold standard is the key to human flourishing. If we grasp the opportunity of gold convertibility this still-dawning millennium beckons with the possibility of becoming a new golden age."
Click here to link to the article
U.S. Government’s fiscal state worsens
Forbes article details how the fiscal crisis of the government is worsening .. already for the 12 months ending May 2011, the government's deficit is $1.3 Trillion, equating to 8.7% of nominal GDP .. relates the political fiddling in Washington over the government's finances .. "So far, we see all too much political posturing while the U.S. government’s fiscal house burns."
Click here to link to the article
Special Debate:
Government Spending Killing
the Economy or Saving It?
President of the Ayn Rand Institute Yaron Brook & Co-Founder of Demos David Callahan face off to discuss whether austerity or more spending is the best road to recovery .. Brook believes the government is killing the economy, should just stay out of economics altogether: "Jobs are created by private business and what you need is an environment in which private businesses can thrive, and to do that you need to stop taking their money and stop limiting the choices that they have." .. Callahan believes the opposite. "Most analysts suggest that if there hadn't been the stimulus we would have much higher unemployment than we now have .. We have to do another round of stimulus otherwise this 9.1% unemployment is going to go on and on and it's going to go on because companies are not hiring — they are not hiring because there is no consumer demand — there is not consumer demand because the middle class is tapped out. They don't have any money."
Courtesy of Steve Kelley
Global Monetary Tightening 
Taking Its Toll
Financial Sense article on how monetary easing has led to inflationary pressures, which central banks have responded to by tightening, which now appears to be slowing economic growth rates globally .. "Unless global economies begin to stabilize there is a real risk of yet another recession occurring on a global scale .. Periods after major financial bubbles are prone to weak recoveries and relapses into new recessions as the imbalances that led up to the bubble are worked through .. Without a stabilization in global equities and commodities, the markets would appear to be sending a recessionary warning that should be heeded, and capital preservation and risk management should take center stage for investors."
The Contagion Risks of Europe
John Mauldin (MAA) writes on the potential contagion risks from the European debt crisis .. considers the survival of the euro .. speculates if a Greek coup could be what causes Greece to leave the euro: ".. For Greece to leave the euro, the politicians would have to make a rather serious decision. That will not happen overnight. The minute there was any speculation or a “secret” meeting of Greek leaders to discuss leaving the euro, the run on the banks would be massive and fast. It would all come down quickly." .. Click "John Mauldin Weekly Letter 26 June" or hit "View Fullscreen" to enlarge viewing, or click "John Mauldin Weekly Letter 26 June" to download the letter (may have to enter your email address to download)
John Mauldin, Best-Selling author and recognized financial expert, is also editor of the free Thoughts From the Frontline that goes to over 1 million readers each week. For more information on John or his FREE weekly economic letter go to:
John Mauldin Weekly Letter 26 June
Have Some Geithner & Pizza
U.S. Treasury Secretary Tim Geithner about the economy & the potential to get a debt deal done, from a pizza shop in New Hampshire .. 7 minutes