austindefender

Criminal defense in Austin Texas.

Who Benefits From Propping Up Home Prices?

| February 19, 2009

“Does it benefit anyone to force another family into foreclosure, out of their house, put another home on a housing inventory that is overburdened with excess supply?” –Sheila Bair, FDIC Chair Yes.  It does. It benefits every single person who’s looking to buy a home. It may also benefit the folks who’re getting foreclosed. And […]

Banking for Dummies

| February 14, 2009

Banks are run according to the following simple equation: Assets (including reserves) = liabilities + equity. Assets are anything that has value.  In the case of banks, it’s mainly the money they’ve lent out, plus the interest they hope to collect on it.  It also includes reserves, the bit of cash they keep on hand […]

There is no safe store of value.

| February 8, 2009

Alan Greenspan (1966): In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value… The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of […]

What’s Happening Next?

| February 8, 2009

Bloggers and other pundits are pretty sure we’re about to experience crippling deflation, or hyper-inflation, but they’re not sure which. According to the Quantity Theory of Money, the actions of the Fed, and of the US Treasury, ought to create a huge amount of inflation. As a visual aid, this chart represents the total borrowing […]

Yuan vs. Dollar

| January 28, 2009

The other day Timothy Geithner, Obama’s new Treasury secretary, accused China of manipulating its currency, and caused a minor kerfuffle. Here’s the thing, though.  There’s no debate that China manipulates its currency.  Of course it does.  The question is whether it’s good or bad for us. China, like the US, has the ability to make […]

Masters of the Universe

| January 27, 2009

Maureen Dowd: In an interview with Maria Bartiromo on CNBC, Thain used the specious, contemptible reasoning that other executives use to rationalize why they’re keeping their bonuses as profits are plunging. “If you don’t pay your best people, you will destroy your franchise” and they’ll go elsewhere, he said. Hello? They destroyed the franchise. Let’s […]

What Are Savings?

| January 5, 2009

The people who keep track of such things (the BEA) have a specific definition in mind when they talk about saving.  It’s “personal disposable income minus personal consumption expenditure.”  Or, what people make, but don’t spend. Intuitively, it makes sense.  It’s problematic, though.  For one thing, some people object to the fact that capital gains […]

Nations Can’t Save

| January 5, 2009

Not long ago I read another one of those articles about how Americans don’t save enough. Which got me thinking about something I read a long time ago – that nations can’t save. Consider: Suppose there’s a country where everyone is the same age.  All their lives, the people work hard, and save.  They accumulate […]