Tuesday, December 28, 2010

Tuesday round up.

On Bloomberg, supply-side guru Robert Mundell suggests the dollar soaring against the euro in 2009 and 2010 is responsible for the weak US economy, and predicts 2011 growth at two percent. He recommends a euro floor of $1.30. He also explains China’s interest rate hikes attract increased hot money flows but does nothing to raise its exchange rate value versus the dollar.

At Gold Seek Radio, Chris Waltzek interviews Steve Forbes on gold (play button towards the bottom).

On The Kudlow Report, Kellyanne Conway debates the President’s change of economic direction:





Pro-growth advocate and former-Godfather Pizza CEO Herman Cain is considering a run for President.

Rebelyid recounts the Mundellian policy mix, and the recent deviations from it.

On The Weekly Standard, Irwin Stelzer notes the rise of interest in sound money (hat tip: Ralph Benko):


All of which explains two important developments—the rise in the price of gold, and the sweeping gains by Republicans in the congressional elections. Gold opened the year at under $1,100 per ounce and is closing it at close to $1,400 per ounce. Despite substantial slack in production capacity, inflation expectations rose, and investors became worried about the long-term value of the dollar. Indeed, some economists are talking about the end of the era of fiat money and a return to the gold standard. The Federal Reserve Board is again printing money, and promises to print more if needed. With unemployment high, and the printing presses running at a rate that just might result in inflation down the road, talk of a return to the bad old days of Jimmy Carter and stagflation, or of a double dip recession, was heard in some boardrooms.

In The WSJ, Pete DuPont proposes spending cuts, reduced regulation, and improving Obamacare as Republican priorities.

From earlier this month, Cato’s Alan Reynolds notes the US is the world’s largest manufacturer.

On NRO, Heritage’s Michael G. Franc sees a loss of faith by entrepreneurs in the federal government.

From the archive, Milton Friedman analyzes the rise of capitalism in Dickensian England on NRO.

On C-SPAN, U.S. Rep. Ron Paul (TX) discusses his agenda, including Federal Reserve oversight.

At Forbes, Dean Zarras anticipates Paul’s tenure.

1 comment:

  1. Re: Rebelyid post-
    I think it is important to stress that the objective of monetary policy should be to stabilize the value of the dollar, not prices. As John Tamny recently reminded in his Forbes online column, in a market economy prices convey important signals to producers as to what consumers want/don't want. Fluctuating prices that reflect the supply and demand for goods and services are critical to the allocation of scare resources. This process is made even more efficient when the currency is stable in value (preferably relative to gold).

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