U.S. Economy

Hollywood can create stories from thin air, but when the film industry creates malinvestments, there is a bust in the future.

In the global Ponzi scheme, thin air and deceit substitute for sound money. As hedge-fund manager Mitch Feierstein wrote in Planet Ponzi, “You don’t solve a Ponzi scheme; you end it.”

In the wake of bad news on inflation, the Federal Reserve is pushing up interest rates. However, a Fed-induced higher rate is not the same as an interest rate decided by the market.

As the US economy sours, look for a wave of new bankruptcies. The Fed cannot pull any rabbits out of its monetary hat this time.

Mark looks at PPI.

Contrary to the government's line that "inflation hurts everyone," inflation really is a wealth transfer from those without political power to the politically connected.

Compared to how most other people in the world live, Americans have a high standard of living. And despite the talk about inequality, there is more economic and social mobility here than anyplace else.

As the economy slowly deteriorates, consumer debt rises. In the meantime, the Fed is pushing up interest rates to deal with the inflation it caused. This does not end well.

We should not just be concerned about problems in the American banking system, but also about the proliferation of Eurodollars.

While many economists claim that high overall debt levels can lead to economic recessions, irresponsible government spending and money expansion are the real culprits.