In 1971, the dollar was officially relieved of its false promise of gold convertibility by creditors to the United States. In an attempt to spare the world’s economies from the effects of creative destruction, free markets and the invisible hand were traded in for centrally planned economies. Instead of market participants determining who succeeded and failed, that task increasingly became the domain of academicians, central bankers and politicians.
Notable mainstream economists and influential policy makers are calling for more quantitative easing, so many that QE3 is a given. Officially, it will be QE3, but in actuality it will be QE4 because “Operation Twist” is quantitative easing with another name. One important voice now calling for another round of QE is no less than
Paul Craig Roberts is the former Assistant Treasury Secretary under Reagan. He is also a man who is not very popular in Washington. The following interview is as good a reason as any why that is.
It’s almost cognitive dissonance the way the financial markets go about their business. Everyone knows that the United States is bankrupt. Everyone knows that US Treasuries are a bubble. Yet, it’s the first place everyone runs to when things start to get messy.