If bull markets die in euphoria, as Sir John Templeton once famously said, then the market may be approaching the sort of exuberance that might have put the British investor and fund manager on edge. At least, that’s judging by the recent coverage of the unrelenting stock-market climb into record territory, with few signs on Wall Street of the historical normal levels of fear or volatility as measured by the CBOE Volatility Index VIX, +3.21%.
Vladimir Putin is doing his part to keep the upswing in gold alive. Since the Russian president went on a geopolitical offensive in Ukraine in 2014, the haven asset had its first annual gain in four years in 2016 and is on track for another in 2017. Russia added another 500,000 ounces of gold to its reserves in August.
Donald Trump has thrown more than one curve ball since becoming President, but his looming choice to run the Federal Reserve Board could be his biggest bender to date. He may choose a Fed Chairman who represents the monetary policies that have favored the affluent and done little or nothing for the real economy.
The revelation that President Donald Trump met with former Federal Reserve governor Kevin Warsh has increased speculation that he could be tapped to replace Janet Yellen when her term as board chairwoman expires in February. Mr. Warsh, a former Morgan Stanley executive, served on the Fed board from 2006 to 2011. He also sat on a business council advising Mr. Trump before it disbanded in August. In essays and public remarks, Mr. Warsh has expressed views on monetary and economic policy that shed light on how he might run a central bank if asked to do so. Below is a sampling of his views.
Recently, Senator Bernie Sanders unveiled a single-payer healthcare plan called “Medicare for All.” Sanders titled his approach for nationalizing one-sixth of the American economy as “Medicare for All” in order to offer a template for his vision of the U.S. healthcare system. Unfortunately, using Medicare as the template for the nation’s healthcare system is a little like using the production model for the Lada, the “people’s car” of the former Soviet Union, as the blue-print for the U.S. auto industry.
America’s military involvement in the Middle East began in classic imperial fashion, according to military historian and retired Army colonel Andrew J. Bacevich. They had something we needed, and we made sure we had access to it. “Oil has always defined the raison d’être of the War for the Greater Middle East,” he writes in the first paragraph of his magisterial work, America’s War for the Greater Middle East. “Over time, other considerations intruded and complicated the war’s conduct, but oil as a prerequisite of freedom was from day one an abiding consideration.”
Donald Trump caused a stir this week by suggesting that Puerto Rico’s massive $73 billion public debt should be “wiped out.” Puerto Rico narrowly avoided default with an interest payment this summer but the debt is a huge long-term problem for the island. While the cost of this burden is plain, talk of default is considered beyond the pale. Indeed, the White House immediately “walked back” the President’s remark.
Over the last few weeks there have been a couple mornings where the Schuylkill Expressway was jammed and I had to take my alternative route through the 30 Blocks of Squalor. I hadn’t had this inspiring dystopian experience all summer. There is nothing like West Philly when the punks, punkettes, and future prison convicts finish a summer of not working, not reading, and not picking up the trash in their neighborhoods, go back to West Philly High and not learn again.
Marc Faber, popularly known as Dr. Doom has predicted that the US stock markets could correct by as much as 30-40%. In an interview to CNBC last week, Marc Faber said, “You don’t see it. I don’t see it and nobody sees it. That’s why people continue buying stocks. Yet something will happen one day.” Explaining what may cause the plummeting of stocks he said, “It may come from a credit event, or a disclosure of a major fraud, or it may come because interest rates start to go up, although central banks remain on the dovish side. There are many small events that can trigger the decline.”
Though people had the right to form a state, they did not have the right to prevent groups within their borders from seceding and forming their own state. Mises is scathing in his criticism of the Spanish liberal Salvador de Madariaga for his opposition to autonomy for Catalonia. Ideally, the right of secession should extend to individuals. As always, Mises’s attention centers on the social cooperation of free individuals. Those in search of greater detail on Mises’s view of nationalism should consult the brilliant and comprehensive essay by Joseph Salerno, “Mises on Nationalism, the Right of Self-Determination, and the Problem of Immigration."