Joseph Stiglitz, winner of the 2001 Nobel Prize Winner for Economics and author of Freefall sits down with Andrew Leonard, Senior Technology and Business Writer for Salon. Stiglitz argues that America exported bad economics, bad policies and bad behavior to the rest of the world. Stiglitz outlines a way forward building on ideas that he has championed his entire career: restoring the balance between markets and government; addressing the inequalities of the global financial system; and demanding more good ideas (and less ideology) from economists.

01. Introduction 03 min 21 sec

02. How Did We Get Here? 03 min 59 sec

03. Peeling Back the Onion: Why Didn't the Regulators Stop Them? 05 min 51 sec

04. Breaking the Crisis Cycle 06 min 31 sec

05. Optimism? 01 min 43 sec

06. Grading Obama 01 min 22 sec

07. I. On the Stimulus 03 min 55 sec

08. II. On Mortgage Crisis 01 min 40 sec

09. III. On Bank Restructuring 02 min 18 sec

10. IV. On Regulation 00 min 46 sec

11. What Would Stiglitz Say at a Tea Party Convention? 04 min 26 sec

12. Reactions to Economic Reform 05 min 00 sec

The current crisis is a classic hit by economic hit men (EHM) - except this time, the victims are us.

Drawing on personal experiences described in his blockbuster books (Confessions of an Economic Hit Man, The Secret History of the American Empire, and Hoodwinked), John Perkins explains how tools honed during the past four decades in developing countries are enabling the extremely rich to purchase businesses and real estate at fire sale prices; defend abolition of health care, education, and other social programs; and justify privatization of the public sector. However, crises offer opportunities.

Perkins presents a plan for transforming the economy and describes ways each of us can employ our individual passions and skills to not only prosper but also create a world we will be proud to pass on to future generations.

In the early 1700s, Europeans discovered in the Pacific Ocean a large, unpopulated island with a temperate climate, rich in all nature's bounty except coal, oil, and natural gas. Reflecting its lack of civilization, they named this island "Basicland."

The Europeans rapidly repopulated Basicland, creating a new nation. They installed a system of government like that of the early United States. There was much encouragement of trade, and no internal tariff or other impediment to such trade. Property rights were greatly respected and strongly enforced. The banking system was simple. It adapted to a national ethos that sought to provide a sound currency, efficient trade, and ample loans for credit-worthy businesses while strongly discouraging loans to the incompetent or for ordinary daily purchases.

Read full article at Slate.com

Chanos Sees `Overheating and Overindulgence' in China 

I was astonished to read Lord Myners’s assertion that banks use our deposits to lend out to businesses and homebuyers. (Comment, 25 January). This is simply not the case, and has not been the case since 1694 when the British banking system was established, and intangible bank money began the process of creating deposits in the banking system.

We have just lived through a period of asset price inflation fuelled by credit-creation that bore little relation whatsoever either to a) our deposits in banks, or b) to the underlying value of assets. Far from the bank starting with a deposit or reserves as a basis for lending, the bank starts with an application for a loan, the asset (eg property) against which to guarantee or secure repayment, and the promise to repay with interest.

A bank clerk then enters the number into a ledger/computer, and charges it to the account of the borrower. This is credit and has been known since 1694 as bank money – intangible and essentially free. The bank does not need savings, deposits or reserves to create credit. If this were the case there would only be as much credit as there are deposits in the bank.

01. Introduction 04 min 46 sec
02. I. Why 2009 Turned Out Better Than Expected 00 min 36 sec
03. Timmer: Was it a Good Year? 02 min 06 sec
04. Dadush: Aggressive Stimulus, Healthy Asian Economies 04 min 59 sec
05. Decressin: Advanced Economies Recovering Early 02 min 55 sec
06. II. What to Expect for 2010 00 min 20 sec
07. Lachman: Recession May Return to US in 2010 04 min 16 sec
08. Suttle: Synchronized Upturn, Emerging Markets, Aggressive Corps 04 min 49 sec
09. Dadush: Emerging Markets, Corp Sector, Policy Support 06 min 40 sec
10. III. Advanced Versus Emerging Economies 00 min 42 sec
11. Timmer: Heterogeneity Among the Emerging Economies 04 min 36 sec
12. Lachman: Public Finance Emerging Markets, Commodity Prices 05 min 09 sec
13. Decressin: Advanced Economies' Structural Weaknesses 03 min 59 sec
14. IV. Risks to Forecasts 00 min 26 sec
15. Dadush: Underestimating Cycles, Policy Tightening, Protectionism 05 min 31 sec
16. Suttle: Oil, US Treasury, Eurozone, Banking Sector 05 min 06 sec
17. Lachman: Crisis in Eurozone, Middle East, Protectionism 05 min 03 sec

More Observations On The Federal Reserve Buying Stocks

The insightful authors of "This Time It's Different" Carmen Reinhardt and Ken Rogoff are at it again, doing a simple yet crucial empirical analysis correlating sovereign debt (both government and external), and inflation (in some case) with GDP growth. It will come as no surprise to anyone that the more indebted a country is, with a government debt/GDP ratio of 0.9, and external debt/GDP of 0.6 being critical thresholds, the more GDP growth drops materially. Alas for the US, which is on the wrong side of this threshold, at the rate Geithner is issuing debt, the US economy will be able to grow organically, and not through stimulus after Keynesian stimulus, only after the administration manages to find a way to reduce its massive and growing debt load. In other words never.

Read the full article at Zero Hedge

Dr. Marc Faber speaking on Indian television channel, December 19, 2009  2/3

Dr. Marc Faber speaking on Indian television channel, December 19, 2009