The Everlasting Phelps

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Dunning-Kruger

January 8th, 2013

Oil prices are up, even though all the numbers (supply vs demand) say that they should be dropping — even though historically oil prices drop in the winter.  (That cycle was already broken by the Obama administration.)  Gold prices are up.  The yen is up.

This is all tied together.  This isn’t because each of these things has some value that is rising relative to everything else.  It is because the value of the dollar is dropping compared to everything else.  This is inflation, pure and simple.  Oil and gold are two of the best indicators of a failing dollar.  More importantly, stock prices are down.  This is because inflation effects stocks less.  You can’t use stocks to hedge against devaluation as easily as you can physical things like oil and gold or foreign currency.

But the dollar isn’t plummeting.  Hyper-inflation hasn’t hit (yet).  Why are we seeing it in inflation hedges?  Because the administration is incompetent.  Frankly, I can point to a single point that is causing this — the idiocy about this stupid trillion dollar coin.  It’s an idea so stupid it could only have come from a world-class moron like Paul Krugman.  Frankly, this administration’s incompetence is displayed perfectly by the fact that large swaths of people believe them capable of taking Krugman seriously.  That in itself is an indictment.  But to actually be studying and preparing for this is insanity.

It’s the way Zimbabwe decided to “solve” its economic problems.  Seriously.  The question, though, is that if this is so obviously, patently idiotic and destructive, why do people at the top think this could be a good idea?  Because of the Dunning-Kruger effect.  These people are so incompetent they don’t even know what competence looks like.  They can’t tell who is competent and isn’t.  They think Paul Krugman is good at economic thought.  They think that they have done a good job with the economy.  They don’t know enough about economics to even know how wrong they are.  They have no idea what a good economy looks like.  They think this is a good economy because they have lots of money in Washington.

Elections have consequences.  This is the consequences of re-electing people who have been proven to be economic incompetents: Complete collapse into hyper-inflation.  Don’t save dollars.  Turn them into Stuff, because dollars are about to be worthless.

Comments

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  • Vivian Louise says on: January 8, 2013 at 11:04 am

     

    I’m surprised that we don’t have lovely ocean front properties for sale in Kansas. Ocean front property is expensive and lucrative. While we are just making stuff up, lets just go for it!

  • Mexigogue says on: January 8, 2013 at 7:32 pm

     

    Hang on kids, James Taggart is behind the wheel!

The Everlasting Phelps

TRIGGER WARNING: This entire site will cause massive butthurt in any precious snowflake that needs a trigger warning for anything.