The Mess That Greenspan Made - Part 415

Ron Paul on Monetary Freedom

Rep. Ron Paul (R-TX) appeared on Fox Business News yesterday to talk about the nation’s money and a return to the gold standard in the unlikely event that he’s elected president.

His discussion of the U.S. dollar throughout American history reminded me of a Wall Street Journal book review yesterday by James Grant that, from what I could tell, was a lot better than the book – Greenback Planet by H.W. Brands. From the book review:

“Greenback Planet” is the story of this amazing monetary transformation. The narrative begins in the 18th century and races to the present, pausing to catch its breath at some of the great American monetary landmarks: Andrew Jackson’s veto, in 1832, of legislation rechartering a predecessor to the Federal Reserve; Abraham Lincoln’s recourse to greenbacks, or fiat currency, to finance the Civil War; resumption of the gold standard in 1879, with which it once more became possible to exchange gold for paper and vice-versa at a fixed and statutory rate; J.P. Morgan quelling the Panic of 1907; the Federal Reserve not quelling, never mind preventing, the Great Depression; the crazy-quilt monetary improvisations of the 1930s; the halfway gold dollar of the post-World War II era; and the creation, in 1971, of the pure paper (later digital) model of today.

Mr. Brands is a paper-money man, though the subtitle of his book—”How the Dollar Conquered the World and Threatened Civilization as We Know It”—seems to betray some reservations.

Consumer Confidence Surges

The Conference Board reported that consumer confidence surged from a two-and-a-half year low of 40.9 in October to 56.0 in November, the highest reading since before the debt ceiling debate began over the summer. After six months of declines, the Present Situation Index jumped from 27.1 to 38.3 and the Expectations Index surged from 50.0 to 67.8.

Those saying jobs are “plentiful” increased from 3.6 percent to 5.8 percent while those saying  jobs are “hard to get” fell from 46.9 percent to 42.1 percent.

Income expectations also improved, those saying they anticipate an increase in their wages over the next six months rose from 11.1 percent to 14.9 percent and business conditions are also expected to be better early next year, that view shared by 13.6 percent of respondents versus 10.2 percent last month.

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Case Shiller Home Prices About Flat

Standard & Poor’s reported that the Case-Shiller 10-City and 20-City Home Price Indexes rose 0.2 percent from July to August, but when seasonal factors are taken into account, the indexes were down 0.2 percent and flat, respectively. The nation’s best housing market remains the nation’s capital where home prices rose an impressive 1.6 percent in August and, along with basket-case Detroit, were the only cities with year-over-year gains.

Ten of the 20 cities saw home prices increase in August while 16 cities saw improving annual returns, though, prices continue to decline on a year-over-year basis as the 10-City and 20-City indexes saw annual returns of -3.5 percent and -3.8 percent, respectively.

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Tuesday Morning Links

American Airlines files for bankruptcy protection – AP
Moody’s Signals Possible Cut for Europe Banks – Bloomberg
Italy borrowing costs surge to euro-era highs – Globe & Mail
Fitch warns of U.S. downgrade if no budget deal in 2013 – Bloomberg
S&P may cut France rating outlook to negative – Economic Times
Euro Zone on the Brink: A Continent Stares into the Abyss – Spiegel
ECB Fails to Fully Sterilize Purchases of Sovereign Debt – Bloomberg
States face bleak economic forecast, report says – Washington Post
Jon Corzine: The face of Wall Street arrogance – NY Post
It’s payback for longest boom in history – Telegraph
Comfortably Numb – The Burning Platform
Family Feud – Gross, Pimco

Crude Oil Firm Near $100 – Nasdaq
Gold steady as euro, stocks recover – Reuters
10 reasons the crisis isn’t over – MarketWatch
Bove: Why I Was Wrong on Bank Stocks – CNBC
Europe stocks rise; euro-zone meeting in focus – MarketWatch
Are the days of gold as collateral getting closer? – Mineweb
‘Fallacy of gold and primacy of silver’ – Commodity Online
Silver trading in a firm downtrend channel – Commodity Online
Gartman: Gold Will Outshine Oil In 2012 – HAI

Newt’s plan for the economy – CNN/Money
Can the U.S. consumer save the economy? – Financial Post
Black Friday Low Income Shoppers Bought Basic Necessities – HuffPost
Another Asian Wake-Up Call – Roach, Project Syndicate
OECD Growth Outlook, Country by Country – WSJ
The euro crisis: Who killed the euro zone? – Economist
Australia cuts growth outlook but vows surplus – MarketWatch
Why the ECB refuses to be a Lender of Last Resort – voxeu
Greece’s top statistician under fire over debt numbers – Globe & Mail
New Home Prices Facing Growing Pressure – CNBC
Barney Frank: Don’t Blame Me for Fannie, Freddie Problems – WSJ
Even John Pierpont Morgan Would Be Blushing Now… – I Heart Wall St.
Failure to Extend Tax Cut Could Push Fed to Do QE3 – WSJ

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