Bill Fleckenstein and Dylan Ratigan Discuss Commodities and “Individually Smart, Collectively Stupid” Regulators Posted on February 24, 2011 by Yves Smith This is a particularly crisp and straightforward discussion between money manager Bill Fleckenstein and Dylan Ratigan about central bank actions and commodities inflation. Enjoy! Visit msnbc.com for breaking news, world news, and news about the economy Post navigation ← The Beast’s “David Koch” Speaks to Wisconsin Governor Walker Daniel Pennell: MERS Counsel Calls Me → Subscribe to Post Comments 17 comments psychohistorian February 24, 2011 at 2:44 am I think that the current biggest driver on commodity prices is demand for a “safe” place for investments because all the currencies are becoming worthless. Bill Fleckstein is saying all the right things about the ignored/unreported effects of the multi-trillion dollar bailout in 2008. What he is not saying is who the banksters work for. That is the next step. It is not just the Koch brothers. It is not just happenstance. The banks that are failing around the country are in poorer areas that sold greedy faith in the credit markets until the magic crash……whocouldnanode. Its time to pull the covers back from the charade of cover for how the world really works. The bottom line is to remove the rich from public policy making control in the same way that we are suppose to have separation of church and state. Unfortunately, the only way I can think of doing that is to make them poor like the rest of us. Since the ultra rich have accumulated so much “ownership” over world property and resources and brainwashed most of the American and “advanced” countries populations into believing that they should have faith in their leadership this seems overwhelming. You would think that our species would start acting with the intelligence that it professes to have. Maybe the youth of the third world can show us our better humanity. ForgottenPsuedonym February 24, 2011 at 3:22 am Frank Rich from October: Asked in [Charles Furgeson’s] “Inside Job” why there’s been no systematic investigation of the 2008 crash, Roubini answers: “Because then you’d find the culprits.” psychohistorian February 24, 2011 at 4:01 am I held up a NO BAILOUTS sign over the Interstate in Portland OR for parts of 4 days in Sept., 2008 and got called a yahoo by the local paper. CaitlinO February 24, 2011 at 10:48 am In the same timeframe we picketed the local AIG office with signs calling for no bailouts. Nearly all cars passing by honked, waved and shouted in support. People know they’re being robbed by the PTB. They just don’t know what to do about it. Yet. jangchub February 24, 2011 at 12:54 pm 2012 election will be very interesting… Daniel de Paris February 24, 2011 at 5:10 am Hi Yves, Pleased to see your editorial line allow for Bill Fleckenstein views to be read by your liberal audience. Why not link up to his pages? Sure he did not get a Nobel price. But in terms of sheer prognostication, he has been absolutely brilliant. Pay attention to what he said during all those years. And just plain compare to what some academics did. rd February 24, 2011 at 8:02 am Why do you assume that it is a liberal audience? I think the predominant theme in these pages is to reduce politicians’ interference with the efficient execution of markets and centuries of jurisprudence. That is actually a very conservative concept. (Note that I said politicians’ interference, not government’s since the actions have to actively come from individuals as they are not found in prior laws and regulations) Trumpeting “Rational Economic Theory” during upturns and then pumping bailouts into failing corporations and over-riding laws to help them in downturns is actually a very socialistic (liberal) concept that was first applied by the Bush Administration in this crisis. One of the primary roles of government is to provide a consistent, well-defined set of rules for commerce and property ownership. The US government has failed miserably at this basic function over the past decade and therefore is actively participating in one of the biggest wealth transfers in history from the middle-class to the wealthy elite. Government-aided wealth transfers is one of the principles of liberalism that the extreme right is always railing at. Yves’ and the commenters commentary on this issue would put them further right than Rush Limbaugh. George999x February 24, 2011 at 12:50 pm “Why do you assume that it is a liberal audience?” Seconded. Re. the rest of rd’s comment, Eugene Fama, father of the efficient markets hypothesis, is an example: http://www.cnbc.com/id/15840232/?video=1506628338&play=1 I suspect Yves would agree that a) too-big-to-fail is a perversion of capitalism, b) much higher capital requirements would be far more reliable than trusting regulators to “supervise big banks more effectively” etc. in making the system safer. Gene Fama makes many of the points made on this blog, repeatedly and with at least as much bigger, but from an entirely free-markets perspective, blaming the regulators for being captured, and saying that this will always happen. Jack Parsons February 24, 2011 at 3:42 pm Corporate socialism is fascist, individual socialism is liberal. readerOfTeaLeaves February 24, 2011 at 12:55 pm I have no idea what you mean by ‘liberal’, but I am one. I also happen to be a huge fan of Ratigan, and I listen carefully to Fleckenstein. I think they’re both more interested in honesty and insight than they are about political partisanship, or scoring points with any political agenda. I think plenty of us – of all points of view – are fed up with partisanship and simply looking for people who have the guts to call it like they see it. David Sala February 24, 2011 at 6:42 am Daniel, I might be the walking definition of Joe Six-Pack, but am the only person I know (of my aging boomer friends) to have gotten out of the market well before the crash. And it was all due to Bill Fleckenstein. I have followed him ever since, and am paying stricter attention with each passing day. joe February 24, 2011 at 9:56 am So if food and oil go up, Fleckenstein expects the fed to raise interest rates? Dollars i circulation increased 5.6% the last 2 years so don’t see how the so called “money printing” is the culprit. Based on this image posted the other day it looks like food prices are back on the same trend they were on before the recession. Basically, he wants a interest rate hike as soon as the economy shows symptom of recovery. http://www.nakedcapitalism.com/wp-content/uploads/2011/02/Screen-shot-2011-02-23-at-5.23.50-AM.png Deus-DJ February 24, 2011 at 11:23 am Another lost opportunity. Mr. Fleckenstein could have talked about speculation on the futures market as well(he did mention that money is going into “financial assets” but didn’t elaborate) but didn’t. joseph February 24, 2011 at 1:29 pm “Trumpeting “Rational Economic Theory” during upturns and then pumping bailouts into failing corporations and over-riding laws to help them in downturns is actually a very socialistic (liberal) concept that was first applied by the Bush Administration in this crisis.” Dead wrong. Bailing out corporations has nothing to do with the left. A really “socialist” bailout would have given a bailout to the vast majority of people and nothing to the people at the top. This is just corporatism or, if you prefer, fascism. Not only does this not describe the left, it doesn’t even accurately describe Keynesianism. I’m tired of this stupid assocation by the non-politically-savvy that “liberalism = gov’t.” First, liberalism as properly defined means being in the tradition of Locke, Mill, etc. Socialism, anarchism, etc. are defined as being part of the “left” tradition. As you can see by the inclusion of anarchism, what defines the left is not a commitment to gov’t action but a commitment to relative egalitarianism and helping the disadvantaged. “One of the primary roles of government is to provide a consistent, well-defined set of rules for commerce and property ownership. The US government has failed miserably at this basic function over the past decade and therefore is actively participating in one of the biggest wealth transfers in history from the middle-class to the wealthy elite. Government-aided wealth transfers is one of the principles of liberalism that the extreme right is always railing at. Yves’ and the commenters commentary on this issue would put them further right than Rush Limbaugh.” Excuse the rudeness, but what’s the highest level of political science you completed? Honestly! Find me a true “liberal” who thinks the gov’t should transfer wealth from the middle and lower classes to the wealthy. This is not liberalism! It’s kleptocracy and fascism. True liberals accept limited gov’t transfer of wealth from the most well off to the least. In NO WAY does being against corporatism make one “further right than Rush Limbaugh.” joseph February 24, 2011 at 1:37 pm Just to further elucidate the total ignorance of that comment…how about we take someone opposed to corporate welfare, like, say, Karl Marx? Are you prepared to argue that Marx was further right than Limbaugh because he would have been opposed to bailing out the corporations and not the people? Now, you can argue that “Obama did it and he’s a liberal” forever but the fact remains: Obama is best viewed as a corporate liberal in the vein of, say, Juan Peron, who was first and foremost a corporatist figure who made some concessions to social justice but in the end was nothing like a real “liberal,” let alone a person of the left. Tyler Cowen argued for the bailouts and he’s one of the more famous and respected libertarian economists these days. Does this make him a “socialist”? Political theory goes so far beyond “circa 2011 Democrats = socialists and circa 2011 Republicans = conservatives.” rd February 24, 2011 at 11:28 pm I am fine with declaring both the Republican and Democratic parties as fascists. I have used that term a couple of times in comments in NC for many of the corporatist policies being executed. I appreciate your definition of liberalism which is essentially the classical definition of 17th and 18th century liberalism. However, these days it is rarely used in that context outside of political theory classes. The reality is that “liberalism” is now generally regarded as being “social liberalism” which is viewed by much of the right as “communism”. So given the modern context of “liberal” when one sees it in blogs or in the media, I don’t see a tendency in the pages of NC to call for expanding individual socialism. I do see a tendency to classical liberalism which would fall under the auspices of many conservatives these days, especially those espousing original readings of the Declaration of Independence and the Constitution, especially the Bill of Rights which are actually highpoints of classical liberalism. I dare you to walk into one of those groups to tell them they are all liberals. We’ll see if you come out alive. You probably will escape if the room is filled with David Brooks look-alikes, but not if it is the Tea Party or Ann Coulter. Cedric Regula February 24, 2011 at 3:33 pm Great line…”You wouldn’t believe what they believe…” I haven’t been reading Fleckenstein lately. I’ll have to rectify that. Comments are closed. Tip Jar Please Donate or Subscribe!