The Parallax Brief


Unrepentant Subjectivity on Economics, Politics, Defence, Foreign Policy, and Russia

The Fed’s Ten Trillion Dollar Problem

If anyone should have been prepared for the credit crunch it was Federal Reserve chairman Ben Bernanke (pictured right). Much of his academic reputation, which is immense, was built upon his work on the causes of depressions and, specifically, the Great Depression.

Although central bankers and economists assumed that advances in economic understanding — a significant portion of which came from Bernanke — had made depressions avoidable, Japan’s oft-discussed lost decade of deflation raised some uncomfortable questions.

Here was a nation not unlike the US and large Western European countries, with a powerful industrial base, sophisticated financial sector, and a modern, mature economy, which became mired in monetary quicksand, unable to exfiltrate itself from economic stagnation, despite following the playbook economists throught could avoid just such scenarios. Why?
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Krugman Overwhelmed by Stress, Planning to Become Monk?

This internet is surely the biggest leap forward in technology since the eighties invented the electrical carving knife, and the Parallax Brief hopelessly addicted. I can be swept into a trancelike state, slowly hyperlinking from a blog post about social planning, to a look at the pros and cons of America’s F-22 Raptor program, to Counterinsurgency Warfare: the Theory and Practice by David Galula, to the Algerian War of Independence, to Charles De Gaulle, to the Day of the Jackal, and all the way through the infinite degrees of separation.

The internet is nirvana, but one does find some odd things, and gain some interesting insights into people’s lives.

For instance, I read Paul Krugman’s blog religiously: I genuinely believe he is one of the finest minds, and most prescient analysts, of our time. In a short blog post today, he included a link to a book called Culture Made Stupid. I followed the link to the book’s Amazon page, where the top review is by none other than Paul Krugman.  From there, we can click through to Krugman’s personal Amazon page and view his Universal Wish List – a feature on Amazon which helps users keep track of the things they want to buy.

And Krugman’s is instructive. First, he is clearly in a state of high stress, with CDs Shamanic Dream, Zen Relaxation, Sleep Deeply, Natural Stress Relief: Dan Gibson’s Solitudes, Echoes of Nature: Rainforest, Evening Crickets (Nature Sounds Only Version), and Soothing Sea populating the top half of Krugman’s wish list.

Even more concerning is the second half of the list, which suggests the Nobel Laureate is so troubled about the parlous state of the world economy that he preparing to quit his positions as professor of economics and international affairs at Princeton Universit and New York Times op-ed columnist for a life of chastity, poverty and piety as a Monk. According to his wish list, Krugman is planning to read Finding Sanctuary: Monastic Steps for Everyday Life, by Abbot Christopher Jamison, and An Infinity of Little Hours: Five Young Men and Their Trial of Faith in the Western World’s Most Austere Monastic Order by Nancy Klein Maguire .

I think we should all be very worried.

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The Next Shoe to Drop on the Road to financial Armageddon?

In an enlightening speech to the American press club on December 8th, Paul Krugman was asked if there were “any more shoes to drop?” He responded that “in this kind of crisis, anything that can go wrong usually does go wrong.”

Certainly, a little over two months after the conference, the situation has worsened considerably.

But what other shoes are likeliest to drop? Well, as Krugman said, everything, but the Parallax Brief has two main contenders.

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World Economy at One Minute to Midnight

Over the last week, portents of doom have enveloped the Parallax Brief. Increasingly, a Great Depression of the Twenty Tens looks to be the fate of the world. Lest we forget, the economic turmoil between 1914 and 1945 led to political upheaval almost unimaginable now, and unleashed the horrors of total war on the developed world.

Why do I feel so pessimistic?

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