Keynesians vs Austrians


Interesting piece today by Dominic Frisby of Money Morning, the daily newsletter of Noting the 10% surge – and now, the equal decline – in the US dollar, he provides an explanation:

Up until summer 2010, the Keynesians had the upper hand. There was a widespread belief that bail-outs and suppressed interest rates were the correct way forward. Now, suddenly the 'Austerian' school of belt-tightening, efficiency, and paying down debt has become de rigeur. At least, it has in the UK and Europe.

In the States there's also a genuine appetite for such measures. This in part is what the Tea Party political movement is about. But Ben Bernanke and Barack Obama have no plans to satisfy that appetite. While the US remains bent on its Keynesian course of unchecked spending in the face of austerity elsewhere, the US dollar will be a casualty. I mean, my goodness, even the basket case that was the pound is now a respectable international currency once again.

So there you have it from a financial expert. Keynesian spending is ruining America. Austrian probity is saving Britain. Told you so.