Steven Hanke Dismisses Krugman's Assertion
Steven Hanke, an applied economics professor at Johns Hopkins University, has criticized Nobel laureate Paul Krugman for his claim that inflation is a "global phenomenon." Hanke took to X (formerly Twitter) to express his disagreement with Krugman's recent op-ed article in the New York Times, referring to it as another instance of disinformation from the Nobel laureate.
Krugman's Case for Bidenomics
In his article published on December 7th, Krugman presents his argument for Bidenomics, a term used to describe the economic policies of President Joe Biden. While Krugman acknowledges that he may not be able to convince conservatives, he suggests that progressive U.S. citizens can still be persuaded that the Biden administration has performed well in terms of the economy.
To support his assertion, Krugman highlights the rise in labor productivity rate in the third quarter as evidence of the U.S. economy's success under Biden. He also mentions the decrease in the gap of unfilled job openings, which he claims has now mostly disappeared.
Hanke Challenges Krugman's Claims
However, Hanke disputes Krugman's assertion that the U.S. has effectively controlled inflation. In his post on X on December 9th, Hanke states that inflation is a local, rather than a global, phenomenon. He points to countries like Switzerland and China, where central banks have successfully managed inflation rates at 1.4% and 0.2% per year, respectively.
Krugman and Hanke's Ongoing Disagreement
This is not the first time that Hanke has disagreed with Krugman's arguments. In October, when Krugman declared victory in the U.S.'s fight against inflation, Hanke also dismissed his claims. Interestingly, when Hanke previously stated that the issue of inflation had been resolved in July, Krugman and economist Mohamed El-Erian were reportedly unsure.
What are your thoughts on this debate between Krugman and Hanke? Share your opinions in the comments section below.
Frequently Asked Questions
Are gold investments a good idea for an IRA?
Any person looking to save money is well-served by gold. It can be used to diversify your portfolio. But gold has more to it than meets the eyes.
It has been used as a currency throughout history and is still a popular method of payment. It's often referred to as “the world's oldest currency.”
But unlike paper currencies, which governments create, gold is mined out of the earth. That makes it very valuable because it's rare and hard to create.
The supply-demand relationship determines the gold price. People tend to spend more when the economy is healthy, which means that fewer people are able to mine gold. The value of gold rises as a consequence.
On the flip side, when the economy slows down, people hoard cash instead of spending it. This increases the production of gold, which in turn drives down its value.
It is this reason that gold investing makes sense for businesses and individuals. If you have gold to invest, you will reap the rewards when the economy expands.
In addition to earning interest on your investments, this will allow you to grow your wealth. Plus, you won't lose money if the value of gold drops.
Can I keep physical gold in an IRA?
Gold is money. Not just paper currency. People have been using gold for thousands of years to store their wealth and protect it from economic instability and inflation. Today, investors invest in gold as part a diversified portfolio. This is because gold tends do better in financial turmoil.
Many Americans are now more inclined to invest in precious metals like gold and silver than stocks or bonds. Although owning gold does not guarantee that you will make money investing in it, there are many reasons to consider adding gold into your retirement portfolio.
Another reason is the fact that gold historically has performed better than other assets in times of financial panic. Between August 2011 and early 2013 gold prices soared nearly 100 percent, while the S&P 500 plunged 21 percent. Gold was one asset that outperformed stocks in turbulent market conditions.
Another advantage of investing in gold is that it's one of the few assets with virtually zero counterparty risk. Your shares will still be yours even if your stock portfolio drops. You can still own your gold even if the company where you invested fails to pay its debt.
Finally, gold provides liquidity. You can sell your gold at any time without worrying about finding a buyer, which is a major advantage over other investments. It makes sense to buy small quantities of gold, as it is more liquid than other investments. This allows for you to benefit from the short-term fluctuations of the gold market.
Can I hold a gold ETF in a Roth IRA?
This option may not be available in a 401(k), but you should look into other options such as an Individual Retirement account (IRA).
Traditional IRAs allow for contributions from both employees and employers. A Employee Stock Ownership Plan, or ESOP, is another way to invest publicly traded companies.
An ESOP is a tax-saving tool because employees have a share of company stock as well as the profits that the business generates. The tax rate on money that is invested in an ESOP is lower than if it was held in the employees' hands.
A Individual Retirement Annuity (IRA), is also available. With an IRA, you make regular payments to yourself throughout your lifetime and receive income during retirement. Contributions to IRAs can be made without tax.
How is gold taxed in an IRA?
The fair market value of gold sold is the basis for tax. You don't pay taxes when you buy gold. It isn't considered income. If you sell it later you will have a taxable profit if the price goes down.
Loans can be secured with gold. Lenders will seek the highest return on your assets when you borrow against them. This often means selling gold. However, there is no guarantee that the lender would do this. They may keep it. They might decide that they want to resell it. The bottom line is that you could lose potential profit in any case.
To avoid losing money, only lend against gold if you intend to use it for collateral. Otherwise, it's better to leave it alone.
Should You Buy or Sell Gold?
In the past, gold was considered a haven for investors during economic turmoil. Today, many people are looking to precious metals like gold and avoiding traditional investments like bonds and stocks.
Although gold prices have shown an upward trend in recent years, they are still relatively low when compared to other commodities like oil and silver.
Some experts think that this could change in the near future. They believe gold prices could increase dramatically if there is another global financial crises.
They also mention that gold is becoming more popular due to its perceived worth and potential return.
These are some important things to remember if your goal is to invest in gold.
- Consider first whether you will need the money to save for retirement. It is possible to save for retirement while still investing your gold savings. However, you can still save for retirement without putting your savings into gold.
- Second, you need to be clear about what you are buying before you decide to buy gold. Each one offers different levels security and flexibility.
- Remember that gold is not as safe as a bank account. You may lose your gold coins and never be able to recover them.
So, if you're thinking about buying gold, make sure you do your research first. And if you already own gold, ensure you're doing everything possible to protect it.
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- 7 U.S. Code SS7 – Designation of boards for trade as contract markets
- 26 U.S. Code SS 408 – Individual retirement accounts
- Saddam Hussein's Invasion Helped Uncage a Bear In 1990 – WSJ
- How do you keep your IRA Gold at Home? It's not exactly legal – WSJ
Guidelines for Gold Roth IRA
It is best to start saving early for retirement. You should start as soon as you are eligible (usually at age 50) and continue saving throughout your career. It is essential to save enough money each year in order to maintain a steady growth rate.
You also want to take advantage of tax-free opportunities such as a traditional 401(k), SEP IRA, or SIMPLE IRA. These savings vehicles permit you to make contributions, but not pay any tax until your earnings are withdrawn. They are a great option for those who do not have access to employer matching money.
The key is to save regularly and consistently over time. You may not be eligible for any tax benefits if your contribution is less than the maximum allowed.
By: Terence Zimwara
Title: Johns Hopkins Economist Criticizes Paul Krugman's Claim on Global Inflation
Sourced From: news.bitcoin.com/economist-steve-hanke-blasts-nobel-laureate-paul-krugmans-global-phenomenon-inflation-remark/
Published Date: Mon, 11 Dec 2023 21:00:55 +0000