[ Attachment content not displayed ]
So why is the govmnt staring to
come a little clean about inflation?
Maybe this sentence from your link
is a clue.." However, that tiny gain
came after a huge 1.9 percent
plunge in retail sales in August." It
seems what we have on our hands
is stagflation verging on
hyperinflationary depression. With
a debt based finacial system and
34 years of uncontrilled workdwide
credit expansion, the situation has
become very unstable. Severe
deflationary risks include...
the recent bankruptcy of Delphi,
which threatens further the collapse
of the GM, and every elementary
school kid raised by socialists
knows that wnats bad for GM...
and of cource there is Fannie Mae,
still not publishing 2004 finacials.
The fomc greatly incresed it's
purchases of mortgage backed
securities in it's lates report,
indicating the fed may be buying
bad mortgage paper especially that
from the Gulf. The monetizing of
bad paper is highlyinflationary.
Ford, Delta, United, Northwest are
also the walking dead, not to
mention all the small suppliers of
Delph.
The Fed cannot cut interest rates
this time or it risks what little
foreign faith in the dollar that
remains.
And so I think the government will
now start coming clean on inflation,
in an attemp to keep people
spending as they face the abyss of
defation. The Fed will continue to
raise rates at the frontdoor in
attempt to prevent the dollar from
plunging and create massive
amounts of money at the back door
by rescuing casualties such as
fannie mae and perhaps holders of
gmac bonds. Who knows how it
will all ahake out, but all this could
have been avoided by never
having the over the top endless
credit expansion of fiat money over
the last 34 years, or the last 60
years..
One really scary thing I read today
on the Mogambo Guru over on
Kitco.com is that M1 may have
grown much larger than reported
by the Fed. It seems that m2's
money market funds with checking
priveledges really belong in m1.
The potential for inflation from that
money is hugh. I don't know.
Greenspan has repeatedly said in
Humphry Hawkins testimony that
the Fed can't really define much
measure the amount of money in
the economy. Thus the
unprecendented expansion of
credit we have experiences leading
to unprecidented levels of
complacency and speculation will
ultimately lead as it always has in
history to instability. As Hyman
Minsky, a professor of mine at
Wasshington U, so succinctly
stated.. Stability leads to instability.
He won a nobel prixe for that, and I
thoght he was just another fat
Jewish Socialist who I could get an
easy A from just by coming up with
a few socialist schemes. Anyway, I
think the present axtion in gold, not
just versus the dollar but all
currencies, is enlightening. You still
can't get libertarians to buy gold
and gold mine stacks in any
quantity, much less mainstream
democans, so it is far from too late
to jump in, but don't use leverage.
Greenspan's term is ending, and
the probable nominee is Ben
Brenanke former Fed Governor,
now Bushes economic advisor, and
in Gold Bug circles called
Helicopter Ben for his famous
speech in Nov 03 when he daid
the Fed will meet any deflationary
threat, no matter waht it takes,
even if the Fed has to drop money
out of Helicopters. Wow. And
people say I'm nuts.
oh and Frnklin, the mofern dilbert
corporate world has nothing to do
with free marketr capitalism, the
republicrats long took care of that.
the modern large corpration is
acreature of the quasi government
finacial system which is anything
but free, hemmed in by unions,
eeoc regulations, corporate
governance regulations, litigation
shakedowns, and market
manipulations by the fed and
treasury,not to mention a spider
web of tax distortions and a
general decay in morality brought
on by the incessant decay in the
value of money, the connection
between money and morality was
best described by Rand in her
novels. I won't even attempt to
umprove on her.
I went to a wedding in tahoe this
weekend. Tried to talk my last rich
aunt to buy some gold. Hopeless.
Even her bf who escaped Germany
in 1940 at 15 would not hear of the
dangerous similarities in monetary
policy from the Weimer
Bundesbank and the Fed, even
when his mind was lubicrated with
a little champaign. A little talk about
prop 75 in front of my school
llibrarian sister from Montgomery
County Md. reveled that she did
not belong to a Union because the
NEA was a "Professional
Organization." Where is Gertrude
Stein when we need her. This is
the same sister who was told in a
teach inservice that Social Security
is well bunded until 2048. My
explainations about them holding
non negiatiable treasuries, and the
cash flow from the social security
trust fund into the treasury will
reverse into a deficit having to be
finaced by taces or borrowing on
the open market fell on deaf ears.
In general I do a real good job of
shutting up around my family and
just enjoying them, cuz I figure
thats waay more important than all
of this. Good personal relationships
and a solid calm mind will be what
get each of us through. Loving,
understanding, and compassion
may be the only weapons we have
during the chaos ahead.
Phil:
Minsky never won the Nobel.
Derek, Thanks for correction. Gosh, I
really got that fact wrong. I guess there
was some talk of it when I was at wash
u in the seventies and it gelled as fact
over the sweep of time. As they say on
snl, better to look good than to think
good.