From Chartoftheday.com we get the Quote of the Day, which is from the legendary Will Rogers, who cleverly said, “The fellow that can only see a week ahead is always the popular fellow, for he is looking with the crowd. But the one that can see years ahead, he has a telescope but he can’t make anybody believe that he has it.”
[Read more...]Two Ways for the US to Go Broke
March 24, 2011 By Leave a Comment
We’re in the airport. We can’t seem to get a signal. So, here’s an abbreviated reckoning.
From what we can tell from the newspapers, the US housing market got very bad news yesterday. New house sales dipped to a record low. Never before since they began keeping records a half century ago have so few new houses been sold.
[Read more...]Purchasing Power Buckles Under Government Spending
March 23, 2011 By Leave a Comment
What if I got right up in your face and told you that there is almost $2 trillion in government debt outstanding on which the government pays no interest? Would you think me insane? Would you look at me skeptically and say to me, “I’ve told you a thousand times that you are not allowed to make things up just because you don’t know what you’re talking about, you moron!” or something equally as rude?
[Read more...]Angry Over Oil Price? Demand a Change in Fed Policy
March 22, 2011 By Leave a Comment
The price of oil has shot up over $100 a barrel, and the price of gasoline is headed to $4 a gallon.
True to form, the call has gone out to “round up all the usual suspects.” Channeling the orders of Captain Renault of Casablanca, the Congress and the press go after speculators, “greedy” oil companies and Arab sheiks, profligate American consumers, and the ever-handy Chinese.
[Read more...]Inflation 1; Economy 0
March 10, 2011 By Leave a Comment
America’s recent economic “recovery” is just a dismal version of “Mother May I.” Almost every “one step forward” will succumb to “two steps backward.”
To switch metaphors, the so-called recovery is not the fruit of sustainable underlying demand; it is merely the weed of rising inflation expectations. Let me explain…
[Read more...]Bernanke’s Undying Love of QE2
February 14, 2011 By Leave a Comment
Three months ago, Ben Bernanke promised lower mortgage rates and lower corporate bond rates.
He promised.
Quantitative Easing – i.e. the Fed’s scheme to print money and buy bonds – would deliver these benefits, Bernanke promised in a November 4, 2010, op-ed piece for The Washington Post. “Easier financial conditions will promote economic growth,” the Chairman declared. “For example, lower mortgage rates will make housing more affordable, and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence…”
[Read more...]Will the FOMC Ignore the Dangers of Printing More Money?
August 10, 2010 By Leave a Comment
Yesterday's markets barely moved in any significant direction, so we will ignore them and go on to today. It's a big day for the men who rule us. The Fed's Open Market Committee meets to decide what to do.
On the table are a number of small steps…and one big one.
Barron's highlights the big one on this week's cover:
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A World of Deficit Spending Without Any Changes
Junior Mogambo Ranger (JMR) Terry L. sent me the essay “Fiscal Armageddon in the USA” by C. Banesh, who reminds us that “Sometime between now and 2012 the US debt will equal the country’s Gross Domestic Product (GDP), the total market value of all the goods and services in our economy for an entire year.”
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