Posts
Mish had a very amusing Freudian slip today. Can you spot it?
Victory for Bloomberg in Freedom of Information Lawsuit with Fed
This is a victory for common sense over secrecy. The Fed does not want an audit nor will it honor reasonable requests for information. The irony is Bernanke promised more transparency. Bernanke's actions prove what a lair he is. Expect more delays as the Fed will fight this.
Let me help.
Lair
2. a secluded or hidden place, esp. a secret retreat or base of operations; a hideout or hideaway: a pirate's lair.
A "secret retreat" is clearly the perfect location for "secrecy".
Ben Bernanke, you ARE a pirate!
Sunday Night Futures
-
Weekend:
• Schedule for Week of November 24, 2024
Monday:
• At 8:30 AM ET, *Chicago Fed National Activity Index* for October. This is
a composite index of ...
5 hours ago
13 comments:
Mark,
if I had Halo3 money I would think this debate was useless!
The pirate film was way out there.
GYSC,
I was hoping that you would think that the pirate video was actually a bit creepy.
I was looking for something that could do justice to Bernanke's "Don't Ask, Don't Tell" policy. ;)
Stag,
I rather like the pirate reference. Looting, plunder, etc. they now call it "wealth creation" or "unlocking value".
The reality is somewhat different - senseless debt creation and socialization of losses.
http://bastiat.org/en/the_law.html#SECTION_G714
Socialism is legal plunder
When plunder becomes a way of life for a group of men living together in society, they create for themselves, in the course of time, a legal system that authorizes it and a moral code that glorifies it.
Frederic Bastiat
mab,
"Pi-rate" is roughly 3.14%.
7-Year Treasury Bond yields roughly 3.14%.
It's legal plunder all right, legal tender plunder!
Ben's a pirate don't you see?
He's got rates pegged below his knee!
How much it costs, would you believe?
Not a dime, this lunch is free!
Arrr!
Stag,
On a mission central bankers went.
Their goal, to plunder savings unspent.
Unleashing inflation they started to rob.
Then came deflation to finish the job.
High priests called eCONomists perpetuated the lie
And a fiat currency made it all easy as pie.
Arrr!
Ahoy me maties!
"I'll chase him round Good Hope, and round the Horn, and round the Norway Maelstrom, and round perdition's flames before I give him up!"
or if you prefer Star Trek:
"I'll chase him round the moons of Nibia and round the Antares maelstrom and round perdition's flames before I give him up!"
mab & GYSC,
http://www.youtube.com/watch?v=_EfW9znJYjw
Arrr!
Mark,
This is a little off topic although I do think Bernanke is involved in some way.
Over at GYSC's site, Gawain's Ghost posted a comment concerning the 'Diminishing Marginal Productivity of Debt in the US Economy' and said that KD's Market Ticker had something on it.
'How Far Down the Rabbit Hole Must We Go?'
http://market-ticker.denninger.net/
I know that you are into TIPS and I was thinking about getting into TIPS myself to diversify a little, but was wonderering how this 'debt' issue would affect this move?
If you read KD and the other links it becomes apparent that they are talking about a monetary system failure, and I do not believe KD is a 'goldbug' by any means.
Any thoughts on this would be appreciated.
Stag,
I've been thinking about two of your comments in the last thread.
If China fights property inflation and India fights food inflation, then watch out below.
That's a very good point. And it may actually be happening. China has tightened bank lending policies and India's Central Bank just raised interest rates. I'll also note that Australia, which seems tied to China, has been raising interest rates too.
As hard as this is to believe, deflation can happen with even 0% interest rates.
I understand the point you are making. In the past, cheap money has always lead to higher inflation. But in an eCONomy saturated with trillions in bad debts, deflation and zero interest rates seem to go hand in hand. You know my thoughts on "printing" money.
On a two year basis, real rates are still quite high - just under 4% when measured against the 10 year treasury.
I still think the prospect of rising real rates is what keeps Bernanke up at night.
watchtower,
You have given me much to think about. I read your KD link and pretty much agree with most of it, if not all. It even inspired me to read what he said in December 2007. Not bad at all in hindsight.
His line of thinking is why I am deflationary. I don't see a monetary collapse. That implies hyperinflation. Credit collapse? Maybe. Economic collapse? Maybe. Stores not taking dollar bills though? Unlikely. Stores scrambling for more dollar bills just to stay afloat though? Extremely likely. It's happening right now all across America.
Here's why I like TIPS even though I'm deflationary.
I could be wrong. If I am, then I have some inflation protection (insurance) if inflation rises. I'll do fine as long as we don't hyperinflate.
I do best during deflation. The more we get the better I do. Very few TIPS investors seem to understand this. Many seem to root for inflation as a matter of pride. These same people wouldn't root for fire just because they have fire insurance on their homes though. Go figure.
I am guaranteed to get all my principal back at maturity AND I earn at least some interest too. It is therefore better than buried cash no matter how hard deflation strikes.
Put another way, I should do at least okay during a deflationary Great Depression, an ongoing Japan-style deflation, and/or a repeat of the 1970s.
And lastly, I do worry about outright default, but we are not at the head of the line in my opinion. Should Japan default for instance, change will happen (if only to prove we won't join them). That's my thinking anyway.
There's also China. Things will get very interesting if their economy isn't nearly as resilient as the world currently seems to believe.
Mark,
Thanks for taking the time to look into this and give your thoughts, very much appreciated.
mab,
"In the past, cheap money has always lead to higher inflation."
In 2004, that was the basis of my stagflationary thinking. I was willing to use cheap money to buy something I thought was cheap. Money is cheap again, but I am not interested. The low-lying fruit has already been picked in my opinion. I'm not throwing temporarily cheap money at what might be just temporarily expensive goods (oil? copper? precious metals? housing? stocks?).
In theory, if interest rates were 0% then I could afford an infinite interest only home loan and therefore an infinitely expensive house.
In practice, an infinitely expensive house has infinite property taxes and infinite maintenance costs. It therefore requires infinite wages to support it.
Infinite wages are a pipe dream. That's especially true with 10% unemployment and billions willing to work for less than we do.
watchtower,
Here's the article from 2007.
The Year In Review And a Look Ahead for 2008
http://market-ticker.denninger.net/archives/134-The-Year-In-Review-And-a-Look-Ahead-for-2008.html
Hindsight is treating him very well.
Post a Comment