But, but, CNBC said inflation was "benign" - even "tame". Even the local paper said the same thing. Surely the beast has been slayed?
<<In 1999, the Fed's outright purchasing of domestic securities expanded by a record $44 billion, surpassing the previous record of $41 billion set in 1997. The $30 billion in coupon passes conducted during the first six months of 1999 was also a record amount for a calendar half-year. Thus far, in 2000, the Fed has conducted $7.042 billion in open market purchases and the Treasury $7.00 billion in debt buy-backs. With more buy-backs scheduled by Treasury for the third and fourth weeks in May, June and July, we will have, essentially, a new calendar-half record for permanent reserve injections. Certainly not an anti-inflationary strategy.
There is no other way I, myself, prefer to account for the Treasury's activity than from the perspective of system effect. Mr. Summers himself used the word "coupon pass" when describing in February the market influence of the buy-backs.>>
beartopia.net
Note also that natural gas is at contract highs, ECRI at multi-year highs, labor unrest (even the Friends cast got a nice bump along with the Boeing folks), and a Fed chairman that just wants to be loved (and to convince everybody that a computer on every desk will fix it all).
Something about reaping the whirlwind comes vaguely to mind... |
