When the credit bubble bursts, US will have to invest a lot in these commodities domain.
You never answer me Jay when I ask you about canadian lumberer - when labor is your biggest cost - how does a paid canadian lumberer with benefits and safety standards compete with free mexican laborer who dies every so often but is OK cause 50 mexicans behind him willing to take his job? In prescott bush's day - how could a paid coal worker with safety standard compete with auschwitz worker who worked for free digging coal and if he died 50 more behind him to pick up the work? What is to stop US prisons from putting huge black or mexican prison population to work for FREE in coal mines or cutting trees? Make me understand how canadian lumberer competes with that?
As Doug Noland said, investing in these commodities itself will be extremely inflationary i.e all the printed credit/money has to go into making commodities (CAT will be a beneficiary in the long term).
I see oil and gold down today - maybe people don't NEED those things as bad as the snake oil salesman convinced them they did.
Because of this inflation, Bernanke is not going to print money/credit to support housing, stocks and bonds!!
Bernanke has said 2% inflation as policy - did I miss something? I see numbers saying money growth is higher than zero.
buy houses, stocks etc. Well, housing market has slowed, but the prices are still raising
I don't see that - I see prices not moving much and inventory levels rising. Jay chen is digging like a mad man in his backyard burying gold.
- did you see copper, steel prices? Soon, corn, wheat etc should also start rising.
Yet I know people that are paid/subsidized by the gubbment NOT TO GROW corn. Silly eh?
Today, I dont see anyone talking about helicopter money!!
I thought people where posting SOMA/TOMO charts and the like?
Noland said, the systemic risk happens when the Fed is not in a position to lower the interest rates!! Did the Fed lower the interest rates in late 1930, 1931 when banks started defaulting? Oh my, the record says, they increased the interest rates inspite of bank failures in 1931!!
Bernanke has said a problem with the depression they didn't loosen fast enough - tightened too long and too far - well I think he has just shown he is willing to stop turning the nut eh?
inspite of the crash!! Will the Fed lower the interest rates when the crash happens next year?
What matters more to those governors - bernanke has a heloc - bernanke owes favors to bush and who knows who else (did abramoff get him a hooker once?) - will foreign bank friends or local votes and congress incumbents getting kicked to the curb matter most? Will foreign capital flows matter most? Who knows what all backroom deals and hookers are going back and forth? I think Ravi Batra hated greenspan because he catered to the politicos and thier election campaigns - damn be the longterm health of the country.
In 1932 they kicked farmers to the curb to take their farms from them to appease foreign investors - a US congressman back then said FUGG the foreign money - lets take care of our own and not boot farmers to the curb - lets shaft those foreign holders of our money and debt - mafia types were hired to take him out and he had a couple drive by shootings. My grandpa lost his farm - Mel Gibson even made a movie about it with sissy spaceck called THE RIVER - go watch it. Who will prevail - Ron Paul that wants to help the little guy in the USA - Liebermans that are power hungry or the foreign investors wanting a return on thier investment no matter the social/political chaos in the USA to j5p?
Why wont the Fed lower the interest rates? Could it be inflation or dollar crash scenario?
Bernanke said we have to minimize the impact of FED guys like him - better to set up a system data dependent and transparent so that fed governors don't get such celebrity status eh? What would happen if all the fed governors on a plane tomorrow and it crashes - would life go on?
When Fed wont even lower interest rates how do you expect them to buy houses, stocks etc?
Bernanke has a heloc - do you think he is refinancing? |
