"By increasing the number of dollars in circulation, or even by credibly threatening to do so, the U.S. Government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation." -Ben Bernanke, in a 2002 speech
Jim Grant reminds his readers of the future Fed Chairman's words in his publication's most recent issue. Amazing, isn't it? It's all right there -- the Fed's entire game plan. All the clueless "fed watchers" who parse every word of every Fed statement looking for insight into the intentions of the great wizards miss the obviousness of what the FED will do. There are none so blind as though who will not see. Consider that Mr. Bernanke's comments were made during his predecessor's tenure -- during the halcyon days for OTC derivatives and structured products. (These were the unregulated jewels you'll recall, which Mr. Greenspan praised for their "risk spreading" attributes and defended against the notion that they be regulated. As I write this I'm listening to our current Treasury Secretary tell the country that now that these products have blown the roof off the barn and effectively crashed our financial system, these products really do need to be regulated.) Mr. Bernanke's comments were made with a myopic eye on consumer spending and surely without contemplation of a systemic credit meltdown. It is a certainty that the Fed is intent on creating a massive, massive inflation. Our Federal Reserve Chairman has effectively told us this. It is the Federal Reserve Bank's only expedient option. It is not necessarily the correct option or the courageous one, but it is the one they are committed to because expediency is their only god.
-Jeff
You would think with April gold briefly touching $1,000 an ounce, I would be jumping up and down for joy. Nope… I turned off my screen in disgust and went to the gym. It was clear that The Gold Cartel and PPT would be called into action to keep spot gold from going through $1,000 and to bail out the DOW, and bring it back from another plunge below 12,000.
It was a sickening no brainer … with the pathetic Orwellians in Washington and New York going berserk (considering market circumstances) in order to save their own bacon.
The other reason for manipulating both markets was their head honcho gave a press conference on the mortgage/financial institution fiasco, as mentioned by Jeff…
09:10 Treasury Secretary Paulson says financial institutions must raise capital and revisit dividend policies -- wires
Institutions need to continue to lend and facilitate economic growth. Paulson says regulators have an important role to play in reform, noting they will issue new rules and seek regulatory authorities as needed. The comments are excerpts from prepared text of a speech Paulson will give in Washington on a report by the President's Working Group on Financial Markets at 10 ET.
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To Mr. Paulson:
You ought to be telling the Working Group On Financial Markets (more popularly known as the Plunge Protection Team) that the PPT and Gold Cartel have erred egregiously in their market manipulation and ought to stop this flawed practice immediately. Then, he should fall on his sword, like Eliot Spitzer, for his role in the ruining of America.
Then, this bit of trite nausea…
10:31 Treasury Secretary Paulson reiterates stance that a strong dollar is in the nation's interest
$/€ 1.5616; $/¥ 100.70.
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