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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (90714)	1/22/2008 10:35:14 AM
From: Tommaso	Read Replies (6) \| Respond to of 110194

>>>no commission deal with BAC<<< Funny thing is, I don't recall either being offered that or asking for it. Just suddenly I quit being charged commissions. I don't do much trading. This Fed cut of 3/4 point seems sure to set off inflation and keep the dollar dropping. It must make Bernanke feel somewhat impotent to see the stock markets continuing to drop (so far today, anyway), despite the cut. In 1929, the memory was still alive in New York and Washington of the terrible inflation brought on by the Civil War and the issuance of the greenback currency (fiat, not redeemable in gold) 65 years earlier. After gradual retirement of the greenbacks, the country was back on a full gold standard. In 1929, economists had seen considerable inflation even in the United States from WWI, and had seen the disaster in Germany and elsewhere from inflation. So here we are, 75 years later, and some economists are still haunted by the Great Depression. Ben Bernanke has built his career as an economist on the foundation of the Friedman-Schwartz monetary explanation of the great depression. So he sees something like an economic contraction coming and he does what Friedman says should have been done about 1930. Except that this is not 1930. There's no gold standard. There are not even any legal prescriptions or limitations on the issuance of fiat currency. Anna Schwartz, still alive and working in her 90s, recently denounced the Greenspan approach, now continued by Bernanke. Paul Volcker has made some rather restrained comments and criticisms. I think that the United States is engaged in an undeclared debt renunciation through currency inflation, and I expect a minimum average inflation rate of 7% compounded over the next five years, leading to a 50% rise in prices, overall, and further depreciation of the dollar against some other currencies. Some important prices may rise more, such as a doubling of grain and gasoline prices.