10/16/10 I am not one for art, statues or monuments. Most of these objects fail to touch me but every now and then I bump into something that sticks in my mind. Last summer I was drawn to the monument in the picture below, which stands on a square in Nevers – a beautiful city on the river Loire in France. I spent quite a long time studying it and I eventually took some pictures that, for some reason, I regularly review at home.
You will have recognized that this is a monument commemorating the tribulations of the First World War. There is a lot of symbolism in the statue but it is the French soldier’s sorrowful stare that won’t let me go. What trauma has he lived through? France eventually battled its way to an armistice (not victory) in 1918 after having incurred 1.7 million dead (one in 28 of the population) and over 4 million wounded. Everyone will see something different, but for me this monument is whispering; my God, what have we done?
The uncanny thing is that before the outbreak of World War I, most Europeans expected the future to provide an endless stream of good fortunes, to the point of being bored by the prospect. In fact many soldiers such as the one represented by the statue, just four years earlier, were swept up by the bizarre spirit of 1914 that took hold of the peoples of Europe.
The “Spirit of 1914” which seems to have infected the passions of most of the European populations is described as a reckless urge for adventurism under the flag of nationalism. Young men in all countries volunteered to leave…Read more…
10/15/10 Buenos Aires, Argentina – Keynes was right about one thing…
Peace talks broke down last weekend. Observers had expected the IMF meeting on the weekend to result in the equivalent of the Peace of Amiens or the Surrender at Appomattox. But Treasury secretaries and central bankers went home, unpacked their bags, and resumed their premeditated mischief.
The dollar went down. Why would anyone pay 100 cents for an old, worn out greenback when the Fed promises to create trillions more of them, brand spanking new? Europe and Japan resumed firing with their new QE guns. Asian nations sent out snipers to intervene in the currency markets directly. And China and the US resorted to “trench warfare,” reported The Financial Times, neither apparently ready to give up an inch; that is, neither was prepared to allow its currency to buy more today than it did yesterday. In America, China has become an election-year bogeyman. The electorate seems convinced that any nation that stockpiles $2 trillion worth of America’s I.O.U. greenbacks must be up to no good.
So, the war goes on. But it is an ersatz war. All the combatants really want the same thing – to debauch their currencies at the expense of savers and creditors. Sooner or later, they’ll conspire to get the job done. A full 93% of US financial professionals believe the Federal Reserve Bank is on the case. It is expected to launch major debauch in November. Investors have run up almost all asset classes in anticipation. The Dow passed 11,000 on Friday. Soft and hard commodities hit new highs. And if, on a given day, gold does not set…Read more…
10/15/10 Tampa, Florida – My wife is on the intercom and asking about whether or not I am coming out of the cocoon-like safety of the Mogambo Screaming Heebie-Jeebies Bunker (MSHJB) to have lunch, or maybe get a shower, or say hello to her and the kids, or pick up my mail, and maybe just stop acting So Damn Weird (SDW) for a pleasant change.
I explode into the intercom “So Damned Weird (SDW)? You think I’m acting So Damned Weird (SDW)?” I scream back. “Everything everywhere is So Damn Weird (SDW), so how is it freaking possible to NOT be So Damn Weird (SDW), SDW, SDW, SDW?”
My voice rising, I continue, “For instance, the bond market has become such an insane bubble that bond buyers have bid prices up so high (audience yells out ‘How high?’) that the yield is less than 2%!”
I could tell by the confused silence at the other end of the Bunker To Outside World (BTOW) intercom that she needed some explanation. So I helpfully went on, “Bond buyers are making a taxable Two Miserable Percent (TMP), while inflation, as measured by the GDP deflator, is 1.9%! Inflation as measured by John Williams at shadowstats.com is running somewhere in the 8%-plus range, and The Economist magazine is measuring a blistering 23.8% inflation in ‘all dollar items,’ with a terrifying 20% inflation in the price of food! Yikes!”
I listened for a response, but it soon became apparent that she had hung up the intercom, probably going back into the house, yammering to the kids about how “Daddy is still acting weird and won’t come out of that stupid bunker of his” and all the rest…Read more…
10/15/10 Stockholm, Sweden – Matt Taibbi, political reporter and financial journalist for Rolling Stone, has made a recent appearance on MSNBC show The Young Turks, hosted by Cenk Uygur. He’s on to discuss just how desperate the Fed has become.
After countless failed government efforts, including slashed interest rates and government work programs, the fed’s back to manning the printing press, to “print a whole bunch of money and buy stuff with it.” Of course, this has been tried before (read: QE1), but of the three options it’s really the only one that lends itself best to repetition… time and time again.
Taibbi explains that with QE2, “they go out and they buy a whole bunch of treasury bonds and a little bit of mortgages too, and that’s how they’re going to do it.” He suggests the system is rigged and is essentially another backdoor bank bailout that impoverishes hardworking money-savers. His conclusion? “The future consequences are dastardly…releasing two and half trillion dollars into the economy, and the next thing you know … we’re Zimbabwe, the dollar is going to be toilet paper.”
See the full video clip below, which came to our attention via a post on The Daily Bail.
We were stopped over a knee-high table in a dingy, all night video game parlor in Kuala Lumpur, Malaysia, at 3 AM on a Saturday night, desperately trying to finish our weekend column so we could send it, via a high-jacked, painfully slow-speed Internet connection, back to our Baltimore HQ on time. The joint was…Read more…
ByBill Bonner | Buenos Aires, Argentina - | 10/15/10
Now…back to our miserable beat…back to lies and vanity and foolishness. Back to the financial world! If you could really make a society prosperous just by inflating the currency, Zimbabwe would be richer than Switzerland…and the Argentines would all be driving Mercedes. They’ve got 25% inflation right now. But they’re not getting rich. They’re not…Read more…
It took a while, but stock traders have decided they like what they saw from the minutes of the Federal Reserve’s September meeting. After picking apart the opaque document the way Kremlinologists of old picked apart the pronouncements of the Soviet Politburo, they’ve sent the Dow close to 11,100. We’re not convinced QE2 – the…Read more…
ByEric Fry | Laguna Beach, California - | 10/13/10
During yesterday’s trading session, the Dow Jones Industrial Average inched ahead 10 points to a new five-month high of 11,020. The financial news services attributed the advance to new disclosures from the Federal Reserve that it would continue debasing the dollar. True. “Traders pushed shares higher Tuesday,” The Associated Press explained, “after minutes from the…Read more…
Traders in the credit default swaps market are no longer showing the same faith in the USA that major credit rating agencies show. This past quarter, the price paid to insure against a US sovereign debt default recently jumped up nearly 30 percent. That spike in cost made the US the third worst performing nation…Read more…
In recent months, commodity prices have risen dramatically. From a low point reached in June, various broad commodity indices are up from 15-20%. Few components have not participated in this rally to at least some extent. While commodity prices are individually quite volatile, when placed in a broad, diversified, basket, their volatility is comparable to…Read more…
October’s half over already, so in honor of the Halloween holiday month we’re posting a Reason TV video clip on the US’ fiscal house of horrors, in 3D no less! Well… that’s assuming you have the old-school red and green 3D glasses on hand. According to the Congressional Budget Office, government spending has skyrocketed while…Read more…
Yesterday morning, the currencies and precious metals were soaring versus the dollar, and I said we would have to see what the NY boys and girls thought about it all when they arrived at their trading desks. Apparently, they didn’t think too much about anything, as the currencies just drifted the rest of the day.…Read more…
My stomach was hurting, so I decided to take a little time off and soothe the old midsection with a few medicinal brews and a dose of pizza. The reason that my stomach hurt was because I had just read the stupidest economic essay, which was, unbelievably, penned by another lackluster university professor, and surprisingly…Read more…
