A Lack of Prudence

What is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom.—Adam Smith, The Wealth of Nations

Here’s some nonsense on stilts:

Richard Feynman was once asked what he would pass on if the whole edifice of modern scientific knowledge had been lost, and all he . . . → Read More: A Lack of Prudence

China Moves Towards More Easing ...

This may be a targeted and essentially pinpointed move, but looking at the data coming on China in the first quarter of 2012, I think there is plenty more to come as China tries to come to grips with a rapidly slowing economy.

Quote Bloomberg

China boosted rural credit by cutting reserve requirements for . . . → Read More: China Moves Towards More Easing …

Where Are the Handcuffs?

For this blatantly illegal act:

The Federal Reserve Open Market Committee (FOMC) has made it official: After its latest two day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years. The debauch of the dollar will be even greater if the Fed exceeds its goal of a . . . → Read More: Where Are the Handcuffs?

A Third Option

Karl Denninger:

In many ways the monetary policy issue is even more important, simply because we are running out of rope on our national debt-addiction rappelling adventure and the floor is still 100′ down.  That’s a serious problem — and “gold standards” do not (in fact cannot!) fix it.  The only fix that works is to demand and enforce a . . . → Read More: A Third Option

European Bank Runs And Underestimated Physical Gold Demand

The demand for gold is vastly underestimated. About 18 months ago I wrote about Euro Gold and the Euro Zone and Euro Evaporation Leading To Credit Default Swaps and IMF Gold. One key excerpt was:

The Euro is broken. This was its destiny. This is the destiny of all fiat currencies. These bureau-rats cannot . . . → Read More: European Bank Runs And Underestimated Physical Gold Demand

Inflation: Just Another Form of Government Theft

Karl Denninger explains inflation in rather graphic terms:

Let’s assume a 2% productivity increase per year over 30 years. Let’s also assume a 2% inflation rate over 30 years. This is what it looks like, starting with a baseline of “10,000.”

Your cost of living has gone up by 78% in notional dollar terms . . . → Read More: Inflation: Just Another Form of Government Theft

This Does Not Bode Well

As can be easily seen from this chart (source), the money stock as measured by the Federal Reserve has grown by approximately 6.67% in the last five months! Since real GDP is projected to grow by only 1% (and will likely be revised downwards ex post), this means prices are going to rise . . . → Read More: This Does Not Bode Well

Porter Stansberry: Enough Already, Let's Return to the Gold Standard!

The money supply increases naturally by exactly the amount of increases in productivity in a healthy economy, notes Stansberry & Associates Investment Research Founder Porter Stansberry. He doesn’t have to point out that the economy isn’t healthy, nor that the money supply expands every time the printing presses run to bail out a failing . . . → Read More: Porter Stansberry: Enough Already, Let’s Return to the Gold Standard!

A Run On Eurozone Banks?

The Calafia Beach Pundit raises an interesting question in relation to the recent surge in the US money supply which he suggests might be a reflection of a scramble into USD assets. More specifically, the argument would seem to be that a silent run on European banks is in the works as money is . . . → Read More: A Run On Eurozone Banks?

Economic Events on May 12, 2011

At 8:30 AM EDT, the U.S. government will release its weekly Jobless Claims report.  The consensus is that there were 430,000 new jobless claims last week, which would would be 44,000 less than the unexpectedly high number released last week.

Also at 8:30 AM EDT, the Producer Price Index for April will be released.  . . . → Read More: Economic Events on May 12, 2011