Archive - Aug 22, 2011 - Blog entry

The debate over whether or not continued deficit spending should be pursued is often characterized as a choice between the short term beneficial effect of Keynesian stimulus as against the long term growing, and ultimately unsustainable, government debt to which continued stimulus would contribute.This view assumes there to be a reliable relationship connecting increases in aggregate spending to increases in employment. The absence of such causality, however, would undermine the case for deficit spending.

This is a rather odd turn of events… a former Fed official urges the Fed to step in and buy the stock market… just three hours before the markets mysteriously reverses and rallies hard on no real news of note.

Comrade, you won't need a night-light for a LONG time ... you'll be able to read by your healthy communist glow

Freedom granted only when it is known beforehand that its effects will be beneficial is not freedom.  --Friedrich August von Hayek

What is a "Bad address? The answer:

This reveals QE for what it really was: just another “hit” for drug addict that is the global debt system. We’ve already passed the point at which the negative effect of monetary easing (inflation) outweigh its positive effect (markets rallying). This is similar to the state of drug addiction in which the drug barely creates a “high” but is ravaging the user’s system with health problems.

Some investment and trading tidbits about the Squid that somehow have miracurously escaped both the pop media and sell side Wall Street... Hmmm....

I warned to get defensive several weeks ago. That warning is even more important now. I would avoid stocks and Treasuries as neither are particularly safe. I’d have increased exposure to cash and PHYSICAL bullion (Gold and Silver). If you have to remain long stocks shift into large-caps and companies that will exist a year from now (brands and industries people will need regardless of how bad the economy gets).

(But yes, @Nouriel, we need central banks, and moral hazard and FRB did not exist before 1913...Q.E.D., right?)

The bounce has started (again), but don't get overly bullish.....

These kinds of extremes in sentiment have not been seen for 12 months.