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The Weekly Chart That Needs No Introduction Or Explanation
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(we'll present our traditional weekly Fed balance sheet update shortly - nothing pretty there either)
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This chart could just as well be my alcohol-use chart for the last year.
It has a much cheerier view from that angle too.
NIFTY INTRADAY UPDATES:
http://markettechnicals-jonak.blogspot.com/2011/02/charts-show-target-5118.html
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The Fed's reaction will be as predictable as ever.
We already know that Chairman Bernanke exculpates the Fed for any blame in creating inflation either domestically or abroad. In fact, he refuses to even consider rising food and energy prices in his definition of inflation. Americans could be paying $50/pound for ground beef, but as long as their houses are still losing value, Bernanke doesn't see an inflation problem. Meanwhile, they're eating squirrel for protein while making payments on a mortgage twice as expensive as the house.
The truth is that Bernanke doesn't know what causes inflation, so he can't be expected to spot it, much less do something about it. Using the Fed's own history as a guide, Bernanke will view rising commodity prices as a threat to GDP growth and a sign of pending deflation. That's because the Fed is caught up in a 'Phillips curve' philosophy that only equates economic growth and prosperity with inflation. In short, Bernanke believes that slow growth and rising unemployment rates equate to deflation, despite plentiful contrary examples in history.
Since he believes rising commodity prices are deflationary and have nothing to do with his own loose monetary policy, the Fed is likely to expand its balance sheet to a greater degree. The fact that the Fed's massive money printing effort is the progenitor of global food riots completely escapes him. As more damage is done, the Fed will use the resulting contraction in GDP to justify a third round of quantitative easing - further harming the GDP.
Unfortunately, the vicious cycle of stagflation will grow more acute with each iteration of the Fed's love affair with counterfeiting. Countries that make the mistake of continuing to peg their currencies to the US dollar will suffer more inflation and more destabilization. Since it will be hardest for the US to ditch the dollar, our hopes are dimmer.
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http://blogs.forbes.com/michaelpento/2011/02/24/arab-autocracies-and-us-...
Oh, Bernanke and friends know perfectly well. They just pretend not to understand so people will excuse their endless, unconstrained, unapologetic, predatory butchery.
hey I know the hedgies at tmm like nemo the fisk are still calling the monetary situation too tight, the bond market yields are too high; just so everyone knows there are people of different shades around; of course for hedgies, there is never enough of free money around :)
YA!!!! But var ist M3?..........ist still negative Ya?