Human foibles and money issues dominant the current thoughts of most. So, let’s take a gander out some of those matters together.
We all know that the Fed Reserve has enormously increased it balance sheet by buying Treasuries and other securities to hold down rates and “pump” money into the economy. Now that QE2 is ending there is discussion about how the Fed will reduce its balance sheet and remove that excess liquidity. The most often mentioned method mentioned is for the Fed to sell it Treasuries and thereby reduce its balance sheet. We still wonder how that works since the Fed will be getting cash for the Treasuries when they are sold. They are replacing one asset with another and the balance sheet shouldn’t change. Yeah, they might sell at a discount but it wouldn’t be that much to have a significant effect. What is the explanation for this oft- quoted method of reducing the balance sheet.
Weiner Roasted. Enough said. But, but, but there will undoubtedly be lots more said until he wakes up and smells the coffee and resigns.
Bernancke talks again and the Market drops again. What’s new? Does it occur to anyone else we would all be better off if he only spoke two or three times a year when he gives his testimony before Congress and otherwise keeps his mouth shut. The guy must have some secret desire to be a Bono-type rock star of economics.
The possibility of sovereign default be a number of nations is all the news today–Greece, Portugal, Ireland and others around the world. As always the current generation acts and some even actually believe this is something new under the Sun. It has happened before, many times. The 1890’s in Latin America and then again after WWI with Latin America mostly. Of course the biggest was in the 1930’s. You recall that under the Treaty of Versailles the Germans were required to pay billions in reparations for the cost of the War. Those payments in turn were supposed to be used to repay the war loans made by the US to Britain and France during the War. Germany had revolutions, tumult and hyperinflation during the 1920’s but demand for payment relief was denied by the Allies. Some in the US wanted to grant relief but not Britain or France. Then came Hitler and the payments stopped. Sanctions (a familiar term today–Libya, Iran, North Korea) were threatened but Germany moved on with tremendous economic growth in the ’30’s and no one was willing to take military action. The obligations were defaulted. Some how the world survived. I think we will survive Greece.
There were many eyebrows raised when Utah passed its recent laws regarding gold and silver as legal tender for transactions in that State. Lots of man on the streets comments were how can they do that? Well, it is refreshing that someone actually still reads the US Constitution. Its right there for all to read. It states that the States may make no coin except gold and silver. They can do that and could have all along. If our US economy gets noticeably worse Utah might have a bit of trading edge on other States because of that new provision and the availability of gold and silver coins there.
The cognoscenti in Washington so often speak about the Constitution as one formed by the people and our government one approved by the people. Well, that is true only indirectly at best. Yes, the preamble starts off talking about “we the people” but when the rubber meets the road and you look at the concluding Article and sections of the Constitution you will clearly see that the Constitution was NOT approved by the people. It was ratified by the individual States, not some popular vote. That approval only came after the first ten amendments were made part of the deal and confirmed the reserved powers of the sovereign States in the 9th and 10th amendments. Without those the Constitution would likely not have received approval.
Even though over 90% of all the species that have ever existed on planet earth are now extinct we are here. We and the planet survived without any dinosaurs for example and there were gazillions of them. So what if the sand lizard becomes extinct in far West Texas and Eastern New Mexico? The EPA seems to take the position that life as we know it will evaporate. Get out of that academic cocoon. The EPA has destroyed more jobs than any downturn. All with no proof of their contention that the world needs these obscure species. Life is a struggle and always has been as Darwin noted and only the species that adapt will make it. Guess those eggheads at EPA forgot that part of their courses in evolution when taking their biology classes. I would rather see a rough neck keep his job than save the lives of a thousand sand lizards. If you love them then adopt one and take it home.
Think how much trouble we are in when Washington DC is the fastest growing and strongest housing market in the country. This is not a good thing. www.olcranky.wordpress.com