Bearish News

A broad index of commodities, as tracked by IndexMundi.com (great site), is up 252% in the last 10 years.

So when an influential idiot like Christina Romer says, “the spectre of inflation is quickly fading”, as she did on Bloomberg TV recently, it makes one wonder. What is the time period these people are looking at? A week? A month? Only ones when commodities are down?

Stop to consider the fact that these price increases have occurred despite stagnant wages (the Keynesian’s preferred deflation argument being that inflation cannot occur without matching wage hikes) AND crawling money-velocity since the crunch. No matter what the Fed does, it is screwed going forward.

1. Tighten? Raise rates. Crush increasingly credit-dependent zombie economy (and banks, for some reason the Fed seems to favor the institutions who own it)
2. Expand lending? Massive inflation, continuation of zombie economy.
3. Keep lending slow, monetize debt. Hyperstagflation, ugly.

If I had my pick, I would of course go #1. Every time. But that’s not likely to be the case (for a while yet).

And regarding investment choices today, they’re a bit like a school cafeteria; sh1tty choices, but clear winners. I am looking to buy more precious metals and foreign bonds (pizza & french fries).

Bill Fleckenstein of Fleckenstein Capital talks to Bloomberg about the Fed, precious metals, and the difficulty of shorting this market (and being long).

Not a new video, but one worth watching if you haven’t yet. Mr. Grant, of Grant’s Interest Rate Observer, is one of the sharpest independent economists around. Inflation hitting suddenly quote at 16:20 (hat tip reader brian).

Weimar Germany may be a bit of an extreme example to use, but it does demonstrate the point rather well … (note that the x-axis is in months, not years).

Another great interview with Jim Rogers, one of the few truth-tellers who continues to get MSM air time. Here he talks with Larry Kudlow, who brings up an important issue — whether the EU will eventually follow the Federal Reserve in their currency devaluation strategy. Other topics discussed: Fed lies, M2 money supply exploding, looming (potentially disastrous) global inflation.

I took advantage of the recent dip in silver prices, bought more. There are few things I want to own today more than gold & silver bullion. Global printing just getting ramped up. Bad as things are today, I believe this is the calm before the storm.

h/t Robert Wenzel.