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).

When nothing seems to help, I go and look at a stonecutter hammering away at his rock, perhaps a hundred times without as much as a crack showing in it. Yet at the hundred and first blow it will split in two, and I know it was not that blow that did it, but all that had gone before.

Jacob Riis

Gold had another up day with stocks, as it was ‘risk on’ with renewed hopes for fresh infusions of liquidity as we saw from the Bank of England.

I tended to view this action as more ‘technical’ than fundamental.

I don’t like the headline correlation between stocks and the metals like gold and silver which would normally function as a safe haven in a time of increased risk.

Notice the new lines of broad support and resistance levels on the gold chart. We have not yet broken to the upside, so caution is advised.

Guest post by Jesse of Jesse’s Cafe.

Please bear in mind that the DX dollar index will become increasingly irrelevant because of its outdated structure, heavily weighted to the euro yen and the pound, to the exclusion of the emerging currencies and the precious metals.

The shorter term chart has been rallying largely on euro weakness. We might see another eurodollar short squeeze if things continue to deteriorate in the European banking system.

A stronger dollar is something that the wealthy and the financial sector may enjoy, to the detriment of the rest of the country and any hopes of economic recovery.   However the realities of things make a stronger dollar problematic.

So the next best thing is to slowly devalue the dollar by printing money and selectively distributing it, with tax benefits, to the most powerful and fortunate members of society.

In a ‘free market’ for currencies the dollar would have been much lower by now because of the persistent trade deficit, and the enormous dollar balances held by some of her trading partners.

The financial engineers favor a slow decline so as not to disclocate any of the major banking concerns. The currency discussions between China and the US are political theater for their respective peoples and the currency tourists, i.e. the small speculators who provide a snack for the wolves.

For more, visit Jesse’s Cafe.

Ombudsman: (n) One who investigates complaints and mediates fair settlements, especially between aggrieved parties such as consumers or students and an institution or organization.

This piece by the Washington Post’s Ombudsman, Patrick Pexton, is a must-read. Excerpts with commentary:

Overall, The Post’s record on Paul coverage is sparse.

… The Post’s main politics blog, The Fix by Chris Cillizza and compatriots, had by the far the most coverage of Paul of any of The Post’s publishing venues, with about nine posts mainly or substantially about Paul, but dozens more where he is mentioned once or twice along with the other GOP candidates.

If you’re a print reader, you don’t see much of this, but I’ve compiled it all on the omblog.

The last is a very important point. Much of the (already sparse) coverage of candiate Ron Paul does not go to print. The little they do publish is mostly on blogs, and at least some of that is “dismissive”, according to Mr. Pexton. Those who only read the print version of WaPo may barely know Paul is in the race.

The GOP’s “top tier”, as judged by the Washington Post (and others), curiously excludes Mr. Paul, as noted by Mr. Pexton:

Post political correspondents Dan Balz and Philip Rucker declared on Aug. 14 that Perry, Romney and Bachmann were the top tier, with barely a reference to Ron Paul.

And when you look a the numbers, a bias, of some sort, becomes apparent:

In the past six months, The Post has published online or in print 34 staff-written stories plus 12 wire service stories on Bachmann, who has served not even five years in the House, and that doesn’t count the blog posts about her on The Fix or Glenn Kessler’s Fact Checker pieces. The Post published 19 staff-written stories on former House speaker Newt Gingrich in that time, plus one wire story and many blog posts. On Paul, a congressman for more than 20 years, who was No. 2 in fundraising after Romney in the last report, The Post has published just three full stories, a couple more that had large sections on him along with other candidates, two wire stories and The Fix blog posts.

Thank you, Mr. Pexton, for writing this.

And thanks to fellow Ron Paul supporters, for flooding WaPo with complaints on the lack of coverage. Pexton cites this as a major factor in his decision to write it.

Mr. Paul is arguably the only non-interventionist candidate in the race. He’s been singing the same tune for decades. Watch this clip of him warning of blowback from Middle East interventions, in 1998:

It’s curious that a “left” paper such as the Washington Post would be so quick to dismiss him. Then again, maybe not. The WaPo, along with the NYT, has become increasingly hawkish.

The mainstream right also wants to discredit him. Here’s Rush Limbaugh saying Dr. Paul could “destroy the Republican party”.

Destroy the GOP, he says? You’d think the left would be more open to the possibility. Nope, they appear to agree with Rush, not Ron. If this shared aggression between neocons and neolibs towards Ron Paul isn’t a sign of a true anti-establishment candidate, I can’t imagine what would be.

Money bomb, Sep 17th.

From this guy.

Disclosure: long silver, gold.

Hat tip LewRockwell.com

My kind of infographic, via Reddit.