Sunday, August 25, 2013

France: Perhaps the Real Canary in the Coal Mine?

I'm living in France at the moment, so what happens here is particularly interesting to me.  The ambiance is a mix of anxiety about the future and cautious hope that things can't be as bad as they seem.

John Mauldin, whose weekly e-mail newsletter is one of my must-reads, puts his finger on the European situation in this week's Thoughts From the Front Line.

A healthy Europe is vital to the future of the U.S., in the sense that our current state of dreamy optimism is fragile.  Our self-confidence is dependent upon things progressing smoothly in other parts of the world, and the slightest hiccup, whether at home or "over there," can have a ripple effect.

John has another column from last year that explains this fragility nicely.  It has to do with complexity theory.  Read here.

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Saturday, August 24, 2013

David Galland is On A Roll About the Constitution

There are a couple of e-mail circulars that I read regularly, or almost regularly.  The top of my list is John Mauldin, author of The End Game (excellent book, a must-read).

Number Two is Casey Research.

Today's scripture from Casey will permit me to be lazy and link you to a good read.  He covers a lot of territory.  The most interesting to me were his comments about the Constitution and limited government.  Here it is.

David Galland at Casey Research

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Saturday, August 10, 2013

I need Relief from the Fed

I was reeling with annoyance after reading this presidential statement about the dual mandate of the Federal Reserve:

"The challenge is not inflation, the challenge is we've still got too many people out of work."  (Read more here.)

Now, just what does the Fed have to do with unemployment?

Admittedly, the Fed has two goals mandated by Congress.  First, it should stabilize prices.  Second, it should do whatever possible to bring about full employment.

I have to believe that Congress wasn't thinking straight when they gave the Fed these two jobs.  Neither can be done without unintended consequences, and the second is quasi-impossible.  The Fed is not in the business of making anything or creating businesses that employ people, and it can't force companies to do so.  It has no influence on Congress, the debt, the President, or any particular market players except the banks.  All it can do is pander to Wall Street and keep it solvent a bit longer.

After frothing at my mental mouth and issuing epithets against what I'm certain is pure abject stupidity on the part of those in power, I fell upon this soothing article at Casey Research.  The introduction is what really calmed my frazzled nerves.  If you need refreshment like me, a quick read may do you some good.

Take a look at the main article by Alasdair MacLeod, too.  I like his style.  I do tend to stop nodding my head in agreement, however, where MacLeod affirms that the planets are lining up for price inflation.  He asserts: "Next, expect raw materials and commodities prices to rise as foreign exchanges try to recycle excess currency."

I need more information to buy into this one.  Too many possibilities exist.  Why commodities?  You might ask, why not commodities.  But we might get just more stagnation, more debt, more printing, more "concrete wings," more bank subsidies (low interest rates), more stock market euphoria, and more flapping of the jaws ad nauseum, all keeping this going for months or even years.  (Until it stops, of course.)

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