I ‘love’ governments. They cause the problem, then wring their hands because ‘you caused it’ and then come up with a cure that is worse than the disease.

Let’s look at the current US financial quagmire.

  1. First Greenspan expanded the M3 to the extent that it not only assisted in the creation of a stock market bubble but led to a real estate bubble as well as a credit bubble. When the ’s… hit the fan’,
  2. The FED first denied there was a long-term problem – remember that it first denied a sub-prime crisis,
  3. then from Bear Stearns and subsequent crises, it kept assuring us that the problem was contained.
  4. It solved the problem by throwing more and more money at it – reported to be 1.6T to date (and growing? since no firm final figure can be arrived at).
  5. This increase in the M3 will cause the CPI and inflation number to rise exponentially. I expect the first rise to occur in 2008 while ShadowStats says 2009.
  6. Let’s not mention the total ban on Short Selling on about 799 stocks. Like lemons the other countries have fallen into line. I wonder if the CFTC is contemplating a ban on short selling of futures?

Of course the FED is only trying to help (??). With help like that from my ‘friend’ I don’t need any enemies.

There were 3 interesting pieces along the lines I have written:

All are interesting reads.