New York seems to have more than its fair share of knuckleheads. Paul Krugman and Tom Friedman are both stalwart…
Another day of piddly trading, with piddly losses for both stocks and gold. So let’s turn back to our thoughts. First, we looked at money. We saw that the US now operates on a type of money better suited to the Paleolithic Age. A credit-backed money system has never worked in the modern world… and none has ever survived a full credit cycle. The credits expand until the debt is far too heavy. Then, when interest rates rise, the cost of carrying the debt goes up until the system falls apart.
When we left you yesterday we were lamenting how the American working classes have lost ground. Today, the typical working stiff has a lower real income than he had in 1950.
Wait… Is that possible?
Yes. As we showed yesterday, he has to work longer today to pay for a family car and a house than did six decades ago. In 1950, he could support a family.
Not much in the markets today to draw our attention. Other than another pronouncement by the Fed that it will remain “highly accommodative” for the so-called “foreseeable future.”
Then whither our thoughts? How about to the end of the world as we know it? This from The Wall Street Journal:
Zurich is a delightful city. So much history! So much beauty! So much money!
You can barely throw a Kruggerand in any direction without hitting a rich banker or his model wife.
They stroll along the Limmatquai. They dine at the Kronenhalle. They shop on Bahnhofstrasse.
And what do they think of today’s markets?
Whew! The Fed is number one in central banking. And it’s finding out just how tough it can be to meddle with a $16 trillion economy. On Wednesday, Ben Bernanke came out with a public statement. He said that if all went well… and he didn’t change his mind… and nothing unexpected came up…and the Fed’s Open Market Committee felt like it… the Fed would begin tapering its bond buying sometime soon.