Thursday, April 7, 2011

4/7 10:50

Just bought 2% SSO at 53.55 on the Japan quake.  A 30-minute close SP futures below 1323.25 gets me out.

The ECB rate hike now puts the Fed alone in the world, pushing a fiat reserve currency outward to speculator's hands and staying to a June schedule for completion of a program that should never have started, QE2.  The 2011 budget contained a good ladle of fat to stimulate as well. 
These expressions of mindless Keynsianism by politicians pushed by bankers anxious to get off the hook are a reflection of the dark side of unbridled populism, the end game of a society.  The Tea Party is a reaction to the extremity of the symptoms of the disease.  The politicians themselves, in the whole, lack understanding of the Constitutional crisis that is unfolding.  On the one side, Democrat and Republican alike, are those that understand the political reality of the past century.  From Woodrow Wilson and on the limits imposed on congressional and executive authority have been removed to either mimic socialist ideals (Wilson, FDR, LBJ) or as expediency (Nixon,Reagan,Clinton,BushJr.).  There is no way out of the disaster that has befallen America without reinstituting Consititutional limits on authority because it is a long-term process and the flip-flop of electorates assures a return to fiat  responses to accelerating events.


  1. Steve, I think I woulkd put the Bank of England and the ECB in the same camp as the Fed.

    The ECB are still covertly monetising govt debt (and 0.25% will have no real impact), and the BoE is in no hurry to stop easy money.
    Oddly it is only the Chinese that are acting aggresively to tighten, but they have starving families to worry about.

    I see the US effectively going bust before things change over there, watch out world then, tough times ahead.

  2. Gary, worldwide fiat, no doubt, but England is dealing with their budget problems (perhaps BOE is offsetting the fiscal). At least ECB has begun the shutoff process. The Fed is just stubborn, but every day they keep QE running just makes the US less desirable as a place to park money.

  3. succinct, powerful, & apropos!