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Morning Reading
Good morning. Today, thoughts on the panic over the dollar, how to pick jurors for a Wall Street trial and Capitalism... An Apathy Story:
Despite what the New York Post says, the dollar has not lost its reserve status (Seeking Alpha)
The dollar is certainly going through a tumultuous time, and it will continue to deteriorate over the next several years. Eventually it may completely collapse and have to be replaced by a new currency. But the dollar has not, I repeat, has not, been replaced as the reserve currency, at least in my view.
What the New York Post said (New York Post):
After printing up trillions of new dollars and new bonds to stimulate the US economy, the Federal Reserve chief is now boxed into a corner battling two separate monsters that could devour the economy -- ravenous inflation on one hand, and a perilous recession on the other.
"He's in a crisis worse than the meltdown ever was," said Peter Schiff, president of Euro Pacific Capital. "I fear that he could be the Fed chairman who brought down the whole thing."
Oh, stop panicking about inflation (Financial Times):
Higher prices of gold reflect fear, not fact. This fear is not widely shared. The US government can borrow at 4.2 per cent over 30 years and 3.4 per cent over 10 years. During the crisis, the inflation expectations implied by the gap in yields between conventional and inflation-protected securities collapsed. These have since recovered - yet another sign of policy success. But they are still below where they were before the crisis. The immediate danger, given excess capacity, in the US and the world, is deflation, not inflation.
Capitalism: An Apathy Story (Oped News) Ouch:
When Goldman Sachs wins the Nobel Prize in Economics next year, we will become mildly annoyed and then yawn in the best American tradition and go on allowing the Robber Class to steal us blind, hoping that there is another juicy divorce or celebrity death that can distract us from reality.
The Robber Class doesn't frustrate me nearly as much as the Robbed Class. Robbers will be Robbers only as long as we in the Robbed Class let them.
GDP is a misleading indicator (The Atlantic)
How to pick jurors for a Wall Street trial (Marketplace)
Computers will only be faster for 75 more years (Inside Science):
A pair of physicists has shown that computers have a speed limit as unbreakable as the speed of light. If processors continue to accelerate as they have in the past, we'll hit the wall of faster processing in less than a century.
As a person with a bachelors of science in computer science, I can tell you that people have been predicting the end of the computer for 10 years. By the time we are 70 years in the future, the definition of a "computer" will have drastically changed. Probably to a highly parallel machine, which is the general concept of human brains. It will also have very little to do with the silicon chips we are all so used to. While the limitation they have found are real, I doubt they will be very relevant to future technology.
Did you see the note at the bottom of the first story?
"Publisher's Note: SHTFplan believes a total collapse of the dollar will occur at some point in the next decade, at which point a new world reserve currency or international monetary unit will be probably be needed."
Sounds like and agenda to me. Our dollar is fine until it isn't. It's wonderful to know we have great leaders to keep the dollar up.
While I agree that the dollar is in danger, I think it's unclear what the "net effect" of the treasury printing all that money last year was.
Certainly, some amount of money "in the system" was wiped out electronically during the derivative market collapse.
The Financial Times writer isn't very bright.
He shows a chart comparing gold prices with inflation, but he doesn't state that the methods used to calculate inflation changed in the 90s.
The Fed has lost control because it can not raise rates during poor economic times (high unemployment) but can not sit idly by watching inflation go crazy, so you monkey around with inflation numbers to make it appear low while the economy turns around. The value of the dollar will be the real gauge of inflation.
I fear the day when the US gives up it's global power and buys into a global currency, then we will lose power over our economy. This all stems from the Fed monkeying around and this guy lying.
http://seekingalpha.com/article/164452-recession-is-over-depression-has-...
Much better article.
P.S. Has anyone thought that the increase in gold prices may be linked to the tax hunt on offshore accounts? Instead of paying millions in taxes, why not buy gold and sneak it into the US or anywhere?
