Saturday, March 12, 2005


Don Luskin, etc.

Honestly, I like kicking Kudlow, because he represents all that, IMO, is wrong with bubblevision, where they are always bullish, always concentrating on the short term and beating estimates by a penny. I have been saying inflation is a danger, that the government statistics are "cooked", and that one of our alarms, Gold, has been capped, to prevent us from taking evasive action.

Don Luskin has a great article about inflation:
Consumer prices don't need to be rising uniformly for inflation to be a problem. They aren't, but it is. in Trendmacrolytics.
Luskin has noticed that long bonds have moved from 3.97% to 4.5%, because investors are seeing the first signs of inflation and he explains how it is working in this global economy.

Mover Mike

From Economics 101 we learned that GDP = Personal Consumption + Gross private domestic investment + Government consumption expenditures and gross investment +/- Net exports of goods and services. If we are running a negative Net exports of goods and services of $600-700 Billion per year, then our GDP is lower than it should be by about 5%+.

Mover Mike

From the PrudentBear

Last night from Dr. Bernanke: “Over the past decade, a combination of diverse forces has created a significant increase in the global supply of saving – a global saving glut – which helps explain both the increase in the U.S. current account deficit and the relatively low level of long-term real interest rates I the world today.”

Well, from the Fed’s own “Flow of Funds” we know that – “over the past decade” - Total U.S. Credit Market Debt has increased $19.4 Trillion, or 115%. Broken down, Non-financial Credit Market Debt increased $11.2 Trillion, or 86%; while Financial Sector Credit Market Debt jumped $8.2 Trillion, or 214%. What Dr. Bernanke refers to as a “global glut of savings” is actually a historic surfeit of dollar IOUs. That these IOUs are predominantly backed by non-productive assets is a huge problem. That a large amount of these IOUs are held by foreigners compounds the problem. That a significant but unknown portion of these IOUs are held or, importantly, hedged by highly leveraged financial players and speculators creates – in the words of Hyman Minsky – “acute financial fragility.”
Kudlow are you listening? Beranke is singing your song!

Mover mike

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