Before:
In tried and true fashion, just as Silver was about to viciously destabilize the global capital markets as it surged to new 31 year highs, the CME stepped in and did its usual 3-6 half life intervention by hiking initial and maintenance margins on silver futures from $11,138 and $8,250 to $11,745 and $8,700 respectively. This is merely the latest margin hike in what appears to be a neverneding series designed to reduce speculative "fervor" courtesy of endless liquidity. What it will do is merely provide a better entry point for those who by now realize that silver's next stop in the fiat endgame is $40, then $50, and so forth.I bet Ben and the boys are seeing this. Robert Wenzel is right when he talks about criticism of the Fed getting more mainstream attention. In what will most assuredly be a dog-and-pony show of trying to mask any real financial calamity from the public, it has just been announced that the Bernak himself will give four "media speeches" a year. EPJ reports:
The Fed has announced that its Chairman Ben Bernanke will hold media briefings four times a year.This of course follows the recent Supreme Court rejection in which the nine justices denied to hear the Fed's case against public disclosure. Jonathan Weil sums it up perfectly in his Bloomberg column today:
Bernanke will hold the previously unheard of question-and-answer sessions with reporters following Fed quarterly economic forecast and policy meetings.
Here’s a little secret the Federal Reserve Board doesn’t want you to know. On Sept. 24, 2008, while financial markets were collapsing, Morgan Stanley borrowed $3.5 billion through the Fed’s oldest lending program, the 98-year- old discount window.
The discount window functions as a lifesaver through which qualifying borrowers can secure emergency liquidity during times of severe stress. Historically the Fed had kept the names of borrowers confidential on the grounds that disclosure could stigmatize them in the public’s eyes, even though it was the public’s money the Fed was lending.
Under Dodd- Frank, the Fed will be required to publish details of its discount-window loans, including borrowers’ identities, after two years. That’s why the Obama administration stepped in last year and urged the high court not to take up the case, saying the new disclosure rules made an appeal by the Fed unnecessary.
This whole sorry exercise by the Fed has shown the central bank at its worst. The Fed lost on the merits. Yet it succeeded in serving notice that anyone who challenges its judgments must be prepared to spend absurd amounts of time and money on litigation as the price for busting its wall of secrecy and holding its leaders accountable.R.I.P. to Mark Pittman of Bloomberg who originally filed the lawsuit. Suspicion of the Fed is sure to ramp up with the on-coming inflation. For all those Krugmanites out there who still need proof, look no further than to one of the leading suppliers of goods to the U.S. from China, Li & Fung:
Li & Fung, which supplies products for companies like Walmart and Gap in the US and Debenhams in the UK, said “a new era in sourcing with higher prices” has begun as manufacturers pass on the rising costs of raw materials and Chinese labour to customers.
Bruce Rockowitz, president of Li & Fung Trading, said: “The biggest topic on the minds of everyone in this business is that higher prices are really here to stay. At this point, retailers are not sure what they can pass on to consumers and what they cannot."
As bad as that sounds, a new report on "China Ghost Cities" is out today from SBS Dateline:
Vast new cities of apartments and shops are being built across China at a rate of ten a year, but they remain almost completely uninhabited ghost towns.You would think Keynesians would be all for this. I mean, who needs desired wealth creation when the government can just pay people to dig holes (in this case it's houses and apartments)?
It’s all part of the government’s efforts to keep the economy booming, and there are many people who would love to move in, but it’s simply too expensive for most.
Video journalist Adrian Brown wanders through malls of vacant shops, and roads lined with empty apartment buildings… 64 million apartments are said to be empty across the country and one of the few shop owners says he once didn’t sell anything for four or five days.
Gary North is out with another great article today warning of the coming rise in interest rates. In regards to The General Theory:
In 1948, the first edition Paul Samuelson's Economics textbook appeared. It became the dominant textbook in the West. It was called neo-Keynesian. That is, it was only partially incoherent, unlike Keynes' General Theory, which is totally incoherent. (Skeptics who think I am exaggerating have either never read The General Theory or have spent years reading textbooks to prepare them to believe they understand The General Theory when they read it after they have received their Ph.Ds in economics.)I have yet to read The General Theory but I would like to someday. I anticipate it will be a difficult read, but why not give it a try?
I will end with posting a chart on radiation levels, their effect, and why there is no need to worry about the disaster in Japan now.
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