Wednesday, November 07, 2007

What A Fantastic Economy!

Here we go:

HONG KONG (MarketWatch) -- Crude oil topped $98 a barrel and gold futures rose as high as $848 an ounce Wednesday after comments from a senior Chinese official suggesting China should consider diversifying some of its foreign reserve holdings sent the dollar to fresh lows.

Gold prices spiked to multi-decade highs on safe-haven buying amid concerns that higher oil prices and dollar weakness could lead to inflation. The front-month contract for bullion leapt $20.03 to $843.70 an ounce in recent London trading, adding to the $12.60 rise Tuesday that took bullion to its highest close since 1980.
Oil for December delivery touched $98.46 a barrel in electronic trading, before easing to $98.19, up $1.49 from the New York close.

Cheng Siwei, vice chairman of the Standing Committee of the National People's Congress, said Wednesday in Beijing that authorities should consider the appreciation of currencies such as the euro when the country purchases foreign bonds with its $1.43 trillion stockpile of foreign-exchange reserves, according to media reports. Later in the day Cheng reportedly said his remarks had been misinterpreted.

The Fed looks like it's going to be coming in with another rate cut next month as oil looks like it will top $100 today or tomorrow, as food and energy costs sky-rocket and as the dollar hits all-time lows.

Australia actually raised interest rates yesterday because of inflation worries.

Here in the U.S., we don't count increased food and energy costs as inflation so we don't have to worry about inflation.

That's why the Fed can continue to cut rates and stoke increases in commodity and equity prices.

Inflation, what inflation?

Enjoy the rate cuts. I know I am. My bank cut my savings rate by 50 basis points today.

Since I get paid in dollars, my savings isn't worth all that much anyway.

I guess the message is clear.

Borrow and spend, borrow and spend, borrow and spend.

What the hell, the dollar's not worth anything anyway.

Indeed, borrow today. It will cost you less to pay it back tomorrow.
Here in the U.S., we don't count increased food and energy costs as inflation
I've been pondering on this today. How can you exclude basics from cost of living calculations?
Surely the Fed at least considers these factors, apart from political issues.
Nope - all they use is core inflation, stripped of food and energy costs. Crazy as that seems, they say with a straight face all the time that inflation is in check even w/ oil near $95 a barrel, gold over $800 an ounce, and the dollar at all-time lows.
Somewhat off topic -- Some of the current administration's budget cuts (like those in the EPA) may be unwelcome, but understandable in light of its philosophy. Others may be "excused" as favors to friends. There are a few, however, that are so maliciously un-christian that one has to wonder if we have human beings in the White House or evil space aliens.

I read about one of these last in the latest AARP Buletin. Social Security disability cases are so backlogged that three years or even longer can pass between the initial claim and the first disability check, even in cases that should be rubber-stamped. While the number of claims has increased substantially since 2001 as the Boomers have aged, the budget to process those claims has declined. Results -- claims, even well-substantiated ones, are initially denied and then stalled by the agency for years, possibly in hopes the disabled individuals will give up or die. The disabled themselves wind up broke, and broken, unless they happen to have access to a junk yard dog of a lawyer.

Can you imagine a human being so depraved that he or she would conciously hinder or thwart a valid disability claim? I first though to liken that mentality to never seeing someone on death row that he didn't want to be executed, but this is far worse, as these victims are innocent.
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