RBS tells clients to prepare for ‘monster’ money-printing by the Federal Reserve
Ambrose Evans-Pritchard, The Telegraph
Entitled “Deflation: Making Sure It Doesn’t Happen Here”, it is a warfare manual for defeating economic slumps by use of extreme monetary stimulus once interest rates have dropped to zero, and implicitly once governments have spent themselves to near bankruptcy.
The speech is best known for its irreverent one-liner: “The US government has a technology, called a printing press, that allows it to produce as many US dollars as it wishes at essentially no cost.”
Bernanke began putting the script into action after the credit system seized up in 2008, purchasing $1.75 trillion of Treasuries, mortgage securities, and agency bonds to shore up the US credit system. He stopped far short of the $5 trillion balance sheet quietly pencilled in by the Fed Board as the upper limit for quantitative easing (QE).
Investors basking in Wall Street’s V-shaped rally had assumed that this bizarre episode was over. So did the Fed, which has been shutting liquidity spigots one by one. But the latest batch of data is disturbing…
(27 June 2010)
Peak Metals – What happens when we run out?
Bill Code, World News Australia
We can’t live without metals. They seem to be in almost everything we use, and we’ve been digging them up for thousands of years.
But virgin metal supplies are finite.
n the 1950’s, an American geoscientist came up with the term ‘peak oil’, to describe the moment when the maximum rate of petrol extraction from the earth would be hit – and academics in Australia are starting to talk about the very same problems faced by our metal mining industry.
Marion King Hubbert claimed that oil production in US mainland states would peak between 1965 and 1970. In the end, production in most US states is widely agreed to have peaked in 1971.
But in his native Texas, the year was 1972. And half a world away that same year, the young Club of Rome think tank was gathering attention with The Limits to Growth, a book causing a stir by confronting the issue of finite resources…
(15 June 2010)
A quiet crisis whispers of impending poverty
ilargi, The automatic earth
President Obama said during the G-20 meeting in Toronto, where he was told to take a hike by European leaders, that both he and British prime minister David Cameron
“… are aiming at the same direction, which is long-term sustainable growth that puts people to work…”
Somewhat curious, since his Vice President, Joe Biden, said a few days ago that
“…there’s no possibility to restore 8 million jobs lost in the Great Recession.”
Looks a lot as if the nonsense now starts to contradict itself. Perhaps we shouldn’t expect anything else.
…That sounds to me like a remarkably accurate portrait of much of America in a few years time. And Britain. And the rest of Europe.
The talk in the press has shifted towards debt, debt and more debt. And austerity. Whether Obama and the rest of the Keynes religion like it or not.
Ambrose Evans-Pritchard writes about an RBS note to its clients that warns of money printing by Bernanke. He says:
“America is one twist shy of a debt-deflation trap.”
Ambrose is right there. But he’s dead wrong in his subsequent remarks:
“There is no doubt that the Fed has the tools to stop this”…
(28 June 2010)
