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May 2010



Steve Saville: The Post-Bubble Recriminations Ramp Up

May 25, 2010 – Comments (3)

Another great article by Saville. Everybody is happy to laud the Federal Reserve when times are good. But the policies of the Federal Reserve, the Treasury, and the Congress (most especially) with regard to reckless financial and monetary policy are what got us into this mess (and yes, I believe we are still in one) and will not get us out of it. Everybody talks about deflation like it is the worst thing in the world and "price stability" like it is this magic panaeca. Only an inflation target of 3-5% is a good thing!! Persistent inflation will always cause speculative bubbles to form because savers in a fiat currency are not rewarded for their risks. During a mania cash should be the smartest investment. So that when the mania is over, those savings can be reinvested and turned into capital. The result would be more "stability" than the current Keynesian inflationary system promotes. But when cash does not provide any safety, then everybody is forced to become a speculator (which the general investing public is very bad at). Which is what makes for much higher highs and much lower lows when debt becomes unsustainable --  Debt Saturation - and More on Debt Saturation Equals Diminishing Growth, Employment, and Capacity Utilization‚Ķ -  [more]



ContraryInvestor: INCOMING

May 03, 2010 – Comments (0)

Here is another great Market Observation by ContraryInvestor. I have linked to a couple of their articles in the past:

ContraryInvestor: Of Mountains And Molehills -
Volatility Schmalatility and ContraryInvestor: Cycle Logical Issues? -

This one is very good as it discusses personal income, what has been seen in the previous recession recoveries and what is going on in this "recovery". Very much related to this post: Not Sustainable - CI's Market Observations are always worth reading every month and this one is no exception  [more]

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