The Shameless, Blame-Shifting, Minneapolis Fed
I've been a bit too busy to blog and comment lately. Still, it never ceases to amaze me the amount of quality work that gets churned out here on a daily basis. Thanks to TMFSinchiruna, binve, speedybure, abitare, and Dare in particular for your recent posts. I really enjoyed them.
Here is an article from economist/historian Thomas DiLorenzo conerning the 2008 Annual Report of the Federal Reserve Bank of Minneapolis, titled "The Current Economic Crisis: What Should We Learn from the Great Depressions of the 20th Century?"
http://mises.org/story/3580 (Are the hyperlinks working yet?)
For the Fed to even begin "learning" about the Great Depression of the 20th Century, it would first to have to admit that credit expansion in the mid-to-late 1920's fueled the boom which eventually collapsed. Only then might they see the parallel to today. We know this won't happen though, which is why most CAPS bloggers don't take the Fed very seriously.
The article is short and sweet, and tells us what we already know:
"Fed economists — like mainstream macroeconomics in general — are intellectually bankrupt and clueless at best or dishonest propagandists at worst." - Thomas DiLorenzo
The Mises Institute has really stepped up its game lately as well, now pumping out three articles a day, as opposed to the two per day that had run for many years. Hopefully the quality will not suffer as a result.
On Friday, Morgan Reynolds had his A History of Labor Unions from Colonial Times to 2009 published for the Weekend Reader.
I highly recommend it.
Since I don't have much time, here are a few thoughts.
Inflation is here. This is purely a Fed-fueled stock market rally. Anyone shorting stocks right now is playing a very dangerous game. Inflation, no matter how many times it runs its course throughout human history, always fools the masses. Every time. You feel richer, but you're actually poorer.
Earnings are dogsh*t and there is red ink everywhere. I can find only 1 out of 100 stocks that I research to even be worthy of a second look. Give me a little positive cash flow and reinstate your dividends to old levels and maybe we'll talk.
I like Breitburt Energy, Fortunet, Constellation Energy, and Activision. I think they're undervalued. That's about it. And I'm not even that high on those.
(Disclosure: I own stock in all these companies.)
I don't trust most balance sheets and I discount all assets by 30-50%.
I don't like mining companies. They are too heavily indebted. If I start holding physical gold, and can the GLD and SLV ETF's, Goldmoney.com may be my next stop.
Debt is death.
Condos built in 2006 are the best shopping. You get a brand new building and 70% of the units are in foreclosure or short sale. Sure you've got a put up with a bunch of mopy neighbors whining about their credit problems, but there are worse things in life.
California could use less government. In the long run, this budget crisis will be a blessing. In the short run, there will be pain.
You can't learn to invest by not investing. You have to put your own personal fortune at stake. That is why bureaucrats can never invest money better than the private sector. They're not playing with their own money.
The Washington Nationals are the perfect team to represent America's political capitol.
David in Qatar