Thursday, March 31, 2011

Fed Transparency? And Here Comes Inflation...

The media has been happily reporting that the Fed is making itself "more transparent" with the news that Bernanke will now give quarterly press conferences AND that today the Fed releases the names of the banks who borrowed from the discount window during the 2008 banking system collapse.  The quarterly press conference is a bunch of b.s. because Bernanke, following in the footsteps of Greenspan, really doesn't say much when his lips are moving and he has for sure issued many non-truths.  And disclosure of the names of banks that took discount window money should not be news to anyone who is paying attention.

To begin with, the Fed is releasing today's information after spending three years fighting the court system in an attempt to prevent today's disclosure.  It took a Supreme Court decision to force the issue.  More "transparent?"  Hardly.  Who gives a crap which banks borrowed from the discount window because it is safe to assume that every single large too-big-to-fail bank in some way or another had become completely insolvent during the course of 2008's systemic financial collapse.  I don't need the Supreme Court to force to the Fed to tell me which banks took discount window money BECAUSE ALL THEM DE FACTO COLLAPSED. And it was only with slick maneuvering that pushed all of that liability - trillions - onto the Taxpayer that enabled the system to be re-liquified and enabled all of the big bank CEO's to continue handing out $100's of millions in compensation to their employees and to themselves.

It is an absolute absurd joke if the citizens of this country believe that the Fed is now willing to be more open about their operations just because the Supreme Court forced today's disclosure and because Bernanke is going to give us a quarterly press conference loaded with worthless grandiosities and literal bullshit.  I would like to see detailed information about the Fed's daily open market operations, which seem to correlate almost perfectly with directional movements in the stocks market and also serve to partially manipulate the precious metals markets.  How about giving us some detailed information about all of the toxic assets the Fed purchased, what they paid and from whom they purchased them?  Why am I entitled to this information?  Because President Obama and Treasury Secretary Tim Geithner have authorized the use YOUR tax money to guarantee that the privately owned Fed does not lose money on the above operations.

Now on to the matter of inflation.  Every single Federal Reserve and Government official is denying that inflation is becoming a problem in this country.  But how about taking that medicine from the CEO of Walmart, the world's largest largest retailer?
inflation is "going to be serious," Wal-Mart U.S. CEO Bill Simon said during a meeting with USA TODAY's editorial board. "We're seeing cost increases starting to come through at a pretty rapid rate."
Walmart is responsible for about 10% of all retail sales in this country and the majority of what they sell here comes from China.  Still want a weaker dollar?  If this guy says inflation is coming, better get prepared for it.  Here's the article LINK

Rest assured that the Goverment statisticians will continue to issue reports which have manipulated away most of the damage you feel at the cash register and in your savings accounts.  But this is going to become a serious problem for everyone who is not prepared.  The best way to get ready is to move as much of your liquid investment funds into physical gold and silver as you can.  You can also put some money into the stock market, which should keep pace with inflation until the dollar collapses, but you will still be left holding dollars.  When the music stops on the dollar game, if all you have is dollars you will be broke because no one will want to take your dollars in exchange for goods and services.  Foretold is forewarned...


  1. my 3 key metrics to inflation:

    1) Skirt Steaks--3 yrs ago I was paying 3.99 lb, last week 9.99 and yesterday saw in grocery store for 10.99

    2_ Chocolate--trader dan stated yesterday HSY increasing price nearly 8% (ouch)

    3) My wife P&M index--its going up.

  2. I like hanger steak but it's not an easy cut to find in the U.S. except at French bistros

  3. Without the collateral details the FED report is just interesting, but not that important. I guess in the end we all know they took crap mortgage paper as collateral as well as plenty of stocks (I know they cannot do that by charter, but I am saying it) that maybe just recently got back to even. Now why would the FED want a higher stock market again? Makes sense to me, but I am carzy after all.

  4. Yesterday I paid $12 for 2 cartons of milk. That's pretty obscene.

  5. How is Wal-Mart going to pass along higher prices if their customers aren't receiving higher incomes and are already stretched to the limit? That can't happen mathematically. I suspect Wal-Mart is going to keep eating most of the higher input costs and get their margins squeezed even more. Wal-Mart's stock is going to tank if my theory holds.

  6. Dave, Buongiorno per lei. Tutto bene? inglese :)

    What about this plan: buy PM stocks (which I thought you advocated. They should appreciate faster than the metals). Then convert the shares to cash and buy the metal at that point before the dollar reaches the point of no return.

    When do you believe the dollar reaches "trash" status such that it would be too late to do as I describe? Buona giornata, Dave.

  7. Ciao Gallo! Come stai? Sto bene, grazie. Sto andando in italia fine guigno! Chiedi una domanda buona.

    I used to operate by your thinking there. BUT, you/we take the risk that it will take a huge premium to the spot price to actually find sellers of the metal. It also requires perfect timing. I believe in owning a balance between physical and mining stocks and the mining stocks will outperform the physical over time, but you do take the risk of ending up with dollars once you sell your stocks. There will come a time when no one will want dollars, so what good will it do to make a huge return on the stocks? Having said that, I believe the reward from owning stocks and converting profits into metal on an ongoing basis outweigh the risks as I've just described them. I don't know when the risk "crossover" point will occur, but by the time I post my view on that on here, I will have already moved everything into physical.

    Ciao e buona fine settimana!

  8. P.S. Dave. You must be expecting the dollar to break critical support at 75ish real soon for you to be converting your PM stocks to the metal at this point. E vero?
    I wonder once a critical low is reached in the dollar (soon?) that we won't have a blistering rally in the dollar and a rather sizable correction in gold sometime after the break. But...what do I know:) Grazie per l'ascolto

  9. Di niente. Sto facendo un commento su il dollaro presto. Forse questo fine settimana.

    The dollar losing 75 or even 71 won't cause a systemic collapse. And it could take some time for that to happen. But once it flushes, it will happen quickly. I have no idea when or how long it will take. If you have any thoughts please post them here.

  10. Have you heard any talk about government confiscation of gold when it reaches $2000? Read that at that point it becomes revalued at $200 whereupon a new world currency is issued at a value of $10,000 gold. Just what I read.

  11. Have not and am not worried about it at this point in time

  12. Non ti preoccupare?! Va bene :) Grazie ancora.

  13. Non c'é di che! Non ancora sono preoccupare.

  14. Today in Safeway...
    $5.99 for Dreyer's Ice Cream, On SALE. LOL
    And this is in the "new packaging" (smaller size carton).

  15. We haven't seen anything yet. Wait till we wee what inflation looks like when the dollar rolls off the cliff.

  16. On the walmart issue--bet they raise prices on the big volume products, control prices on the lower volume products (and advertise those as controlling prices).

    Once you fall behind on raising prices you never catch up--I guess the stock price of wmt (and TGT) has been telegraphing the margin and sales problems.

  17. Check all sale items. Buy a lot of items you will use eventually that will not spoil. I bought 20 Folgers 2 lb at 8.98; now they are 11.95. I bought 20 pkgs of Ronzini pasta @ $.66 each plus 20 jars of sauce for 2@ 3.95. 40 cans of stewed tomatoes on sale @0.66 each. Etc Etc If the stores and banks close I can live on this (along with canned fruit) for a few months. Have at least 5 5 gallon water jugs per person in your home.

    A good shotgun and at least 200 shells are nice too.