According to the guy Obama appointed to investigate this: The federal government has devoted $4.7 trillion to help the financial sector through its crisis, a level of assistance equal to about one-third of the overall U.S. economy, a watchdog report said Monday.
Under the worst of circumstances, the report said, the government’s maximum exposure could total nearly $24 trillion, or $80,000 for every American.
The Treasury Department has been backpedaling furiously, saying basically that special inspector general Neil Barofsky doesn’t know what he’s talking about. In the New York Times, Floyd Norris added to the chorus of disapproval, saying that Barofsky’s worst-case scenario was “overblown.”
Maybe so. But I’m going to pass along this eye-candy from Clusterstock.com …
So, maybe we are seeing the real reason that gold soared on Monday.
You see, hyperinflation requires two ingredients.
1) Debts grown so enormous that they can’t be paid through conventional means. We’ve got those in spades
2) A central bank that loses its independence and prints as much money as the politicians demand. We’ve got that, too.
Are we in hyperinflation? No. Heck, there are many signs of deflation. But we are seeing inflation in HARD assets, and general inflation will probably arrive soon enough. Could hyperinflation follow? Stay tuned!
In Other News
There’s a great read over at the Automatic Earth today, about how Wall Street bankers (including those working in the White House) are probably psychologically destined to repeat their mistakes.
Proving once again that the line between tabloids and the regular press has been irrevocably blurred, Marketwatch columnist David Marsh engages in a dazzling display of mind-reading. Read it for yourself in: The Peking-Washington connection: is it real?
Missouri Grain Dealer Accused of Ponzi-Scheme Fraud
From 2002 until February, Gieseker quoted above-market prices to farmers, which she said were guaranteed through contracts with ADM. Instead, she sold the grain at the “spot price,” or the local cash price for immediate settlement and delivery, and used the proceeds from subsequent transactions to pay the above-market prices. Farmers who agreed to have her sell their grain toward the end of the scheme didn’t get paid at all, according to the indictment.
Now how about some good news? Hale “Bondad” Stewart tells us that there are More Signs of an Economic Bottom Emerging
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