Skip to content

How Ben Bernanke Rationalizes “Exceptionally Low” Interest Rates

By

leadimage

01/26/12 Buenos Aires, Argentina – Anything happen in the markets yesterday? To tell the truth, we forgot to check. Let’s have a look now, then…

Dow up by 80-something points. A barrel of the world’s currently-preferred energy sits pretty at $100, on the nose. Nothing much, in other words.

Ooh…but here’s something: “Gold extends post-Fed rally to 6-week high.” MarketWatch has the story…

Gold prices climbed Thursday to levels last seen in early December, extending a rally triggered as the Federal Reserve pledged to hold US interest rates near zero until the end of 2014.

Gold for February delivery, having risen almost $25 yesterday on the news, now fetches $1,725 an ounce. And this, just when investors had begun to abandon the barbarous relic, to question its motives. But that was their mistake. Gold may go up. It may go down. But it has no motives. It is no man’s liability. Instead, it simply holds a mirror up to its government-issued competition. It is, itself, just a dumb lump of metal. But even so…it frequently appears the brighter, smarter choice — in relative terms — to the buffoons in the mirror.

Should we be surprised?

So Mr. Bernanke is fiddling the levers again, promising to keep rates lower than a sea snake’s belly until 2014. He might have just taken out an ad in the front page of the paper:

“Fed to Savers: Go to Hell!”

America’s #1 central banker may well be highly intelligent…but that does not preclude him from also being a dunce. Probably, it depends on the subject at hand. Maybe he’s a talented cowboy,…Read more…

Best Places in the World to Retire

By

leadimage

01/26/12 If you had $20,000 a month to retire on — you could live lavishly pretty much anywhere on the planet. But we’re interested in the places where you can live that lifestyle on one-tenth the budget…

Places where you can have a maid clean for you…hire a gardener… wake up to a view…have great health care, eat well, enjoy the finer things in life — for less than $2,000 a month. You may be surprised how many there are…

Months ago, our far-flung editors and in-country advisers began collecting all the data and details that inform our annual Retirement Index.

To compile it, we evaluate and rank countries around the world according to eight crucial categories: real estate, special retirement benefits, cost of living, ease of integration, entertainment and amenities, health care, retirement infrastructure and climate.

This is a qualitative assessment, based on real-world data gathered on the ground. For each category in our Index, we looked closely at what matters most to you when you’re considering an overseas retirement spot — everything from the price of bread to how easy it is to make friends or stay in touch with family.

We considered a vast range of data points, from the average humidity to the cost of a taxi. And with costs in mind, we examined prices for real estate, rentals, and utilities like water, electricity, and cable TV. We looked at costs for groceries, eating out, even specific medical procedures. We took into account what kind of discounts retirees can get on travel, taxes and entertainment. And we considered whether there were…Read more…

Obama’s Fairness Doctrine

By

leadimage

01/26/12 Baltimore, Maryland – “The US is going to hell,” we told the group at the Watergate last night.

“You mean the economy is really going to get worse, huh?”

“No, I mean it’s going to hell.”

We had been invited to watch the State of the Union address with a group of dinosaurs…a group approaching extinction with dignity and intelligence. You might call them ‘thinking conservatives,’ ‘paleo-conservatives’ or ‘constitutionalists.’ Whatever they were, they were not like the scoundrels currently running for the Republican nomination or the yahoos who vote for them. They were more like a renegade, retrograde group…like a secret society of White Russian intellectuals after the Revolution of 1917. They cling to hope…that the nation will come to its senses…that the constitution will again be honored…and that the old republic, established by the founding fathers, will be resurrected…

…they will hang on to their hope…until they are hanged by a rope.

“What do you mean?”

“I mean…it is on the road to hell… This isn’t just about losing money. Heck, the US is going broke. But you can go broke with honor. Good people go broke. Smart people go broke. Dumb people go broke. You can’t go to hell with honor. Bad people go to hell.”

“You’re saying the American people are bad?”

“Not by nature. No people are bad by nature. Even Republicans are not bad by nature. Or good. They’re all subject to influence. And now Americans are under a bad spell…being influenced to do terrible things…”

We turned to the TV. There was the…Read more…

Demand Fears in a Consumer-Based Economy

By

leadimage

01/25/12 Baltimore, Maryland – Yesterday, Europe was back in the news. Whenever Europe is in the headlines, the headlines are bad. And the ideas behind the headlines are absurd. In fact, it is amazing how many crackpot ideas the press can throw at you in a single day.

The immediate problems in Europe were two:

First, it looked like Portugal was going the way of Greece. It would soon need another bailout, said the papers.

Second, the Greeks themselves, were still having trouble settling up with their creditors — despite years of negotiation, bailouts, rescue plans, and mouth-to-mouth resuscitation.

Bloomberg was on the story yesterday afternoon:

…a stalemate between European policy makers and Greek bondholders over debt relief increased concern that the European credit crisis will spread.

…finance ministers balked at putting up more public money for Greece, calling on holders of its debt to provide more relief. The International Monetary Fund cut its global economic forecast as Europe slips into recession and growth cools in China and India.

“The Greek debt impasse is weighing on the market,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “The IMF warning this morning dampened any economic optimism.”

At the heart of the market’s nervousness was what Bloomberg calls “demand fears.” As near as we can figure, ‘demand fear’ is the worry that there aren’t enough people who want things and…Read more…