Monday, October 6, 2008

Theory to Practice

Gee, who could have seen this coming?

Oct. 6 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke may find the next fronts of the financial crisis to be just as chilling as last month's downfall of Wall Street titans: its spread to corporate America and state and local governments.

Question: In what manner can a sitting Mayor of a failing city put out self-serving news so blatantly?

Answer: In a poorly veiled manner, and not for long.

It feels like things are accelerating. Gold is up today, but I don’t understand why it is still off its highs. The federal government will not be able to extract more tax revenue out of the country, so the only option that I can see is to print money and deflate the currency. The fact that the Euro is falling relative to the dollar reflects Europe’s weakness.

America has many advantages over Europe going forward. Europe is out of energy while America is sitting on hundreds of years of liquid fuel in the form of oil shale (the secret to unleashing this energy resource is kicking an unknowable number of desks).

As socialism never works, Europe is probably twenty years ahead of us, and European immigrant populations are more hostile to freedom than their American counterparts, expect democracy in its current form to fail first in Europe. People talk of England and the BNP, but Brick Oven is going to go ahead and predict that the first country will be Sweden.

Swedes have historically been the most trusting and generous of Europeans. But they are descendents of Vikings. I talked to a professional Swedish lady recently and she is pissed.


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