-- Posted Tuesday, 21 October 2008 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Tuesday, October 21, 2008
“Phenomenally accurate forecasts”
Historians have never quite agreed on what caused the Great Depression, but if there’s another, no one will be able to say it occurred because the central bank did not act aggressively enough. Indeed, Bernanke and Paulson have done everything but shower hundred dollar bills on the citizenry. Not that that would have accomplished any more than the mountain of electronic dollars that have been credited to the accounts of shaky banks throughout the Western world.
The notion that the Fed could have avoided the 1930s Depression by opening the money spigots haunts us to this day – or rather, haunts those who are ignorant of just what it is the Fed actually did. But it sure as heck didn’t sit idle, as Murray Rothbard makes clear in this passage from “The Mystery of Banking”: “The Fed tried frantically to inflate after the 1929 crash, including massive open market purchases and heavy loans to banks. These attempts succeeded in driving interest rates down, but they foundered on the rock of massive distrust of the banks. Furthermore, bank fears of runs as well as bankruptcies by their borrowers led them to pile up excess reserves in a manner not seen before or since the 1930s.”
‘Value’ at Dow 10,000
Is the Fed pushing on a string once again? Almost certainly; for to believe otherwise is to assume the economy will recover if Paulson and Bernanke simply pile up enough bailouts and rescue schemes. Yesterday, Bernanke merely let it be known that he favors more fiscal stimulus, and bulls stampeded again, pushing the Dow Industrials up more than 400 points. The blue chip index ended the day at 9265, so we’ll say it again: If you think the Dow represents value anywhere near 10,000, you deserve what’s coming. The same goes for the still potent army of imbeciles who evidently believe that more credit is the cure for a credit deflation. This is about the stupidest idea we’ve heard since Alan Greenspan told us that inflated real estate values constituted “wealth”.
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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2008, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Tuesday, 21 October 2008 | Digg This Article | Source: GoldSeek.com
