This explains soaring commodity prices quite well.
Greg Mankiw: Real Interest Rates Are Now Negative
Market Oracle:
Real interest rates represent the true price of the most important “commodity” of all: Money.
Here’s the scoop in a nutshell …
* When real interest rates are high, money is expensive. If it persists, the days of inflation are numbered.
* When real interest rates are low, money is cheap. And with cheap money chasing scarce goods, inflation is bound to continue.
* Worse, when real interest rates are zero , money is not just cheap, it’s effectively free. And free money chasing scarce goods puts inflation into overdrive.
* Worst of all, when real interest rates are below zero , money is not just free — but borrowers are, in effect, actually getting paid to take the money. And it’s the abundance of this kind of highest-octave money that is the ultimate prelude to double-digit inflation.
That’s what we have today: The Fed has dropped the fed funds rate to 2%. But the CPI inflation, even with all its distortions, is now close to 4%. So the real interest rate is …
2% minus 4% = 2% below zero!
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Two things I’m noticing lately:
The idea of “Post-Constitutional America”. VIDEO
And “Secret Sessions”. LINK
Godwin’s Law states:
“As a Usenet discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches one.”
Usually, invoking the Nazis in a political argument involving George Bush causes one to lose the argument due to hyperbolic comparisons.
Vincent Bugliosi, prosecutor of Charles Manson, has a new angle. I think a new meme is emerging.
Commondreams: The Prosecution of George W. Bush for Murder
AND:
http://www.prosecutionofbush.com/
On May 25th, 2008, Vanguard Press will publish a major new book by Vincent Bugliosi, world-famous prosecutor and author of the #1 New York Times bestseller Helter Skelter.
It will be the most explosive and harshest book written to date about President George W. Bush.
Some blogger guy:
Last night, I had the television on in a back room. It was tuned to some pseudo-documentary about D.B. Cooper, featuring gobs of “re-enactment” footage. Anyway, I left the room for awhile and when I came back, something else was on…
I was standing with my back to the TV when I heard the familiar voice of President George W. Bush. I didn’t think much of it, until I noticed that his jabbering was far more insane and incomprehensible than usual. I turned and discovered that it wasn’t George Bush talking.
It was Charles Manson.
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