THE REALLY IMPORTANT THING – II
THE ORDER OF EVENTS
First deflation – we’re in that now (falling gas prices, falling home prices, falling stock prices, falling Christmas-gift prices; falling spending, falling profits, falling payrolls) – then, someplace down the road, inflation.
I was wrong to miss the deflation part; I thought we’d avoid it because of the Fed’s very-easy money policy . . . and because of the huge deficits we were running.
But the cash inflow from expansive fiscal and monetary policy seems to have been overwhelmed by the cash outflow of ‘deleveraging’ – namely, when debt balances are reduced, voluntarily or involuntarily, and the money supply contracts. Picture a swimming pool with a garden hose running water into it full blast . . . but the pool pump set to ‘backwash.’ The pool level falls instead of rising. Or picture a bank getting $25 billion in new cash from Treasury, but its credit card customers deciding to pay down their credit cards by $50 billion.
IN CASE YOU MISSED THE PRESIDENT ELECT’S WEEKLY ADDRESS
Click here. The times ahead are tough, but plans are being formulated to get us back on track.
PROP 8 COMES TO PRINCETON
Have you seen what they’re doing at Princeton? Inspired by the recent California precedent -where a slim majority succeeded in taking rights away from a minority (who’s next?) – students are looking to clear their sidewalks of freshmen.
ASK, TELL – WHO CARES?
ANNAPOLIS, Md. (AP) – More than 100 retired generals and admirals called Monday for repeal of the military’s “don’t ask, don’t tell” policy on gays so they can serve openly, according to a statement obtained by The Associated Press. . . .
“As is the case with Great Britain, Israel, and other nations that allow gays and lesbians to serve openly, our service members are professionals who are able to work together effectively despite differences in race, gender, religion, and sexuality,” the officers wrote. . . .
Quote of the Day
[It would be splendid if someday] economists could manage to get themselves thought of as humble, competent people, on a level with dentists.~John Maynard Keynes
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