And, in case you think China will solve all our problems:
Inflation flashing red may be less of a green light for higher interest rates as global growth falters.
Some Federal Reserve policy makers favor keeping their benchmark rate close to zero until price increases reach a level Vincent Reinhart, a former top official, says could be 3 percent. The Bank of England has held its key rate at a record low even as U.K. inflation breached its 2 percent target for 21 months. Brazil executed a surprise cut Aug. 31 to safeguard its economy even after inflation quickened to a six-year high.
Policy makers such as Fed Chairman Ben S. Bernanke and Bank of England Governor Mervyn King may be challenging central-bank orthodoxy to replenish depleted toolkits and support recoveries at risk of sliding back into recession. Tolerating higher inflation may make long-term Treasuries less attractive while supporting stocks and commodity prices, said Jim Kochan, chief fixed-income strategist at Wells Fargo Advantage Funds.
“There’s a hint of desperation here,” said Kochan, who helps manage $216 billion in Menomonee Falls, Wisconsin. “They’re clearly concerned that monetary policy to date hasn’t really accomplished what they expected it to. So they ask themselves, why? And what could we do about it?”
Meanwhile in Germany: Angela Merkel and her "Center-Right" government lost the recent election by a landslide as:
Social Democrats won23.3% of the votes; the Greens won 17.6% and the Left
Party won 11.7%, for a total of 52.6% of the votes cast.
This compares to 47.8% won by the same three parties in elections five years ago. On the centre-right, the Christian Democrats won 28.2% of the votes cast.
the most ardently free market,pro-capitalist of the political parties in German… won but
1.8% of the votes cast, falling below the mandatory 5% needed to win any seats in the local government.
What is extraordinary here is that the "Right Wing Free market" parties were precisely those advocating a socialist bailout of the European Banks while the Left Wing Socialist Parties are advocating a stop to the lunacy of handing tax payer money over for bailouts.
Trump accepts three 32-ounce gold bars as a security deposit. Is gold more secure in turbulent financial times?
By Douglas French, Guest blogger / September 15, 2011
Precious metals dealer Apmex is signing a lease at Donald Trump’s 70-story skyscraper located at 40 Wall Street and The Donald has agreed to accept for a security deposit, “just three 32-ounce bars of gold, each about the size of a television remote control,” according to the Wall Street Journal.
Over on Park Avenue South, the Provident Loan Society of New York is lending to consumers who pledge gold jewelry to borrow enough to pay their bills and cover the 6-month interest rate of 13%.
It’s tough getting a loan at the bank, so consumers and small business are pledging their gold to get operating cash. “It’s a big problem now with the banks,” Pepa Abad Toledo told the WSJ. She uses Provident loans to buy merchandise for her business selling costume jewelry.
Across the pond, Jack Farchy reports for the Financial Times, “European banks are rushing to use their gold to access much-needed dollar funding, in the latest sign of the growing liquidity crunch for the continent’s financial institutions.”
Farchy explains that the cost of swapping euros for dollars has increased fivefold just since June. It’s normal for large bullion banks to lend some of their gold out at the end of each quarter, but, “the latest move is unusually dramatic and highlights the stresses in the dollar funding market, according to bankers.”
When money is tight and currencies are weak, gold comes in handy.
Gold took another 50 dollar dive today. Why? Who cares? Unless you're trading futures - it just means gold is on sale. Awesome. One day soon a big bank will go under - despite all the efforts and intercessions of the Central Banks- and then it will be difficult to buy real gold at any price. They're already worried about that in Europe THUS: