Comic relief came yesterday in the novel form of a Colorado shootout that put the until-recently-unheard-of Dougherty Gang behind bars and left gun-moll and self-styled redneck stripper Lee-Gracey Dougherty with an exit wound in her leg. Only in America, as they say. As we went to press early Thursday morning following an all-day outage of Rick's Picks (and a thousand other web sites served by a Dallas data center that was hit by a power blackout), the Bonnie-and-Clyde wannabees were still the top story on Google news, proving that timing is everything if you want to be an overnight sensation. Wall Street in particular must have welcomed the entertaining story of the Dougherty siblings' interstate armed robbery spree, since, without it, the evening news would surely have been dominated by video clips of trading-floor denizens puking their guts out following a 520-point plunge in the Dow. However, as of late Wednesday night, it would appear that the traders had lost little time trying to wrest back control of the headlines with their own brand of comic relief: a 200-point rally in Dow index futures that was continuing into the wee hours on Thursday. We wouldn't be so churlish as to admonish them for their newly reinvigorated faith in America, but shouldn't someone break the bad news to them about the dire condition of Spain and Italy? Meanwhile, the previous, huge dead-cat bounce, a 429-pointer on Wednesday, elicited in the Boulder, Colorado Daily Camera what may have been the most clueless headline concerning the economy that we've seen all year: Fed Pledge Boosts Stocks. So, did yesterday's 520-point reversal perhaps occur because somebody discovered the Fed had crossed its short, slimy little fingers when it made that promise? The sub-headline was just as bad: Market Soars After Reserve Vows to Maintain Low Rates
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No Escaping Deflation’s Fatal Drag on Economy
– Posted in: Commentary for the Week of March 8 FreeGotta love those inflationists! We enjoy getting in their faces now and then because their nutty ideas, particularly that inflation is worth worrying about at the moment, can only confuse and misdirect people who are struggling to sort out the facts for themselves. Imagine waiting…and waiting…and waiting for inflation to “break out,” as the inflationists have been doing all too patiently since 1991. That’s when the Fed put pedal to the metal to escape the drag of recession. At the time, virtually every monetarist in the land was predicting that a nasty inflationary spiral lay just ahead. All we got in the end was the kind of inflation that no one noticed, let alone complained about: asset inflation. Greenspan sealed his reputation as a bubblehead forever by finally noticing the bubble, although, to his further discredit, he was only explaining at the time that no one with a trained eye who was watching for a bubble could be faulted for having failed to see one. And now, finally, deflation is overpowering the myth of monetarism itself – the myth that the Fed can fine-tune economic cycles by creating “money” out of thin air. Turns out it’s not so easy. In reality, the banking system’s feather merchants succeeded only in building, one nearly indiscernible layer at a time, a debt juggernaut that can no longer be controlled, let alone reversed. Deflation has suffocated the monetarists and is about to do in the Keynesians for good measure. It is also continuing to tighten its grip on just about anything that can be bought or sold. We’ll say more about that in a moment, even after conceding up front that inflation eventually is going to be a huge concern, since an outright hyperinflation will be needed to wipe hundreds of trillions of dollars’
