A quick note

I am in wine country and have found an internet connection. This is a quick post on some events I have heard/read about in the past few days.\

Joe Stack flew his plane into the Austin IRS building ostensibly in a fit of frustration at the taxman and the government in general. This is exactly the type of individual action that will become more commonplace across segments of society. Eventually, the logical progression is for individuals that want to make a statement to band together. You see where this could be going. 

The problem is that no Western government has yet done anything sensible or moral with regards to tackling the crisis. Certainly, the political and business elite are exceptionally busy trying to refute and deflect any degree of responsibility trying to make the masses believe that more spending will make things right again provided we give all this money to the banks.

Which brings me to another commentator: John Mauldin. In his latest piece “The Pain in Spain”, Mr. Mauldin digs out a graph carried by the Wall Street Journal that, though under a different angle, shows what this entire blog has been about (i.e. here) since inception:

http://frontlinethoughts.com/gateway.asp

Excerpt – (to read the entire article you must give Mr. Mauldin your email address. In return you will get his letter free of charge. John Mauldin does raise some interesting points in his letters so it is worth it.)

 How Much Is Too Much?
And to close, I want to show a chart from today’s Wall Street Journal, from a column by Daniel Henninger.
 
This is the definition of an unsustainable path. Spending has grown 7 times as much in real (inflation-adjusted) terms as median household income over the last 40 years. Like Greece and Spain and much of the rest of the developed world, we will be forced to make hard choices. We cannot afford to do everything that even conservatives would like, let alone liberals. We cannot fight two wars, increase spending on health care, stimulate a faltering economy, and fun a 20% explosion in federal employees in just one year, etc., etc.
Pay attention to Greece and Spain and especially Japan over the next few years. Unless the US gets its fiscal house in order, we will be next. It will not be any easier for us in five years than it is for Greece today
.”

John Mauldin, Best-Selling author and recognized financial expert, is also editor of the free Thoughts From the Frontline that goes to over 1 million readers each week. For more information on John or his FREE weekly economic letter go to: http://www.frontlinethoughts.com/learnmore

In other developments, it is reported that Citibank has mistakenly sent out a note nationwide rather than only to its intended Texas clients.  The note explains that as of April 201o Citi may avail itself of an obscure clause so far never enforced that will allow it, if needed, to delay (or halt?) cash withdrawals at its discretion. Of course, this may be nothing or may be the beginning of something ugly. Either way, where there is smoke… … this most certainly bears watching….

Finally, I take a peek at my favorite indicator the Money Multiplier which tells me that despite the dozen Trillion Dollars of stimulus we have been throwing shoveling into the banks, this gargantuan effor has all been for nought…

http://research.stlouisfed.org/fred2/series/MULT

A housekeeping note.

Although I’ll be back at my desk next Saturday, I am not sure my internet connection will be up and running. So posting may be sporadic for a few more days.

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