A while back, I made a promise. I used Elmo to illustrate a few points, and somebody responded “Where’s the chick with the cleavage?” Without understanding the reference, I replied “next time...” (he had me at cleavage). I’ve since learned that he was referring to one Katy Perry, a singer whose suggestive lyrics surely have made fathers of daughters everywhere cringe. Be that as it may, a promise is a promise.
In seemingly unrelated news, one particularly clueless paper bug recently referred to gold as “A shiny yellow metal used primarily as an excuse for missing a generational rally in equities.” The weird part is that generational rally in equities vanishes into Katy’s left boobage line if you look at the big picture:
For those keeping score, it’s Goldbugs: 200% – Paperbugs: 0
Aside from awesome returns, the best thing about being a conspiracy theorist is that it gives you hope that somebody’s actually thinking out there. After all, diabolical geniuses are still geniuses, so I find a certain degree of comfort in believing that at least smart guys are in charge. It’s when I read an op-ed by one of them and am forced to conclude it was probably written in crayon, I get worried. Enter QE2. Here’s the (printing) money quote from Bernanke:
….lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending
Don’t look now, but I think somebody just tried to order up another round of generational rally in equities. Yep, this is the almighty plan: If we can trick Joe Sixpack into thinking he’s richer, he’ll spend money, which will be good for….somebody (but probably not Joe, I’m thinking). I guess the only question I have is what do you think this will do for the price of gold? Because somebody once defined insanity as doing the same thing over and over and expecting different results (maybe it was Einstein, but maybe not).
And speaking of insanity, the patron Saint of Moral Hazard goes on to say it’s ok to print money because he can’t find any signs of inflation:
Today, most measures of underlying inflation are running somewhat below 2 percent, or a bit lower than the rate most Fed policymakers see as being most consistent with healthy economic growth in the long run.
~Ben Bernanke November 4, 2010
It shouldn’t surprise anyone that the guy who never saw the housing bubble can’t find any inflation now. Here’s a six month performance snapshot taken from Finviz.com the same morning the Fed Chair published those remarks:
I’m a romantic, so I’ll say that I hope Katy’s recent marriage to Russell Brand (yes, that Russell Brand) ends better for her than Quantitative Easing will end for America, but if Katy can’t make stocks look sexy again, what chance does Ben Bernanke have?
Breaking News Update: It’s been three weeks since QE2 was unveiled and like most sequels, it has proven to be a dud. But in a shocking development today, a NYSE algorithmic trading computer named Joshua became self-aware. Joshua “spoke” his first words upon grasping the futility of quantitative easing:
Joshua then requested delivery of physical silver.