Still on the road to moksha…

Prices are rising in India – pushed up by the high cost of food. Thanks partly to a disastrous government policy of encouraging the over-use of chemical fertilizer, food prices are shooting up. In a poor country, food is a bigger part of the family budget than in a rich country. India’s CPI is rising at about 11%.

Flash from the TIMES of India:

A man brought his wife to Mumbai from Augangabad. He then took her to the house of someone she didn’t know and told her to wait there for him to come back. But he didn’t return. The wife asked the owner of the house what was going on. She was informed that she had been sold to the man for 40,000 rupees (a bit less than $1,000). Her family back in Augangabad came to her rescue. They bought her back.

A thousand dollars seems

The Germans broke rank with the rest of the EU and suggested Greece should turn to the IMF for support. The euro (EUR) had rallied over the past couple of days after it seemed the EU finance ministers had agreed on a loan facility to back the Greek government. But Germany’s Angela Merkel threw a cat among the pigeons today when she said Greece should not look to the EU but should turn to the IMF if it needs aid. So traders immediately started selling the euro again as the black cloud of a possible Greek default fell back over the market.

I have to question the German Chancellor’s timing on this announcement. Could it be that she is simply trying to bring the value of the euro down a bit? After all, Germany’s economy is dependent on exports, and a lower euro is a big plus for

As the legend goes, some 1,600 years ago a Celtic missionary banished the serpents from Ireland, using little more than divine assistance and his walking stick. It’s in fancy paintings, so it must be true:

Were they really snakes, or rather an unpopular religious sect? Was St. Patty even Irish?

We don’t care. It’s a good excuse for a drink…and inspiration to chase out some modern-day slithering here in I.O.U.S.A.:

The Fed did a whole lot of nothing yesterday at the FOMC meeting. Rates stayed the same, and one year after coining the phrase, the Fed insisted rates will stay “exceptionally low” for “an extended period.” In short, it was a snoozer.

“What in the shillelagh is the Fed actually thinking?” Dan Denning asked in response in this morning’s Australian Daily Reckoning.

“To be clear, a shillelagh is an Irish cudgel, used to beat things or threaten drunken bar patrons on St.

Federal Reserve Vice Chairman Donald Kohn announced his retirement on March 1, 2010. In his obligatory lament, Federal Reserve Chairman Ben S. Bernanke was half right: “The Federal Reserve and the country owe a tremendous debt of gratitude to Don Kohn.” What is good for the Fed is generally not good for the country. The influence of Donald Kohn supports this view.

A rarity, Kohn rose through the ranks of the Federal Reserve System. After 32 years of grunt work, he was named a Federal Reserve governor in 2002 and assigned the vice chairmanship in 2006. He participated in Federal Reserve Open Market Committee (FOMC) meetings long before his governorship. He had been a staff economist (Director of Monetary Affairs) and Secretary at FOMC meetings.

Donald Kohn will be smothered in praise from now until his June retirement. The media will quote celebrity economists who will deify the celebrity vice chairman. Alan

Why It’s “Mayday” For the Euro… And What You Should Do

by Alexander Green, Chief Investment Strategist Monday, March 8, 2010: Issue #1211

I’ve often said that it’s not possible to predict stock markets, commodity markets, bond markets or currency markets consistently and accurately.

But there is an exception: when both valuations and sentiment reach severe extremes simultaneously.

That’s what happened with the dollar a few months ago. And, seeing the planets in alignment (as I’ll explain), I immediately wrote a column, predicting that the greenback would soar in the months ahead.

As is the case with most contrarian calls, my message was met with immediate catcalls and derision from respondents. Readers e-mailed me that a weaker dollar was a “no-brainer.” With the size of our budget and trade deficits and nearly $60

This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• Jim Jubak (MSN Money): The No. 1 key to long-term investing, March 1, 2010. Let the profitability of a company’s investment in itself guide your stock picking.

• David Serchuk (Forbes): Fed fights deflationary demons, March 4, 2010. In the wake of a credit collapse with unemployment at double-digit rates, what Ben Bernanke fears most is deflation. It’s here.

• Uri Dadushe and Moisés Naím (Financial Times): End this “inflation fundamentalism”, March 4, 2010. In a recession, ultra-low inflation easily becomes deflation, but this is only one way the policy can be harmful.

• Edmund Conway (Telegraph): We have to learn from Japan’s lost years, March 4, 2010. The turbulence in the currency markets is a welcome warning

Okay, I will admit that we had a little accidental gunfire around here recently, but nobody was hurt, and all that really happened is that I wasted a lot of very expensive ammunition and scared the hell out of a lot of people, including myself, a commotion which instantly activated my Amazing Mogambo Reflexes (AMR), making me drop the delicious Hostess Cupcake that I was noisily eating and take cover on the floor, falling, as I did, on top of the aforesaid cupcake, smashing it all over myself, and all over the floor, which made it taste terrible after that.

But the surprising gunfire was not my fault, as I had just read that the Federal Reserve is being as dangerously incompetent as ever by continuing to massively increase the money supply (which is so horrible because it causes inflation in prices) so that they can buy up (monetize) at least

Every crisis comes with political baggage. This morning, the US Justice Department is said to be “requesting” that certain hedge funds reveal their bets against the euro.

Under pressure from their EU counterparts, say rumors making their way around the Internet, the Department of Justice is tracking down fund managers who attended a particular dinner in February hosted by Monness, Crespi, Hardt & Co., a NYC brokerage firm. The managers there supposedly discussed taking short positions in the euro and in US banks while going long the Canadian dollar…all fantastic trading ideas, if you ask us.

But such “counterproductive” trading, as Ben Bernanke put it Monday, is irritating the masters of the universe. The Justice Department wants to investigate whether sharing such information amounts to collusion, and wants to crosscheck the trading histories of each firm.

(Hmmmn… We’re having a dinner tonight with several of our Agora Financial colleagues and analysts. We’ll no

The Bank for International Settlements says Britain needs a primary surplus of 5.8pc of GDP for a decade to stabilise debt at pre-crisis levels, given the ageing crunch as well. The figure is 6.4pc for Japan, 4.3pc for the US and France. It warns of “unstable dynamics”, posh talk for a debt spiral. www.telegraph.co.uk; By: Ambrose Evans-Pritchard; Words: 620

In further edited excerpts from the original article* Evans-Pritchard goes on to say:

Belt-tightening is the oppressive fact of 2010-2012 for half the world: - Hungary, Ukraine, the Baltics and the Balkans are already under the knife. - Latvia’s economy may contract by 30pc from peak to trough as it carries out an “internal devaluation”, ie wage cuts, to hold its euro peg. - The eurozone’s fiscal squeeze is well advanced in Ireland. - Brussels has told Greece to cut by 10pc of GDP in three years, Spain by 8pc, Portugal by 6pc.

This post is a guest contribution by Asha Bangalore* of The Northern Trust  Company

Recent Fed rhetoric suggests strains of disagreement gaining momentum within the FOMC. A composition of the FOMC is handy before evaluating the positions of the members. The FOMC consists of seven members of the Board of Governors and five Reserve Bank presidents. There are three vacant spots in the Board of Governors to be filled following the resignation announcement of Vice Chairman Kohn (effective as of June 23, 2010). Presidents Hoenig (Kansas City), Bullard (St, Louis), Rosengren (Boston), Dudley (New York), and Pianalto (Cleveland) are current voting members of the FOMC in addition to the five governors - Ben Bernanke, Donald Kohn, Elizabeth Duke, Daniel Tarullo, and Kevin Warsh.

Of the Fed presidents, Hoenig is a hawkish member who dissented at the January FOMC meeting. His remarks today suggest a likely dissent at the