Future voting members of the Fed’s policy setting committee waved off concerns regarding a declining dollar on Thursday, Nov. 19, suggesting that unless the decline becomes volatile or otherwise erratic, concerns about an inflationary impulse are unwarranted.

In commentary that seems to suggest the dollar’s decline may be a counterbalance to a historically undervalued renminbi (RMB). Dallas Fed President Richard Fisher told Market News International (MNSI) that the declining dollar value was simply one factor out of many the Fed used as an analytical input for its policy setting model.

Fisher told reporters that “a gradually depreciating dollar” would not necessarily add an “enormous inflation impulse”, and that the Fed’s answer to concerns over a weaker dollar was to pay attention to the dollar’s activity. Fisher also mentioned that there are “trade-offs” to be made between the strength of the dollar and deliberately low interest rates existing over a protracted

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

• Daniel Gross (Newsweek): The greatest trade ever, November 10, 2009. How hedge fund manager John Paulson bet against the real estate bubble and made $15 billion in a single year.

• abc News: SocGen’s top analyst sees market lows next year, November 9, 2009. Albert Edwards, a top analyst with French bank Societe Generale, expects global markets to hit a new low in 2010, adding that he would not be surprised if the global economy enters another recession next year. Edwards, one of the leading equities bears and a long-term critic of the policies of Western central banks, is skeptical of popular opinion that extreme policy response will safeguard the West against a repeat of Japan’s lost decade of the 1990’s.

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

• Mohamed El-Erian and Ramin Toloui (Financial Times): How to fill the gaps left by dollar decline, November 5, 2009. We should expect to see more discussion in the next few years on new types of reserve assets.

• James West (GoldSeek): Gold price is no bubble, November 4, 2009. The price performance of gold recently has all sorts of armchair economists waxing philosophical on the idea that this is the advent of a price “bubble”. While certainly everyone has and is entitled to their opinion, there are other features of humanity that we all possess, and much like many opinions, are best obscured from view. Declaring that gold is in a “bubble” demonstrates complete ignorance of or disregard for

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The stock market is up 51% from its March 9 lows. The leading economic indicators have turned sharply positive, showing gains for each of the last four months. Manufacturing is on the rebound. And banks are promising to pay record bonuses, as their earnings have rebounded.

With this recent rush of upbeat economic news, it’s no wonder commentators are trumpeting the rebound of the U.S. economy.

But I think it’s time to short U.S. stocks.

Shocked?

Don’t be.

What most experts see as a strengthening U.S. rebound, I see as an increasingly dangerous “false dawn” – for these two key reasons:

An overly expansive monetary policy that’s almost certain to spawn inflation. And a record-level budget deficit that will cause interest rates to spike, crimping economic growth. A Foundation for Trouble

U.S. policies that were intended

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$172,000 Payday First subscribers to Martin Hutchinson’s new advisory service were able to collect $13,301 in guaranteed cash in record time. Now, Martin’s using the same “guaranteed payment” strategy to help new subscribers collect $172,000. He explains how here.

The stock market is up 51% from its March 9 lows. The leading economic indicators have turned sharply positive, showing gains for each of the last four months. Manufacturing is on the rebound. And banks are promising to pay record bonuses, as their earnings have rebounded.

With this recent rush of upbeat economic news, it’s no wonder commentators are trumpeting the rebound of the U.S. economy.

But I think it’s time to short U.S. stocks.

Shocked?

Don’t be.

What most experts see as a strengthening U.S. rebound, I see as an increasingly dangerous “false dawn” – for these …

As you review your investment portfolio to size up your current exposure to gold, keep one key point in mind: When it comes to profits, there’s no rush like a speculative gold rush.

And that’s just what we have at hand.

Inflationary fears are on the march the world over. And most of those worries are due to the trillions of dollars in stimulus spending the world’s central bankers have engineered. Those worries about the pressure from rising prices are destined to cause the next big asset bubble.

And the color of this particular bubble will be gold.

The irony here is that even though central bankers are the cause of this looming bubble in gold prices, a higher gold price isn’t their objective.

They apparently believe that freshly minted “fiat dollars” - trillions of them - are just what’s needed.

Let me explain.

The plan, you see, is quite ingenious - on its face,

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For two decades, the Japanese economy has been dead as a doornail – in spite of hefty Japanese consumer savings. Why?

Field Reporter: Are they slow-moving, chief?
Sheriff McClelland: Yeah, they’re dead. They’re all messed up.
– Night of the Living Dead (1968)

In B-grade horror movie lore, Tokyo has to fend off attacks from rampaging monsters like Mothra and Godzilla. If the cinema were more true-to-life, however, Japan would be less worried about overgrown fire-breathing lizards… and more terrified of zombies instead.

In response to a recent Taipan Daily asking what brought us out of the Great Depression, a number of you responded with a good question. “What about Japan?” Or rather, “What about Japan’s extraordinary rate of consumer savings – and why hasn’t it helped?”

After putting in a massive blowoff top to cap a truly insane 1980s bull market, Japanese stocks proceeded to head lower… for the next twenty years. The Nikkei is …

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

• John Hussman (Hussman Funds): Tending seeds - reacting, responding, planting and watering, July 20, 2009.

In recent weeks, I’ve emphasized the very mixed nature of market conditions, which regardless of longer-term headwinds, remain very ambiguous regarding near term direction. For investors, the shifts in trend and the lack of clear direction create some difficulties, particularly for those who tend to react rather than respond to market fluctuations.

• Paul Krugman (The New York Times): The joy of Sachs, July 16, 2009. The bottom line is that Goldman’s blowout quarter is good news for Goldman and the people who work there. It’s good news for financial superstars in general, whose paychecks are rapidly climbing back to precrisis levels. But it’s bad

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For two decades, the Japanese economy has been dead as a doornail – in spite of hefty Japanese consumer savings. Why?

Field Reporter: Are they slow-moving, chief? Sheriff McClelland: Yeah, they’re dead. They’re all messed up. – Night of the Living Dead (1968)

In B-grade horror movie lore, Tokyo has to fend off attacks from rampaging monsters like Mothra and Godzilla. If the cinema were more true-to-life, however, Japan would be less worried about overgrown fire-breathing lizards… and more terrified of zombies instead.

In response to a recent Taipan Daily asking what brought us out of the Great Depression, a number of you responded with a good question. “What about Japan?” Or rather, “What about Japan’s extraordinary rate of consumer savings – and why hasn’t it helped?”

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Is the commercial real estate bubble next? Fortune

Why US government bonds are not safe Money Morning

Protect yourself from the looming sell off Seeking Alpha

Why Beijing wants a strong dollar Wall Street Journal

Will “Helicopter” Ben get four more years at the Fed? Real Clear Markets

Roubini the revisionist Seeking Alpha

Barney Frank in 2005: What housing bubble? YouTube

GM reaches a deal with bondholders NYT

Benefit from rising bond yields with ETFs Trends I’m Watching

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