This post provides links to a number of thought-provoking articles I have read over the past few days that you may also find of interest.

• Andy Kessler (The Wall Street Journal): The Bernanke market, July 16, 2009, We won’t get real growth until Congress and Treasury get policy right.

• Irwin Stelzer (Times Online): American account: Barack Obama’s cures may just kill any recovery, July 12, 2009.

• Paul McCulley (Pimco - Global Central Bank Focus): What if?, So what should Washington do, if and when - and I stress “if and when”; I’m not making a forecast here! - private sector aggregate (nominal) demand growth looks like it’s going to languish in Japan style for the indefinite future? The answer: Take one cup of Krugman’s advice for Japan and two cups of Bernanke’s advice for Japan - responsibly

Gold stocks are taking a drubbing, as are most of the other classic inflation hedges. Why? Because inflation fears have abated. The deflationist view of the world is the one that now prevails. That’s why 10-year Treasury yields have dropped all the way down to 3.35% from a high of 3.95% one month ago.

The deflationist view, which makes some compelling and elegant arguments, maintains that the credit losses in the U.S. financial system far surpass the size of the government’s monetary and fiscal stimulus. All those trillions in bad loans – plus the yanking of credit from consumers and businesses – overwhelm new money creation. The Fed, in other words, is trying to fill a swimming pool with a Dixie cup. This might take a while.

Therefore, this reasoning goes, the greater risk is that asset prices continue to fall. This is the classic debt-deflation point of view. I

We lay awake last night wondering if we’d made a terrible mistake warning notes readers of the coming “Great Inflation.” We know that the government is spending unprecedented sums of borrowed and printed cash to ‘fix’ the economy… the money supply as measured by M2 is shooting up (at an annualized rate of 14% over the past six months)… but the threat of deflation remains.

What was giving us nightmares was Japan. If fiscal stimulus is so stimulating, then Japan would have experienced on the of the biggest economic booms of all time after its government ramped up the debt-to-GDP ratio there from 50% to almost 170% to ward of the recession that struck the former Asian powerhouse in the 1990s.

Instead, as Van Hoisington and Lucy Hunt put it recently in John’s Mauldin’s Quarterly Review and Outlook, Japans economy “is in shambles.”

After two decades of repeated disappointments, Japan is in

Welcome to Sopranos USA… Can the “junk-stock” rally last? Credit to get worse before it gets better… Feds’ “hair of the dog” recovery plan… Shockwave coming… Jim Rogers on why he’s not buying stocks… Introducing your new Notes tax expert, Raife Neuman… And more!

*** What kind of men have we entrusted to manage our economy? And whose interests do they serve? Get the answer to either of these questions wrong and you’re in for a rough ride as an investor.

*** Consider the facts surrounding the Bank of America’s takeover of Merrill Lynch.

Thanks to New York Attorney General Andrew Cuomo, we know that former Treasury secretary Hank “The Hammer” Paulson and Fed chief Benny “Two Fingers” Bernanke violated U.S. securities law by keeping the huge losses sustained by

In a recent post about “bubbly” Treasuries, we got some comments that deserve attention.

First, this is briefly what we said;

“Treasuries have reached bubbly levels, both in terms of low yield and the rate of change of price.

Interest rates will rise when the economy recovers, or when bond buyers demand more long-term interest to absorb trillions of new issues to fund recovery programs. Rising interest rates mean Treasury prices will fall.

… For investors who invest only “long”, closing long positions in long-dated Treasuries, or being alert to a trend reversal necessitating the closing of those positions is recommended.

… For investors who also invest “short”, being alert to a trend reversal creating a shorting opportunity is recommended. The current trend is strongly upward, but could reverse dramatically …”

Some commenters agreed and some did not.

A supportive comment was;

“The safe haven play into Treasuries is demonstrating a true example of a parabolic