Charlie Chan and Tommy Interrogate Geithner, Bernanke, et al.

Charlie Chan and the Case of the Incredible Shrinking Dollar

Excerpts:

Vice President Joe Biden: Welcome to America, Charlie. I've heard so much about your restaurant in Honolulu. I love cashew chicken, myself. Sure glad you could join this Spring into Recovery celebration. You know, Charlie, I'm on record as saying that we have to spend money so we don't go bankrupt. Now, by that I mean we...

Chan: Honorable Vice President, excuse please. Humbly request you get everyone take-out lunch from Chinese Restaurant down block. (Biden agrees and leaves on his mission.)

Tommy: Pop, you just sent the Vice President of the United States out to get lunch!

Chan: Ancient honorable ancestor say serious matter best discussed by serious people. He not shrink dollar, Tommy. But he may get lost seeking restaurant.

...

Tommy: Look, Pop! The dollar under the glass shrunk while Bernanke was talking!

Chan: (Nods yes.)

...

Austan Goolsbee: Mr. Chan, as Chairman of the Council of Economic Advisors, I'm missing an important meeting with the President. Look, I'm not responsible for the incredible shrinking dollar, but I did bring along the YouTube video of an internet presentation where I professorially...because I was, you know, a professor at the University of Chicago... where I present a white board lesson explaining why we need to increase taxes on the rich. I can show it to you here on my laptop. First, I start off...

Chan: Honorable Chairman, thank you. Not now. Maybe later. Now interested only in what you know about incredible shrinking dollar.

Goolsbee: Detective Chan, like I said back last year when the economy slowed down in the first quarter of 2010, ""The biggest driver was a reduction in government spending at the federal level, a big negative from defense spending." That's still true. The government must spend more money, until we collect more revenue from increased taxes on the richest Americans. Until then, it's print and borrow, print and borrow, print and borrow, till we spend our way out of this recession. That's why it's so important we raise taxes on the rich because they're not...

Chan: Thank you, honorable Chairman. No additional questions.

Tommy: Gee, Pop, he sounds like the Vice President. Are they related?

Chan: Ancient honorable ancestor say that bad economic theory like virus that spreads sickness.

Comment: Meanwhile the real "perp" (Mr. Big) is far away in the White House. Remember Charlie Chan?

Check out this video (upcoming financial crisis)

Video

Comment: I only watched 30 min. I understand it is 80 min long. What do you think? Porter Stansberry is a controversial figure. Google search on him.

Paul Volcker's concern about the "dollar crisis"

Volcker's Demarche

Excerpt:

On the dollar, Mr. Volcker's blunt talk of crisis is a welcome tonic to the devaluationist consensus that now dominates Washington. The world has been staging a run on the greenback, with damaging results if it continues. Mr. Volcker noted that when "concerns about recession are rife," the central bank will be tempted to "subordinate the fundamental need to maintain a reliable currency" to the impulse to shore up a flagging economy. The danger is that you lose both battles, as the U.S. did in the 1970s, and wind up with stagflation.

The present climate, Mr. Volcker told his audience, reminded him of nothing so much as the early 1970s. Then as now, certain commodity prices were rising fast – he cited oil and soybeans as two examples. Then as now too, these were explained away as speculative price run-ups and not as a harbinger of a broader inflationary trend.

We all know how that ended, and Mr. Volcker knows better than anyone. He was the one who, at the end of that decade, had to step in and raise interest rates to punitive levels to break the back of that bout of inflation. With commodity prices spiking again – soybeans are $12 a bushel today compared to $7 a year ago – Mr. Volcker is warning the Fed not to let inflationary expectations become embedded once again.



Comment: Note bolded red above