Jim is hatin' BB this week. Not surprising where his mind is wandering given his revelation of the web spots that he frequents- zero hedge, Gerald Celente etc.
Krugman's NYT site appears to be down but he had a little discussion on that phenomenon recently.
I've been there and done that, I was way ahead of the curve in dissing him when he was first being vetted as Greenwad's successor- pretty clear then that we were headed for the 0 bound, Japan style, when they chose the world's leading academic theorist on the topic.
Setting aside the belief that the Fed is the source of all evil or the parallel view that gold should be at $5000, both of which might have some validity, the empire (where we live better than the kins of old) is not in a million years going to run up the white flag and go quietly into the night. Nor was I particularly anxious to take the leap into the chasm when well educated caucasian suicide bombers held us all hostage recently.
The primary loci of Bernake hatred are the hedgies and other high financial operators who apparently can't make any money even though financial assets- particularly stocks and junk bonds- are skyrocketing. The run of the mill equivalent out here in Hooterville are the guys with a gold stash who are hoping to buy everything on the cheap after the crash- or at least have their worldview validated. I'm guessing Jim might have got himself somewhere near there.
Back when I was a Bernanke hater it was the period before the crash when I was deeply frustrated that the things I thought were going to happen didn't (until they did.) It REALLY isn't easy to fight the Fed and it is even harder to get positioned in the right things at the right time to make a fortune off of the crash.
My guess is that there will be a big crackup but it won't be soon. If there's a good argument for letting the devil take the hindmost last time it is that next time it will be worse, That's why I don't think it will be soon and every form of sleight of hand will be conducted to forestall that day.
Precious metals flush out continues this morning, new lows in silver, looks like just a matter of time before the stops under the lows in gold get cleaned out too.
Interesting that given that I am totally open to all conspiracy theories I'm not really red hot on the gold manipulation thing, at least not big M type.
That would be despite the fact that I 100% believe what I wrote above- that I expect markets to get ever more phony and rigged going forward becasue that is implicit in the choices we've made, particularly about deciding that it is more expedient to just patch things together and keep the system running as it is rather than reassert the rule of law. Which might indeed have resulted in some temporary bad data prints.
But actually I'd have to admit that if I were king and could wave my wand I might like this- liquidity injections being channelled into "good" equities and homes, not bad commodities.
But there could be more, too. Intermarket relationships do evolve and break down over time so it could be that we're just seeing a fracturing of the All One Market where everything goes up on expanding liquidity.
What I do know, or at least believe is that charts tend to top ideology. You may be 100% certain that gold has to go up, for instance, but the chart was really bringing that into question going all the way back to when silver fell out of a parabola in June 2011 and then gold failed on a second run to the highs on very high volume and OI.
There is also the fact that there is a large amount of gold in some very weak hands- i.e. some of the one hit wonder hedge funders like Paulson who made massive fortunes shorting stuff into the crash (in Paulson's case he even had to have Goldman rig it for him) and then are regarded as geniuses, at least by themselves.
Much better that when you happen to hit the hillbilly lottery you repair to a private island with a bevy of hookers and a brick of cocaine.
You mention Paulson
Just short of 3 years ago, July 2010: