David Gaffen at the WSJ's MarketBeat blog brings it home with this quote regarding the Fed's half-point move today:
“It’s not unlike an ill person begging for more morphine and they just got a double dose from the doctor — the problem of course with getting a double dose of morphine is, you’re very sick,” says Richard Weiss, chief investment officer at City National Bank.
With both gold and oil priced in dollars (for now, see post from earlier) inflation appears to be in the driver's seat. You've got to wonder though, just how sick the patient is, the junk paper problem is so opaque. Stagflation anyone?
Here's a story I meant to get to earlier.
The Economist does a "On the One Hand":
Food-price fears in China
Update:Real Time Economics directs us to James Grant's review of Allen Greenspan's book:
...At one point during his long interview on "60 Minutes" Sunday evening, Alan Greenspan could be seen autographing dollar bills for his smiling fans. Meanwhile, off camera, unautographed greenbacks continue to depreciate against a variety of metals and foreign currencies. A century ago the pound sterling anticipated the dollar's role today as the pre-eminent global monetary brand. But the pound was exchangeable into gold at the bearer's demand. Not since 1971 has the dollar been collateralized by gold or exchangeable at the U.S. Treasury into anything except nickels, dimes and quarters.
Sooner or later, the dollar will lose its luster and finally its value, as paper currencies always do. Striving to understand why people trusted it in the first place, historians will naturally reach for the memoirs of the foremost central banker of his day. But Mr. Greenspan's "The Age of Turbulence" will leave them just as confused as they ever were.