Old and New

Exactly the News that I didn’t want to hear, Rift-splicing by the Fed to rescue bad Bank debt. One-Month debt would be acceptable, but Everyone knows that the Banks will renew, and the TAF can only expand. Running a revolving debt of that magnitude will adversely affect Deposit Interest rates, and is bound to expand. The Term Auction Facility stands as a mechanism to save Bankers from registering Bankruptcies. The concept is laudable, except for the fact that it does little more than hide Banking malfeasance, and the Fed becoming the Depositor of Last Resort is too easily transferable to Money creation; the worst form of Inflation existent. I had my doubts about the TAF from the Start, and can say now that this example of Bankers covering their own Ass, will have very serious down-the-Road consequences.

China’s Inflation has Good News and Bad News. The Good News will be a welcome spread of competition throughout the World, as numerous other Countries can more easily match the Production Costs of the Chinese. The Bad News is that Chinese inflation will raise Import Costs in both the U.S. and EU, without having any reduction of the advantage of foreign production in comparison with native domestic production. I should say that what increased competition is induced, will improve Quality Controls of Production throughout the World, as competition extends beyond outright cheap Cost. It is a sadness when the Good News is not good enough, and the Bad News is worse than expected.

The BBC ended its Shortwave English Broadcasts to Europe last Monday. The historian within me feels saddened by the passage of a major symbol of Empire, considering the contributions of this Service in its time. The economist, on the other hand, wonders at the longevity of the Service outdated with the development of the Internet. Computers and Internet access have become almost as cheap as Shortwave Receivers today, and the self-programming choices available on Internet makes it far superior to the editing efforts of the BBC. Young Readers, though, may not understand the conflicting emotions of old Hands hearing of this cancellation, never having listened to the Service or having watched the old Movies highlighting the Service. lgl