Some people will swallow any cod's swallop as we say

Here's the friggnin proof.

Man, I think Hank Paulson is SO low.

Too bad those of us who KNOW don't get the ink.

Dr. Hudson: "Bernanke just raised US living costs 20%"

According to Dr. Michael Hudson, the headlines in the financial press are not reflecting economic reality.

The financial press is not reflecting the impeact of "helicopter" Ben Bernake's finanacial policies.

Instead the headlines should read "Bernanke just raised US living costs 20% " according to Dr. Hudson.

The Fed has let it be known that it may lower the discount rate by an
amazingly high 50 basis points. The dollar naturally plunged, gold prices
soared and oil prices followed suit.

The reason "Helicopter Ben" is flooding the economy with money is to
support stock prices for the wealthiest 1% of Americans -- those to whom
squiggles matter. (Lower-income Americans hold stocks mainly via pension
funds for the long term.)

said Dr. Hudson.

Pointing out that lower interest rates mean a lower dollar, Dr. Hudson suggests what the effect of higher import prices will be be:

lower dollar means higher import prices, for everything from oil to manufactured goods.

This is of concern for US policy makers for they seem unable to grasp the effects of US economic policies. Dr. Hudson asserts:

"Obviously, central banks today don't care about what they pretended so long to care about -- consumer prices, which was their excuse for TIGHTENING credit.
They're all for asset-price inflation, increasing the price of property
and financial claims relative to labor.

It's amazing that politicians pretend that exchange rates should be left to 'technocrats, ' e.g. flaks for High Finance and its short-term speculative gains."

Talk about recession regularly garners headlines and dominates the financial news. But few seem to understand the underlying effects of the Central bank's recent "remedies".

Dr. Hudson has been working on a new tax policy for the United States. and is President of The Institute for the Study of Long-Term Economic Trends (ISLET).

He is the Cheif Economic Policy Adviser for Dennis Kucinich who is running for US president in 2008.

His cover article in May's 2006 Harper's magazine presaged the coming of the subprime crisis and coming recession.

Bill Bonner: 2007 year in review

Well, the final day of 2007 is upon us. And what a year it’s been...oh yes...an interesting year to say the least.

2007 was an eye-opening year for many...finally seeing the truth behind the housing market...the precarious state of the dollar...and the underlying strength of gold and other commodities.

Here at The Daily Reckoning we’ve covered each of these topics...and more. And today and tomorrow, we will be taking a trip down memory lane. So without further ado, we give you:

2007: The Year in Review – Part I

01/04/07 – The World’s Push for Power
by Chris Mayer “The North American power grid is the largest in the world. Chris Mayer explains that investment in the power grid will top $100 billion by 2015 - but that’s nothing compared to what other countries are going to spend...”

01/31/07 – The Rising Liquidity Wave
by Puru Saxena “During the past year, the ongoing monetary inflation, credit growth and expanding liquidity environment drove up prices in various markets. Apart from rising interest rates and unrest in the Middle East, we did not get any major negative developments on the economic front, which also helped the global markets. Puru Saxena looks forward to the year ahead to see what we can expect from the various asset classes...”

02/01/07 – Corporate America to the Rescue?
by Dr. Kurt Richebächer “The Good Doctor is back - and still wondering why our friends at the Fed seem to think that the U.S. economy is ‘sound’ - even though all the signs seem to be saying otherwise. Read on...”

02/27/07 – A Bad Hand for Bernanke
by Adrian Ash “It’s clear Bernanke’s been dealt a bad hand by the Maestro. But will the gold market fold, raise, or call his bluff...? Our U.K correspondent, Adrian Ash, explores...”

03/09/07 – Alphas, Betas, Scamps and Scalawags
by Bill Bonner “As the subprime industry continues its steady decline into the bowels of bankruptcy, we can’t help but wonder what these lenders were thinking. Bill Bonner explores this industry’s business model, and finds out that sometimes, thinking isn’t necessary - just showing up to work is enough. Read on...”

03/28/07 – “It’s the End of the World As We Know It”
by Doug Casey “Anyone paying even a little attention right now can’t help but notice the stunning array of problems that are menacing the global economy and threatening traditional investments. Doug Casey explains how you can profit from the unfolding crisis...”

04/17/07 – Oil Booms and Busts
by Byron King “Over the past 25 years, the ‘growth’ in oil reserves estimated to be in existing oil fields has actually exceeded the additions to reserves from new discoveries. The implication is that the existing oil fields of the world are as important, and maybe even more important, than the prospective new discoveries out in wildcat country. Byron King explores...”

04/19/07 – Standby Commodities
by Kevin Kerr “There are certain commodities that are staples of trading...beef...sugar...soybeans, etc. Kevin Kerr asserts that all investors should know these sectors and be very comfortable with them. Read on...”

05/12/07 – Where’s the Boom?
by Kate “Short Fuse” Incontrera “Using the mighty force of Fed-speak, Helicopter Ben and Ol’ Bubbles helped to push the Dow back up. They should really think about using their awesome powers to fight crime.”

05/29/07 – Alas, The Demise of the Dollar
by Addison Wiggin “The greenback is in a sorry state of affairs, down against most major European currencies. This weak dollar trend looks like it is nowhere near wrapping up, and below, Addison Wiggin details how a declining value of the dollar has far-reaching effects. Read on...”

06/02/07 – Is Ethanol Running Out of Gas?
by Kevin Kerr “The corn-based ethanol craze is probably not being shown the door, but may be getting handed its hat. Kevin Kerr explores...”

06/12/07 – Fighting the Last War
by Chris Mayer “You have probably heard the expression about generals always fighting the last war. Investors, too, tend to invest by looking in the rear-view mirror. In both cases, the consequences are costly. Chris Mayer explains...”

07/06/07 – Bear’s Market Blues
by Bill Bonner “With the housing market in free fall, it is sometimes difficult to decipher exactly where everything began to go wrong. This week, Bill Bonner sifts through CDO’s, MBS’s, and falling asset prices to explain what is really happening. Read on...”

07/10/07 – Gone, But Not Forgotten
by Mark Skousen “Hans Sennholz, who passed away two weeks ago, was a died-in-the-wool doomsayer, a charismatic speaker, and an influential player in the financial freedom movement. Mark Skousen, who was a close friend of Dr. Sennholz’s, gives us a snapshot of his life, below...”

08/09/07 – The Jekyll and Hyde Global Economy
by Bill Bonner “The symmetry of the system is simple: the East makes; the West takes. The East saves; the West spends. The East lends; the West borrows. The boom in the East is real; in the West it is a fraud.”

08/20/07 – The Currency Cavalry Rides Again
by Bill Bonner “On Friday, the Bernanke Fed looked a lot like the old Greenspan Fed...riding out to rescue speculators like the cavalry to the aid of desperate pioneers. The trumpet sounded...the rifles fired...and the savages were beaten back.

09/13/07 – The Effects of the Summer Market Shock
by Bill Bonner “Pity the poor American householder. Just a few months ago he had people lining up to lend him money. Now they’re on the phone wanting it back! He had gotten used to refinancing. But now refinancing is tough...and more expensive.”

09/22/07 – Brokedown Greenback
by Kate “Short Fuse” Incontrera “Wow, the dollar has certainly taken a beating this past week following the Fed’s rate cut. It has fallen to a 15-year low in the world dollar index, hitting the weakest level ever against the euro at just under $1.40.”

10/02/07 – Like Fed Head Like Son
by Bill Bonner “The results, announced two weeks ago, made it clear that Bernanke is heir to Alan Greenspan, not Paul Volcker. That is, the Bank of Ben Bernanke will not fight inflation...instead, it will battle deflation to the bitter end.”

10/20/07 – An All Season Hedge
by Addison Wiggin “The lesson not yet learned has everything to do with the reasons why the gold standard was so important. We have given control of economic forces over to government tinkering.”

11/15/07 – It’s All About the Euros
by Kate “Short Fuse” Incontrera “The dollar is quickly becoming the red-headed stepchild of the currency world. First, supermodel Gisele came out saying she didn’t want to be paid in dollars for her latest campaign. Then, rap superstar Jay-Z released a video in which he was doing something very odd - flashing money around.”

11/19/07 – More Than “Sheets” Hitting the Fan
by The Mogambo Guru “People want to know why things in the financial markets are so damned weird, and I answer that there are many reasons, all of them concerned with greed. And it may also have something to do with ‘making hay while the sun shines’.”

12/13/07 – So What’s Gold Worth?
by Ed Bugos “Writing from Vancouver, British Columbia, Strategic Investment contributor Ed Bugos estimates the value of gold adjusted for the exploding supply of dollars. He also provides a trader’s perspective on the likelihood of a gold correction. Read on...”

12/19/07 – A Recession Worth Having
by Bill Bonner “Yes, dear reader...a recession is probably on the way...And it will probably be a real recession this time, not just a phony recession such as we had in 2001. This time the consumer will actually have to cut back on his spending.”

Happy New Year from all of us here at The Daily Reckoning !

Short Fuse
The Daily Reckoning

I read about this yesterday and meant to post about it, but found maissonneuve is right on it.

Again, this is a story that is MORE than meets the eye.

V
HUFFIN AND PUFFIN OVER NUFFIN
by Jordan Himelfarb
www.maisonneuve.org/mediascout
August 31, 2007

OSHAWA AS RECESSION BELLWETHER?
The National, CTV News and the Star lead, while the Citizen goes inside with the slashing of 1,200 jobs at a General Motors truck plant in Oshawa, Ontario. In response to the precipitous fall in sales of the Chevrolet Silverado and GMC Sierra pickup trucks, GM has cut production at the Oshawa plant from three shifts to two. Many of those losing their jobs live in the Whitby-Oshawa riding of Finance Minister Jim Flaherty, who responded somewhat defensively to news of the cuts. Though “it’s a concern because people are going to lose their jobs and I know a lot of those people,” Flaherty suggested,with the Canadian unemployment rate lower than it’s been in a generation, these newly unemployed autoworkers are sure to find work elsewhere. Canadian Autoworkers Union president Buzz Hargrove took the news with less serenity: “They shocked the living hell out of us, quite frankly.”

Analysts throughout the Big Seven blame the cuts on a stumbling American economy, and particularly the plummeting US real estate market. A detailed article in the Star isolates three primary causes of the layoffs: the US real estate crash, which has meant workers are less likely to buy pick-ups; the rising Canadian dollar, which has made Canadian exports more expensive abroad; and astronomical oil prices, which have rendered gas-guzzling trucks unaffordable for many. Liberal finance critic John McCallum posited the cutbacks as a foreboding development for the Canadian economy: “All the economists are telling me … the possibility of a recession is rising, and that’s why it’s ever more important that this government takes action and shows economic competence.” With analysts extrapolating from the trajectory of the global economy, the word “recession” is bandied about extensively in today’s sources, though no pundit is bold enough to make an outright prediction.