market

If you’re after a perfect example of everything that’s wrong with mainstream economic thinking can I suggest you go out and buy today’s Australian Financial Review (AFR).

Once you’ve bought it, take it home, lay it on the table and then slowly turn to page 26.

But before you start reading, grab a notepad and a pencil and then settle down to read the article by “Market monitor” Glen Mumford.

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Gold Unwinds Last Month’s Sell-Off as “Race to Bottom” in Forex Spreads to China’s Yuan

THE PRICE OF GOLD rose to its best level since the start of July in early trading on Monday, rising above $1226 per ounce as world stock markets sagged but commodity prices ticked higher.

Crude oil bounced from a 1-month low, and wheat futures rose again after dipping from this month’s near-two year high – sparked by Russia banning exports amid its worst drought in five decades.

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That’s today’s headline. The headline for Monday’s Money Morning will be the follow on… “How a Housing Index Could Work”.

Yesterday I mentioned that the Australian Securities Exchange (ASX) is considering offering an index based on residential house prices.

The index – from what we can gather – will allow investors to bet, gamble or punt on the direction of the residential housing market.

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Much as we suspected in yesterday’s Money Morning, we’ve already seen the first stages of the institutionalisation of blatant money printing.

And not surprisingly it came from the market drones and Federal Reserve cheerleaders at CNBC.

Your editor wasn’t quick enough with the notepad and pen to jot down exactly what ‘Squawk on the Street’ host Erin Burnett said, but it went something like this:

“The Fed hasn’t actually increased the size of its balance sheet, it’s just going to keep it at the same level.”

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