stimulus

It seems that not only is our friend Michael Pascoe unable to see the value of gold, but he is obviously quite incapable of working out a basic sum – that 1 + 1 = 2.

And his unwavering faith in the ability of the Reserve Bank of Australia is commendable, yet completely mad. After all, the RBA is the same crowd that’s overseen the destruction in the value of your money over the last fifty years.

And here’s the proof courtesy of the RBA’s website:

They don’t even hide the fact that they’ve singularly failed in one of their main aims, to provide a stable currency.

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“THE good news is that the American Recovery and Reinvestment Act, aka the Obama stimulus plan, is working just about the way textbook macro-economics said it would. But that’s also the bad news – because the same textbook analysis says that the stimulus was far too small given the scale of America’s economic problems.”

That’s some mainstream economic analysis for you from economic public enemy number 1 – Paul Krugman…

Sorry, I should say, Nobel Prize winning economic public enemy number 1.

We’re not sure what textbooks he’s been reading, but if we were in favour of book burning – which we aren’t – then those textbooks would be the first we’d put on the bonfire.

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We only have a brief Money Morning for you today.

We’re back in Melbourne and of course it’s Melbourne Cup Day. So your editor is going to relax for most of today after only getting back into Melbourne at 2am this morning, followed by an hour drive home to Frankston.

One of the things we did notice over the last few days is how easy it is to forget what’s happening in financial markets when you’re enjoying yourself on holiday.

For instance, it wasn’t until Sunday morning that we read about Wall Street’s 250 point drop from Friday.

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Morning reader,

Kris Sayce is busy finishing up Australian Wealth Gameplan today. So, I thought I’d share a few words with you this morning.

Yes, he did make me assemble my own chair. And, surprisingly it hasn’t fallen apart – yet.

Kris will be back tomorrow, but in the meantime, grab a coffee and enjoy…

“The signs of recovery being seen around the world are due to huge stimulus packages, which will only prop up economies for another 12 to 18 months before they collapse again.”

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