Chart of the Week

 

"Endless money forms the sinews of war."

-Cicero

Our guru of everything China here at Research Edge, Andrew Barber, put together the picture below. Sometimes pictures are far more powerful than prose, so I'll cut this note short.

What you see in the Ben Bernanke quote below is the product of the most highly politicized US monetary policy in American history. When the US Federal Reserve was established prior to World War I, this was not the objective. The objective was to protect the credibility of one's currency and prevent financial panics.

Free money policy will continue to erode the currency that backs it. For the immediate term TRADE, unlimited credit creation backed by nothing other than political compromise will continue to be positive for REFLATION. In the long run however, this groupthink of levering up America's future will be dead.

The Chinese are selling. Watch what they do, not what the manic media interprets them as saying.

KM

Keith R. McCullough
Chief Executive Officer

Chart of the Week - a1