currencies

One thing to keep in mind, what got us to this point did not transpire overnight and it's going to take years to play out. However the sooner we accept things are not going to go back to where they were, the better we will be able to embrace the necessary change, and the better the future.

John Authers has a nice little piece at the FT on the continued sell-off of the Euro caused by the two weeks ago solved Greek Crisis, which turns out, hasn't been solved. Talk grows about bringing in the IMF, which is both a slap to Europe, and America, another bailout courtesy your tax dollars. While Chinese Central Banker Zhu Min states:

Greece "just one case," but also the "tip of the iceberg," and warned that fiscal problems could spread to Spain and Italy. High levels of debt throughout the developed world, he said, would keep growth low for several years.

"The governments tried to put every burden from the financial sector onto their own children. Now they find nobody can save them," he added, referring to the large amounts of government debt issued to fund bank bailouts and stimulus programs in the West during the crisis.

To reinforce, Mr. Zhu's sentiments, Ben Bernanke was before Congress once again assuring everyone who will listen that Fed rates will be low for a very, very long time. However, in the next couple weeks the Fed will end one of the greatest props to the housing market, their buying mortgage back securities to the tune of 1.3 trillion dollars in total. We'll see how that works.

Meanwhile, Bill Gross is about a week early in his monthly perspective and sounds a little agitated. If you're king of the bonds and sovereign debt is becoming increasingly risky, where do you go? Mr. Gross takes a swipe at the CBO's numbers on the recently past health care bill, saying far from saving $138 billion, it's going to increase the debt by $562 billion. Like I said, he's agitated.

Well plenty of money to be made in this volatility if you're the gambling sort. But remember, Mr. Keynes lost almost everything speculating on commodities and currencies in 1929. His mistake, "I was forgetting gold is a fetish." Revenge of the gold bugs? Lord help us all.