“In the big picture, inflation supports big government. It is a major method of financing governments. With the help of inflation and the inflation tax, government is orders of magnitude larger. Inflation therefore supports the evils of big government. For example, big government quite often chooses armaments and warfare. In this way, inflation helps states to maintain belligerent postures toward one another that lead to waste, frictions, and wars that undermine economic progress. Inflation helps governments to control their peoples or peoples they claim sovereignty over. They often are then enabled to make war on dissident and breakaway movements. Inflation enables governments to finance social programs, many of which undermine the society they purport to support. Inflation benefits some in society at the expense of others. This invariably undermines social cooperation…”

Michael Rozeff, Lew Rockwell

Gold has gone sharply down below 900.  Already I feel better, although it puts my SLV nibble in the red.

I held off buying because I thought GLD showed more strengths on its down side moves – but recently I was just wondering if I was wrong after all and whether it was making a solid base at around 900-920.  Good thing I held off. That plunge down was sharp and shows that the corrective thrust is stronger than the upthrust still.

The propaganda effort on behalf of the fiat money regime started up last week and this latest onslaught by General Bernanke has the market up and  sentiment more optimistic.  So some faithless money is finding its way back into equities.

“Incomes in “The OC” are 25% higher than average for the state and unemployment lower. But even here, the US recession is biting. House prices have fallen nearly 30% in a year and now about one home in every 250 is at risk of foreclosure, or repossession.America’s wealthy are hurting, so this is a get-together with a difference: a gold party.

Guests bring old unwanted jewellery and sell it. It is tupperware for tough times. Not so much a bring-and-buy as a bye-to-bling….”

More at the BBC

And meanwhile, a vulture investors tells it like it is:

V: I heard this yesterday: The top five U.K. banks have $10 trillion of assets and their GDP is only $2.13 trillion. The whole country could fall into the ocean. The top five U.S. banks represent only about 60 percent of GDP by comparison. The other thing is a survey that I just read about in the Times. Over six in ten Americans think that someone in their household will lose their job in the next year. That means six in ten people won’t buy anything other than basics. The economy comes to a full halt even worse than now….

 New York Magazine.

“The computerization of personal healthcare records is one of the showpieces of the new stimulus bill. President Obama promised, “We will make the immediate investments necessary to ensure that within five years all of America’s medical records are computerized.” Congress ponied up $19 billion to subsidize the digitization of patient files and creation of electronic healthcare tracking systems. The ultimate goal is “the utilization of a certified electronic health record for each person in the United States by 2014.” Shoved into a 1,400-page bill passed in a panic, the plan went largely undebated. But the implications are horrifying. Doctors will be coerced into a massive federal healthcare scheme, and government will serve as the leaky repository of patients’ most intimate information. Much as the Patriot Act pried, this measure intrudes on a far more personal level. No patient left behind—or alone.”

Jim Bovard

Anne Picket at Econoday

“Calling the $12 trillion giveaway to bankers a “subprime crisis” makes it appear that bleeding-heart liberals got Fannie Mae and Freddie Mac into trouble by insisting that these public-private institutions make irresponsible loans to the poor. The party line is, “Blame the victim.” But we know this is false. The bulk of bad loans are concentrated in the largest banks. It was Countrywide and other banksters that led the irresponsible lending and brought heavy-handed pressure on Fannie Mae. Most of the nation’s smaller, local banks didn’t make such reckless loans. The big mortgage shops didn’t care about loan quality, because they were run by salesmen. The Treasury is paying off the gamblers and billionaires by supporting the value of bank loans, investments and derivative gambles, leaving the Treasury in debt….”

Michael Hudson on the new KKK – Korporatist-Krisismongering-Kleptocrats