Federal Reserve and Monetary Policy: Slash and Burn

It was disconcerting to hear an International Monetary Fund principle say that the new power brokers are hedge funds, private equity, national sovereign funds and central banks (The International Monetary Fund (IMF) Roundtable of Sovereign Asset and Reserve Managers in Washington, D.C. on November 15-16, 2007). I am not concern with hedge funds and private equity as long as they act on free market principles and they lose their capital if a wrong strategy was acted on. Having foreign powers deciding on policy is an invasion. Fortunately, for US of A’s citizens, Bush’s ineptness has made repelling this invasion easy. Bush’s lead in sending the world in a global economic depression has the effect of the strategic use of SLASH and BURN.

The Independent, Identical Distributed can no longer be applied, when one market embeds the value added chain from another, in stochastic economic models. Their marginal probability distributions are no longer the same. I wrote a business plan and got the “rookie” talk from my mentor. He said I would not get an investor if I undercut the revenue to gain business share. This is a business reality, which has to be applied to hiring descions. Example: If one uses “Risk & Reward” as the first ordent and number of hires as the second and assume it has a normal distribution. The convolution of a two normal distributions with a zero mean and variance var(1) and var(2) is a normal distubution with mean of zero and variance that is the sum of the two variances. The Free Market forces the firms to either make efficient use of inputs (competition among processes) or find the lowest cost of capital (the majority of the cost is labor).

IRS data show that the median tax filer’s income - half earn less than the median, half earn more - fell 2% between 2000 and 2005 when adjusted for inflation, to US$30,881. The IRS data shows the drop of wages and salaries indicated by the convolution of two independent, random variables whose generating functions are different.

A misquote attribute to Lincoln (Wikiquote): We may congratulate ourselves that this cruel war is nearing its end. It has cost a vast amount of treasure and blood... It has indeed been a trying hour for the Republic; but I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war. God grant that my suspicions may prove groundless.

There are those on Wall Street who think the job of the Federal Reserve is to lower short-term interest rates such that the Fed creates a market for their now illiquid assets.

The illegal alien crisis is now an economic struggle, a clash between race and a religious strife.

Bush’s housing debacle is getting worst. I predict we will elect the president based on the coming global economic depression and one who promises to get our troops out of the Middle East. If the religious right gets behind a candidate, I fear critical issues will not be addressed because the main theme will be focus on the “Separation of Church and State”. The US Supreme Court did not resolve this issue.

The Democrats are a bunch of spineless yellow bellies. The Nazis Party America (formally known as the Republicans) is a bunch of Fascist. Both parties are bought by multi-nationals. I will not back any candidate from the Christian Fundamentalist Party. The candidate I will like to see is Nader from the “I Told You So Party”. I do not think a candidate from the “Book of the Month Club” is viable.

One can not go wrong shorting the U$ dollar and buy those counties’ currencies that export raw materials. The Russians are buying Euros thereby propping up crude oil. The Federal Reserve has made this possible by “Printing” money for those, who gammed the system, can make a profit. Also, Bush is not doing his job. Bush’s “Faith Based Economic and Foreign Policies” are religious ideological myths (religion does poison everything). “With Proof, One does not need Faith“.

Viva La Revolucion!