• U.S. Dollar: Review And Outlook
• Japan Update: Cars, Cigarettes, And Confidence In Short Supply
• Economics Focus: BRIC Wall
• The Fed Obliterates the Savings Ethic
• Gold Prices Pop; Silver at 31-Year High
• U.S. Embassy Families Cleared to Return
• Matt Taibbi “Justice Department Has No Appetite"
• U.S. economy is improving but energy costs are a drag, Fed says
• The Planet Strikes Back

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Economy

U.S. Dollar: Review And Outlook (Joe P.)

In late August 2010, Fed Chair Ben Bernanke, through a speech in Jackson Hole, WY, alluded to the Fed’s intention to conduct an expanded quantitative easing program. Subsequently, in November 2010, a $600 billion quantitative easing program was announced (“QE2”), aimed at acquiring longer-term U.S. Treasury securities through the end of June 2011. The Jackson Hole speech marked the start of a significant rally in the price of many assets that typically help provide investors with protection against inflation, from equities to oil to gold. Over the same time period, we witnessed a significant increase in the market’s implied expectations for future inflation, a gauge we watch closely, as it tends to be a leading indicator of inflation itself.

Japan Update: Cars, Cigarettes, And Confidence In Short Supply (guardia)

People are buying food, but holding off on restaurants, hotels and hairdressers. While some of the decline is due to the Japanese tendency to self-restraint, or jishuku, there are still supply disruptions and power outages.

Economics Focus: BRIC Wall (jdargis)

Rapid growth is initially easy because the leader has already trodden a clear path. Developing countries can borrow existing technologies from countries that have already become rich. Advanced economies may be stuck with obsolete infrastructure; laggards can skip right to the shiniest and best. Labour productivity soars as poor economies shift workers from agriculture to a growing manufacturing sector. And rapid income growth among young workers boosts savings and fuels investment.

The Fed Obliterates the Savings Ethic (Alfredo E.)

There is no caveat to the counsel that says, "Keep six months of savings around if the money is earning at least six percent." Even if the money sits there all shiny, not earning a thing, it's the liquidity and insurance against the unknown that's the issue.

Unfortunately, a central bank's debauchery of the currency serves to raise people's time preferences and impair their judgment. In a blog post recently, I highlighted the advice of life coach and author John P. Strelecky, who advises people to spend their tax refunds on an experience they will remember forever, rather than saving the few hundred or thousand dollars that the IRS may be giving back.

Gold Prices Pop; Silver at 31-Year High (Alfredo E.)

Gold for June delivery added $16.80 to settle at $1,472.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,475.20 while the spot gold price was rising more than $14, according to Kitco's gold index.

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U.S. Embassy Families Cleared to Return (Debu)

“Today, while the situation remains serious, and there is still a possibility of unanticipated developments, cooling efforts are ongoing and successful, power, water supply, and back-up services have been partially or fully restored, and planning has begun to control radioactive contamination and mitigate future dangers.” The advisory maintains U.S. citizens should steer clear of a 50-mile radius around the troubled plant.

Matt Taibbi “Justice Department Has No Appetite"

Anderson Cooper: Eliot Spitzer, Matt Taibbi and Carl Levin go after Goldman Sachs.

Energy

U.S. economy is improving but energy costs are a drag, Fed says (David B.)

"While many districts described the improvements as only moderate, most districts stated that gains were widespread across sectors, and Kansas City described its economic gains as solid," the U.S. central bank said in its "beige book" summary.

"Manufacturing continued to lead, with virtually every district citing examples of steady improvement, often with reports of increased hiring," the Fed said.

Environment

The Planet Strikes Back (Alfredo E.)

In his 2010 book, "Eaarth: Making a Life on a Tough New Planet," environmental scholar and activist Bill McKibben writes of a planet so devastated by global warming that it's no longer recognizable as the Earth we once inhabited. This is a planet, he predicts, of "melting poles and dying forests and a heaving, corrosive sea, raked by winds, strafed by storms, scorched by heat." Altered as it is from the world in which human civilization was born and thrived, it needs a new name -- so he gave it that extra "a" in "Eaarth."

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