"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Sunday, March 6, 2011

Thailand also Facing the Kraken

Many thanks to Paul, a reader who sends us this story about the problems that Thailand is also facing from the inflation beast. Any wonder why gold and silver prices are generally strong during the Asian session?

Thailand may remove oil subsidy as fund runs out

BANGKOK, March 4 (Reuters) - Thailand's state Oil Fund has fallen to about 7 billion baht ($230 million), the Energy Ministry said on Friday, suggesting the government may soon remove a fuel subsidy, which could add to inflation worries.

Read the entire story here:

The Kraken Devouring China

I keep bringing this up even at the risk of beating a dead horse because I believe that the inflation monster is rampaging through many Asian countries, particularly China, at a pace which is putting a severe amount of stress on government policy makers not to mention consumers

This is the reason that Asian demand for gold and silver is so robust and also the reason I believe that all dips in price for the metals will be eagerly bought.

Factoring in the current inflation rate of China, savers there are experiencing negative REAL rates of return. Gold and silver therefore are like a lifeline to those citizens who are attempting to preserve their buying power.

It could well be that part of the "strategy" behind the Fed's Quantitative Easing Policy is to put so much pressure on the Chinese that they have no choice but to let the Yuan rise to a more natural equilibrium level to defeat the Kraken.

Here's the kicker however, if any upward revaluation in the Yuan were to serve to correct somewhat the huge imbalance in US/China trade by lowering US imports of Chinese goods, the effect would be that China would need to BUY LESS US Treasuries to sterilize that trade surplus of theirs. To whom then is the Fed going to sell all those Treasuries that keep accumulating on its balance sheet?

You can read the story detailing the seriousness of the inflation problem in China at the link here: