the wine cellar of 1600 Pennsylvania Ave

Will Obama’s Change We Can Believe In go as far as expanding the ignominious wine service of the Bushie administration? Of course having a President that actually drinks wine will help.

According to Shanks (current White House Wine Steward), the White House currently stocks around 500-600 bottles. That is pathetic and another example of how America’s infrastructure has been allowed to deteriorate. During his eight years in office, Thomas Jefferson amassed a 20,000-bottle collection, which he kept in a cellar that he had built under what is now the West Wing. Two centuries later, that space is being used for other purposes, and the president of the United States has less wine in his basement than I have in mine.

Printing…just a figure of speech

With Obama’s looming titanic fiscal disaster which path will the Fed decide to take? Central banking or central planning?  The Fed has announced that it will continue to print notes in order to trim its funds rate, if need be, all the way to zero. All bodies in Washington seem to think the wholesale printing of money is the answer to the nation’s economic woes.

Yes, today’s policy makers allow, there are risks to “creating” a trillion or so of new currency every few months, but that is tomorrow’s worry. On today’s agenda is a deflationary abyss. Frostbite victims tend not to dwell on the summertime perils of heatstroke.

Our troubles, over which we will certainly prevail, stem from a basic contradiction. The dollar is the world’s currency, yet the Fed is America’s central bank. In the boom, a superabundance of mispriced debt led countless people down innumerable blind investment alleys. E-Z credit financed bubbles in real estate, commodities, mortgage-backed securities and a myriad of other assets. It punished saving and encouraged speculation. Imagine a man at the top of a stepladder. He is up on his toes reaching for something. Call that something “yield.” Call the stepladder “leverage.” Now kick the ladder away. The man falls, pieces of debt crashing to the floor around him.

One final question for which Mr. Bernanke will have to put himself into the shoes of a foreign depositer:

“Tell us, Mr. Bernanke, if you had the choice, would you hold dollars? And may I remind you, Mr. Chairman, that you are under oath?”

Sink your chops in here, via WSJ.

The Sidewalk to Nowhere

The Crazies.