Pater Tenebrarum's Blog

CIBC thinks the huge amount of household debt in Canada and the beginning cracks in the housing bubble are nothing to worry about. The main reason for this benign assessment seems to be that there have been a few other credit and real estate bubbles in the world that have grown even bigger than the US one before it burst.

The choice of the word “unadulterated” is not accidental. There were many different kinds of gold standard, including what we now call the Classical Gold Standard, the Gold Bullion Standard, and the Gold Exchange Standard. Each contained flaws; each was adulterated.

Readers may recall that Ron Paul once surprised everyone with a seemingly very elegant proposal to bring the debt ceiling wrangle to a close. If you're all so worried about the federal deficit and the debt ceiling, so Paul asked, then why doesn't the treasury simply cancel the treasury bonds held by the Fed?

As a friend recently reminded us, the charts of credit default swaps (CDS) on sovereign debt in the euro area that we are regularly updating in these pages may no longer be indicative of the underlying reality of market perceptions.

Economists, market analysts, journalists and investors alike are all talking about it quite openly, generally in a calm and reserved tone that suggests that - to borrow a phrase from Bill Gross – it represents the 'new normal'.

When money is debased, social cooperation is hampered. There is even more to this in fact: the fiat money system, which has become such an indispensable feature of the modern-day welfare-warfare State, severely erodes peoples moral values. This is because it enables the belief that one can get something for nothing to become ever more entrenched.

The recent burst of market enthusiasm has meanwhile been accompanied by an inordinate number of technical divergences, including a strong warning sign in the form of a Dow Theory divergence between industrial and transportation stocks. All of these are to be filed under 'they won't matter until they do', but it would be a mistake to simply ignore them.

It appears it is after all not Scott Sumner who 'saved the US economy' by urging the helicopter pilot to create even more money ex nihilo than hitherto. What will save us instead is Apple, or rather, its latest product, the iPhone 5. Who needs Bernanke when this wondrous device stands ready to pull the economy up by its bootstraps?

Keith Weiner, the president of the US Gold Standard Institute and a follower of Dr. Fekete's school, has become a regular and valued contributor to this site. It is our hope that the occasional juxtaposition of points on which we disagree serves as an encouragement for readers to carefully think through the arguments that are presented and helps to foster debate...

Mrs. Merkel has just visited China, a big delegation in tow, for extensive talks with Wen Jiabao and his government. Germany has good reason to keep in close touch with China: it is one of its biggest export destinations these days.