EXCELLENT RESULTS

Tottenham won on Sunday 2-nil and City bested United 1-nil just an hour ago with 20% of the world watching in case you weren't.  Riviting stuff.

In far less important matters, Little Paulie is all over the talk programs humping his new book which says--among few other things--that all we have to do is build out national debt up to about $20 trillion, put some teachers back to work, accept a bit more inflation and everything will be just fine.  As to where the money comes from?  The markets, they are happy to lend it to us...until they aren't.  That's the funny thing about markets.  You just never know, but Paulie's arguments are always wonderful because you can't prove him wrong...until he is.

Today, the debt of the U.S. Treasury is the debt of last resort because at the present time it is the safest and the most liquid.  The Yuan?  Well not now but when?  Since I started warning people about this scenario 2 years ago, we have seen a remarkable internationalization of China's currency in this short period of time and an acceptance as a a currency of trade and exchange far quicker than I predicted.  Right now we are the only game in town; are we still in 18 months because that is the sort of time frame in which one measures when contemplating issues such as these.  One might also wish to look to the experience of our friends in Euroland and their fiscal efforts and the results from the same.  No structural reform, no growth. No growth...well, one sees the result.  They are back talking about a EUROBOND; a debt instrument issued on behalf of all members of the currncy union.  It will not happen not because it is illegal under the rules (it is) which is the excuse given but because of the real fear that no one will buy it, and when that happens the game is over.   So it would be here.  Paulie the economist can simply say, "Assume a receptive market."  For those of us who have toiled in the real world the answer isn't so simple.

Going to try to talk more about this later in the week and some ideas concerning our central bank which are kicking around in Congress.  FA Cup coming up.  It's really hard to focus.