...AND THE BEAT GOES ON...

And the beat goes on
Dollar keeps marching downward to the grave...yadda dadda de, yadda da...oops, I'm sorry. Just can't get that tune out of my head.

Nobody believes either Big Ben or The Suit anymore on the importance of a strong dollar. Indeed, it's so bad that even Vince Reinhart, the former head of monetary policy at the Fed admitted today that a moderate amount of dollar depreciation and inflation was always in the cards. Why not? No harm, no foul. And today as though on cue gold was up again, silver hit 50 bucks before settling at 48 and big change and the Buck itself continued its decline against everything but the Yen.

Then again one can find amusement in this if one looks in the right places. This morning on CNBC, the gereral view was as expressed above except for Steve Liesman, who while not trying to act as the resident toad for the administration and the Fed, sometimes finds it difficult.

The subject got around to the effect of the weakening dollar on iflationary pressures when up poped Steve. Now he is a pretty bright guy--speaks Russian, did good reporting for the WSJ (Pulitzer)--but from time to time, Steve's mouth works faster than his mind. Apparently having been passed a talking point on this very subject, Steve leaped into the discussion with, "Well Rick (that being Rick Santelli, Liesman's bete noir), if there's this fear of inflation why isn't the yield on TIPS up? It's down." The look on Santelli's face said it all. Poor, Steve. Had he stopped to think a moment he would have realized that the reason for this apparent disconnect was the THERE IS NO BID! If nobody wants to own the damn things who the hell cares what the yield is? NOBODY OWNS TREASURIES EXCEPT THE FED AND CENTRAL BANKS. EVEN TIPS! It was a moment to be savored.

This is going to change at some point and Carter points out what a kick it's going to be when we have to defend the dollar because even Central banks, who really don't run a P/L get sick and tired of buying junk and if commodities keep getting priced in dollars can six dollar gasoline be far behind? Not a pretty thought. But in the meantime, the girls in the 'hood are gathering at 5:00 a.m. tomorrow (hats and sweats) to drink champers and watch the wedding from the Abby Church.
A perfectly wonderful opportunity to forget all about this sort of stuff and watch the pagentry that really only the Brits do right. A Royal Wedding...truth be known I think they do funerals even better. Rule, Brittania!