BEST OF JIM COOK

August 1, 2006

CHRONIC INFLATION

Any talk of aggressive Federal Reserve action to quell inflation appears to be only talk. The Mogambo Guru reports total Fed credit increased by $11.5 billion the second week of July. He writes, "It was only a couple of months ago that Ben Bernanke, chairman of the Federal Reserve, confided to CNBC’s Maria Bartiromo that "it’s worrisome that people would look at me as dovish and not necessarily an aggressive inflation-fighter." Hahaha! Now we know why people look at him as dovish on inflation! $11.5 billion of brand-new credit in one week! Pure, excessive monetary inflation, which always precedes, and causes, price inflation!

"And the unholy Fed is absolutely going bananas with accommodating the repo market. There were $24 billion in repos just last Thursday alone! And, for good measure, the Fed printed up another $5.3 billion in actual cash last week, enough for every man, woman and child in America to get $18 in cash."