Greenspan and the Fed Need to Pause - Or Roll Back

September 2 –

Have to talk about the Gulf Coast.  I’ve been some pretty nasty places.  Rural Hungary was unpleasant in spots, and the gypsy areas of the big city were not places I wanted to remain for long.  I’ve never been anywhere like New Orleans even back when it was dry, and cannot imagine what those poor people are going through.

As it impacts somewhat less important things, let me say that the unbroken rise in interest rates inflicted on the economy by Greenspan and his Gang of Thieves has to be in serious jeopardy now.  We are seeing the disruption of gasoline production – this on top of already large rises in fuel prices – and that is going to have an impact on growth.  Bigger than that, we’ve lost the economic production of three large-ish cities in Gulfport, Biloxi, and New Orleans.  Remember that the several tens of billions of dollars we’re going to have to spend rebuilding those places is tens of billions we are NOT going to be spending on repairing existing infrastructure, building new homes, or investing in stocks and bonds.  There will be lots of talk about how the disaster “could restart the economies of these cities”, but that’s a complete crock.  You don’t restart the economy by dumping a hundred billion dollars of stuff into the Gulf of Mexico.  If you could, why is it that we’re not burning down other cities to “restart” their economies?  Why didn’t we think of this sooner!

The loss of production from destroyed businesses is also going to amount to billions, and this on top of an already shaky economic recovery.  I just don’t see how anyone can look at all this devastation and say that the US economy is going to overheat if we don’t keep jacking up interest rates.  It was wrongheaded before.  Now it would be deranged.

Therefore I decree that interest rates will be flat for the remainder of the yaer, and declining on short-term bonds.  There.  Now that that’s settled…

Let’s talk about college football.  I know that’s why you’re really reading this blog anyway.

Utah plays Arizona tonight, in a game that will tell us virtually nothing at all about how good either team is.  The Spewts (as we call them here in Utah County) were awfully good last year – painfully so – and they may be again this year.  But Arizona was woeful last year and has been for some time, and if they are better this year how will this game tell us?  Utah wins by 20, and we have to wait another couple weeks before we know anything about what that means as a predictor of future success.  Still, it’s always nice for the MWC to beat the Pac-10.

BYU plays Boston College – 22nd ranked Boston College – which has allegedly got the best offensive and defensive lines since the 1986 Chicago Bears.  BYU has no chance, I am told.  I take this admonition very seriously.  I therefore predict that BYU will only win by 17.  Look, I’m from the east coast.  I know how good those teams are.  I also know that BYU’s style of offense absolutely drives these teams nuts.  In Boston, maybe this wouldn’t be too big a deal.  But it’s a big deal here.  BYU 37 BC 20.

Your predictions welcome.  But don’t make them without some substance to back it up.  We don’t put up with weak opinions here, not on this subject.  Or any subject, frankly.

Happy Labor Day, all you women with child.  May it be smooth and easy for all of you.