Economics and Investing:

John in Ohio forwarded this: At G20, Kremlin to Pitch New Currency. JWR’s Comment: Gee, so they propose replacing numerous un-backed fiat currencies (with free-floating values) with a single un-backed fiat currency of a “fixed” (constantly inflating) value. Cui bono? As I’ve written before: inflation is a hidden form of taxation. How do I vote for a genuine specie-backed currency? Only with a trip to my local coin shop or arms bazaar. Vote with your wallet. For our own protection, get out of paper currencies and into tangibles!

From The Appenzell Daily Bell: Banks pop on talk of [FASB] accounting rule relief. (I’ve mentioned delays in implementing the FASB 157 “Mark-to-market” rule, before. Given the severity of the current financial crisis, we can expect to see convenient delays and changes (convenient to the bankers, that is), for the foreseeable future.

Reader Brian F. sent this: Consumer prices rise by largest amount in seven months. Rather than typical inflation, this may be evidence of fixed overhead costs being distributed into a dwindling sales base. To explain: In a retail operation, the building lease or mortgage must still be paid, utilities must be paid, and sales clerks must be paid, regardless of sales volume. When sales volume drops, it is inevitable that some of the fixed costs must be passed along to customers. This does not bode well for traditional “bricks and mortar” retailers–especially the large department stores. In the long run, low overhead home-based Internet sellers may get a larger share of the market, as consumers search for bargain prices and are willing to wait a few days to have items mailed or shipped.

G.G. found this one: Fed to buy up to $300 Billion in long-term Treasury bonds, Fed will buy up to $300 billion of long-term government bonds; buy more mortgage securities. Back in the Stone Age, when I studied economics in college they called this monetization, and I distinctly recall my professor explaining that this practice was peculiar to South American Banana Republics. ¿Se habla Español, Señor Obama?

From reader HPD comes a link to some commentary by Mish Shedlock: Yet Another Incompetent Treasury Appointment