Brice Timmons

It's the Capital, Not Liquidity, Stupid

Bravo! First truly sensible analysis I've seen here.

What Effect Will Hyperinflation Have?

Hmm... I'm not going to get all the way on board with this analysis. Some poor analogies are drawn between the status of Wiemar Germany and the U.S. at present. Further, there is an underlying assumption that the economy generally is the same or similar. I think we're already seeing the first signs of hyperinflation, but not Wiemar-like hyperinflation. I would definitely go for hard assets over dollar-based paper, though. Heck, I'd convert dollars into RMB in a heartbeat. China's coastal middle-class will continue to increase their domestic consumption, thus making up for our decreasing consumption and protecting the Chinese economy. I suspect that this will allow them to hold more reserves in RMB, deflating their currency a bit as their diversification undercuts ours.

Payrolls Drop - And You Ain't Seen Nothin' Yet

This isn't the result of a Bush project. This is the result of a midnight-before Christmas-in-DC deregulation of derivatives that resulted in the sub-prime mortgage-backed AAA securities that we've all come to know and love, the SIV in all it's on-the-book-when-it's-... glory, and the absolutely bizarre belief that any sector could continue to grow completely out of proportion to population growth and median income growth. Let's not turn all cheerleader for over-regulation here and end up on the other side of this stupid coin. Let's just demand some transparency and accountability and maybe require that derivatives fully disclose their structure. Is that naive?

Thanks, Kathy, for doing a great job of explaining the data objectively.