Extra Legal Stimulus Means Extra Legal Taxes

John Ransom
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Posted: Jun 18, 2012 12:01 AM

If there wasn’t a financial crisis in Europe, God- that is Obama- would have to invent one.

After all there’s an election at stake.

Because now that the Eurozone has dithered and dickered and voted, it seems that the Central Banks of the world are ready to unite.

They have nothing to lose but more of our loose change- that is if we have any left.

“Ahead of Sunday’s election in Greece, central bankers stand ready,” writes Peter Boockvar, equity strategist at Miller Tabak & Co. in New York, according to BloombergBusinessWeek. “With all the water central banks have expended out of their fire hoses in their attempt to ‘do something,’ I can only think of magic candles. Those candles you blow out that only flare up again immediately after.”

Which means that the Central Banks are ready to expend even more water to put out the fires that are cropping up, again. Until the fires go out, and then start up again.

More from BloombergBusinessWeek:

Stocks also rose on speculation the Federal Reserve may join central banks in taking steps to boost growth. Data today showed that industrial production unexpectedly fell and consumer confidence slid, adding to evidence of U.S. economic weakness. U.S. policy makers meet June 19-20.

“There’s hope of some coordinated action if bad news does occur,” said Tim Ghriskey, who oversees about $2 billion as chief investment officer of Solaris Group in Bedford Hills, New York. He spoke in a telephone interview. “There’s the Greek election. It could be an ongoing process.”  

So bad news for the rest of us is good news for the stock market- or in other words, Obama.

That because the Federal Reserve bank will begin the process of minting more money, chasing stock prices up temporarily and halting the slide in commodity prices- to great cheers from traders everywhere and trepidation for the rest of us.

Maybe the head of OPEC knew something when he pegged oil at $110 as a fair market price?

From Fox News:

Oil prices could rise about $25 from their present levels to $110 a barrel without threatening the world economy, OPEC Secretary General Abdullah Al-Badry said Friday.

Crude prices have dropped steeply in recent months with the U.S. benchmark selling Friday at just below $85 a barrel. That's about 20 percent less than where they were in February, and Al-Badry said it's far below what consumers can afford.

"$110 is not a threat to the world economic growth," Al-Badry told reporters a day after OPEC oil ministers agreed to keep the cartel's total output ceiling at 30 million barrels a day.

Hey, guys? Have you seen what $110 per-barrel oil did the last few times we tried it?

Gasoline was around $3.90 per gallon last year at this time just as the Fed turned off the water hoses on QE2. They turn them on again, and it looks like Obama and Secretary of Energy Chu could get their wish and see $5.00 gas by the end of the summer.

So bad news for us is good news for OPEC- that is Obama.

Obama’s OPEC’s bestest friend ever.

In 2011, as gas prices went up, so did unemployment in the US, with about a three month delay.

As gas prices came down, the employment situation improved.

Fast forward to 2012: As gas prices climbed, unemployment started creeping up again and GDP started to slow after a temporary and artificial goose for inflation.

What happens this time when they turn the fire hoses back on?

What happens when all that money starts chasing oil prices right past $110 per barrel?

Inflation happens, that’s what.

Ronald Regan explained it thusly: Inflation is the cruelest tax of all because it hits the poor and the middle class the hardest.

Obama to tax the rich?

Hardly. He’s too busy ripping off people who don’t vacation at Martha’s Vineyard.

And that’s the cruelest truth of all.