Waiting for events.

The world of business and economics is now focusing on two things: 1. the decision of the German Constitutional Court and 2. the results of the meeting of the FED. And the Pundits are going crazy trying to figure out the outcome of all this. Personally, I like the formulation of Jim Grant, Head of the Portola Group, given in today's KINGWORLDNEWS.

Grant presents two metaphors for today's economic world: 1. the Truman show and 2. forces controlling a beech ball. The applicability of the Truman show is rather obscure, after all, saying that the whole world is a stage and most everything that is happening is not understood, is hardly helpful in explaining the world economic situation. But the metaphor about the beech ball is.

The FED injected nearly twenty trillion dollars into the world's financial system to combat the financial meltdown created to elect Barak Hussein Obama. The bubble created by the cash is like the air pumped into a beech ball that is held under water. The tendency of the ball is to rise, i.e. gold and silver prices would rise as the inflation caused by the cash injection would propel inflation. But, the central banks are holding down prices, preventing the inflation to occur. The resultant force is pushing the ball down. Too much push and the ball will collapse in a deflationary meltdown, too little push and the ball will pop in the air in an orgy of inflation.

Central banks and the regimes they support are full of hubris and they believe that they can direct and control world finances and the economy. The electorate of Europe and the US wants to maintain the status quo and live off deficits used to maintain government handouts. In the end, there is no substitute for hard work and there is no free lunch. Not without bankrupting the provider. The longer they hold down gold and silver prices, the faster they will rise when the central banks lose control. Even Larry agrees with that.