First at bat for the Fed is Helicopter Ben Bernanke.  Ben hates the idea of deflation, can't stand it, would throw money from the sky to stop it.  He'll fire up the printing presses and buy bonds.  Hey, what's that up his sleeve? "The Board of Governors of the Federal Reserve System will cease publication of the  M3  monetary aggregate" after March, 2006.

The 10 year Treasury yield is now hovering at 4.5%.  Maryland based October Consultants, an economic research firm, predicts that going above 4.5% is the breaking point at which our economy heads into recession.  But it's been good for foreign investment in the U.S., which is the backbone of the Ponzi scheme.  

Foreigners are throwing more money back into the U.S. than they are taking away in trade deficits.  All you fishermen in the house will nod when I call that chumming the dollar.  In order to induce continued American spending, foreigners keep their goods artificially cheap by making the dollar artificially strong. The Chinese Real Estate boom is fueled in this way, via a national policy of trade across the Pacific.

The end result so far is record setting prices for platinum and copper.   Gold and silver, while strong, aren't quite peaking due to their fungible nature and connection to the value of the dollar (read: Overt manipulation) but they are still crashing the ceiling in other currencies.  Foreigners are accepting less for their exports and they're biting the bullet on rising costs, and they will continue to to this until all our excess is squeezed out. That will probably happen when the real estate driven credit glut dries up.

Inevitably, inflation has to come to America.

All capital letters willingly volunteered and were not unduly harmed in the writing of this diary.