Krugman: Catastrophic Credibility

A little while ago Ben Bernanke responded to suggestions that the Fed needed to do more — in particular, that it should raise the inflation target — by insisting that this would undermine the institution’s “hard-won credibility”. May I say that what recent events in Europe, and to some extent in the US, really suggest is that central banks have too much credibility? Or more accurately, their credibility as inflation-haters is very clear, while their willingness to tolerate even as much inflation as they say they want, let alone take some risks with inflation to rescue the real economy, is very much in doubt.

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Euro is now +0.6%!!!!!

Money is flowing into precious metals. Gold is up 2.5% and silver +2%.

down just 0.3%

Italy should start printing fresh euros and Germany should leave the currency union, former Italian Prime Minister Silvio Berlusconi said Friday, MF-Dow Jones reported.

“Here’s my crazy idea; Let’s start printing euros ourselves,” Mr Berlusconi told an assembly of his center-right People of Liberty party’s parliamentary deputies.

“Germany should leave the euro if it doesn’t agree with the European Central Bank serving as a lender of last resort,” he added, MF-Dow Jones said.

If the ECB doesn’t take on that role, Germany’s role in Europe should be reviewed, he said.

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min cap $5bill

New York City plans to enact a far-reaching ban on the sale of large sodas and other sugary drinks at restaurants, movie theaters and street carts, in the most ambitious effort yet by the Bloomberg administration to combat rising obesity.

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http://www.youtube.com/watch?v=YLgWHeezzuc&feature=g-all-u

http://www.youtube.com/watch?v=d055EMRZ74I&feature=g-all-u

“What’s going on here is basically a con game to suggest otherwise,” Callister said. “What do con men do? They normally try to change their name. The FDA has thankfully stopped that.”

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