"Who doesn’t know the funds rate is going to zero? Who doesn’t know the government has provided liquidity backstops totaling nearly $8 trillion? Who doesn’t know a massive fiscal stimulus package is coming soon? Who doesn’t know the Fed has quadrupled its balance sheet? Who doesn’t know that money base growth is running at a double digit annual rate? Who doesn’t know the FDIC is going to modify millions of mortgage loans?
"The government intrusion into the real economy and capital market is so well-known, its making the front pages of tabloids. So, how is it then that gold is faltering? Why is copper hitting 3-year lows? Why have platinum futures collapsed 47% this year? Why are Treasuries rallying?
"Because all the government can really do is cushion the blow – it cannot prevent business cycles from taking their course."
Yes, well that's what governments are there for in a slowdown, although most governments are under the impression that a quick return to rapid economic growth is necessarily a good thing - and under the illusion that they are capable of making it happen.
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