One Year Ago Today

Today is the one year anniversary of the very first post on this blog. It's strange to think about it now. Looking back, at the time, there was no inkling as to where it might lead or about what might transpire in the year that has passed.

The very first post, It Didn't Have To Be This Way, included excerpts from a Stephen Roach commentary:

"It didn’t have to be this way. The big mistake, in my view, came when the Fed condoned the equity bubble in the late 1990s. It has been playing post-bubble defense ever since, fostering an unusually low real interest rate climate that has led to one bubble after another. And that has given rise to the real monster -- the asset-dependent American consumer and a co-dependent global economy that can’t live without excess US consumption. The real test was always the exit strategy."

And a few thoughts of my own:

This is my central belief on this issue, and the motivation for this blog - that given the choice of some economic pain and a long slow death by inflation, the Fed will opt for the latter. It will never be able to raise interest rates like Paul Volcker did, in order to put this fiat currency system back on a track that is sustainable for another generation or two - instead, we will continue to swim out to the deep water and hope for the best.

So, one year later, interest rates are still rising, albeit in baby steps, but there seems to be very little economic pain as a result. Of course rates are still low by historical standards, and in the year that has passed, there has been essentially no regulation of any lenders. Some guidance has been offered, but despite the rising rates, lenders and borrowers carry on, and liquidity remains at historic highs.

Somehow, despite wars, hurricanes, debt downgrades, increasing deficits, negative savings rates, rising personal debt, a faltering housing market, and a host of other nagging and potential problems, the wheels keep turning, the American consumer keeps spending, and life goes on.

For how long? We'll see.

Highlights from the last year included lots of commentary on real estate and discussions on the impact of rising gas prices, including a nascent fixation on SUVs:

• Money Magazine Does Real Estate
• The California SUV Fill Up Index
• Money Magazine Does a One-Eighty

Then the pencils were sharpened and some serious "what-if" calculations were done confirming the worst fears about government statistics:

• Home Ownership Costs and Core Inflation
• Fun With the Public Debt
• Open Enrollment and the CPI - Part One
• Open Enrollment and the CPI - Part Two

And, then of course, there was the little Hummer story in November:

• Hummer Overfloweth
• Deluge
• Inbox Overfloweth
• Epilogue (for now)
• Hummer Overfloweth Still

Which goes a long way in explaining this chart pattern:
Of course, January was the big build up to Alan Greenspan's retirement, which came and went with relatively little fanfare (it still boggles my mind that the Daily Show on Comedy Central did an entire 30 minute show on this subject on the day of his retirement - what a disaster).

These articles were offered up in the weeks leading up t0 the big day:

• Three Sins, One Gift - Sin #1, Ignoring Asset Prices
• Three Sins, One Gift - Sin #2, Bending to the Will of Others
• Three Sins, One Gift - Sin #3, Fostering a Culture of Debt
• Three Sins, One Gift - The Gift, Hastening the Demise of Fiat Money

A lot has been written in these pages about the barbarous relic, atomic element number 79, which, during the time that we've been scribbling here has risen in price from about $430 to $560. A thirty percent increase over the course of one year, yet the public is still mostly unaware of one of the greatest investment opportunities of their lifetime occurring right now, right under their nose.

A search of this blog for the word 'gold' reveals a total of 69 posts on the subject:

• The Mess That Greenspan Made Does Gold

There are a number of new projects in the works - a couple of great ideas for potential "Hummer-esque" stories that, so far, have not been given the attention that that surely deserve. But, most importantly, there is a major announcement coming up for a project that has been ongoing for many months now.

Details will be announced in a few weeks or so - stay tuned. Long time readers will likely wonder what took so long, but projects such as these take an unbelievable amount of time to get ready to launch.

Thanks for reading everybody. Hopefully, this is just the first of many years at this.