Two Sentences Proving I'm Right

This is a fairly unremarkable Daniel Gross column, stating the usual argument that non-core inflation is important and our mechanisms for measuring core inflation are inadequate. But it's really worth reading for the following two sentences justifying everything I've been saying about the Fed recently:

There are sound macroeconomic reasons to believe higher inflation may be a fact of economic life, according to former Federal Reserve Chairman Alan Greenspan, who discusses the topic in his new memoir, The Age of Turbulence. (Apparently, the editors killed the original title: The Dotcom Bubble Wasn't My Fault. Nor Was the Housing Bubble.)

Sweet. (By the way, I know Gross doesn't write his headlines but he should have stepped in to block this one. It asks, "Why Won't the Government Admit Inflation is Rising?" Gross doesn't answer that question, though the answer is simple and instructive: Social Security is indexed to consumer inflation.)

Iranian Irony

Wow. That's a headline. Thanks for setting that up.

Iran has been in the news lately, hasn't it? This is largely thanks to Ahmadinejad's talent for controversy, though it's a cheap laugh at this point as Ahmadinejad is a study in self-parody. He does legitimately represent some concernable issues - nuclear proliferation and human rights chief among them. Serious issues aside, every time I hear/see this guy it is an uncomfortable reminder of the current, reprehensible state of politics. Let me stir your memory: this guy speaks at the U.N. (along with, admittedly, Hugo Chavez who said "Bush is The Devil." Now this happens to be one point I agree with him on, despite my lack of religious dedication. Clearly Ahmadinejad isn't alone in his playa hatin')!! Nonetheless, the U.N. was formerly an association where matters of serious character were discussed. Of course George Bush speaks there too, so it's hard to wax philosophical about the degeneration of a formerly respected body...

Even More Good News

While I agree with Matt's excellent point in this post that the ideology of radical Islamism will resist modernity for a very long time, there is more good news from the How-Dumb-Are-They Department. Iran has formally issued a booklet at the U.N. accusing Canada of human-rights violations. When I saw the headline in the Winnipeg Free Press I thought it must have been a complaint about the handful of Canadian troops assisting us in various sensitive places like Afghanistan. But no, incredibly it's actually a little 70-page book ("in the name of God," no less!) claiming that there's concern in the international community about Canada's treatment of its own citizens. In Canada.

Really, Li'l Squinty? I mean it reads like an Onion headline! Who can't possibly laugh out loud at "Iran attacks Canada's human rights record" ???

From the schoolyard to Presidential politics to international relations, the weakest of all possible positions is to be an object of ridicule. This is very good news for those opposed to Iran's tyrranical regime.

For God's Sake...

Not real estate yet. That's my first thought about what sort of "contrarian strategy" you ought to pursue. Besides, how exactly would you get into the real estate game? REITs? If you were to purchase actual real estate it would probably be in California, still the most distorted market in the country. But the other markets remain distorted as well.

There are also some hints that in the major metropolitan areas, housing prices may remain depressed due to a reduction in the number of illegals seeking housing. There are anecdotes about Mexicans leaving certain predominantly immigrant communities to return home. But that's mostly a sideshow, I suspect: housing prices are likely to remain depressed for awhile due to other factors too.

The Credit Plague Spreads?

I'm still not sure what to think about this. I'm not alone, it seems, with bulls and bears both arguing their position well: Mild, yet delayed, recession? Downturn? Steady Growth? Credit crunch contained? This article in The Paper of Record does a nice job of summarizing the trends and events that may or may not be contributing to an "economic downturn."

As you know, I have a significant amount of cash sitting on the sidelines sucking up a not paltry 4.25% in a money market account. Do I get back in? If so, how? Contrarian strategy seems to be one play to make. I can't wait, for instance, to get into the housing market in a year or so. Will there be a "flight to quality" as fears of recession loom? Perhaps a utility run as people seek stability and consistent returns. Maybe, just maybe, this is a matter of waiting it out, as our true (and just) long-term inclination suggests. Your thoughts?