2012 March 12 | timiacono.com

Prompted by last week’s trial balloon about “sterilized bond purchases”, I went looking for that clip from a few years ago when Fed Chief Ben Bernanke told Congress during the early stages of the financial crisis that central bank’s asset purchases would be “sterilized” (as if Congressman understood what that meant). I never did find that clip, but, I did find this:

The post title is a paraphrasing of words of wisdom from Caddy Shack’s Carl Spackler:

So I jump ship in Hong Kong and make my way to Tibet, and I get on as a looper at a course over in the Himalayas. You know, a caddy, a looper, a jock. So, I tell them I’m a pro jock, and who do they give me? The Dalai Lama, himself. Twelfth son of the Lama. The flowing robes, the grace, bald… striking. So, I’m on the first tee with him. I give him the driver. He hauls off and whacks one — big hitter, the Lama – long, into a ten-thousand foot crevice, right at the base of this glacier. And do you know what the Lama says? Gunga galunga…gunga – gunga galunga. So we finish the eighteenth and he’s gonna stiff me. And I say, “Hey, Lama, hey, how about a little something, you know, for the effort, you know.” And he says, “Oh, uh, there won’t be any money, but when you die, on your deathbed, you will receive total consciousness.” So I got that goin’ for me, which is nice.

I wonder what that was that Austan Goolsbee muttered to himself there…

Higher Education in Greece

This Bloomberg story about campus life in the new, more austere Greece makes you wonder about the future of the Occupy Wall Street protests in the U.S. and about higher education in places like California where budget cuts will continue to be felt for years to come.

In the universities of Athens, the city where Plato taught and Cicero studied, campuses are covered in anarchist graffiti, stray dogs run through buildings and students take lessons in Swedish with the aim of emigrating.

Higher education in Greece, as in much of Europe, has been battered by the recession and austerity measures. Budget cuts of 23 percent since 2009 mean buildings aren’t heated in the winter, schools have slashed faculty salaries and newly hired professors can wait more than a year to be appointed.

Students say it’s hard to be hopeful with youth unemployment surpassing 50 percent and protesters seizing university buildings.

“People are pessimistic and sad,” said Konstantinos Markou, a 19-year-old law student, speaking in a lobby at the University of Athens, where dogs fought nearby and students say drug dealers and users congregate. “The sadness is all around the air.”

As universities in Greece reduce salaries and slow hiring, young academics are rethinking their careers there, said Leonidas Karakatsanis, 39, who received his Ph.D. in political science last year from the University of Essex in England and has a research fellowship at Panteion University in Athens.

“My initial plan was to spend some years abroad and return back to Greece,” Karakatsanis said. “Now it seems like it’s impossible to return to Greece. I’m starting to imagine myself living abroad for the next 15 to 20 years.”

While no one is expecting any U.S. states to follow the path of Greece, there are already some important parallels, namely, how policy makers continue to pass on a disproportionate share of the pain to the younger generation who have little political power and how people are adjusting to recent changes by relocating within the U.S.

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The week is not starting out well for the yellow metal, but, as anyone who has owned gold and/or silver for more than a few  years surely realizes, this is a marathon, not a sprint, and confusing the two can really hurt your bottom line. Another reminder of the secular nature of rising gold prices comes via the infographic below from Gold Bullion International:

Click to enlarge and, just in case there was any doubt, to learn the answer to the question.

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Monday Morning Links

MUST READS
Greek debt swap could be short-lived reprieve – Reuters
Report Shows Depth of the Distress in Europe – NY Times
Global liquidity peak spells trouble for late 2012 – Telegraph
China Has Biggest Trade Shortfall Since 1989 – Bloomberg
China central bank eyes freer yuan, policy flexibility – Reuters
Financial Repression Has Come Back to Stay – Reinhart, Bloomberg
Can California’s Economic Self-Immolation Be Exported? – RCM
GAO: Banks Paying Back TARP with Federal Money – FBN
Gas Price Disparity Seems Here to Stay – NY Times
What Retirees Wish They’d Done Differently – Reuters
Student Loan Bubble Nonsense – Baker, CEPR
“Do I Feel Lucky?” – Hussman Funds
Uncle Sam’s Teaser Rate – WSJ

MARKETS/INVESTING
Oil below $107 on weak China growth – AP
Gold slips, eyes on Fed meeting – Reuters
Gas prices top $3.80 a gallon – CNN/Money
A play on consumers in China – Financial Post
Banks Buying Treasuries at Seven Times 2011 Pace – Bloomberg
Investors Ignore Politics at Their Peril – Kass, The Street
BIS: Currency Trading at Record $5 Trillion a Day – Bloomberg
Gold Declines as Hedge Funds Cut Holdings of Bullion – Bloomberg
Does gold rise with inflation or is it just rising anyway? – Mineweb
Miners now pay dividends in physical precious metals – BullionStreet
Dude, where’s my gold? – The Real Asset Company

ECONOMY/WORLD/HOUSING/BANKING
Great Expectations? – New Yorker
Japan’s Two Lost Decades – And Ours? – RCM
America’s real inflation rate is above 8% – NY Post
Italy in recession, headache for Prime Minister Monti – Reuters
China sacrifices growth to satiate inflation dragon – Reuters
China’s yuan nearing fair value: PBOC’s Zhou – MarketWatch
Iceland to pick new currency (I can’t stand the suspense) – Globe & Mail
BIS: Operation Twist’s Effect on Yields Comparable Easing – Bloomberg
State-backed mortgage scheme NewBuy ‘threatens negative equity’ – Telegraph
As Fed Officials Prepare to Meet, They Await Clearer Signals – NY Times
Fed’s sterilized purchases will raise short term rates – Sober Look
Sterilized quantitative easing – Econbrowser
Now, Sterilized QE? – Noland, Prudent Bear

 
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