Chris Powell of the Journal Inquirer wrote:

While everyone is agitated about what seems to be the dramatically rising price of oil, in terms of the European currency, the euro, and gold, the once and possibly future world currency, the price of oil has been nearly constant in recent years.

That is, commodities are not soaring; the dollar is plunging.

So in seeking to prohibit pension funds from investing in commodities, in necessities, in real goods, Lieberman and Collins would punish not just supposed speculators but also ordinary working people, whose pension fund investments in commodities may be the only practical way for them to protect themselves against dollar devaluation. The senators are also seeking to protect themselves against any doubt that the United States can afford its empire and can afford to bestow on the public a largesse that nobody pays for.
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The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

“A very nasty period is soon to be upon us - be prepared,” said Bob Janjuah, the bank’s credit strategist.

A report by the bank’s research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as “all the chickens come home to roost” from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

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Martin Crutsinger of the Associated Press wrote:

As part of the effort to encourage a swifter revaluation of the yuan, Paulson has been urging the Chinese to open their financial system to foreign banks and investment houses including major U.S. institutions. They have the expertise, he maintains, to help guide the Chinese to a more modern financial system with a currency whose value is not controlled by the government but set by free-market trading.

However, Paulson is likely to meet strong resistance from the Chinese in this area, given the billions of dollars in losses suffered by U.S. financial giants in the credit crisis that erupted last August. The Chinese are likely to say they don’t need the financial innovation that has brought so much grief to U.S. firms.

Likewise, a U.S. effort to get China to promote greater energy efficiency as a way of reducing strains on global supplies will also face strong resistance. In fact, the Chinese have been moving in the opposite direction, providing ever greater subsidies to keep energy prices low as global prices have surged.

“Over the past year, China has really fallen off the energy conservation wagon,” said Nicholas Lardy, a China expert at the Peterson Institute for International Economics in Washington. “This will make it very difficult for China to cut energy use relative to their gross domestic product.”

And the Chinese are signaling that they do not intend to speed up the pace at which they are allowing their currency to rise in value against the dollar. They are going as fast as is prudent, they argue, despite demands in Congress to pass legislation that would impose economic sanctions on China if they do not move faster.

For one thing, if the dollar fell in value more quickly against the yuan it could trigger bigger dollar declines against other currencies such as the euro, where it has already touched record lows. Just this week, Federal Reserve Chairman Ben Bernanke said that the dollar’s decline had contributed to an “unwelcome rise in import prices and consumer-price inflation,” remarks which were seen as a signal that the Fed doesn’t plan to cut interest rates further because of heightened inflation concerns.

“Right now, we are interested in getting some dollar stability and if China allowed the yuan to appreciate more quickly it could create more turmoil and a possible run on the dollar that would exacerbate our current plight,” said Mark Zandi, chief economist at Moody’s Economy.com.

Analysts are not expecting any breakthroughs on a host of other trade tensions between the two countries even though the U.S. deficit with China rose last year to $256 billion, the highest ever recorded with a single country and one-third of the total U.S. deficit with the world.

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The Fed’s view is that they did not cause the bubble or the bust. When the recession is official they will claim that they did everything they could to stop it and to make it less severe. The Federal Reserve plays the blame game and they blame YOU for this mess. The truth is that THEY are the ones to blame.

This attack on the middle class is growing with one target in mind . . . the middle class. 

The Fed has always been a scam to cheat the middle classes, but the lesson of income redistribution is less well known than the connections between the Fed and price inflation and the business cycle (which themselves are not widely understood). Even though mainstream economists will sometimes admit of the negative impact of inflation on real wages, few if any are willing to admit that there are beneficiaries as well as losers. Indeed the Fed’s low-interest policy not only encourages spending and borrowing, it discourages the one thing that best helps people raise themselves into higher economic classes — saving. Therefore it should be clear that the Fed is systematically working against the interests of the common American.

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What is going on? You hear from fiat supporting economists, including Dave Ramsey, not to invest in gold and silver because it is not a good investment.  Interestingly though, the government has to limit supply of its silver.  Ianthe Jeanne Dugan,The Wall Street Journal, wrote on Friday, May 23rd:

The government rationed food during World War II and gasoline in the 1970s. Now it’s imposing quotas on another precious commodity: 2008 dollar coins known as silver eagles.

The coins, each containing about an ounce of silver, have become so popular among investors seeking alternatives to stocks and real estate that the U.S. Mint can’t make them fast enough. In March the mint stopped taking orders for the bullion coins. Late last month it began limiting how many coins its 13 authorized buyers worldwide are allowed to purchase.

“This came out of nowhere,” says Mark Oliari, owner of Coins ‘N Things Inc. in Bridgewater, Mass., one of the biggest buyers of silver eagles. With customers demanding twice as many as they did last year, Mr. Oliari would like to buy 500,000 a week. But the mint will sell him only around 100,000.
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On March 11th, Bernanke met with the who’s who of Wall Street Leaders, according to Bloomberg on May 12th: 

WASHINGTON — Federal Reserve Chairman Ben S. Bernanke lunched on March 11 with a Who’s Who of Wall Street leaders, including JPMorgan Chase & Co.’s Jamie Dimon, three days before the central bank rescued Bear Stearns Cos. from bankruptcy.

Other guests included Goldman Sachs Group Inc. Chief Executive Lloyd Blankfein, Lehman Brothers Holdings Inc. CEO Richard Fuld, Morgan Stanley President James Gorman, Citigroup Inc.’s Robert Rubin, Blackstone Group CEO Stephen Schwarzman, and Merrill Lynch & Co. CEO John Thain. Alan Schwartz, the CEO of Bear Stearns, was not listed among the attendees.
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This article, by the UK Telegraph, was very enlightening of the current realities in our economy

The sick list is varied, though most for now are victims of the housing crash: Linens ‘n Things, ($650m), Kimball Hill ($703m), Home Interiors ($310m), French Lick Resorts ($142m), Recycled Paper Greetings ($187m), and Tropicana Entertainment ($2.49bn). . .

The California city of Vallejo (117,000 inhabitants) has just made history by opting for Chapter 9 bankruptcy, the result of tax erosion from a 26pc fall in local house prices. Half Moon Bay may be next.

“This is the tip of the iceberg: everybody is going to line up for Chapter 9 in California,” said John Moorlach, Orange County board chief.

US consumers are juggling plastic to put off their day of reckoning. The Fed survey said credit card debt had jumped 6.7pc in the first quarter to $957bn, or $6,000 per working American, despite usury rates near 20pc.

“My guess is that many Americans continue to run up massive credit card debt because they have little intention of paying it off,” said Peter Schiff at Euro Pacific Capital. Quite.

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This is a great anectdote regarding the history of Fiat Money:

2,000 yrs ago As Rome debased its currency and expanded via inflationary methods, the question must be asked who was buying the tangible productive assets?

It was the Byzantine Empire! When the Byzantines finally did over run Rome, they did not collapse it, they merely replaced Rome’s leadership with their own leadership, and effectively ran Rome as a defacto Empire keeping all the same systems in place for another 200yrs.

Finally, the Byzantium leadership broke apart from a Moral decay into the nations we call Europe today!

So the Question now, is China & the East going to do the same thing and keep the current system running further expanding globally and running inflation even further sending the cost of tangibles higher for may yrs to come? It certainly looks that way!

- Simon Heapes, The Anglo Far East Bullion Company

According to IMF:

research suggests low interest rates effect commodity prices “above and beyond the traditional effect of increased demand” while the decline in the dollar since 2002 was responsible for about $25 of the increase in the oil price. READ MORE

The article goes on to state the commodity market may not be a bubble, but a result of global inflation.  Strap your seatbelt on and get ready for a ride.  Especially, if our polititians answer to solving our countries ailments is to raise taxes.   It appears the fiat money mechanism is about ready to unravel.

It may be wise to look seriously at investing in Gold or Silver, real money.

Robert Kiyosaki nails this one well regarding the impact of Bernanke bailing out Bear Stearns.  His actions say to the elite “if you mess up, we will bail you out.”  Question for you is if you mess up will the government bail you out?

This bailout was a signal to Wall Street that the Fed stands behind them — that they’re on the same team. It was a thumbs-up to the super-rich: “Do what you want. If you screw up, we’ll cover your blunders.”

Ralph Nader’s father purportedly once said that “Capitalism will never fail because Socialism will always bail it out.” My concern, especially in this election year, is that socialists will seek revenge. Already I can hear the war cry “tax the rich!” The problem with taxing the truly rich is that the rich simply move their money to countries that treat them and their money with undue respect. And when the rich move their money, the poor and middle class end up paying more taxes. Read More