As understood by an anonymous commentator over at the Cunning Realist:

At this point it seems the sack of flour in my pantry has out performed my stock portfolio in the last 6 months.

The Big Picture points us to an eye-opening chart by Bill King that illustrates the extent of borrowing by financial institutions at the Fed Discount Window.

Note how the rush for cash from Bernanke and Co. literally dwarfs the S&L crisis from the 80s, and appears to be on its way to doubling the infusion of cash that the fed released after 9/11 to keep the American economy on track.

So we're headed to more inflation, right? Well, that's an interesting debate, and an upcoming post I have planned will take a look at the arguments between the inflationists and the deflationists.

Which, to be honest, I find far more interesting and relevant than almost anything the presidential candidates are saying at the moment.

Blogging will resume with some regularity momentarily....

An interesting post from John Rubino:

With a few months of hindsight, it’s now clear that debt-as-money was not one of humanity’s better ideas. When the U.S. housing market—the source of all that mortgage-backed pseudo money—began to tank, hedge funds found out that an asset-backed bond wasn’t exactly the same thing as a stack of hundred dollar bills. The global economy then started taking inventory of what it was using as money. And it began crossing things off the list. Subprime ABS? Nope, that’s not money. BBB corporate bonds? Nope. High-grade corporates? Alas, no. Credit default swaps? Are you kidding me?

No longer able to function as money, these instruments are being “repriced” (a slick little euphemism for “dumped for whatever anyone will pay”), which is causing a cascade failure of the many business models that depend on infinite liquidity....

The process of debt reclassification has a momentum that a few hundred billion new dollars [from central banks] won’t stop. And once corporate bonds and agency bonds and emerging market bonds have been crossed off the list, the system will start eyeing the dollar. Is it really a store of value after falling by half against oil and gold in the past five years? Didn’t the Fed just create a tidal wave of new dollars and promise to create infinitely more if needed? Isn’t the U.S. economy hobbled by the implosion of housing and mortgage finance and hedge funds and (soon) derivatives? Don’t Americans owe more per capita than any people in human history? And a realization will begin to dawn: Maybe the paper currency of an over-indebted country isn’t money either…