January 23rd, 2008

At work, Self portrait

From a safe distance

The American economy only amuses me because I am too far away to hear the screams of the dying.

I suspect I share this physical and emotional distance with Mark Shuttleworth, the South African entrepreneur who is among other things funding the Ubuntu Linux. He wrote a pretty blank-edged blog entry about the recent interest rate cut by the Fed.

My own view is subtly different: I think the recession is overdue by several years, and it will likely be horrifying when it firsts happens. Slashing the interest rates to zero over the next few months may actually be perfectly valid, depending on the level of panic. But it means to completely roll over for inflation. I don't see any hope that inflation can be contained now. None at all. The dollar will tumble, and anything that contains imported parts of raw materials will necessarily soar in price, since you need to pay that many more greenbacks before you even start making it.

I commend Shuttleworth's blog entry mainly for its verbal surgical strikes. The fine restraint he shows in his elegant turns of phrase while in practice calling Bernanke a yellow-trousered coward. Another fine example of why I consider the English language a wonder of the world.
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