[G20]Last Friday, Geithner’s message was “Do as I say, not as I do.”

This weekend, Timmy took a big doo doo on the rest of the World as he pressed fellow Finance Ministers into (in theory) setting mechanisms to address trade balances (which means export countries need to strengthen their currencies against the dollar) while importing countries (like US) should not try to manipulate their own currency.  Well, that sounds reasonable EXCEPT, before the ink is even dry on the G20 release, Timmy flies off to China to get them to commit to revalue the Yuan, which is pegged to the Dollar and effectively DE-values the dollar in an entirely manipulative manner.  

No, WE didn’t manipulate the Dollar, China did.  We only told them to manipulate their currency which is tied to the dollar, so it’s not the same thing at all as us manipulating the dollar and —- oh my God Tim, how can you sleep at night???

So good morning, America, how are ya?  I’ll tell you how you are, you are 1% poorer than you were on Friday as the Yen rises to 80 to the Dollar and the Euro rises to $1.41 and the Pound hits $1.58.  That drive oil back over $82.50 and gold back to $1,350 and copper hit $3.89, up from $3.75 on Friday – that’s 3.5% inflation of a basic material OVER THE WEEKEND!  That annualizes out to about 1,000% but let’s be fair and say this only happens on weekends and call it 52 x 3.5% for 182% – hyperinflation accomplished!  Of course, we don’t need 182% increases in commodities to achieve hyperinflation, hyperinflation is anything over 26% and our Dollar is down 15% since May and that’s 5 months so we’re heading for 36% over 12 months already.  

I’ve been invited to attend the Economists’ Buttonwood Gathering in New York today where the agenda will be discussing the State’s Fiscal Crises led by Robert Rubin and Josh Bolten over lunch followed by BOE Governor Mervyn King’s speech on “International Reform in the Financial Sector” and then my favorite bond pimp, Mohamed El-Erian will be speaking about “Sovereign Risk and the Banks” followed after market hours by Vikram Pandit (Citigroup’s CEO) and then Nassim Taleb (Black Swan) after which there’d better be drinks!  

I usually can’t be bothered with these things but this conference is likely to move the markets and I should, in theory, be able to chat with our Members…
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