When the ordinary person thinks about money, the acts of the Fed's FOMC are rarely the first thing springing to mind. Yet what the committee does, and even more what it says, makes for scrutiny in ministries and financial haunts across the globe.

One notes the vast subtlety of it. Is it this shading or that of motive, simple or complex, we extract from Mr. Greenspan and fellows' thought, word, and act? Is it insurance of the Greenspan legacy, drab bureaucracy, maestro care, genius insight (brilliance sufficing for a "Greenspan Put"?), tightening reins, or just ineffable gestures amid the random flux that we observe?

Daniel Kadlec assesses the post-Internet "flood of easy money" has pervaded everything "from oil, gold and timber to stocks, bonds, real estate, art and the price of a Mickey Mantle rookie card" so that happy bargains no longer abound. Thus investors stick with low yield 10 year T-bonds. "Stubbornly low yields are an acknowledgement of the new reality: Today a near certain 4% return looks pretty darn good."

There you have it - take the redounding floods of money and parlay them into Time's unreachable horizon. Ten years, a decade, is not the Now by which you and I sigh, or languish, or wonder -- amazed, thrilled, or stunned.

T-bonds are stubborn and low. Gold, the flowing, liquid, shining stuff? Gold futures are down $8.00 an ounce.

----------
Readings on the recent FOMC increase of the federal funds rate, the overnight rate charged between banks, by 25 basis points to 3.25%,

From "A New Quarter and The Same Old Questions", The Capital Spectator, Money, Oil, Economics and the Search for the Bottom Line, July 1, 2005,

"The reluctance of the bond market to support the central bank's efforts to raise the price of money across the yield and thereby move closer to inverting the yield curve is a familiar game of late. Therein lies the problem. ...which side will blink first? The Fed will either stop raising rates, and perhaps even lower them ... or the bond market will send up a white flag and sell debt securities and thereby elevate long-term yields."

"... if the growth factor is awakening from its long relative slumber, the case is still less than airtight ..."

---
Daniel Kadlec, "What's on Greenspan's Mind?", Time Magazine, July 3, 2005.
---
From Wayne Masden, to Should Greenspan step down as chairman of the Fed?, "YES: Greenspan's tendency to shoot from the lip could trigger a recession", The Salt Lake Tribune, July 2, 2005.

" ... the Fed chairman often departs from his prime mission of controlling the nation's monetary policy to launch verbal warning shells at the so-called irrational exuberance in America's housing and stock markets. ... ... he does the nation a disservice when he regularly bad mouths robust growth. ... ... Greenspan has urged that Fannie and Freddie sell-off about 80 percent of their $1.5 trillion portfolio."

---
From Pete du Pont, to Should Greenspan step down as chairman of the Fed?, "NO: Greenspan era of growth with low inflation deserves a round of applause", The Salt Lake Tribune, July 2, 2005.

" ... Greenspan recognizes the importance of stimulating economic growth through access to capital for small businesses ... ... a simplified and fair tax code and the repeal of arduous rules that cripple economic growth. That's what Greenspan advocates ..."

---
From John Azzopardi Vella, "Half-yearly evaluation of investment predictions", The Sunday Times of Malta, Malta, July 3, 2005.

"... the price of oil, which because of Chinese demand can be expected to remain above $ 50. ... in turn has consequence for Venezuelan sovereign debt, which is safe at that oil price in spite of that country's 23% inflation rate. China is now key to understanding the world economy, including that of Venezuela."

"Nothing succeeds like success in economics. The US is benefiting ... as the Chinese with their dollars buy US Treasury Stocks, keeping down that country's interest rates. If this were not happening, the US would have to sell its Treasury Stocks to other nations at a higher rate of interest, triggering a nasty recession in the US."

"Gold and the dollar ... ... The world is no longer seeking refuge in gold from the high price of oil. It is seeking it in nuclear power. ... ... BHP Billiton ... controls 38% of world uranium. ... ... The Arabs will soon learn what Sheikh Yamani, the Oil Minister of Saudi Arabia, once stated, that the Stone Age did not end because of a lack of stone. The relationship is changing from the dollar to gold, to oil and energy shares."

---
From Nell Henderson, "Analysts worry Greenspan Fed too forgiving", The Washington Post, July 03, 2005.

"Investors have come to perceive the Fed's policies of recent years as 'free insurance for aggressive risk-taking' ... ... The idea of 'the Greenspan put' stems in part from the chairman’s success in helping to steady financial markets through the stock market crash of 1987, the recession of 1990-91 and the international financial crises of the 1990s. ... ... Fed board member Donald Kohn noted recently ... ... 'We central bankers are by nature a gloomy lot, trained to focus on what could go wrong ... ...' ."

---
from Forbes, AFX News Limited, RPT - "Gold futures fall $8 an ounce, log 3% weekly loss", July 3, 2005.

"Other metals futures closed lower Friday. September copper lost 3.65 cents ... July silver ... down 17.7 cents ...September palladium dipped $2.95 ... ... gold inventories stood at 5.75 million troy ounces ... ... As for mining stocks, key indexes traded lower ... following the weakness in metals futures ..."

---
The Federal Reserve Board, Finance and Economics Discussion Series, "Do Actions Speak Louder Than Words? The Response of Asset Prices to Monetary Policy Actions and Statements" Refet Gurkaynak, Brian Sack, Eric Swanson, 2004-66, Keywords: Measuring monetary policy surprises, FOMC statement, factor models, asset prices.

"... ... both monetary policy actions and statements have important but differing effects on asset prices, with statements having a much greater impact on longer-term Treasury yields."

----------

Dad's finishing "Confessions of an Economic Hit Man". Better to do, to choose, what you love rather than doing something for which you castigate yourself.

With Mr. Ahmadinejad so much in the news yesterday, one wondered, and suspected not, that he likewise castigated himself in his life's pursuits.

Also yesterday, we saw Adam Curtis' interview elaborating his production, "The Power of Nightmares". He attributes high ideology, a motivation run off ideas, to the neo-cons. And charges that a "politics of fear" is pushed onto a naive public. Yet it's a day where one mind, one person, can be massively dangerous, so one fellow's fear is another's prudence.

In the perspective Curtis sketched, are those motivated by Ideas strictly in service of a Hobbesian struggle indicated with a politics of fear? Ideas, are they not lofty and sublime, and thus quiet apart from fear?

I began "Confessions of an Economic Hit Man" yesterday. Easy reading on macroeconomics, good case study on a cultural pathology. With castigating globalization running through the author's story, how much is entirely his own perspective and how much heavy editorial shaping? I am wondering what the ending will be like.

The book could make a nice Father's Day present.