Gold vs. Goldilocks - WSJ.com

Gold vs. Goldilocks - WSJ.com

In terms of interest rates, it's worth looking at some of the clear signs of a shortage of cash.

Here in Europe that was seen in the ECB's concerns about repayments on its lending facility.

But, it is also rampant in a recent UCB report on business conditions in Portugal where it points out that a shortage of lending capacity (i.e. not enough funds) is limiting businesses ability to expand and in fact the cancellation of some programs. It sees credit constraint throughout the local economy.

I haven't seen such reports for other parts of the world but clearly this is a common problem. Eventually, the government has crowded out the private sector where jobs are created.

And, what is government doing with this money? It's social consumption, social consumption and social consumption. People feel 'entitled' and government provides.

This will not easily be brought under control. These are fiscal policies akin to drinking and drug problems.